Resisting the State: Reform and Retrenchment in Post-Soviet Russia

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Resisting the State Reform and Retrenchment in Post-Soviet Russia Why do new democratizing states often find it so difficult to actually govern? Why do they so often fail to provide their beleaguered populations with better access to public goods and services? Even when policy intentions are clearly declared and laws are passed, sometimes they have little effect in practice. Using original and unusual data, this book uses post-communist Russia as a case in examining what the author calls a broader “weak state syndrome” in many developing countries. More specifically, the book looks at how and why the policies of the Russian central state, despite the size and formally pervasive presence of federal bureaucracy, often had little impact in the sprawling Russian provinces. Through interviews with more than 800 Russian bureaucrats in 72 of Russia’s 89 provinces and a fresh set of data on patterns of regional government noncompliance with federal law and policy, the book demonstrates that resistance to Russian central authority was not ethnically based (as others have argued) as much as generated by the will of powerful and wealthy regional political and economic actors seeking to protect assets that they had acquired through Russia’s troubled transition from communism. Kathryn Stoner-Weiss is Associate Director and Senior Research Associate at the Center on Democracy, Development and the Rule of Law, Stanford University. Before coming to Stanford, she taught in the Department of Politics and the Woodrow Wilson School for International and Political Affairs at Princeton University. At Princeton, she was awarded the Ralph O. Glendinning Preceptorship for outstanding faculty. She was also a Fellow at the Davis Center for Russian Studies at Harvard University and the Kennan Institute for Advanced Russian Studies at the Woodrow Wilson Center for Scholars. Stoner-Weiss is the co-editor (with Michael McFaul) of After the Collapse of Communism: Comparative Lessons of Transition (Cambridge, 2004) and the author of Local Heroes: The Political Economy of Russian Regional Governance, in addition to many articles and book chapters on contemporary Russia.

Resisting the State Reform and Retrenchment in Post-Soviet Russia

KATHRYN STONER-WEISS Stanford University

   Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São Paulo Cambridge University Press The Edinburgh Building, Cambridge  , UK Published in the United States of America by Cambridge University Press, New York www.cambridge.org Information on this title: www.cambridge.org/9780521824637 © Kathryn Stoner-Weiss 2006 This publication is in copyright. Subject to statutory exception and to the provision of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press. First published in print format 2006 - -

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For Adam and Abby – love, Mommy

Contents

Acknowledgments Note on Transliteration 1 2 3 4 5 6 7

W(h)ither the Russian State? Apparatchiki into “Entrepreneurchiki”: The Sources of Russia’s Weak Central State Governing Russia: Patterns of Regional Resistance to the Central State Inside the Russian State: Assessing Infrastructural Power in the Provinces Retrenchment over Reform: Obstacles to the Central State in the Periphery Weak National Parties, Weak Central State The Comparative Implications of Russia’s Weak State Syndrome

Index

page ix xi 1 19 44 77 98 111 147 161

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Acknowledgments

Throughout the almost nine years it took to complete this project, I have had the tremendous good fortune of being assisted by many friends and colleagues in Russia, at Princeton University, and at Stanford, where I moved in 2004. There are too many individuals to thank individually, but several deserve special recognition. In Russia, Aleksandr Gasparishvili and Sergei Tumanov were invaluable and tireless co-organizers of the surveys of Russian policy makers that are at the empirical core of the book. Leokadia Drobizheva graciously gave her time and technical help. Emil Pain also assisted in gathering some of the economic data for the project. Too many government officials to count from across the sprawling provinces of Russia contributed their time and knowledge to this book. Back in the United States, my then–graduate students at Princeton, Marc Berenson, Eric McGlinchey and Alex Sokolowski, helped work through the data. My former colleagues then at Princeton, including Jeffrey Herbst, Larry Bartels, Joshua Tucker, Atul Kohli, Sheri Berman, Steve Kotkin, Deborah Yashar, and Kate McNamara, generously read large portions of this book – often more than once – or provided advice on some of the statistical analysis. The finished product is that much better for their efforts. Other colleagues and friends who also read and commented on the book over the past few years include Tim Colton, Steven Solnick, Valerie Bunce, Pauline Jones Luong, Beth Mitchneck, Nikolai Petrov, Tom Remington, Christophe Zuercher, and Yoshiko Herrera. Thanks ix

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Acknowledgments

especially to Michael McFaul at Stanford for reading and commenting on the manuscript at various stages of this project and providing many valuable suggestions for improvement. In finishing the book, I also greatly benefited from the fun but intense work environment at the Freeman Spogli Institute for International Studies at Stanford (under the very able leadership of Chip Blacker) and especially the interaction with my colleagues at the Center on Democracy, Development, and the Rule of Law. This project would not have been possible without the generous support of the Smith Richardson Foundation and the William and Flora Hewlett Foundation. Lewis Bateman oversaw the publication of this book on behalf of Cambridge University Press, and I am indebted to him for the trust he put in me throughout the entire process. Finally, thank you to my wonderful husband, Eric, for your warmth and wonderful sense of humor, for enduring my travels to Russia, and resolving my various tech troubles back home. You never lost faith in me and reminded me, time and time again, not to lose faith in myself either. My children are my inspiration. Their love, curiosity, energy, and sense of fun keep me going. Although my family, many dear friends, and colleagues helped in various ways with this project, I alone bear responsibility for any errors or misinterpretations in what follows.

Note on Transliteration

Throughout this book I follow the Library of Congress Russian– English transliteration system, but with a few exceptions. In cases where proper names are generally transliterated a certain way, I follow the accepted convention rather than strictly applying the Library of Congress system, so I use “Chechnya” rather than “Chechniia,” “Yeltsin” instead of “El’tsin,” “Khodorkovsky” rather than “Khodrokovskii,” and “Zhirinovsky” instead of “Zhirinovskii,” for example. Unless otherwise noted, where they occur, translations from Russian to English are my own.

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Resisting the State Reform and Retrenchment in Post-Soviet Russia

1

The twentieth century was bracketed by two seminal events: the formation of the Soviet Union through the revolution of 1917, and the collapse of the Soviet system in 1991. Far from being the end of history that Karl Marx might have predicted, the withering and then demise of the Soviet state brought with it the rebirth of Russia. In the early 1990s many hoped that the renewed Russian state would succeed where its Soviet predecessor had ultimately failed – in the provision of public goods and services to an exhausted and impoverished population. After more than a decade of incomplete reform, however, few Russians had attained the benefits of their nation’s most recent great transformation. Indeed, the central state’s halting abilities to extract revenues, enforce contracts, pay public sector wages on time, provide meaningful poverty relief or even basic social services defined the immediate post-Soviet transition effort. This book identifies the Russian state’s inability to extend its authority across the vast Eurasian landmass as the primary problem of post-communist governance. Indeed, the task became so challenging that Russia’s second post-communist president, Vladimir Putin, using the tragic deaths of hundreds of schoolchildren and their parents at the hands of Chechen insurgents in the southern town of Beslan, opted by the fall of 2004 to abandon even the pretense of democracy in Russia’s provinces in favor of more centralized control. Historically, governing Russia has always been a challenge. Anyone who has traveled by air or rail from Moscow to Vladivostok cannot 1

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help but be awestruck by the sheer expanse of the country. The Russian Federation, in geographic terms the largest nation-state on the planet, spans 11 time zones, comprises 89 provinces, and contains within its borders more than 128 distinct indigenous ethnic groups. The challenge of governing Russia was further complicated by the collapse of the Soviet Union, the protracted economic crisis that ensued, and the crucial new opportunities to redefine relationships within the state itself and between the state and emergent sectors of society. Undeniably such a redefinition occurred. But the rhetorical triumph of democracy and markets has failed to translate into universally positive developmental outcomes. Lasting reform has been more halting and measured than expected in the heady days that followed the lowering of the Hammer and Sickle and the raising of the Russian tricolor flag over the Kremlin on December 25, 1991. Despite the political rights and freedoms that Mikhail Gorbachev extended in the late 1980s, consolidated by Boris Yeltsin in the early 1990s, and later largely abandoned by Yeltsin’s successor, Vladimir Putin, Russian citizens remain, in Putin’s own words, “poor people living in a rich country.”1 In 1999, the first year following the Soviet collapse that registered positive economic growth, Russia’s gross national product was still roughly only 5 percent of the United States’ GNP.2 After three years of steady growth, in 2002 Russia regained its dismal economic footing from the early 1990s,3 but by Putin’s own admission, Russia will require 20 years of annual growth of 5 percent gross domestic product or better to approach the GDP per capita level of Portugal.4 Russia’s bumpy economic transition also has exacted a clear social toll. The country experienced negative population growth of 1 2

3 4

Vladimir Putin inaugural speech, May 6, 2000, Radio Free Europe/Radio Liberty online edition. Thomas E. Graham Jr., “Putin’s Russia: Why Economic Reform Requires Political Support – Reflections on US Policy Toward Russia,” East European Constitutional Review (Winter/Spring 2000). Graham’s data on GNP come from the World Bank’s Development Indicators, update July 1, 1999, and A. Illarionov, ed., Rossiia v meniaiushchemsia mire (Moscow: Institute of Economic Analysis, 1997). See for example, “Best Year in Decade Brings Russia Back to 1994 Levels,” Radio Free Europe/Radio Liberty Newsline, Vol. 5, no. 42, March 1, 2001. Putin, inaugural address, May 6, 2000.

