IESET.
Policies·ru_war_economy_normalization_2024

Russia 2025-2027 federal budget war-economy normalization

RUS·2024 – 2027·enacted 2024-11-30·United Russia / Putin fifth termcandidate
movesspending level↑sectoral subsidy↑trade openness↓

What the policy did

Federal Law No. 419-FZ on the 2025 federal budget and the 2026-2027 planning period made the post-2022 war-spending regime a multi-year budget baseline rather than a one-year emergency. The budget raised national-defence appropriations to a record level for 2025, kept defence and security near two-fifths of federal spending, and paired those outlays with social and industrial payments tied to the military procurement chain. The package was enacted after Putin began his fifth presidential term and after Andrei Belousov replaced Sergei Shoigu at the Defence Ministry, aligning fiscal policy with a longer war-production horizon.

Policy-content fingerprint — what this policy moved, on which axes

Per invariant 3, reforms are scored by what they did on each channel-separated axis, not by the party that enacted them. This fingerprint is how the policy-match engine finds historical analogues.

intended
↑
spending level
fiscal.spending_level
General government spending as share of GDP, excluding transfers already captured under fiscal.transfer_expansion to avoid double-counting.
increased · strong
higher spending share
The federal budget locked in record defence and security outlays across the 2025-2027 budget window.
↑
sectoral subsidy
fiscal.sectoral_subsidy
Targeted industrial and sectoral subsidies (renewable energy, chip manufacturing, agriculture, green hydrogen, etc).
increased · moderate
expanded sectoral subsidies
Defence-procurement, industrial-capacity, and import-substitution allocations expanded targeted state support to war-linked sectors.
↓
trade openness
regulatory.trade_openness
Trade policy openness — tariffs, non-tariff barriers, FTAs, industrial protection.
decreased · moderate
more protectionist
The fiscal package financed a sanctions-adapted import-substitution and Asia-pivot production model rather than reintegration with G7 markets.

Enacted by

Empirical evidence — linked hypotheses

Explicit links are curated by the author. Inferred links are hypotheses in the library that test the same axes this policy moved — the framework's answer to "what does the data say about a policy like this?".

Canada’s long-run prosperity after the Canada–US Free Trade Agreement (1988) and NAFTA (1994) is more associated with market openness than with national industrial-policy initiatives.
canada_market_liberalisation_vs_state_industry_1988_2024inferred
viaregulatory.trade_opennessfiscal.sectoral_subsidy
INCONCLUSIVE_DATA_PENDING — treatment 'canada_post_1988' has no within-country variation under country fixed effects
run pending
Across a broad panel of countries 1960-2019, higher trade openness predicts faster long-run convergence of real GDP per capita toward the global frontier (the United States) than industrial-policy intensity does.
trade_openness_long_run_income_convergenceinferred
viaregulatory.trade_opennessfiscal.sectoral_subsidy
PARTIAL — coef=+6.729e-18, p=0.00881; effect magnitude effectively zero
partial
In a panel of middle-income countries 1990-2020, export complexity (Hausmann-Hidalgo Economic Complexity Index) rises more following reforms that improve foreign market access and reduce domestic entry barriers than following expansions of subsidy-only industrial policy.
export_complexity_market_access_vs_subsidyinferred
viaregulatory.trade_opennessfiscal.sectoral_subsidy
PARTIAL — coef=+4.68e-14, p=0.393; effect magnitude effectively zero
partial
Estonia adopted among the most radical market-liberalisation packages of any post-Soviet state — flat tax (26% universal rate, 1994), currency board (EEK pegged to DM/EUR, 1992), rapid privatisation, unilateral free trade, and minimal capital controls — and by 2007 had recovered to Soviet-era GDP per capita levels and substantially exceeded them, while Belarusian and Ukrainian peers had not recovered comparably.
estonia_market_reform_post_soviet_growth_1991_2007inferred
viaregulatory.trade_openness
PARTIAL — recovery threshold pass=True (year_recovered=1998, 2007 vs 1991 = 70.53282727739165); Baltic−CIS gap pass=False (gap=5.1509956229348575)
partial
Lula third-term's Nova Indústria Brasil 2024 industrial-policy package, conditioned on export performance and technology-diffusion metrics, produces measurable sectoral capability gains (semiconductors, green hydrogen, health-industrial complex) by 2030 — replicating the East Asian export-discipline conditionality pattern rather than the earlier Latin American import-substitution-industrialisation pattern.
nova_industria_brasil_export_discipline_pattern_effectinferred
viaregulatory.trade_opennessfiscal.sectoral_subsidy
INCONCLUSIVE_DATA_PENDING
run pending
Large welfare states sustain long-run real GDP per capita growth when paired with market flexibility (low product- and labour-market barriers), trade openness, and fiscal discipline (debt-to-GDP below 90%), but not when paired with rigid product and labour markets, in an OECD and rich- country panel 1980-2020.
welfare_state_market_flexibility_complementinferred
viafiscal.spending_levelregulatory.trade_openness
PARTIAL — coef=+3.308e-18, p=0.653; effect magnitude effectively zero
partial
Hong Kong's long-run income convergence to the productivity frontier without classic industrial policy (sectoral targeting, directed credit, national champions, or SOE promotion) matches or exceeds that of developmentalist East Asian comparators after controlling for initial income, human capital, and trade openness.
hong_kong_no_industrial_policy_frontier_comparisoninferred
viaregulatory.trade_opennessfiscal.sectoral_subsidy
REFUTED — coef=-0.06133 (sign opposite claim +), p=7.33e-15
refuted
Industrial policy (sectoral targeting, export subsidies, conditional credit, technology push) succeeds in raising long-run manufacturing productivity and export sophistication when implemented in high-governance states with export discipline (clear performance criteria, sunset clauses, competitive benchmarking), over 30-year windows 1960-2020.
industrial_policy_high_governance_successinferred
viaregulatory.trade_opennessfiscal.sectoral_subsidyfiscal.spending_level
PARTIAL — coef=-0.0009676, p=0.661 (above α=0.1); direction inconclusive
partial

Similar historical policies

Ranked by axis-fingerprint overlap with this policy. Direction match bolded — those are the closest historical analogues. Shape of the match is what drives policy-outcome comparison, not the country or party label.

II Plano Nacional de Desenvolvimento (Brazil, 1974-1979)
BRA·1974
match
2.5
sectoral subsidyspending leveltrade openness
Industrialising industries strategy
DZA·1967
match
2.5
spending levelsectoral subsidytrade openness
CHIPS and Science Act 2022
USA·2022
match
2.4
sectoral subsidytrade opennessspending level
Djibouti Vision 2035 logistics strategy 2014
DJI·2014
match
2.0
spending levelsectoral subsidytrade openness
Repelita III and IV five-year plans (Indonesia 1979-1989)
IDN·1979
match
2.0
sectoral subsidyspending leveltrade openness
Aridor 'correct economics' consumer subsidies 1981-1982
ISR·1981
match
2.0
sectoral subsidytrade opennessspending level
Grand Ethiopian Renaissance Dam launch
ETH·2011
match
1.9
sectoral subsidyspending level
Growth and Transformation Plan I (GTP I)
ETH·2010
match
1.9
sectoral subsidyspending level

References