What is at stake in Crimea?

Yuriy Gorodnichenko, Gérard Roland 10 March 2014







Crimea: A first step



Putin’s actions are dangerous and risky, but the calculation on his part was cold-blooded and clear minded. There were three key elements to his logic.

  • First, an occupation of Crimea and other parts of Ukraine would be greeted as liberation from a coup in Kiev.
  • Second, Europe and the rest of the civilised world would be divided and unable to present a united front against the aggression.



So far, his calculations have not proved right.

Ukrainians are united in their opposition to the invasion. It is clear to most that the February revolution was not a coup but the result of a mobilisation of the Ukrainian people to establish true democracy in their country. While the Russian propaganda may have been effective in the beginning, few outside Russia are falling for Putin’s claims now. The US, Canada, U.K., the rest of Europe and most of the planet’s governments have expressed their disgust with the invasion.


Unilateral nuclear disarmament in question

In 1994, Ukraine voluntarily gave up the 3rd largest arsenal of nuclear weapons. No other country has done it. Ukraine’s act of good will was heralded as a major success of efforts to limit proliferation of nuclear weapons in the world. In exchange, Russia, the US and the U.K.— and later France and China —guaranteed the sovereignty and territorial integrity of Ukraine. Now one of the guarantor countries — Russia — is invading Ukraine and other guarantor countries appear unable to stop the aggression.

In light of this, how can one credibly guarantee the sovereignty and integrity of countries protected by non-proliferation and military treaties? How will other countries under the umbrella of various US security agreements—such as Japan, South Korea or NATO nations— perceive this inability of the US to live up to its guarantees? The most likely response of potentially threatened countries will be to rearm, thereby potentially starting an arms race.

Many countries – including Ukraine – have the technical capacity to rapidly develop nuclear weapons, as well as other weapons of mass destruction and the means to deliver them. A more militarised world, along with increased uncertainty about the willingness and ability of the US and its allies to enforce security guarantees, will raise the frequency of armed regional conflicts, as well as the associated probability of inadvertent global war. The invasion of Crimea may thus trigger a chain of events that threaten world peace.

The way forward

Given Putin’s goal of destabilising the new government in Ukraine, the best one can do to counter the Russian strategy is to help make the Ukrainian revolution a success. This implies several policy steps.

  • First, one must help the new government and the reform process in Ukraine.

Economic aid and technical expertise to help Ukraine reform its governance and find the road to macroeconomic equilibrium and a solid growth path are more important than ever, after the invasion of Crimea. Signing the association agreement with the EU as soon as possible is another critical step in this direction.

A constitutional change to achieve political and economic decentralisation has become urgent and would strongly improve governance of the country. An initiative in this sense started by 2007 economics Nobel prize Roger Myerson, is crucial here (https://sites.google.com/site/tmylovanov/ukraine-decentralization-initiative).

  • Second, the international community should use all means to stop the Russian aggression.




Concluding remarks




Topics:  Europe's nations and regions

Tags:  Putin, Ukraine, Crimea


E. Morris Cox Professor of Economics and Professor of Political Science, University of California, Berkeley; NBER and CEPR Research Fellow


CEPR Policy Research