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0.5 percent that persisted following the collapse of the Soviet Union.5 More than a decade into Russia’s transition, the Russian State Committee on Statistics reported that 33 percent of the population lived below the official subsistence minimum level of $55 per capita per month.6 The 2002 United Nations Human Development Index – evaluating countries on an index of measures including average literacy rates, gross domestic products, infant mortality, and adult life expectancy – ranked Russia just below Cuba, for example, and considerably below other post-communist development success stories like Poland and Hungary.7 Russia’s rocky reform experience is far from unique in many respects, although perhaps distinctive in others. Post-Soviet Russia is a striking example of a weak state syndrome in the developing world and now a good part of the formerly communist region. Despite even the best of intentions, new states frequently turn out to be incapable of positively changing the lives of the people they are supposed to govern. Indeed, new ineffective states often make life worse for all but a select few.8 Why does this happen? How do fledgling democracies ensure adequate governance, and why do they so often fail to do so? What are the consequences of this weak state syndrome for democracy and development in countries undergoing massive economic and political transitions? Finally, what contributions might the case of post-Soviet Russia make to our understanding of state development and the problem of governance in developing states? This study demonstrates that, following the collapse of the Soviet Union and the introduction of sweeping reform, the new Russian state, rather than leading a social and economic transformation, was itself transformed by latent socioeconomic forces. In particular, I argue that the post-Soviet Russian state’s inability to do little to improve the lives of average people is in no small part due to its basic inability to

5 6 7 8

OECD Survey, Russian Federation, p. 178. “Thirty-three percent of Russians Live in Poverty,” Associated Press, May 31, 2002, as reported in Johnson’s Russia List, #6283, June 1, 2002. Human Development Index, 2002, United Nations, New York, New York. This was the most up-to-date available HDI at the time of writing in 2005. Joel Migdal makes a similar point in his Strong Societies and Weak States (Princeton, N.J.: Princeton University Press, 1988), p. xx.

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convey its authority and ensure the implementation of its policies in the Russian provinces. This problem was not, however, an inevitable by-product of Russia’s experiment with decentralization and democratization. On the contrary, it was the result of the rapid movement on the part of latent social forces to capture state resources following the collapse of the Soviet Union. Policymaking authority devolved quickly and completely from center to periphery throughout the 1990s. In less than a decade, Russia went from a country tightly governed by the institutional constraints of the Communist Party of the Soviet Union and the planned economy to what might be termed a “hyper-federation.” The center lost an effective governing presence in many Russian provinces. Even just prior to the collapse of the Soviet Union in 1991, regional governments had begun to openly defy the central state and usurp central authority. This phenomenon accelerated throughout the 1990s as regional political actors declared their laws sovereign on provincial territory, usurped federal taxation privileges, imposed illegal internal tariffs, established citizenship requirements distinct from those of the Russian Federation, and even issued their own currencies. By the late 1990s, unbridled provincial ambition threatened the cohesion of Russia as a single political and economic expanse. As president of Russia, Vladimir Putin wrestled with this threat through a series of aggressive institutional reforms between 2000 and 2004 (described and evaluated in greater detail in Chapter 7). Ultimately, however, unsatisfied with the results of his earlier efforts, Putin opted to do away with electoral democracy at the regional level early in his second term. However, as the collapse of the Soviet Union itself demonstrated, there is little reason to believe that the more authoritarian and centralized state Putin attempted to build will necessarily bring greater governing authority in the Russian provinces. Some decentralization of Russian state functions was both inevitable and desirable following the collapse of the Soviet system of central planning and the Communist Party of the Soviet Union. Nonetheless, the Russian case indicates that rapid decentralization in the absence of a central state capable of regulating and coordinating, even minimally, the policies of subnational political units can impede political development and economic growth. To some degree, therefore, the arguments and evidence presented here run counter to the arguments

W(h)ither the Russian State?

5

of those who would maintain that the greatest threat to the growth of competitive markets in federal states is an unrestrained central state. In post-communist Russia, it was weakly restrained regional governments and an impotent central state that threatened the emergence of a truly market-based economy.9 Russia’s example also puts another nail in the coffin of the idea that state size correlates positively with state capacity. Regional flouting of central policy occurred despite the fact that federal agencies were already abundant in both the center and periphery and that the central state’s participation in social and economic life was still significant on paper. Russian state expenditures at all levels of government constituted between 38 and 42 percent of official gross domestic product from 1995 to 1998 – at the height of provincial defiance of Moscow. This translates into 56 to 61 percent of real, legal gross domestic product.10 Indeed, the Russian state apparatus actually grew throughout the 1990s relative to its size in the first few years following the collapse of the Soviet Union. The Russian State Committee on Statistics reported in 1999 that, despite central state efforts to cut the size of the Russian bureaucracy, it grew steadily in terms of the number of officials employed in federal agencies and regional administrations since 1994. Whereas in 1994, for example, a reported 1,004,000 officials were employed at all layers of the state, that number had increased each year to reach 1,133,000 by the end of 1999 as Vladimir Putin ascended to the post of acting president.11 Not surprisingly, therefore, state spending on its apparatus has also increased steadily since 1994 (the first year for which such figures are available), from 1.73 percent of all state spending in 1994 to 2.4 percent in 1998, a year before Putin assumed the post of prime minister under Boris Yeltsin.12

9

10 11 12

See Barry Weingast, “The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development,” The Journal of Law, Economics and Organization, Vol. 11, no. 1, April 1995, pp. 1–31. Andrei Illarionov, “What Went Wrong in Russia: The Roots of the Economic Crisis,” Journal of Democracy, April 1999, p. 76. As reported in Vitaly Golovachev, “Russian Bureaucrats Reproducing Like Rabbits,” Trud, June 14, 2000. These data are taken from the federal law “O federal’nom biudzhete RF,” which is published annually in “Sobranie aktov gosudarstvennogo zakonodatel’stva RF” for each year noted in the text. I am thankful to Dr. Emil Pain, former advisor to the Russian president for nationalities affairs, for providing me with this material.

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In 2002, more than two years after Putin’s rise to the top of the Russian state hierarchy, a Russian bureaucrat was born every eighteen minutes.13 Indeed, the number of bureaucrats increased in the first ten years since the Soviet collapse as Russia’s total population declined, such that about 10 percent of the population worked in the Russian civil service by the early twenty-first century.14 At the same time, about 300,000 more Russians were employed in the civil service than in the army.15 But despite its size, the Russian central state did not govern authoritatively in the heartland. The central state had a dominating presence on paper in a wide variety of policy areas, but it often lacked power in practice. Undeniably, there are certain political and economic advantages to keeping the Russian central state weak and limited. The Soviet state, after all, was overly intrusive into people’s daily lives. A democratic Russian state should obviously have allowed far greater political and economic freedom. To encourage thriving markets and a lively democracy, the Russian state should have been far less intrusive than its Soviet predecessor. Further, experience from other transitional contexts demonstrates that strong states faced with weak societies, like Russia’s, can hinder the development of pluralist politics.16 But even a minimalist state need not be weak. On the contrary, even if limited, it must be strong enough to regulate certain key aspects of markets (to keep transaction costs low, ensure the free flow of goods, enforce contracts, and protect property rights) and preserve and protect the civil and political rights of its citizenry.17 But accomplishing these crucial tasks requires provincial recognition of the authority (and, indeed, utility) of the central state in certain key policy areas, and it requires that the central state, therefore, be able to convey its authority across territory. 13 14

15 16 17

Vladimir Kovalyev, “A Bureaucracy That Cuts Just One Way,” St. Petersburg Times, May 21, 2002, Johnson’s Russia List, #6260, May 22, 2002. Mikhail Dmitriev, First Deputy Minister, Russian Ministry of Economic Development and Trade, “Public Administration Reform in Russia,” Carnegie Endowment for International Peace, May 1, 2002 (available at http://www.ceip.org/files/ events/events.asp?Event ID=482) and Kovalyev, “A Bureaucracy.” Kovalyev. Migdal, p. xx. Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (New York: Farrar and Rhinehart, 1944).

W(h)ither the Russian State?

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The intellectual and policy agendas of books on state capacity and state power open up a Pandora’s Box of thorny theoretical questions and practical challenges. Most authors can generally agree on a definition of the state, although there are more disagreements in the comparative literature regarding the difficult concept of state capacity, or state effectiveness. A third set of theoretical concerns is the role of the state in promoting economic development and democracy. My own theoretical focus is in some ways prior to this last issue. This book is not so much about the state’s role in development (although certainly the focus is related to this) as much as it is concerned with the issue of governing capability across territory. If the state cannot project authority within its borders, then it is unlikely to be able to provide the basic framework required for the establishment of any coherent development project. My theoretical and empirical goals are more narrowly to determine the extent to which central state agencies and actors were able to project authority across territory and to decipher what factors promoted or impeded the state’s capabilities in this regard. I adopt Michael Mann’s definition of the state, which is drawn, in turn, from Charles Tilly and Max Weber. For Mann the state is (i) a differentiated set of institutions and personnel embodying (ii) centrality, in the sense that political relations radiate outwards from a center to cover a (iii) territorially, demarcated area over which it exercises (iv) a monopoly of authoritative binding rule-making backed up by a monopoly of the means of physical violence.18

The attractive aspects of this definition for the current study are that it emphasizes both the institutional and territorial dimensions of the state. The Weberian reference to the state’s monopoly over legitimate means of violence is also crucial. But it is the credible threat of sanction for those who do not comply with state authority rather than the actual use of force that is at the core of modern state capacity.19 The importance of gaining compliance from key sectors of society is instrumental in a state’s ability to govern. As a result, the degree of compliance with state authority is a direct measure of a state’s relative power in 18 19

Michael Mann, “The Autonomous Power of the State,” in John Hall, ed., States in History (New York: B. Blackwell, 1986), p. 112. Robert Jackman, Power without Force: The Political Capacity of Nation-States (Ann Arbor: University of Michigan Press, 1993).

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relation to various segments of society. It is “a fundamental conflict” over who – the state or other organizations – makes the rules that guide society.20 There are almost as many ways of measuring state power or capacity or ability to govern as there are definitions of these terms.21 In common, however, is the idea that relative compliance with clearly articulated state goals through the promulgation of policy and laws is the crux of the issue. As Robert Jackman argues, noncompliance with the will of the state “is an escalation that reflects a failure of political institutions to channel demands, grievances and challenges. It is prima facie evidence that [state] institutions have lost legitimacy.”22 The authority that a state has can be understood only as a relative concept in that it involves the state (which can itself be disaggregated) and at least one or more actors or groups. It also involves a conflict or dispute between the state and other organizations over interests or property or something else of value to both. The extent of the state’s authority over other groups is manifested by the degree to which these groups comply with the state’s will. It is assumed that other groups and organizations comply with the state’s demands because of fear of a threatened negative sanction for noncompliance.23 I view the state’s inability to extract compliance from lower levels of government as a symptom of a broader problem caused by a rift within Russian state and society relations more generally. I argue that a key reason the Russian central state could not ensure reliable regional government compliance with its policies and laws is that regional government actors often actively colluded with key regional economic interests against the central state. This was neither encouraged nor

20 21

22 23

Migdal, p. 31. Compare, for example Migdal; Atul Kohli, Democracy and Discontent: India’s Growing Crisis of Governability (New York: Cambridge University Press, 1990); Mann in Hall, ed., Samuel Huntington, Political Order in Changing Societies (New Haven, Conn.: Yale University Press, 1968); Merilee Grindle, Challenging the State: Crisis and Innovation in Latin America and Africa (New York: Cambridge University Press, 1996); and Jeffrey Herbst, State Power in Africa (Princeton, N.J.: Princeton University Press, 2000). Jackman, p. 116. I have adapted this from Robert Jackman, p. 28. Jackman is drawing from Peter Bachrach and Morton Baratz, Power and Poverty: Theory and Practice (New York: Oxford University Press, 1970), especially chapter 2.

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impeded by early Russian democracy at the provincial level as much as it was a continuation of a trajectory initiated under the old Soviet regime. I distinguish between two types of central state authority. First, I examine the center’s ability to extract compliance from elected regional political authorities. I begin by viewing different parts of the state acting in relation to their provincial counterparts to assess the degree to which central power is projected outward into the periphery. Throughout the 1990s, when arguments over the distribution of power in the Russian state were at their sharpest, to what degree did provincial governments comply with central state law and the constitution? What were the patterns of noncompliance across time, policy area, and territory? Second, because states exercise power through institutions, I look inside the administrative mechanisms of state bureaucracy in examining the Russian state’s infrastructural capacity, or “the capacity of the state to actually penetrate society, and to implement logistically political decisions throughout the realm.”24 Where despotic power is the “power of the state elite over civil society, infrastructural power is the ability of the state to penetrate and centrally coordinate the actions of civil society.”25 Consolidated capitalist democracies rely not on force to ensure the allegiance of their populations but on bureaucratic and organizational capacity. Even states that are heavily reliant on force but that lack significant infrastructural supports are by nature precarious.26 A crucial contributor, then, to a state’s capacity, authority, and stability is its infrastructural base – a bureaucracy that has some degree of autonomy from societal interests that can also provide a reliable mechanism of organizational control and coherence.27 Introducing distinctions between types of state power into the analysis allows us to more reliably assess the nature of the contemporary Russian state. It also helps to underscore the fact that if Russia ever intends to build a modern, democratic capitalist state (as its leaders 24 25 26 27

Mann in Hall, eds., p. 113. Mann in Hall, eds., p. 114, emphasis added. Mann in Hall, eds., p. 134. Jackman at p. 116 also notes that a state’s use of force against society usually indicates its decreased capacity. A similar point is made in Peter Evans, Embedded Autonomy: States and Industrial Transformation (Princeton, N.J.: Princeton University Press, 1995).

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have frequently declared as their goal over the past decade), then it must possess sufficient infrastructural power to ensure that its authority extends beyond the Kremlin walls. Even if Russia completely abandons democracy, the demise of the highly centralized Soviet state is a reminder that authoritarianism is not necessarily a reliable way in which to ensure adherence to central state authority. Regardless of the amount of financial aid Russia receives from international organizations, the quality of its fiscal or social policies, the fiscal and political threats issued by the president, or even if full or partial electoral rights are rescinded at the provincial level, if the central state lacks sufficient infrastructural power, then positive changes will come slowly, if at all, to the lives of average Russians outside Moscow. The remainder of the study seeks to explain the weaknesses of central political and administrative authority in Russia’s periphery. I argue that central state weakness was a result of both the constellation of political and economic forces that were created just prior to and in the wake of the Soviet collapse, and the consolidation of these interests through Russia’s early economic reform choices and compromises, in particular the privatization program of 1992–4 that included large and mediumsized enterprises. The transfer from state ownership to a system of private ownership that was dominated by insider interests within the bulk of Russian enterprises consolidated strong but particularistic societal interests. The new “entrepreneurchiki,” formerly members of the Soviet nomenklatura, were determined to prevent the new Russian state from regulating their rent-seeking activities. These groups benefited from stalled reform and had an interest – even an investment – in preventing further change. They preferred to co-opt regional governments (or collude directly with them) to prevent the central state from effectively regulating their activities. This was to lock in their early transitional gains or in some cases to prevent further losses. This phenomenon has been documented in parts of Eastern Europe in explaining stalled economic reform, but it is also highly relevant in explaining stalled state building and low state capacity in dual transitional contexts like Russia.28 In sum, this behavior has had a negative economic effect in transitional 28

See in particular an excellent article by Joel S. Hellman, “Winners Take All: The Politics of Partial Reform in Post-Communist Transitions,” World Politics, Vol. 50, no. 2, January 1998.

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Russia and also a concomitantly damaging political effect on the development and capacities of the renewed Russian state. In previous work on the political economy of the Russian provinces, I found that cooperation (or collusion) between newly elected regional governments and enterprise directors in the early 1990s generated relatively effective provincial governance in an otherwise chaotic national political and economic environment. But I also warned that in the longer term, these collusive relationships might allow a narrow set of powerful interests to dominate provincial-level government and thus prevent the growth of political pluralism at the regional level.29 Regrettably for Russia, the current study confirms this concern. It also demonstrates that the collusion between powerful regional political and economic elites also has a clearly negative effect on what the central state can accomplish in the periphery. In sum, these interests resisted the central state’s incursion into their activities primarily for narrow personal gain. In doing so, they threatened the veracity of Russia as a single political and economic unit as well as hindered its future political and economic development.

the russian experience in comparative perspective Not only is post-Soviet Russia fertile soil for the study of state capacity and development, but its economic and political transitional experience has much to offer comparative theories of political development more generally. For the past twenty or so years, scholars have focused on democratization and the construction of democratic institutions (e.g., popular elections, the advantages and disadvantages of parliamentary over presidential systems, etc.).30 However, with the tentative triumph 29 30

Kathryn Stoner-Weiss, Local Heroes: The Political Economy of Russian Regional Governance (Princeton, N.J.: Princeton University Press, 1997). Witness the titles of a spate of books on democracy and democratic transition in the last ten years alone. For example: Samuel P. Huntington, The Third Wave: Democratization in the Late Twentieth Century (Norman: Oklahoma University Press, 1991); Larry Diamond, Marc F. Plattner, Yun-han Chu, and Hung-mao Tien, Consolidating Third World Democracies: Regional Challenges (Baltimore, Md.: Johns Hopkins University Press, 1997); Diamond and Plattner, The Global Resurgence of Democracy (Baltimore, Md.: Johns Hopkins University Press, 1993); Juan Linz and Alfred Stepan, Problems of Democratic Transition and Consolidation: Southern Europe, South America, and Post-Communist Europe (Baltimore, Md.: Johns Hopkins University Press, 1996). This is merely a representative, but by no means an exhaustive, list.

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of electoral (if not always liberal) democracy in the late twentieth century, the time has come to refocus our attention on the more difficult question as to why some states have proven unable to govern effectively in new (if unconsolidated and tentative) democracies. Questions about state efficacy are intimately linked with the larger issues of democratic consolidation and resilience. If new democratic states prove incapable of better delivering goods and services to their beleaguered populations than were their authoritarian predecessors, then the danger of regime reversal surely increases. Indeed, in Russia, the economic and social disappointments of the reform period threw the question of Russia’s democratic endurance into deep jeopardy. In a 1999 poll, VtsIOM, a respected national public opinion polling center, reported that only 5 percent of respondents had a positive view of the reform era under President Yeltsin, while 72 percent had a negative view, with the remainder undecided. Further, the proportion of respondents agreeing with the statement that “It would have been better if the country had remained as it was before 1985” increased from 44 percent in 1994 to 58 percent within a mere five years.31 Small wonder, then, that President Putin in the fall of 2004 anticipated (and witnessed) little social upheaval from his decision to cancel elections at the provincial level in Russia. As many third-wave democratizing states remain unable to fulfill the developmental promises made at the start of their transitions, Russian and other post-communist development trajectories strongly recommend that the issue to which we should turn (or return) now is not just the kind of government in any particular state (democratic or authoritarian), therefore, but the degree of government and the state’s actual capacity to govern.32 Within comparative politics, an older literature and an increasingly richer contemporary literature are concerned with just these problems. The Russian case corroborates some of the experiences of other country-specific cases, but it also offers several distinct contributions to the study of state capacity and comparative governance. 31

32

As cited by Archie Brown in Johnson’s Russia List #4383, June 23, 2000. Further support for this point can be found in Timothy J. Colton, Transitional Citizens: Voters and What Influences Them in the New Russia (Cambridge, Mass.: Harvard University Press, 2000). Huntington, 1968, p. 1.

