Having scanned through Eurostat and other database at places like the World Bank and the IMF I was consistently struck by how poorly the new EU members in Eastern Europe had fared since 2007. Indeed it seems surprising and counter-intuitive, perhaps even bizarre, but many of these countries have actually performed significantly worse than Russia since the onset of the global financial crisis.

As I have made clear in past posts (and re-iterate here just so I’m not misunderstood) this is not because Russia has been an economic dynamo. In fact, Russia’s post-crisis growth has been noticeably slower than its pre-crisis growth and the Kremlin itself has repeatedly and publicly stated that it needs to increase the annual rate of growth by at least 1-2% in order to safeguard political stability and meet the expectations of ordinary Russian citizens. However, as you can see in the following chart, while Russia has not outperformed every country in Central and Eastern Europe, it has done better than quite a few of them. Let’s take a look at data on real GDP, which comes via the IMF*:

Next, let’s take a quick look at unemployment, which comes via Eurostat  and Rosstat (2011 figures here). Is Rosstat’s methodology somewhat less exacting than Eurostat’s? Yes, almost certainly. But a few quick notes. One, I used Rosstat’s overall estimation of unemployment not the (notoriously unreliable) figure of people actively claiming unemployment benefits. Two, the magnitude of the difference between Russia’s figure and the figures of other Eastern European countries seems large enough to not be a purely statistical artifact. Three, from everything I can gather (including the fact that Russia has continued to attract labor migrants from former Soviet republics at a healthy clip) Russia’s employment situation has, after a brief and very serious weakening in 2008-09, held up reasonably well. It is true that the public is more dissatisfied with the Kremlin, but this has not been focused on employment but on issues related to elections, the police, and the courts.

Lastly, let’s take a look at industrial production from Eurostat and (via FRED) the OECD. I wanted to look at a longer time horizon here partly because the data was easily available, and also because the story it tells is an interesting one.

Here Russia appears to be…well, kind of boring. It’s neither a laggard nor a leader, it’s just solidly in the middle of the pack. Now “middle of the pack” doesn’t sound particularly meaningful, but consider the countries it’s being compared to: these are all either members in good standing of the European Union or (in Croatia’s case) a country that will soon join it. In short these are countries that have made substantial progress on economic and political liberalization, progress that is well beyond what Russia is going make in any plausible scenario. Russia, meanwhile, has been politically stagnant and even regressive during the same time frame. Can anyone look at that chart and see the penalty Russia has paid for moving in an anti-democratic direction? I certainly can’t.

Indeed what’s worrying is that several of these countries haven’t seen much meaningful growth since they joined the EU: what was supposed to be a sustained economic bonanza has instead turned into protracted stagnation. This is exceptionally dangerous. As Russia’s own experience demonstrates, if people associate “democracy” with “economic misery” there  is a very real chance that democracy itself will become delegitimized. Is this an immediate risk? Well with the possible exception of Hungary, no: democratic institutions in the region have, thankfully, been quite robust. So far. However, the consensus forecasts for the Eurozone periphery over the next few years are dire indeed: austerity, slow growth, tax raises, pension cuts, and general economic unpleasantness. In that situation, I would expect there to eventually be serious erosion of democratic institutions and norms something that would, of course, be a catastrophe for the region’s inhabitants.

Forbes