David M. Woodruff


Department of Government
London School of Economics and Political Science
Houghton Street
London WC2A 2AE

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 Blog Book Articles and Book Chapters Translation  Short Pieces  Review Essays


Political Economy in Public


1999 Money Unmade: Barter and the Fate of Russian Capitalism. Ithaca: Cornell University Press, 228 pp. Table of Contents (pdf) - Preface (pdf) - Review by The Economist - Paperback at Amazon.com - Hardcover at Amazon.com  

Articles and Book Chapters

2016. "Governing by Panic: The Politics of the Eurozone Crisis," Politics & Society 44 (1): 81-116. (Open access version.)

ABSTRACT: The Eurozone’s reaction to the economic crisis beginning in late 2008 involved both efforts to mitigate the arbitrarily destructive effects of markets and vigorous pursuit of policies aimed at austerity and deflation. To explain this paradoxical outcome, this paper builds on Karl Polanyi’s account of how politics reached a similar deadlock in the 1930s. Polanyi argued that democratic impulses pushed for the protective response to malfunctioning markets. However, under the gold standard the prospect of currency panic afforded great political influence to bankers, who used it to push for austerity, deflationary policies, and the political marginalization of labor. Only with the achievement of this last would bankers and their political allies countenance surrendering the gold standard.

The paper reconstructs Polanyi’s theory of “governing by panic” and uses it to explain the course of the Eurozone policy over three key episodes in the course of 2010-2012. The prospect of panic on sovereign debt markets served as a political weapon capable of limiting a protective response, wielded in this case by the European Central Bank (ECB). Committed to the neoliberal “Brussels-Frankfurt consensus,” the ECB used the threat of staying idle during panic episodes to push policies and institutional changes promoting austerity and deflation. Germany’s Ordoliberalism, and its weight in European affairs, contributed to the credibility of this threat. While in September 2012 the ECB did accept a lender-of-last-resort role for sovereign debt, it did so only after successfully promoting institutional changes that severely complicated any deviation from its preferred policies.

2013 “After Neoliberal Constitutionalism: Financial Crisis and State Resurgence in Russia and Argentina,” in Moments of Truth: The Politics of Financial Crises in Comparative Perspective, Francisco Panizza and George Philip, eds. London, Routledge.

ABSTRACT: In the 1990’s, both Argentina and Russia were significant and closely watched exemplars of the international turn to neoliberal economic policy. The devastating financial crises they eventually suffered rocked international financial markets and appeared to portend further disasters ahead. What ensued was rather different however: a substantial and surprising restoration of the power and discretion of the national state. This chapter argues that the sudden resurgence of state capacity reflected the artificial character of state weakness in the 1990s, resulting from neoliberal efforts to ‘lock-in’ commitments to particular policies. These policies were pursued to the point that they simply became institutionally unsustainable: their continuation undermined the two states’ governance capacity, and their abandonment restored it.

2013 “Monetary Surrogates and Money’s Dual Nature,” in Financial Crises and the Nature of Capitalist Money: Mutual Developments from the Work of Geoffrey Ingham, Jocelyn Pixley and G.C. Harcourt, eds. Houndmills, Palgrave Macmillan, 101-23.

ABSTRACT: This chapter investigates the emergence and evolution of "monetary surrogates:" alternatives to official money that are nevertheless denominated in the same units and offered in payments of debts contracted in the official currency. Surrogates shed light on how money combines two its classical functions: as medium of exchange and means of payment. The chapter argues that money serves as medium of exchange and means of payment in very different sociological and institutional contexts, and this is what makes possible the emergence of monetary surrogates. Understanding these contexts helps explain how monetary surrogates emerge and evolve, and in particular their limited capacity to become broadly accepted media of exchange. By investigating the fragmentation of monetary space, ordinarily unseen background conditions that allow money to pass seamlessly from serving one role to another are revealed. I conclude by discussing how a failure to understand the dualistic institutional bases of money can contribute to analysis of inflation phobia and moral absolutism regarding economic policy.

2013. "Law's Authorizations and Rule of Law Ideals: Lessons From Russia," Georgia Journal of International and Comparative Law. 41 (1): 157-185.

ABSTRACT: It is widely accepted that core rule of law ideals require that the legal consequences of various acts be predictable both in terms of statutes and their administration, and that these consequences pertain to agents of the state no less than other actors. Debates over the rule of law and development have generated little clarity over how to pursue these ideals, however. This article argues that it is crucial to recognize that the laws that govern a capitalist order not only forbid some acts and require others, but also authorize a multitude of individuals and organizations, both inside and outside the state, to create legally significant facts at their own discretion. Creditors, for instance, may accept repayment and cancel the existence of debt; similarly, owners can transfer ownership. The set of legally significant facts created at actors’ discretion, I argue, affects the practicality of rule of law ideals. These ideals are attainable only insofar as law does not grant authority to some actors that allows them to affect legal rights of other actors in unpredictable ways. The common emphasis on institutions that implement and enforce laws obscures this vital role of authorized discretion, and weakens the effectiveness of efforts to promote the rule of law. Empirical cases from contemporary Russia illustrate these theses.

