Climate Smart Political Economy: Climate Risks and Post-Soviet Rural Recoveries

• In Event: Green Politics around the World

Abstract

Institutional economics conceptualizes expectations about future gains and risks as a function of the institutional context of economic exchange. The explicit or implicit argument is that a country’s institutions are singularly potent in sheltering and ensuring economic agency’s future profitability, while failing institutions leave actors exposed to risks. Today, however, it is becoming ever more apparent that climate and environmental risks shape economic expectations in very fundamental ways, in both strong and weak institutional contexts. While the political economy of the climate crisis has theorized how winners and losers of climate adaptation have shaped global governance, debates in comparative political economy are only just beginning to rethink domestic institutions in light of these new realities.

This paper examines economic strategies by agricultural producers in the post-Soviet region to develop a suggestion how to integrate climate risks into comparative political economy. Ukraine, Russia and Kazakhstan are among the worlds’ largest grain producers and exporters. Farmers in these countries share institutional histories and work the soil of the region’s rich black earth belt. Until 1991, the Soviet planned economy had provided very significant level of risk insurance for farms, especially in the seventies and eighties. Drought risks were forestalled with irrigation, state-run railroads transported grain below costs, and massive amounts of agrochemicals helped ward off natural predators, to mention just some of the most obvious landscape interventions by the Soviet state.

As independent countries, Ukraine, Russia and Kazakhstan have undergone very different trajectories over the last thirty years. Drawing on a novel dataset of contemporary and historical rainfall, the paper demonstrates that we cannot understand these differences unless we closely examine risks and costs related to the varied climate and geographies of the grain growing regions in these three countries. Climate risks deserve more attention in comparative political economy as powerful forces shaping the domestic distribution of costs and benefits, and therefore expectations and market decisions.

The analytical strategy to look more closely at agricultural producers is deliberate; farmers are notoriously exposed to both local environmental conditions and to powerful global market forces. Agriculture is a kind of model sector that reveals how climate and ecological contexts matter. The focus on post-Soviet region is also not accidental. With the collapse of the Soviet planned economy, the region experienced an abrupt withdrawal of the state from agricultural production in the nineties, allowing us to observe the effects of a kind of institutional facility and collapse, along with an opportunity to study different trajectories of institution re-building and marketization strategies that happen in a relatively short, and therefore more easily observed, time frame.

Author

• Susanne A. Wengle, University of Notre Dame