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Samuel Huntington argued in 1968 that the problem in the developing world was increasingly that societal demands outpaced state institutional development, rendering states incapable of governing effectively. In post-Soviet Russia, however, with a few exceptions, mass social mobilization was generally quite low. Indeed, Russian mass society has become increasingly demobilized politically through time since the Soviet collapse in 1991 and the living situation of the average citizen worsened. The fact that social services (such as they were) were also still frequently provided at places of work gave less incentive to workers to strike or cause widespread social disruption.33 Further, as noted earlier in this chapter, the Russian state did not suffer from a lack of institutional presence, but its capacity to provide public goods and services outside Moscow remained constrained. My evidence and arguments demonstrate that while Russia did not lack political institutions, it lacked the right kinds of political institutions – those that were capable of capturing and restraining emergent social interests. This absence threatened the central state’s ability to govern the country effectively. More recent literature on state capacity in developing countries argues that an effective state is more properly conceived of as not so much governing over society as much as governing with societal cooperation – or that the state and society are mutually empowering. We must understand the capable “developmental” state as fundamentally embedded in society, although ideally not captured by societal elements.34 This, however, is a difficult task to achieve, as most contemporary students of state development realize. The solution, for some, as for Huntington before them, is also more state institutionalization. Peter

33

34

This is not to suggest, however, that there have not been labor strikes in transitional Russia. The coal industry is one area where strike action was sometimes quite frequent; however, even those labor actions gradually trailed off with the demands of the strikers going largely unsatisfied. See Stephen Crowley, Hot Coal, Cold Steel: Russian and Ukrainian Workers from the End of the Soviet Union to the Post-Communist Transformations (Ann Arbor: University of Michigan Press, 1997). See for example the excellent collection of essays in Joel Migdal, Atul Kohli, and Vivienne Shue, eds., State Power and Social Forces: Domination and Transformation in the Third World (New York: Cambridge University Press, 1994); Evans, 1995; and Peter Evans, ed., State and Society Synergy: Government and Social Capital in Development (Berkeley: University of California Press, 1997).

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Evans argues, for example, that contra the neo-liberal paradigm of the state dominant in the 1980s, “It is the scarcity of bureaucracy that undermines development, not its prevalence.”35 But this does not hit exactly the right chord either, for the post-Soviet Russian state, as noted previously, did not lack for bureaucracy, yet it was still unable to implement its programs effectively at the regional level. Again, then, the Russian experience points to the fact that certain kinds of institutions contribute to the development of state capacity, and certain kinds of capacities are most important to develop in transitional economies and democracies. Finally, as I note in the Conclusion to this study, Russia’s postSoviet state-building trajectory provides a stark contrast to the dominant paradigm put forward by Charles Tilly and others regarding the rise of the modern state.36 In much of Western Europe, strong central administrations were built through a process of conquest and gradual unification of disparate lands. This study of transitional Russia shows this dynamic in reverse – that is, how and why the post-communist Russian state lost a good deal of control over its own policies to localized, particularistic interests in the provinces.

organization of this book In Chapter 2 I develop the argument that the nature of the Soviet collapse left post-Soviet reformers with a diverse and often conflicting constellation of interests to incorporate into the reform process. This led to early macro-economic reform decisions that strengthened opposition to any further reform policies that would imperil the early gains made by entrenched economic interests in the provinces. In particular, to protect the rents that they gained from communism’s demise, these groups cooperated with regional governments to resist the central state’s attempts to tax and encourage competition in their regions. These goals often dominated regional government activities in Russia in the 1990s. This, then, was the basis of regional resistance to central 35 36

Evans, 1995, p. 40. See for example Charles Tilly, “War Making and State Making as Organized Crime,” in Theda Skocpol, Dietrich Rueschemeyer, and Peter Evans, eds., Bringing the State Back In (New York: Cambridge University Press, 1985).

W(h)ither the Russian State?

15

authority helping to undermine the infrastructural capacity of the Russian state. Chapters 3, 4, and 5 contain the empirical core of the study. Chapters 3 and 4 present two aspects of the dependent variable, central state capacity, while Chapter 5 examines the causal chain of the argument. Chapter 3 traces the patterns of regional government noncompliance with federal policy and the constitution from 1994 through 1999 and Boris Yeltsin’s resignation as president. The main patterns that emerge from statistical analysis of the data in this chapter indicate that regional government resistance to the central state had little to do with ethnic or cultural claims from non-Russian regions. Instead, regions tended to defy central state oversight in economic policy areas in particular (taxation, licensing, trade barriers, the promotion of competition, and labor mobility, for example). Further, it was the wealthiest and most industrialized regions that were home to economically powerful enterprises that proved the most defiant of central regulation. Building on the findings in Chapter 3, and operationalizing the notion of central state infrastructural power, Chapter 4 draws on a survey of public officials in seventy-two regions to delve more deeply into the workings of the Russian state. The survey explores how different policies were made and implemented in practice at the provincial level. It examines what role federal authorities played in provincial policy making and implementation as opposed to other social forces. Chapter 4 makes a number of fundamental observations that support the patterns noted in Chapter 3. First, in virtually all regions of Russia, regional forces prevailed over federal forces in economic policy areas as opposed to social policy areas. Second, heads of executive branches of government (regional governors and presidents of republics) reported that the support they received in policy implementation from regional business groups was more important to them than the support they received from federal ministries, federal law, or even (somewhat surprisingly) federal financing. In sum, Chapter 4 establishes that the source of provincial resistance to central state authority appeared to be powerful regional economic interests. Chapter 5 then provides the empirical underpinnings of the argument previewed in Chapter 2 by examining in greater detail the relationships among elected public officials as well as the various ways

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in which nonstate actors entered into close partnership with regional government actors. This chapter also refutes contending arguments as to how the central state may have exercised its authority in the provinces in the past, including a discussion of the strengths and weaknesses of mechanisms of Russian fiscal federalism and purported strategies on the part of the federal government to deal with regions bilaterally in an effort to “divide and conquer” them politically. Instead, Chapter 5 demonstrates that a positive correlation existed between noncompliance with federal law and the degree to which political actors reported heavy influence on their activities by regional business groups. This correlation increased with a region’s level of industrialization and the presence of economically powerful enterprises located in the region.37 Economic and not cultural variables, with few exceptions, largely account for the variations in relative noncompliance with the central state and central infrastructural authority among regions that I observe in Chapters 3 and 4.38 In sum, the empirics in this section of the study indicate that these groups, often in cooperation with regional officials, actively worked to block central state regulation of their activities. They preferred to stall Russia’s state-building project, working to undermine the central state in order to advance their own narrow interests. Chapter 6 extends the theory to the underdevelopment of national political parties outside the Russian State Duma.39 Using regional election results from the first three rounds of gubernatorial and legislative elections in the Russian provinces, I demonstrate the low degree of partisanship among regional politicians in Russia that has persisted from 1994 to the present. 37

38

39

In the regression analysis in Chapters 3 and 5, I define “economically powerful” as having greater than 35 percent of national market share of a particular product. This is a definition used by the Russian State Committee on Statistics in identifying economically important enterprises in Russia. The one notable exception to this finding is the Chechen Republic. I discuss this in more detail in Chapters 3 and 5. Chechnya could not be included in the data in Chapter 4 for logistical reasons. There was no real government to interview because of the conflict in progress at the time of the survey and we could not safely put interviewers on the ground in any event. I draw on my findings in “The Limited Reach of Russia’s Party System: Underinstitutionalization in Dual Transitions,” Politics and Society, September 2001, and “Central Governing Incapacity and the Weakness of Political Parties: Russian Democracy in Disarray,” Publius: The Journal of Federalism, November 2001.

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17

I argue that this behavior was consistent with the interests of regional elites. That is, they preferred a “partial reform equilibrium” in political institutional development. This allowed them to avoid widening the sphere of accountability for their decisions in order to protect the gains they made in the early stage of the economic transition.40 President Putin’s decision to end effective electoral democracy at the regional level will presumably only heighten this phenomenon rather than eliminate it. Consistent with the arguments and evidence in Chapters 2 and 5, therefore, Chapter 6 contends that just as they resisted central state regulation of regional policy, these interests also opposed party development and the limitations on populistic and personalistic governance that national political party institutions in particular would bring. Limited party development, however, also meant even worse central state linkage to the periphery. Putin’s attempts to recentralize in the absence of alternative institutions (even a more authoritarian party system) that reliably connect central and regional political actors are unlikely to overcome this obstacle to central authority in Russia’s regions. Finally, Chapter 7 describes what measures President Putin, in inheriting recalcitrant regions from his predecessor, took to reclaim central state authority. After four years of making only halting progress in recentralizing Russia, by the fall of 2004 Putin used the botched hostage rescue at a primary school in the southern city of Beslan to completely do away with elections for regional heads of executive in Russia’s eighty-nine provinces. Instead, they would be appointed by his administration upon “recommendations” of provincial legislatures. This law took effect in February 2005. Despite the high-handedness of this move, I argue, there is no reason to believe that limiting the rights and freedoms of the Russian people to select their regional governors will in fact work. That is, a more authoritarian and unitary regime in Russia will not necessarily produce a more coordinated Russian state that is more capable than a democratic regime of providing the Russian people with economic and personal security. Following the arguments of Chapter 6, I suggest that in the absence of strong, inclusive political institutions capable of 40

See for example Hellman, 1998.

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creating a more clear set of dependencies on central political officials, Putin is now merely proposing to consolidate “authoritarianism without authority.”41 Finally, the study ends with a discussion of the consequences of eroding central state capacity for Russia’s future economic and political development trajectory. The theory and empirics of the book as a whole demonstrate how, following the collapse of the Soviet Union, the new Russian state initiated in 1992 a series of changes that had the unintended consequence of undermining the state itself. The overarching concern that this project underscores is the danger of an enduring vicious cycle of weak institutions and resulting low state capacity in many developing countries. 41

Michael McFaul has used this term to describe Putin’s tenure more generally.

2 Apparatchiki into “Entrepreneurchiki” The Sources of Russia’s Weak Central State

As Chapter 1 noted, this book is devoted to explaining the weak political and administrative capacities of Russian central state institutions in the periphery following the collapse of the Soviet Union in December 1991. A thorough analysis of this question, however, requires an examination of the institutional mechanisms by which the Soviet state extended its authority across the periphery. This too begs the question as to whether or not Soviet central institutions were all that successful in governing disparate territories. This is particularly relevant too in light of Putin’s turn toward a more centralized, authoritarian rule of Russia’s provinces in 2004, discussed in the concluding chapter. In 1968, Samuel Huntington wrote admiringly that [T]he one thing communist states can do is to govern; they do provide effective authority. Their ideology furnishes a basis of legitimacy, and their party organization provides the institutional mechanism for mobilizing support and executing policy.1

But if the communist regime of the Soviet Union was so capable of governing, how and why did the system collapse? How did the nature of its collapse constrain the reform options for post-Soviet institutional 1

Samuel P. Huntington, Political Order in Changing Societies (New Haven, Conn.: Yale University Press, 1968), p. 8.

