"The Ukraine crisis and the imposition of sanctions on Russia threaten to change the trajectory of political and economic development in Russia for the worse. This is not because of any painful macroeconomic effects. These effects are likely to be modest. Instead, by boosting factions within Russia’s policy elite who favour increased state control and a move away from Russia’s integration with the global economy, sanctions threaten to reduce the prospects for much-needed economic reform. While sanctions were no doubt intended as a signal to Russia of Western anger at its actions in Ukraine, it is not clear that they were intended to strengthen statist factions within Russia. However, this may prove to be an unintended outcome. If so, it just goes to show how doing something for the sake of action can prove worse than doing nothing at all."
The ELN policy brief is available for download here: