I've been quiet for the last few days, because there have been no momentous events that seemed to warrant comment. Putin and Medvedev both seem to be focussed on housekeeping affairs like the budget and the banking system. The holiday period is over, and September is normally a key time for approving the next year's budget before it's sent to the Duma, so that it can get three readings in the Duma before year end. The Duma are apparently complaining that they have less time this year, which presumably reflects the fact that the government has spent a lot more time arguing over how much money there is to spend, and how it will be spent.

Revenues are unpredictable next year, because commodity prices are unpredictable. Kudrin is no doubt hawkish on revenues, and on borrowing. This was played out in a public meeting, where Putin asked Kudrin about the IMF, and how much Russia could borrow, and Putin forced Kudrin to say publicly that they did not need to borrow from the Fund. Apparently Kudrin has been suggesting that it might be a good idea to borrow from the Fund, because it's a cheaper source of borrowing. Putin is against it, because the Fund has heavy conditionality in terms of fiscal policy, and he no doubt thinks that it's humiliating to have US agents (in his mind) telling the Ministry of Finance and Central Bank of Russia what to do.

In general, though, one of the few unquestionably good things that Putin has done for Russia is to instil a hard budget constraint on the government. He hated the lack of freedom that Russia's debt imposed on him when he first became Prime Minister. So Russia was quick to repay its debts, when the oil price allowed it, and he has presided over the building of reserves that have protected Russia during the credit crunch of 2008. The flipside to this is that he can be relied upon to be more hawkish on government spending than most authoritarian leaders tend to be. Given that it's his natural allies in the army, security services, and military industrial complex who are the ones calling for more spending, this means that the political environment favours a rational budget policy, which by and large is good news for Russia.

In general, over the last couple of years, the pragmatic view has tended to win out in the economic debates. The government could have handled the rouble slide a lot worse last year, given that they had to stop it crashing so as to avoid the population panicking, while preserving reserves. Some commentators still claim that Russia spent all its reserves defending the roubles, while in fact they only spent the reserves that they had accumulated in preventing the rouble from strengthening too much when oil was high. There is a point when reserves get too big, as the Chinese have discovered. Yes, there is a lot wrong with Russia's government, but its fiscal policy is not too bad.

What does this mean for the future of Russia? Well, hopefully the current crisis will serve as an example to future leaders, and Russia will continue to accumulate reserves when times are good, and spend them when times are bad, using them as stabilisers. The likelihood is that future leaders won't be as tough on spending as Putin, and eventually the reserves will be spent, and Russia will have a good old-fashioned emerging markets budget crisis, run on the banks, devaluation, etc, which is normally a catalyst to clean out the government, as in many Latin American countries. An alternative scenario is for Russia to be like a Gulf State, but this would require the ruling families to occasionally lend money to the State, and I'm not sure that this would be an option.