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designers? In what ways did these constraints and resulting decisions render Russian central state institutions deficient in penetrating provincial politics? This chapter responds to these fundamental questions. One increasingly popular line of argument in the post-Sovietological literature puts the blame on Boris Yeltsin, Russia’s first president, and his reform team of “neo-liberal shock therapists” as well as their foreign economic advisors.2 The general contours of this argument are that first, Yeltsin’s reform team, led initially by Egor Gaidar (named deputy prime minister and minister of finance and the economy in December 1991 and then acting prime minister in June 1992, only to be dismissed in December 1992), urged by their own commitment to “market bolshevism,” introduced “shock therapy” to an unwilling and unprepared Russian economy and society. This ill-advised package of reforms included rapid freeing of prices, mass privatization, and the introduction of hard budget constraints on state industry, all of which were mandated by a generally anti-statist ideology.3 International financial institutions and the United States provided unwavering support for this program, thus bringing about the criminalization and virtual collapse of the Russian state and, in the words of one commentator, “the worst U.S. foreign policy disaster since the Vietnam war.”4 In sum, this line of argument faults the fundamentally flawed programs of na¨ıve Russian reformers, apparently unaware of the political culture of their own country, who were supported by even more na¨ıve international financial institutions and the United States, for the decline of the Russian economy throughout the 1990s and the weakness of the Russian state more generally. It was these groups that perpetrated the crippled beginnings of the new Russian state and ensured both its incapacities and successive economic crises throughout the 1990s.5

2

3 4 5

See for example Peter Reddaway and Dmitri Glinsky, The Tragedy of Russia’s Reforms: Market Bolshevism Against Democracy (Washington, D.C.: US Institute of Peace, 2001); Stephen F. Cohen, Failed Crusade: America and the Tragedy of PostCommunist Russia (New York: W. W. Norton and Company, 2000); and Janine Wedel, Collision and Collusion: The Strange Case of Western Aid to Eastern Europe, 1989– 1998 (New York: St. Martin’s Press, 1998). Reddaway and Glinsky, pp. 233–4. Cohen, p. 9. Reddaway and Glinsky even appear to fault neo-liberals in Yeltsin’s government for the breakup of the Soviet Union in December 1991, although the “shock therapy” program did not begin until January 1992.

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I do not want to defend or attack the internal coherence or advisability of the neo-liberal reform project. Instead, my goal is to argue that regardless of how ill advised and misdirected they may have been, such programs were never really implemented in Russia following the collapse of the Soviet Union.6 Blaming shock therapists for Russia’s weak state and crisis-ridden economy more than a decade later is undoubtedly looking in the wrong place for a smoking gun. Such arguments also assume that the reform process started no sooner than January 1992 with the freeing of prices under Gaidar and his associates.7 This, of course, overlooks the entire Soviet experience and the possibility that Russia’s post-Soviet troubles are rooted more deeply in the past. In rebutting these overly simplified arguments, one might reasonably ask in exactly what ways the neo-liberal shock therapy “project” in Russia was successful. Shock therapy is generally taken to include the rapid introduction of ten or so economic measures: (1) the introduction of hard budget constraints on state enterprises; (2) a tight fiscal and monetary policy; (3) the introduction of a convertible currency; (4) deregulation of prices; (5) the destruction of state monopolies; (6) removal of external and internal trade barriers; (7) a fully liberated private sector; (8) tax reform; (9) the introduction of social security and unemployment schemes; and (10) rapid privatization of state enterprises. All of this is to be accomplished within a period of three or so years, if not sooner.8 Strictly speaking, however, only a small portion of this program was ever implemented in Russia (and even then imperfectly so) in the 1990s. The success of shock therapy programs really depends on the simultaneous and rapid implementation of all elements of the plan in

6

7

8

Among the long list of work critical of neo-liberal economics more generally see Peter Murrell, “What Is Shock Therapy? What Did It Do in Poland and Russia?” PostSoviet Affairs 9:2 (1993); Adam Przeworski, “The Neo-Liberal Fallacy,” Journal of Democracy 3:3 (1992), pp. 45–57; Lance Taylor, “The Market Met Its Match: Lessons for the Future from the Transition’s Initial Years,” Journal of Comparative Economics, Vol. 19, no. 1 (August 1994), pp. 64–87; Peter Berger, “The Uncertain Triumph of Democratic Capitalism,” Journal of Democracy 3:3 (1992). This is somewhat ironic because Cohen, for example, faults American academia for overlooking Soviet history in its supposedly flawed analyses of Russian politics in the 1990s. I am drawing this definition from Murrell and Anders Aslund., How Russia Became a Market Economy (Washington, D.C.: Brookings Institution, 1995).

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an effort to limit the social dislocation associated with the package of reforms. In Russia, though, the attempt to implement this package of reforms was beaten back by firmly entrenched economic forces with strong political clout. Thus, in the face of strong political opposition by June 1992, Gaidar retreated on his commitment to enforcing hard budget constraints on Russian industry long accustomed to state subsidies as he was forced to issue what became known as “Gaidar credits” through the spring and summer of that year.9 The desired pursuit of a strict monetary policy also quickly went by the wayside as beginning in July 1992 the Central Bank of Russia, headed by the former head of the USSR State Bank, Viktor Gerashchenko, printed money such that inflation became rampant. Far from pursuing an inflationary policy somehow supported by staunch shock therapists, Gerashchenko was deemed by one economist deeply invested in the program “the worst central banker in history.”10 The deregulation of monopolies also clearly did not happen in any significant way in the early years of post-Soviet reform. Indeed, it was only haltingly underway ten years later. Comprehensive and meaningful social security and unemployment insurance programs, ten years later, were also largely still plans on paper. The ruble became convertible under the rules of the Charter of the International Monetary Fund only gradually (taking about three years to establish), and after almost fifteen years of monetary reform it is still not fully convertible in practical terms.11 Behind all of this lay an economy that was largely unmonetized for a significant part of the post-communist period such that taxes were frequently provided “in kind” if at all. It is also difficult to see all of this as somehow the result of an abandoned attempt at shock therapy. Further, comprehensive tax reform was achieved a decade after the initiation of Gaidar’s program under Vladimir Putin, although its implementation remained uneven.12 Finally, and perhaps most significantly, the privatization program adopted in the second half of 1992 9 10 11 12

Aslund, p. 97. The quotation is from Jeffrey Sachs. See Aslund, p. 94. Peter Rutland, ed., Business and the State in Contemporary Russia (Boulder, Colo.: Westview Press, 2001), p. 7. See Radio Free Europe/Radio Liberty, May 17, 2001, for information on the difficulties in implementing Putin’s 13 percent flat tax.

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and pursued most forcefully through 1994 left most Russian enterprises in the hands of the insiders who had run them prior to communism’s demise. Privatization, therefore, failed to attain the goals of separating ownership from management and ending soft budget constraints on enterprises. Few firms had gone bankrupt by the close of the decade.13 Gaidar himself was replaced as prime minister by Viktor Chernomyrdin in December 1992, and almost all of the initial reform team followed him out of office. Chernomyrdin remained prime minister until 1998 and, as the former Soviet Minister for Gas and Energy, was an undisputed representative of the old Soviet nomenklatura and industrial lobby. Although he did not roll back everything in Gaidar’s program, he did support Gerashchenko’s inflationary policies for a time and reintroduced some price controls.14 Moreover, there is far more evidence that the Russian attempt at rapid reform was rather quickly overwhelmed. Thus, while the shock therapy paradigm may well have been for Russia ill advised and generally destructive of state capacities and long-term economic recovery, we shall never really know because it went largely unimplemented and was, perhaps, politically unimplementable given the strength of the forces arrayed against it. To indict only the small clique of Russian “reformers” surrounding Boris Yeltsin, who were in office for only a year or so, as well as international financial institutions for what ails Russia is really to overlook the genesis of Russia’s state-building and later state-capacity troubles. True, incompletely implemented and hastily conceived macroeconomic reform packages may have contributed to Russia’s longerterm economic problems, but this was not the neo-liberal vision of shock therapy. Indeed, the interesting questions really are why these programs were nipped in the bud, and also what their quick defeat tells us about the development of the Russian state’s capacity to lead further economic change in particular. Rather than blaming only the “market Bolsheviks” (Yeltsin, Gaidar, and the team of reformers briefly in office in 1992) then for Russia’s economic woes years later, I argue instead that the seeds of Russia’s 13 14

Rutland, p. 15. Aslund, p. 92.

