Russia is the world’s largest country by landmass, covering an area of 17 million square kilometres. Canada, the world’s second-largest country, is less than 10 million square kilometres in size. At the beginning of 2022, before the invasion of Ukraine, Moscow, Russia’s capital, was home to more billionaires than any other city on earth. Yet Russians are relatively poor compared with their western and eastern neighbours. The GDP per capita of Russians is only half that of Portugal, one of the poorest countries in Western Europe, and less than a quarter of that of Japan, its easternmost neighbour. Why is it that the average Russian has lagged behind, despite the nation’s apparent opulence?

The answer lies in the country’s economic institutions. By the beginning of the twentieth century Russia was already a poor country relative to its neighbours. It had only abolished serfdom in 1861.