Is Vladimir Putin rational?  This is a question that has emerged from the seizure of Crimea against the expectations of most Russia watchers. Before the annexation cost-benefit analyses were drawn up, such as Mark Galeotti’s which quite convincingly argued that the costs of annexing Crimea outweighed the benefits (a view I shared), and a New York Times article making similar arguments regarding invading Eastern Ukraine. These argue in effect that, as the costs outweighed the benefits, the ‘rational’ decision would be to not go in. And yet Crimea was annexed and it seems unlikely it will return to Ukraine, at least while Putin is in office. So at first glance this makes Putin ‘irrational’ – he went ahead with an action where the costs outweighed the benefits.
But this doesn’t seem right. If the costs really outweighed the benefits then it would not have happened if Putin is rational. What do we mean by rational? Rational behaviour is to do the best that you can to achieve your aims, using all the information available to you (in econ terms maximising some function, utility or social welfare). The problem is we do not know what function Putin is aiming to maximise. We do not know what outcomes he really wants and is working towards, be it personal wealth or glory, or some goals on behalf of Russia, or some combination of different aims with different importance given to each. We essentially do not know enough about what he is attempting to achieve, and over what time period he is trying to do this. This means almost nothing can be ruled out as his best strategy given the circumstances. To rule out strategies, assumptions about his aims (utility function) are needed.
If we assume broad basic aims such as ‘increasing Russia’s regional power’ then again it becomes hard to rule out any action, as this aim is almost by definition long-term. Annexing Crimea could be seen as the best response to a western-facing Ukrainian government by sending out a message to other neighbours about the results of loosening ties with Russia. In the long term, it could be argued, this move will give Russia more influence in the region and so Putin is just trying to achieve his aims rationally. With broad aims almost anything could be presented as helping to achieve them in the long run – it rules almost no behaviour out. The only way to declare Putin ‘irrational’ is to assume that he has very narrow objectives and show he is obviously undermining those. People referred to the budgetary cost of taking on Crimea, the possibility of a low-level insurgency, the loss of influence within Ukraine once Crimea had gone – all valid reasons why Russia may not have acted – but for these to make Putin’s subsequent actions irrational you would have to assume that this was all he cared about, that his aims are entirely small scale; budgetary and security based. If they were then yes Putin is irrational as annexing Crimea will damage the budget and potentially undermine security. But once you allow for the possibility that Putin places some weight on grander things like (for example) Russia’s prestige and influence over the medium term then it is impossible to call him irrational. It doesn’t matter what these grander aims are – the point is if he has any then it is impossible for us to identify irrational behaviour.
The key point is not that people got their predictions on Crimea wrong, the problem is systemic, the point is that it is impossible to predict what even a ‘rational’ Putin would do if you accept his aims might go beyond balancing the budget in 2014-15. Without making implausibly detailed assumptions about Putin’s objectives then almost no action can be ruled out as ‘irrational’ and no action predictable as ‘the rational response’ given how little we can know about his aims and information.
So yes Vladimir Putin is rational but that isn’t the good news that people might think. He may be rational, but he certainly isn’t predictable.
P.S. I am working an a broader and related post ‘Modelling Putin’ – on the models that are used to describe Putin’s behaviour and whether recent Russian actions show that a ‘new Putin’ has emerged. I hope it will be up in the next week or so.
 By ‘Putin’ I am referring to ‘the collective Putin’ as coined (I think) by Brian Whitmore of RFE/RL’s Power Vertical blog. But it is simpler to talk of Putin’s actions as a byword for the actions of the Russian leadership. That’s for another blog post!
 I am not arguing that this is true, but rather that it could be believed to be true by Putin acting with the information available to him.