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incapacitated state are more firmly rooted in the structure of the late Soviet system and the rapidity and nature of its collapse. The post-communist state-building project in Russia was subverted by well-entrenched economic elites who had little incentive to build or interest in building the state’s extractive or regulatory capacities at the expense of their own private extractive opportunities and capabilities. On the contrary, they had every incentive to continue to resist state oversight of their activities and even to actively tear the state down and continue to grab its assets. Thus, the central state’s presence after more than ten years of reform, and particularly determined attempts by President Putin since 2000, was only weakly felt in Russia’s sprawling provinces. In this chapter, I make this argument in three stages. First, I examine the nature of the collapse of the Soviet state and draw a link between that process and the set of economic and political interests that best survived the dissolution of the Soviet Union. Second, I examine how these interests forced compromise and accommodation during the early post-Soviet reform process in Russia such that they were further strengthened. Third, I make the argument that this group formed shifting alliances among themselves and with regional governments to prevent central government penetration of regional politics and economics that might enable better regulation of their activities. This, then, presented the biggest obstacle to further state development and central state capabilities in post-communist Russia.

the legacy of communism and its collapse The communist state-building project was devoted to the development of the Soviet Union’s productive capacities. The regime was, of course, aimed toward the future construction of full-blown communism. Toward this goal, the state’s administrative capacities were designed primarily to extract resources to continue enhancing economic growth in both agriculture and industry. Under Stalin, the Soviet state effectively divested society of virtually all forms of private property and usurped authority over all productive assets. Thus the early Soviet state extracted resources initially from society (through collectivization of agriculture, for example) in a way that is not entirely inconsistent with the Western European experience regarding the development of the state’s administrative capacities for

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25

similar ends. The central difference, of course, was that the demands of an overarching ideology of change demanded full divestment of private property in the service of the state. Further, the exigencies of rapid industrialization and modernization in Russia in the early twentieth century more generally required that the state’s extractive and productive capacities be maximized. Through the effective fusion of the Communist Party of the Soviet Union (CPSU) and the state, and the state and the economy, the Soviet system governed relatively successfully in some important respects, and this is likely why it drew admiration from Samuel Huntington by 1968. It was, after all, remarkably successful in industrializing a largely rural economy in the space of thirty years; adult literacy reached 95 percent by the collapse; it mounted a serious security threat to the United States in its early development and adoption of nuclear weapons technology, to name but a few of its accomplishments. Through campaign mechanisms, it managed to undertake some of the most ambitious industrial projects the world had yet known – including changing the directions in which rivers flowed, and the construction of massive agricultural and industrial enterprises, all owned by the state, employing hundreds of thousands of workers.15 These accomplishments, of course, came at far too high a social cost – the individual rights and freedoms of the population. Moreover, Huntington is correct in noting that Soviet rulers did, at least for a time, manage to govern relatively effectively. They accomplished this through the two main institutional bulwarks of the communist state: the Party and the centrally planned economy, which were from time to time reinforced by a comprehensive security apparatus capable of coercing society by force when required. With the possible exception of the reemerging coercive aspect of the security forces, none of these institutional mainstays was available to President Putin’s emerging authoritarian state by 2004, raising serious questions about whether his autocracy would be better than Yeltsin’s democracy in reestablishing central authority in Russia’s regions. The Party and the planned economy provided strong mechanisms of state centralization such that authority clearly spread outward from 15

See for example Steven Kotkin, Magnetic Mountain: Stalinism as a Civilization (Berkeley: University of California Press, 1997).

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central party officials and planners in Moscow to their republican and provincial counterparts. As a result, “ . . . in the early years, the institutions that defined socialism produced strong regimes, weak societies and robust economic growth.”16 A hallmark feature of the Soviet system was the fusion between the Party and the state and the domination of the party-state over society. Through this tight association, and the preservation of the state’s monopoly over society and the economy, the system left little room, it would seem, for political and administrative noncompliance with central initiatives. During high Stalinism in particular, the KGB and other instruments of terror as well as the pervasive influence of a powerful ideology helped to preserve the administrative hierarchy. Given, however, the relatively rapid collapse of this system, it is reasonable to question how well the Soviet state actually did govern in practice as it matured. That is, the Soviet state may have been strong despotically (as Mann would describe it), but in the longer term it proved itself to be administratively weak and lost the ability to govern effectively. Thus, the Soviet state, by 1985 and Mikhail S. Gorbachev’s ascension to power, was arguably a “hard” state in that it still possessed considerable despotic power relative to society (although this too was on the wane), but its administrative capabilities and status as a “strong” state were thrown into serious doubt.17 The causes of the collapse of the Soviet Union have been the subject of several excellent analyses, some of which I draw on in what follows.18 It is not my purpose to provide a new explanation of the system’s demise as much as it is to show how and why the way in which the system collapsed helped propel into power in the provinces

16 17

18

Valerie Bunce, Subversive Institutions: The Design and the Destruction of Socialism and the State (New York: Cambridge University Press, 1999), p. 20. The distinction between a hard state and a strong state comes from Myrdal 1971, cited in William Zertman, ed., Collapsed States: The Disintegration and Restoration of Legitimate Order (Boulder, Colo.: Lynn Rienner, SAIS African Studies Library, 1995), p. 7. Note, though, that the late Soviet state was apparently still more capable of providing basic public services than was the post-collapse Russian state; cf. Chapter 1 regarding comparative death and infant mortality rates. See for example Philip Roeder, Red Sunset: The Failure of Soviet Politics (Princeton, N.J.: Princeton University Press, 1993); Steven L. Solnick, Stealing the State: Control and Collapse in Soviet Institutions (Cambridge, Mass.: Harvard University Press, 1998); and Bunce, 1999.

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27

a set of political and economic interests that negatively affected the governing capacities of the post-Soviet Russian state. As Valerie Bunce has deftly shown, “the sudden collapse of socialism was long in the making.”19 The seeds of destruction of the Soviet party-state were arguably embedded in some of the very institutions that Huntington identified as being the source of the Soviet state’s seemingly awesome governing capacities. As the system matured and the economy grew more complex, it became increasingly difficult for the party to mobilize unwavering support for its policies. Further, the economy, in a sense, became a victim of its earlier successes. As it grew and became more diversified, the planning mechanisms that had worked so well in ensuring rapid industrialization decades earlier proved incapable of efficiently managing a much larger and more complicated system. Economic growth had also slowed considerably with the end of the large industrialization projects of the 1950s and 1960s. Given that socialist systems depended heavily on the growth imperative for their survival and the strict control over the economy and politics through the party, “if the economy faltered, especially over an extended period of time, then the regime would necessarily weaken in the face of deregulatory pressures.”20 Indeed, the economy did begin to falter under Leonid Brezhnev’s long tenure as General Secretary of the CPSU. Through the 1970s the system stagnated politically, socially, and economically. Elite interests in the center and on the periphery grew increasingly differentiated. Donna Bahry found that provincial elites had grown highly resentful of a lack of career opportunities in Moscow.21 This was very problematic for a system so dependent on elite cohesion and cooperation. It was in response to these systemic deficiencies that Gorbachev initiated perestroika shortly after becoming General Secretary of the CPSU in 1985. Still, despite these problems, the collapse of the Soviet system was not inevitable. Indeed, highly respected analysts were able to write as late as 1986, barely a year after Gorbachev had come into office, that

19 20 21

Bunce, 1999, p. 38. Bunce, p. 56. Donna Bahry, Outside Moscow: Power, Politics and Budgetary Policy in the Soviet Republics (New York: Columbia University Press, 1987).

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“As the post-Brezhnev era takes shape, the survival of the Soviet system is not in question, but the utility of its policies is.”22 Why then, did the Soviet state and its complex network of administrative institutions collapse so quickly following the reforms initiated by Gorbachev in the late 1980s? The most compelling set of explanations focuses on the internal dynamics of the Soviet system as Gorbachev initiated his reforms of the two main structural bulwarks of the entire system: the planned economy and the party. Unwittingly (and therefore unpredictably not only for Soviet watchers), as he tried to save the system, Gorbachev struck at the institutional cores of the entire governing apparatus of state socialism. As Bunce and others have noted, the institutional framework of communism made it extremely elite sensitive and highly dependent on complex hierarchies of authority.23 Gorbachev’s reforms between 1985 and 1990 effectively deregulated these hierarchies and helped to bring about the collapse of the Soviet state from “within” rather than from above (by a failed attempted coup by elites opposed to Gorbachev in August 1991) or below (from societal mobilization of which there was surprisingly little in the fading years of the Soviet Union) as contending theories of state collapse would posit. More specifically, by loosening the Party’s monopoly on power through the introduction of (limited) political competition at the same time that the economy was deregulated through tentative market reforms in the late 1980s, Gorbachev undermined longstanding hierarchies of authority linking bureaucrats and party officials in the center and on the periphery. Of particular relevance to the argument advanced in this study, Gorbachev’s reforms, coupled with the institutionalized deficiencies of the planning mechanism, effectively caused the rise of directors of large, formerly state-owned enterprises as powerful, autonomous political forces intent on resisting further state development and regulation in the post-communist era. Moreover, “Gorbachev’s economic reforms worsened the dysfunctions of central planning just as his political reforms were eliminating the Party as the key agent responsible for dealing with these 22 23

Timothy J. Colton, The Dilemma of Reform in the Soviet Union (New York: Council on Foreign Relations, 1986), p. 32. Bunce, 1999; Roeder, 1993; and Solnick, 1998.

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dysfunctions.”24 These dysfunctions included the inabilities of central planners in the State Planning Agency as well as various ministries under whom factories were subordinated to anticipate perfectly the inputs required by enterprises throughout the Soviet Union given the difficulty of accurately measuring outputs.25 Part of this difficulty was also due to the propensity of factory managers to systematically underreport outputs so as to prevent the “ratchet” effect of future plans such that they would require greater levels of output. (Under-reporting output also enabled managers to sell excess output on the black market.) As a result, Party first secretaries at the provincial level frequently stepped in to grease the wheels of supply (and demand) for enterprises located within their regions. Jerry Hough first documented this well-known phenomenon in 1969, when he likened the activities of Communist Party first secretaries to those of French provincial prefects.26 The practice of assisting in provincial supply and production networks clearly extended through the late Soviet era as well. Indeed, in his first set of memoirs, Yeltsin himself reported that he initially met Gorbachev when the former was the Party first secretary of Sverdlovsk oblast and the latter held the same position in Stavrapol in the 1970s. The two exchanged Sverdlovsk’s industrial products for Stavrapol’s foodstuffs.27 Gorbachev’s set of economic reforms hit at both the vertical line of authority stemming from economic ministries through to the enterprise level and the less formal horizontal line of authority that had long been the practice among party functionaries in the provinces. Regarding the mechanisms of vertical control, Gorbachev’s deregulation of planning mechanisms through his 1987 Law on State Enterprises and the Law on Cooperatives of 1988 presented enterprises with new opportunities to direct resources out of the control of central planning agencies. State enterprises were now allowed access to new domestic and foreign markets. They were also permitted to form daughter companies 24 25 26 27

David Woodruff, Money Unmade: Barter and the Fate of Russian Capitalism (Ithaca, N.Y.: Cornell University Press, 1999), p. 58. These were noted initially in Joseph Berliner, Factory and Manager in the Soviet Union (Cambridge, Mass.: Harvard University Press, 1957). Jerry F. Hough, The Soviet Prefects (Cambridge, Mass.: Harvard University Press, 1969). Boris Yeltsin, Against the Grain (New York: Summit Books), p. 71.

