A new report from PeaceRep and LSE IDEAS highlights the contrasting economic foundations of Russia and Ukraine in the ongoing war, revealing significant vulnerabilities in Russia’s war economy.
Authored by Dr Luke Cooper, the report argues that Ukraine’s resilience and Western-backed stability place it in a stronger negotiating position than is often acknowledged.
Read the new report: https://peacerep.org/publication/russo-ukrainian-war/
New PeaceRep–LSE IDEAS Report: Ukraine’s Economic Strength Challenges Russia’s...
A major new report from PeaceRep and LSE IDEAS, the London School of Economics’ foreign policy think tank, assesses the relative economic strengths and vulnerabilities of both Russia and Ukraine in the ongoing war.
Authored by Dr Luke Cooper, a member of LSE IDEAS’ Conflict and Civicness Research Group, the report was produced for the Peace and Conflict Resolution Evidence Platform (PeaceRep). It argues that focusing on the economic “home front” reveals the potential brittleness and fragility of the Russian war economy.
Ukraine’s economic strengths, supported by Western financial aid—secured until 2027—and unprecedented tax revenue mobilisation, are often understated. The report suggests that, as things stand, Ukraine holds a surprisingly strong negotiating position.
The 60-page report develops this argument in detail, showing that:
- Russia’s war effort is heavily reliant on oil and gas revenues and is experiencing serious fiscal pressure, including a looming credit crunch and the risk of a systemic banking crisis.
- Both countries have adopted “military Keynesian” strategies—using war spending to stimulate their economies—with differing outcomes: Ukraine’s democratic institutions and EU aspirations provide checks on militarised rent-seeking, while Russia’s autocratic centralisation entrenches elite interests and sustains the war.
- As US-Russia talks gain momentum, the report cautions that Ukraine could be side-lined. It calls for peace negotiations to be inclusive and grounded in rights-based principles, including independent human rights monitoring in occupied territories.
- While neither side is positioned for “total victory”, Russia’s internal vulnerabilities could shift its negotiating calculus over the coming year.
“Despite fighting a vastly more powerful adversary, Ukraine’s wartime economy has proven surprisingly resilient. Sustained by the inflow of external aid and the mobilisation of the Ukrainian people, Ukraine’s wartime economy has helped level the playing field. Russia, by contrast, is betting its war effort on volatile oil rents and a fragile financial system that is coming under considerable strain. Even in the face of the Trump administration’s apparent pivot towards the Russian side, Ukraine and its European allies hold more ‘cards’ than many, including President Trump, seem to believe,” said Dr Luke Cooper, Associate Professorial Research Fellow in International Relations and Director of PeaceRep’s Ukraine programme.
Read the full report here: https://peacerep.org/publication/russo-ukrainian-war/
Explore all PeaceRep Ukraine research