Putin is not the winner in the Ukraine crisis

A couple of weeks ago, a New Republic article used a piece of behavioral economics, known as prospect theory, to interpret recent events in Ukraine:

Rose McDermott, a Brown University professor and author of Risk-Taking in International Politics, says that when applied to international relations, prospect theory is more than a simple choice between a loss and a win; it’s a struggle to maintain the status quo. “People are so averse to loss that they will really take a lot of risks to come back to the status quo—meaning things as they’ve been previously, but it can also relate to all kinds of things,” says McDermott. “It can relate to your level of aspiration where you think things should be, given some kind of social comparison like where somebody else is, or some kind of historical precedence of where you think it should be.”

 

In political scenarios, the status quo is interpreted differently depending on the biases of the people involved. In the paper “Psychology and International Relations Theory,” co-author James Goldgeier writes that this especially becomes a problem when interpretations of the status quo are by those “who are less fixated on the world that is—and prone to give more weight to counterfactual worlds that could or should have been.” Instead of seeing the riskier choice as greedy or self-serving, they instead see it as an attempt to undo losses caused by other nations. …

 

How will Ukraine respond to its loss of Crimea? “You can imagine that people on the other side of the debate also see the secession of the Crimean territory as a loss,” McDermott says. “If you have these decision makers who both see the situation as a loss, they’re more likely to take risks. And when you have two people who are taking risks, you escalate the possibility of conflict.”

The risk of Russia waging war with a neighbor exists and is larger than any time since 2008, but Ukraine is not very likely to be the aggressor and seek conflict. The war may not even involve Ukraine.

The sight of unmarked Russian troops in Crimea was unnerving for the West and psychologically feels like Putin outmaneuvered us. But step back, and you’ll realize that Putin feels like the bigger loser. Putin now owns a strategic port and peninsula that used to be in Ukraine, but he essentially used to own all of Ukraine when Yanukovych was in power there. Crimea is a mere consolation prize for Yanukovych’s coup de grace. The reason we were so caught off guard by Putin is that he felt like he was in danger, and so he felt like taking a risk. (As explained by prospect theory.)

Putin views his interactions with the West (and Ukraine’s pro-West actors, which he views as extensions of the West) as a continuous tug of war. When Yanukovych was toppled the first time in 2004 and replaced by a pro-West coalition, he made life difficult for the government by cutting off natural gas. When Yanukovych was going to sign an agreement with the EU on economic cooperation, Putin countered last year. When protesters appeared, Yanukovych passed an anti-protest law. When the protests intensified and toppled Yanukovych’s government, Putin took Crimea as a face-saving measure.

Putin is not done fighting. He is worse off than he was six months ago, and he sees it as a direct result of American/Western plotting against him. He also sees the Kyiv protests as something that could happen in Moscow if he does not push back, and that’s one reason why he put his most popular critic under house arrest in late February. It is not possible to know what his next move will be, but there are some countries on Russia’s periphery that are not protected by NATO — such as Moldova, Georgia, and Azerbaijan. There may yet be more activity in Ukraine.

The U.S. needs to consider now what its response will be to a range of future problems created by Putin. It must communicate these plans to its allies so that these countries don’t feel a need to “trap” the U.S. into protecting their interests. Lastly, American policymakers should not panic. Putin is on the defensive because he is trying to prop up an unsustainable order. Putin is not in control; he is reacting to events and desperately trying to regain the perception of control. But his resources are limited and his neighbors are more eager for American assistance than they were before. This round is a loss for the former KGB man.