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(or cooperatives) through which they could spin off profits from the sale of excess productive output or new production. These reforms, therefore, exacerbated the previously existing principal-agent problem embedded within the system of central planning and made worse by the increased complexity of the Soviet economy over time. That is, principals within central planning agencies gradually lost control of their agents (enterprise directors), who had greater knowledge of the actual operations of their enterprises. In one of the most detailed and thoughtful studies of the systemic effect of reforms in this period, David Woodruff argues that . . . by 1990, enterprises were experiencing the relationship with their superior organizations as increasingly extortionate. The supplies and assistance that had previously accompanied higher-ups’ demands to meet plan targets were gone, but output was demanded anyway. In response, to the extent that they were able, enterprises exited these relations to use those of the horizontal economy. And this weakened the vertical economy still further.28

As a result, noncompliance with the plan gradually increased as Party secretaries became even more involved in barter for their provincial enterprises and to provide for local consumer needs that were no longer being satisfied as a result of the disintegration of planning mechanisms.29 Not only did they become adept at the practice of hiding revenues from central planners or reselling excess enterprise production for a personal profit, but under Gorbachev’s reforms (particularly the allowance for the establishment of cooperatives), opportunities for enterprise directors to derive more personal wealth from state property were greatly increased.30 The Law on Cooperatives in particular allowed wily enterprise directors to set up cooperatives that were sometimes joint ventures or lease agreements that generated private profits from state-owned assets. 28 29 30

Woodruff, p. 67. Woodruff at p. 70 cites the example of an altercation in 1990 between Krasnoiarsk and Omsk provinces over delinquent deliveries of planned shipments. Similar arguments can be found in Vitali Naishul, “Institutional Development in the USSR,” Cato Journal, Vol. 11, Winter 1992; as well as in Michael McFaul, “State Power, Institutional Change, and the Politics of Privatization in Russia,” World Politics, Vol. 47, no. 2, January 1995, pp. 210–43.

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31

At the same time, enterprise directors clearly had doubts about the center’s ability to punish their activities beyond the plan. This, in turn, provided further motivation to collude with regional authorities through horizontal networks to extract inputs and dispose of outputs beyond the plan rather than work through the traditional vertical hierarchies of central planning agencies. This initiated the wave of “spontaneous” privatizations of the late 1980s whereby enterprise management took de facto control of their factories. In sum, enterprise directors by 1991 and the ultimate collapse of the Soviet Union had often become the undisputed rulers and sometimes de facto owners of their enterprises. The deficiencies of the Soviet planning mechanism in a complex economy, combined with presumably unanticipated opportunities wrought by Gorbachev’s ill-conceived set of reforms, turned Soviet apparatchiki into entrepreneurchiki. Finally, Gorbachev’s relinquishment of the Party’s monopoly on political power in February 1990, and his introduction of limited but competitive elections throughout the Soviet Union later that year, however, weakened the Party’s monopoly on the polity as well as on the economy. Party secretaries could no longer count on being in control of regional legislative bodies of power. Indeed, many lost their positions in the elections and their unwavering control of provincial politics as a result. Most important, the seat of political power in the provinces began to move from the Party first secretary to elected regional governments at the same time as vertical lines of authority within the Party itself weakened. The political point of reference for newly elected provincial officials was in their localities more than in Moscow. At the same time, by 1990 and the summer of 1991, Gorbachev was locked in an intense political battle with Boris Yeltsin (elected president of Russia in June 1991) over central authority in the Russian republic itself. Yeltsin adeptly manipulated the concerns of Russian provincial leaders to turn them to his side in the struggle with Gorbachev and the Soviet state, infamously exhorting them in 1990 to “take as much power as you can swallow.” Prior to the attempted coup against Gorbachev by members of his own politburo in August 1991, Yeltsin took the unprecedented measure of banning the CPSU on Russian soil, putting yet another nail in the coffin of the Soviet state. Moreover, the set of political and economic reforms under Gorbachev triggered the rapid disintegration of the main institutional

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32

bulwarks that had sustained the Soviet Union as a highly centralized, coherent political and economic system and ultimately as a nationstate. By the fall of 1991, little was left of the governing system of the Soviet state. The economy was in a shambles (with a budget deficit of 20 percent of GDP, rising inflation, acute shortages of goods such that there was a realistic fear of famine),31 the Party was destroyed, and the formerly all-powerful ministries of the USSR quickly came under Russian control. This was the legacy left to Russian reformers in the winter of 1991–2.

the russian inheritance: apparatchiki into entrepreneurchiki Analysts frequently describe Russian civil society as “stunted” or “flattened” in the wake of communism’s demise. But it is important to note that this characterization stems from a blurring of the lines between civil society and the state within the communist system itself (that is, where did the state end and society begin?). Civil society in the sense of well-formed interest groups autonomous from the state may have been emerging (indeed, proliferating) by 1991 only to evaporate a year later. Nonetheless, well-formed political and economic interests that emerged out of the ruins of the Soviet state itself already constituted robust and active interest groups that endured throughout the postSoviet period. Their preeminence evolved at least partly from the way in which the Soviet economy had developed such that it was dominated by relatively few large enterprises to more easily facilitate centralized planning of productive inputs and outputs. As a result, by the end of 1988 in Russia, the 23,766 existing large and medium-sized enterprises (those with more than 200 workers) employed 95 percent of the workforce and produced 95 percent of economic output. Even more indicative of the degree to which productive capacity was highly concentrated, 75 percent of employees and production were in enterprises with more than 1,000 workers.32 31 32

Aslund, p. 52. Joseph Blasi, Maya Kroumova, and Douglas Kruse, Kremlin Capitalism: Privatizing the Russian Economy (Ithaca, N.Y.: Cornell University Press, 1997), p. 25.

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Through the decade after the collapse of the Soviet Union, it was still this group of “entrepreneurchiki” (Soviet apparatchiks turned postSoviet entrepreneurs) that had such a dramatic and far-reaching effect on the development and governing capacity of the post-Soviet Russian state – capacities that had clearly declined relative to even the late Soviet state.33 Unlike the dominant accounts of Western European state building, where administrative capacity was built out of the ruling elites’ desire for resources to make territorial conquests, in postcommunist Russia during and immediately following the collapse of the Soviet Union, state administrative capacity was rapidly torn down to grab assets that resided not within society but within the state. Thus, it became perfectly rational for Soviet bureaucrats, like enterprise directors, to “steal the state” itself.34 The main inheritance, then, of post-Soviet rulers was a rapidly disappearing and severely debilitated state that became even more so. Moreover, one can also argue that the dynamic of post-Soviet Russian state building was reversed from the dominant Western European model advanced by Charles Tilly, for example, where societies’ assets in the form of taxation funded state development.35 In post-communist Russia, the very fact that assets were vested within the Soviet state itself rather than within society meant that as the system began to unravel, apparatchiks – as de facto owners of state assets – had a clear incentive to grab as much as they could. Even immediately following the collapse of the Soviet system, former apparatchiki as de facto owners continued to tear the state down by extracting its assets rather than building it up through extraction from an impoverished society. Further, contrary to the analyses of those who would blame Boris Yeltsin and his successive teams of reformers for the sorry condition of the Russian state more than a decade after the collapse of the Soviet Union, it was the apparatchiki-turned-entrepreneurchiki (themselves products of the dysfunctions of the Soviet system and Gorbachev’s 33

34 35

It is worth distinguishing between those enterprises that were “privatized” in the first wave of privatization in particular and those that were “born private” or that never existed previously as state enterprises. In this book, I am focusing more on the former and not the latter. See Thane Gustafson, Capitalism Russian Style (New York: Cambridge University Press, 1999), pp. 36 and 37. Solnick. Ganev, 2001.

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haphazard reforms) who should be looked at far more closely as the perpetrators and sustainers of Russia’s incapacitated state. These powerful interests clearly inserted themselves into the reform process by mid-1992, effectively ending the attempt at shock therapy after only six months and ensuring further that the first wave of privatization presented no challenge to their newly found gains. In his memoirs, Gaidar would later say of this group: “It went for the scent of property, as a predator goes for his victim. . . . Nobody fired any managers of state companies or ministerial bureaucrats, nobody seized their bank accounts . . . and they were allowed to keep their status, wealth and connections.”36 Indeed, they managed to extract enough compromises from Yeltsin’s team that privatization of large enterprises established enterprise directors as de jure, not just de facto, owners of their factories. The interdependence and collusion between regional enterprises and governments stems back, as I have argued already, into the Soviet era, but the political compromises built into the 1992 privatization program institutionalized the de facto ownership that many managers had established over their factories and thus further cemented enterprise– government dependencies. Initially, Anatolii Chubais and his team at the newly created State Committee for the Management of State Property (Goskomimushchestvo, or GKI) argued against a privatization program that would grant special privileges to employees and enterprise directors. But given the opposition that was mounting against privatization through 1991 and 1992, combined with the degree to which the economy had already collapsed and the extent to which spontaneous or insider privatization had already taken place through the late Soviet era, Chubais was forced to make a serious compromise on insider privilege.37 All three variants of the 1992 mass privatization program under Yeltsin (and under which 14,000 firms were privatized) enabled insiders – both managers and workers – to purchase between 40 and 51 percent of shares outright. Of the three options under which enterprise employees and directors could choose to privatize their enterprise, the most popular (chosen by 73 percent of enterprises) was 36 37

Egor Gaidar, Gosudarstvo i evoliutsiia (The State and Evolution), p. 155. Blasi, Kroumova, and Kruse, p. 40; and Aslund, p. 229.

