During the fall of the Soviet Union, Russia applied the golden straight jacket technique to reform its failing economy. The country rushed to make a series of political and economic reforms, including opening Russia to foreign markets, privatizing state-owned organizations, and encouraging free markets (Lehmann 17). Foreign experts, most of whom were Americans, recommended the policies known as the Washington Consensus.
The implementation of the policies translated to a shock therapy that led Russia to an economic crisis. In fact, those years are remembered as Russian most consequential and darkest times in the history of the country, and they still affect the political and economic direction of the state. The shock therapy had put a significant Russian population through extreme poverty and hardship. The country suffered economically as those who were employed by the state, including teachers and military, went for months without being paid (Lehmann 20). The opening of Russia to foreign markets meant the country had to import cheaper goods than the Russian products, worsening the economy.
To ensure the golden straight jacket was implemented, Sachs ensured Russia complied with Washington Consensus policies. The Russian officials thought their country would drastically recover from the economic crisis by agreeing to the shock therapy. They understood that harmonizing to the Washington Consensus would reward them in the free capital and trade in the international foreign markets.
Consequently, the Russian official decided to go along with the shock therapy, which in turn did not work well for the country’s economy as it worsened the nation (Lehmann 21). The shock therapy was supposed to last for a few months, but lasted for years, creating uncertainty, shame, and desperation. Therefore, in economic reforms, it is important to implement policies considering a given country’s economic and political specification.
Lehmann, Jennifer M. Globalization between the Cold War and Neo-Imperialism. Elsevier JAI, 2006.