Russo-Ukrainian war: the political economy of the present balance of forces

This paper examines the evolving political economy of the Russo-Ukrainian War, arguing that despite its asymmetric nature, the conflict has become more balanced due to Ukraine’s institutional resilience and consistent financial support from allies. Neither side currently has a viable path to total victory. Both economies have adopted forms of military Keynesianism, though in distinct ways shaped by regime type and external dependencies: Ukraine on allied funding, Russia on volatile oil rents. Ukraine has secured financing until 2027 and maintained monetary stability, while Russia faces growing economic risks, including a potential credit crunch and balance of payments crisis. War has reshaped both states’ capacity for autonomous organisation, central to mobilising resources and restructuring their economies. As global geopolitics fragment and protectionism rises, the prospects for peace are increasingly defined by economic pressures and shifting alliances. A ceasefire, if reached, is likely to be unstable, with Russia potentially maintaining a militarised economy. Ukraine, meanwhile, has shifted its focus from military breakthroughs to securing long-term security guarantees. The outcome of negotiations will hinge not only on military dynamics but also on the internal strains shaping each regime’s strategic calculus.