2009 “The Politburo on Gold, Money, and the International Economy, 1925-1926,” in The Lost Politburo Transcripts, Paul R. Gregory and Norman Naimark, eds. New Haven: Yale University Press.

ABSTRACT: Based on newly available Politburo transcripts, this essay analyzes Bolshevik policy on inflation, the gold standard, and international trade in 1925-1926. During this period, an ambitious push for industrial expansion required imports, while rising procurement prices for grain complicated exports. The result was a severe shortage of gold, which became the focal issue of the Politburo's debates on economic policymaking. Although the gold crisis was addressed through macroeconomic restriction, in the advocacy of which several Politburo members displayed sophisticated economic reasoning, it also gave rise to a number of microeconomic restrictions that foreshadow the policies that ended NEP later in the decade. Thus, the Politburo debates underscore the extreme fragility of the NEP model as early as 1925-1926.

2006. "Understanding Rules and Institutions: Possibilities and Limits of Game Theory," Qualitative Methods. 4 (1): 13-17.

ABSTRACT: Examines whether the modelling of institutions as equilibrium strategies in a repeated game is effective, arguing that it can be, but only in those circumstances in which local context is unimportant. Discusses the analytic dangers that arise when susceptibility of institutions to compact game-theoretic modelling is assumed when incentives are in fact contextual.

2006. "Нестабиьность частной собственности в России: экономические и политические причины." [The Instability of Private Property in Russia: Economic and Political Causes.] Русские чтения: Выпуск 1 (Москва, Группа Эксперт): 206-219.

ABSTRACT: Argues that the instability of property rights in Russia is not a result of bad laws or a corrupt legal system, but rather of powerful contextual incentives encouraging efforts to seize property. Such incentives arose initially from the design of privatization, and later from radical volatility in the price environment. Solutions to the problem must take these incentives into account; sloganeering about the "rule of law" does more to obscure than help in this regard.


2005. "Commerce and Demolition in Tsarist and Soviet Russia: Lessons for Theories of Trade Politics and the Philosophy of Social Science," Review of International Political Economy 12 (2):199-225.

ABSTRACT: Leaders of commodity-exporting states will sometimes push exports even when world prices are declining, if export receipts allow access to international capital markets. This article demonstrates that such state-mediated ties between commodity and capital markets shaped the politics of foreign trade in tsarist, and then Soviet, Russia. It also refutes an alternate, group-centered explanation of the same historical cases proposed in Rogowski’s Commerce and Coalitions, pointing out serious empirical errors and oversights. These empirical problems have methodological implications. Searching for universal “laws,” rather than sometimes relevant “mechanisms,” limits the consideration of counterhypotheses to those that apply to a whole universe of cases, rather than a subset of them. Because such counterhypotheses serve to determine which data are relevant, their exclusion weakens the empirical tests to which proposed laws are subjected. Thus, the ambition for generality may cause scholars to become inadvertently too generous to the theories they seek to test.

2005 "Boom, Gloom, Doom: Balance Sheets, Monetary Fragmentation, and Financial Crisis in Argentina and Russia," Politics & Society 33 (4): 3-47. Franklin L. Burdette/Pi Sigma Alpha Award for the best paper presented at the 2003 Annual Conference of the American Political Science Association (joint winner).

ABSTRACT: In the 1990s, Russia and Argentina both tied their currencies to the dollar to combat inflation. They later devalued under pressure, but only after an extremely costly delay, and only after an explosive spread of monetary surrogates substituting for official currency. This article explains these puzzling developments using an institutional-sociological approach to money, which relates exchange-rate preferences to financial context ("balance sheets") rather than sectoral position, as is common. It proposes a "lock-in" mechanism explaining delayed devaluation in both cases, as well as Argentina 's greater delay, and explores the linkages between exchange-rate policy and the origins of monetary surrogates.

2004 "Property Rights in Context: Privatization’s Legacy for Corporate Legality in Poland and Russia," Studies in Comparative International Development 38 (4): 82-108.

ABSTRACT: In the first decade after the collapse of Communism, Russia became notorious for conflicts around corporate property and corporate governance. In Poland, such conflicts were far less frequent. This distinction, I argue, reflects the form of privatization in each country. In Poland, negotiation among potential shareholders and current enterprise stakeholders preceded privatization, whereas in Russia privatization procedures pitted these same groups against one another. The legacy of privatization in Russia expressed itself in long-running legal conflicts over the security of property rights. These developments highlight the importance of situational incentives to challenge or respect property rights, undermining various new-institutionalist arguments that link security of property rights primarily to the commitment and capacity of state bodies to enforce them, to the normative legitimacy of the law, or to coordination equilibria in a game-theoretic framework. The argument also enables a clarification of the political trajectory now leading to stronger corporate property rights in Russia.

