Institutions and Prospects for a Currency Board in Russia: Perspectives on a Deepening Crisis

Three Western economists present and analyze the prospects for a currency board in light of the deepening economic crisis in Russia in late September 1998. Relying on the results of their investigation in Moscow, the authors focus on the role of Russian institutions, emphasizing the weak protection of investors. They note the political conditions for institutional reform and the impact of institutional inadequacies on the rapid economic collapse. Also discussed in this context are the need for tax reform, simplification of the regulatory regime for business, and for legal reform involving significant changes. Projecting developments beyond the impact of prospective hyperinflation, the paper outlines conditions for effective stabilization of the economy in conjunction with a currency board. Journal of Eco-nomic Literature, Classification Numbers: E42, E50, E63. 32 references.