The Soviet currency union outlasted the Soviet political union, but not by much. In December 1991, when the Soviet Union's collapse became official and final, all fifteen states shared a common currency, the ruble, and thus composed the so-called rublevaia zona, or ruble zone. This currency union could have succeeded, at least for a while. Many observers thought that it would. A number of post-Soviet states wanted it to succeed. Russia intended to hold the ruble zone together. Even the IMF and EC encouraged post-Soviet states to maintain their currency union. Yet the ruble zone ultimately fell apart in the autumn of 1993. Why? In this paper I depart from the explanations offered by political scientists and economists, who have focused on realpolitik, institutional design, and the theory of optimum currency areas. I also argue that the question should be reframed: Why did some post-Soviet states exit the currency union almost immediately as part of their strategies for autonomy and security from Russia, while others were content to trade monetary sovereignty and economic autonomy for the material rewards of ruble-zone membership? To understand the decline and fall of the ruble zone it is necessary to explore the divergent monetary strategies of the successor states. Several studies have shown material incentives alone insufficient to account for their behavior. I argue that the national identities of post-Soviet societies led to the variety of their monetary strategies. After showing that an explanation based on national identity can account for the strategies of nearly all post-Soviet states, I illustrate these politics with two case studies of post-Soviet monetary policy-making: Estonia, the first out, and Kazakhstan, one of the last out.
BGIE
54 pages
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