In December, Vladimir Putin ended the mystery about his successor. He anointed Deputy Prime Minister Dmitry Medvedev as his preferred candidate for the presidential election scheduled for March 2, when Putin’s term ends. Not surprisingly, candidate Medvedev has pledged to continue Putin’s policies, and suggested that Putin should become prime minister to ensure his continued involvement in ruling Russia.

For most Russians, Medvedev’s commitment to continuity is good, since the vast majority give Putin high marks for restoring the Russian state and jumpstarting its economy. According to the conventional narrative, in the 1990s under Boris Yeltsin, post-Soviet Russia’s ?rst president, the state did not govern, the economy shrank, and the populace suffered. Since 2000, under Putin, order has returned, the economy has ?ourished, and the average Russian’s standard of living is better than ever before. As political freedom has decreased, economic growth has increased. Putin may have rolled back democratic gains, the story goes, but these were necessary sacri?ces on the altar of stability and growth.

This narrative has a powerful simplicity. Medvedev undoubtedly put many minds at ease by indicating that he wants Putin actively involved in ruling Russia for the foreseeable future. And authoritarians elsewhere (as well as those who invest in countries ruled by autocrats) have held up Putin’s popularity and accomplishments as proof that market-friendly autocracy has a bright future.

But this conventional narrative is wrong and based almost entirely on a spurious correlation. The emergence of Russian democracy in the 1990s did indeed coincide with state breakdown and economic decline, but it did not cause either. The transformation of Russia’s command economy into a market economy produced a temporary decline in economic growth similar to every economy in the post-communist region. Some countries such as Poland recovered faster than Russia, but those fastest democratizers were also the ones that introduced economic reforms most rapidly and then recovered the quickest. At times, Russia’s troubled transition from communism to democracy exacerbated economic problems, but these would have occurred in Russia after the collapse of the Soviet command economy, regardless of whether under democracy or dictatorship.

The reemergence of Russian autocracy under Putin has coincided with tremendous economic growth, but it has not caused that growth. If anything, Putin’s autocratic turn has reduced the gains that would have been seen had democracy survived.

Few question that Russia’s political system is now more autocratic than it was in the previous decade. Putin has tamed or seized control of independent media with a national reach, focusing especially on national television networks. His reforms for constituting the Federal Council – Russia’s closest equivalent to the U.S. Senate – have made this once powerful political actor a rubber stamp for Kremlin actions. The same is true for Russia’s lower house, the State Duma, now dominated by Putin’s United Russia and other parties loyal to the Kremlin. Putin has also dramatically reduced regional governments’ autonomy, first by establishing seven supra-regional districts headed primarily by former generals and K.G.B. officers to reign in local government officials. Then in September 2004, he abolished direct elections for governors and instead made these regional executives Kremlin appointees. Putin even decided that non-governmental organizations could pose a threat to his power, so he promulgated a law that provides the state numerous means to harass, weaken, and even close down organizations considered too political.

Defenders of Putin’s autocratic ways claim that economic growth has been autocracy’s outcome – a trade-off most Russians are willing to take. However, the causal relationship between increasing autocracy and economic growth is difficult if not impossible to trace.

Economic growth has averaged an impressive 6.7 percent during Putin’s tenure. The last eight years have seen budget surpluses, the eradication of foreign debt, the accumulation of massive hard-currency reserves, and modest in?ation (at least until this year). Since 2000, disposable income has increased by over 10 percent a year, consumer spending has skyrocketed, unemployment fell to 6 percent in 2006, from 12 in 1999, and according to one measure, poverty declined to 14 percent in 2006, from 41 in 1999. Russians are richer today than ever before.

But it is crucial to compare Russia’s economic recovery with the rest of the post-communist world. Rapid and deep economic decline followed communism’s collapse in every country throughout the region. Given the dire conditions they started with, every post-communist government (including Russia’s) was compelled to pursue some degree of price and trade liberalization, macroeconomic stabilization, and eventually, privatization. During this transition, the entire region experienced economic recession and then began to recover several years after the adoption of reforms. Russia’s economy followed this same general trajectory – and would have under dictatorship or democracy. Russia’s real economic turnaround came after a financial meltdown in August 1998, which finally forced the government to pursue prudent fiscal policies and a more rational exchange rate policy, including a major devaluation. As a result of these painful but necessary reforms (ironically, carried out by a left-of-center government headed by Evgeny Primakov), Russia’s economy finally began to grow a year before Putin came to power.

As president, Putin did implement important tax reforms, including a 13 percent flat income tax, a reduced corporate tax, and a stabilization fund to insure that windfall revenues from oil and gas exports would not trigger increased government spending and inflation. But Putin’s real impact on Russian economic growth was simply being in the right place at the right time. Putin especially benefited from rising world oil and gas prices, which began to soar the year he became prime minister. Of course, increasing authoritarianism inside Russia did not cause these rising energy prices. The causality may well run in the opposite direction: increased energy revenues have underwritten the return to autocracy.

If there is any causal relationship between authoritarianism and economic growth in Russia, then it is negative. Russia’s more autocratic system in the last several years has produced more corruption and less-secure property rights. Asset transfers have transformed a thriving private energy sector into one that is effectively state-dominated and less efficient. Re-nationalization has destroyed value in Russia’s most pro?table companies, and slowed both foreign and domestic investment.

Perhaps the most telling evidence that Putin’s autocracy has hurt rather than helped Russia’s economy is provided by regional comparisons. Between 1999 and 2006, in terms of average growth, Russia ranked 9th of the 15 post-Soviet countries. Similarly, investment in Russia (at 18 percent of G.D.P.), although stronger than ever before, is well below the average for democracies in the region, like Poland and Estonia.

Comparing Russia with Ukraine underscores the autocracy fallacy. Russia and Ukraine share hundreds of years of culture and history, and both endured the hardships of the 1990s. But there are two big differences between them today: Russia has oil and gas, and Ukraine does not; Russia is an autocracy, Ukraine is not. Yet democratic Ukraine has managed annual growth rates higher than autocratic Russia’s, despite having to pay dearly for higher energy prices rather than reaping their profits. So why was the erosion of democracy necessary for economic growth? How did taking control of Russia’s independent TV stations help to balance the budget? How did arresting Garry Kasparov last December foster investment?

One can only wonder how much faster Russia would have grown with a more democratic system. Strengthening the institutions of accountability – a real opposition party, a genuinely independent media, a court system not beholden to Kremlin control – would have helped to tame corruption and secure property rights, thereby encouraging more investment and growth.

To sustain growth and rebuild the Russian state over the long haul, Medvedev needs to be selective about which Putin-era policies he continues and which he changes. Above all, he must move past Putin’s autocratic legacy rather than emulate it.

Michael McFaul is a Hoover Fellow, a professor of political science, and director of the Center on Democracy, Development, and the Rule of Law (CDDRL) at Stanford University. Kathryn Stoner-Weiss is a senior research scholar and associate director at CDDRL. This article is based on a longer essay in the January/February 2008 issue of Foreign Affairs.