Russia’s Defense-Based Economy Risks Forcing Putin to Fight Wars
Brief
Executive Summary
Since Russia’s full-scale invasion of Ukraine in February 2022, and the subsequent increase in Western sanctions on Russian individuals and firms, Russia’s economy has become increasingly skewed toward the defense sector. This has very likely led Russian political elites to increasingly draw patronage flows from defense-related expenditures.
The wide range of sanctions has likely made it difficult for elites to diversify the sources of their graft, leaving them increasingly dependent on defense contracts for illicit funds.
As Russian President Vladimir Putin uses the distribution and withdrawal of patronage flows as a key way to maintain elite loyalty, a steady stream of defense expenditures has likely become an increasingly important cornerstone for Putin’s ability to maintain domestic political stability.