2002 "Monnaie, Troc et Place de Gazprom dans l'Économie Russe," in La Transition Monétaire Russe: Avatars de la Monnaie, Crises de la Finance (1990-2000), Sophie Brana, Mathilde Mesnard and Yves Zlotowski, eds. Paris: Editions l'Harmattan, 83-101. Translation of "It's Value that's Virtual," 1999.

2000 "Rules for Followers: Institutional Theory and the New Politics of Economic Backwardness in Russia," Politics & Society 28 (4): 437-482.

ABSTRACT: Investigates contemporary Russia’s real, but shallow success in implementing two borrowed capitalist institutions—a monetary system and the joint-stock company. Even though money and shares of stock in Russia are exchanged in voluntary transactions, they fail to play the legal roles ordinarily expected of them, resulting in weak corporate governance and nonmonetary (barter) exchange. Via a criticism of game-theoretic approaches to institutions in the New Institutional Economics, argues that the roots of this shallow marketization lie in the distinct social foundations of the transactional and legal roles of money and corporate stock. Arguments drawn from sociological institutionalism then illuminate why Russia displays this limited isomorphism to authoritative international models of market institutions. The article concludes by discussing implications for a third body of institutional theory, historical institutionalism, and the possible broader relevance of the pattern of shallow marketization in contemporary relatively backward countries.

1999 "It's Value that's Virtual: Bartles, Rubles, and the Place of Gazprom in the Russian Economy," Post-Soviet Affairs 15 (2): 130-148.

ABSTRACT: Criticises the "virtual economy" model pioneered by Clifford Gaddy and Barry Ickes, demonstrating that their key assumption of value subtraction is algebraically unnecessary to their conclusions. Argues that Gaddy and Ickes overstate the extent to which Gazprom meaningfully subsidizes domestic consumers, suggesting that the company instead has pursued a policy of "reverse dumping," in which it charges domestic consumers less than foreign ones as a form of revenue-maximizing price discrimination. However, price rigidities that complicate this policy mean that domestic-market sales regularly take place in nonmonetary form.

1999 "Barter of the Bankrupt: The Politics of Demonetization in Russia's Federal State," in Uncertain Transition: Ethnographies of Change in the Postsocialist World, Michael Burawoy and Katherine Verdery, eds. Lanham: Rowman & Littlefield Publishers, 83-124

1998 "Why Market Liberalism and the Ruble's Value are Sinking Together," East European Constitutional Review 7 (4): 73-76.

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2016 Bockman, Johanna, Fischer, Ariane and Woodruff, David. "'Socialist Accounting' by Karl Polanyi: with preface 'Socialism and the Embedded Economy,'" Theory and Society 45 (5): 385-427.

Short Pieces

2014 "The ECB should focus on the threat of deflation rather than maintaining austerity." European Politics and Policy Blog, LSE

2014 "Draghi needs to realize ECB's gas pedal is already on the floor." CNN.com

2007 "The Expansion of State Ownership in Russia: Cause for Concern?Development & Transition no. 7, July, 11-13.

2003 Khodorkovsky's Gamble: From Business to Politics in the YUKOS Conflict, PONARS Policy Memo No. 308, November.

2002 The End of 'Primitive Capitalist Accumulation'? The New Bankruptcy Law and the Political Assertiveness of Russian Big Business, PONARS Policy Memo No. 274, November.

2001 Pension Reform in Russia: From the Politics of Implementation to the Politics of Lawmaking?, PONARS Policy Memo No. 234, December.

2000 Too Much of a Good Thing? High Oil Prices and Russian Monetary Policy, PONARS Policy Memo No. 175, November.

1999 Dilemmas and Tradeoffs in Russian Exchange Rate Policy, PONARS Policy Memo No. 90, October.

1998 The Russian Barter Debate: Implications for Western Policy, PONARS Policy Memo No. 38, November.

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Review Essays

2009 "The Economist's Burden," New Left Review (55): 143-152.  Reviews Anders Åslund, How Capitalism Was Built: The Transformation of Central and Eastern Europe, Russia and Central Asia, Cambridge University Press: Cambridge 2007.

2008 Review of Karen S. Cook, Russell Hardin, and Margaret Levi, Cooperation Without Trust and Michael Taylor, Rationality and the Ideology of Disconnection for Perspectives on Politics

2003 Review of Randall Stone's Lending Credibility for Slavic Review 62 (3): 584-585. (pdf, 443k, pp. 2)

2001 Review of Mancur Olson's Power and Prosperity for East European Constitutional Review 10 (1): 97-103.

2001 Review of Timothy Frye's Brokers and Bureaucrats: Building Market Institutions in Russia for Studies in Comparative International Development 35 (4): 117-119. (pdf. 644k, pp. 3)

1997 "Law and the Postsocialist Market," East European Constitutional Review 6 (4): 99-103. Reviews Sachs and Pistor, eds., The Rule of Law and Economic Reform in Russia (Westview, 1997) and Weimer, ed., The Political Economy of Property Rights: Institutional Change and Credibility in the Reform of Centrally Planned Economies (Cambridge, 1997).

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