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“option 2,” which allowed for majority (51 percent) employee ownership. It is important to note that workers and managers of enterprises did not have to compete with outsiders for this initial block of shares. This went some distance in assuaging their earlier fears that they would lose control of their respective enterprises (and job security as a result) to outsiders. Employees and managers could purchase additional shares through vouchers and also through the employee pension plan.38 Although Chubais clearly opposed this degree of insider ownership, he was largely forced to concede this option to get the program passed in the Supreme Soviet (as the Russian parliament at the time was known) and implemented by regional officials and enterprise managers.39 Indeed, the fact that the privatization vouchers issued to every man, woman, and child in Russia were also tradeable under the program allowed insiders to buy additional vouchers and thus additional shares in their enterprises. Thus, compromises built into the privatization program, despite the clear misgivings of its “market bolshevik” designers, enabled insiders to maintain and even more firmly establish their effective control over their enterprises. This, in turn, consolidated a property rights regime that has proven difficult to change and that was not only a drag on investment and productivity but also provided a political base from which powerful elites could resist central state interference in regional economies and politics. The designers of the privatization program justified these huge concessions to managers, hoping that they would effectively buy and ensure the managers’ participation.40 The high degree of insider privatization that was condoned by the program was also a way to provide some assurance to newly elected regional governments that regional outsiders would not immediately be empowered to interfere substantially with the regional economy, for which they were now accountable through elections. In addition, the program gave an incentive to regional governments to participate in the privatization process by granting them blocks of shares of between 15 and 20 percent in certain

38 39 40

Blasi, Kroumova, and Kruse, p. 41. Aslund, p. 234. Andrei Shleifer and Daniel Treisman, Without a Map: Political Tactics and Economic Reform in Russia (Cambridge, Mass.: MIT Press, 2000), pp. 27–34.

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enterprises (to either be held or sold later) as well as by enabling them to get a percentage of funds from the auctions that were held for the remaining shares. (Later, some enterprise managers would openly report that local privatization officials had assisted them in effectively blocking the participation of outsiders in provincial auctions of enterprise shares.)41 Despite the concessions made to the major stakeholders (enterprise directors, workers, and regional and local governments), the hope was that gradually, outsiders would invest in these firms and that ownership and management would become separated. By the end of this phase of the program, employees owned a majority of stock (51 percent or greater) in about 65 percent of the 15,000 large and mid-sized enterprises privatized between 1992 and 1994. By the year 2000, however, there was general agreement that managers and employees continued to hold 50 to 60 percent of shares in privatized enterprises.42 Some analysts have claimed, therefore, that “such a concentration of employee ownership of the core of an economy is unprecedented in world economic history.”43 To add further perspective to this claim and these numbers, it is important to note that managers’ de facto control of their enterprises often exceeded their actual direct ownership of shares of their companies because many employee shares did not come with voting rights. Managers also routinely employed coercive tactics (like threatening layoffs or firings, withholding wages, etc.) to prevent employees from selling their shares to outsiders. Finally, most corporate boards of privatized companies had a majority of insider membership, most enterprise directors reportedly opposed the disclosure of ownership and financial information, and most had conducted little restructuring by 1996.44 41 42

43 44

Blasi, Kroumova, and Kruse, p. 52. Raj Desai and Itzhak Goldberg, p. 9. “The Vicious Circles of Control: Regional Governments and Insiders in Privatized Russian Enterprises,” Policy Research Working Paper 2287 (Washington, D.C.: The World Bank, Europe and Central Asia Region Private and Financial Sectors Development Unit, February 2000). Blasi, Kroumova, and Kruse, p. 58. These details can be found in Table 9 of Blasi, Kroumova, and Kruse, pp. 200–1, and are based on responses to surveys conducted of enterprise managers between 1994 and 1996. Note also that there are, of course, exceptions to these trends. Kathryn Hendley, for example, writes convincingly of the situation at the Saratov Aviation Factory (SAZ), where clearly attempts at restructuring had taken place but the obstacles to actually bringing about meaningful restructuring within the context of declining orders and poor state support were considerable.

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Moreover, “despite other positive signs in the Russian economy, the enterprise sector remained in a low-investment, low-productivity trap.”45 Wage, supply, and tax arrears persisted and inter-enterprise barter payments reached half of all industrial sales by mid-1999.46 Insiders received particularized benefits while the general state of productivity and investment declined. Although the original argument for rapid privatization was to prevent asset stripping by industrial managers in state-owned enterprises (and also to forestall any further “spontaneous privatization” of enterprises by management), in fact they persistently grabbed and resold assets from their newly privatized firms. World Bank analysis indicates that instead of increasing a firm’s value through reinvestment, enterprise managerowners have typically extracted income streams from these firms at the expense of minority shareholders. The managers have diverted cash flows to offshore accounts and shell corporations, concentrated losses among subsidiaries held by outsiders . . . and delay[ed] payments of dividends.47

Other studies by the World Bank characterize the dynamic between enterprises and the state in some post-communist countries – including Russia – as indicative of a form of “state capture.”48 State capture is understood to denote both the influence a firm may have on the formation of laws as well as administrative corruption that may entail not only conflict of interest of government officials but also private payments by firms to public officials to “distort the prescribed implementation of official rules and policies.”49

45 46

47 48

49

Desai and Goldberg, p. 7. Desai and Goldberg, p. 7. Their source for this economic data is Russian Economic Barometer and Russian Economic Trends. World Bank, “Dismantling Russia’s Nonpayments System: Creating Conditions for Growth,” 1999. For more on barter and the nonpayments crisis, see David Woodruff, Money Unmade: Barter and the Fate of Russian Capitalism (Ithaca, N.Y.: Cornell University Press, 1999). Desai and Goldberg, p. 9. Joel S. Hellman, Geraint Jones, and Daniel Kaufmann, “Seize the State, Seize the Day: State Capture, Corruption and Influence in Transition,” Policy Research Working Paper 2444 (Washington, D.C.: The World Bank, World Bank Institute Governance, Regulation and Finance Division and Europe and Central Asia Region, Public Sector Group, and European Bank of Reconstruction and Development Office of the Chief Economist, September 2000). The BEEPS data indicate that Russia’s is a comparatively “high capture” economy. Hellman, Jones, and Kaufmann, p. 2.

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Analyses employing the 1999 Business Environment and Enterprise Performance Survey (BEEPS) of more than 3,000 firms in 20 countries in Eastern Europe and the former Soviet Union indicate that both older and newer firms engaged in attempts to influence and often capture the state. This behavior on the part of firms was to ensure the perpetuation of the property regime described above that favored them (by limiting competition and entry into their markets, preserving their rent-seeking opportunities, and protecting them from central state regulation and taxation). More specifically, these firms (especially those privatized firms as opposed to those born private, but to some degree the latter as well) in particular wanted continued state subsidies (a continuation of soft budget constraints as well as subsidized energy supplies), relief from paying taxes, and protection from outside competition.50 It would be a mistake, however, to assume that regional governments in Russia were merely victims of this kind of behavior on the part of emerging “entrepreneurchiki” rather than frequently willing participants in an interdependent or more collusive relationship. It is not clear, therefore, that regional governments were “captured” per se. Indeed, regional governments often sought to maintain involvement in and sometimes control over the operations of regional enterprises particularly important to the regional economy – even if the latter were formally privatized. This was often to prevent large-scale changes within enterprises that might threaten the local workforce with unemployment and “to preserve the rent-seeking opportunities for vested interests.”51 Moreover, far from strictly a system of state capture, a regime of interdependence grew between regional business and government that favored the economic status quo: In certain regions . . . the nexus of interdependence between government officials and enterprise management typically grant[ed] management quasi-governmental powers, including influence over executing and lawenforcing apparatus in a given locality. . . . 52

50

51 52

This is not an exhaustive list, but it covers the main concerns of most enterprises engaged in collusive activity with regional governments. Peter Rutland provides a slightly different wish list for enterprises in “Business Lobbies in Contemporary Russia,” International Spectator, Vol. 32, no. 1, January–March 1997. Desai and Goldberg, p. 10. Desai and Goldberg, p. 10.

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The stakes of the relationship were high for regional governments not wanting large factories within their regions to go bankrupt because such bankruptcies would result in widespread unemployment. Since the workforce of the enterprises also constituted the voting public, the futures of regional politicians were quite tightly bound up with the success and failures of enterprises.53 In addition, another holdover from the Soviet era further bound regional politicians in the post-Soviet era to the success of regional enterprises. Many important social services (kindergartens, housing, vacation properties) were still provided through large, formerly state enterprises. Should, therefore, the ownership of the enterprise have attempted to seriously change the status quo in this regard and divest the enterprise of these social service burdens, impoverished regional governments would have been left to assume responsibility for their provision. As a result, collusion between business and government at the regional level in Russia persisted – to the detriment of the central state’s ability to create a single political and economic expanse and govern it effectively. Examples abound of provincial politicians’ becoming deeply involved in the financial transactions of “privatized” enterprises located within their provinces. Woodruff, for example, finds that regional governors in particular were integral figures in facilitating and even promoting barter transactions between enterprises in their regions and enterprises elsewhere. He claims, therefore, that this made them “facilitators” of the defense of the organization of production at the regional level.54 In many regions, oblast governors assumed the former role of “Party secretary” or “prefect” in stepping in to assure back payment of wages for employees of privatized companies, or even in attempting to remove directors of failing privatized enterprises.55

53 54 55

I have made this point previously in Local Heroes: The Political Economy of Russian Regional Governance (Princeton, N.J.: Princeton University Press, 1997). Woodruff, p. 137. For example, see Kathryn Hendley, “Struggling to Survive: A Case Study of Adjustment at a Russian Enterprise, Europe-Asia Studies, Vol. 50, no. 1, 1998. Hendley recounts the story of the governor of Saratov province in 1996 dismissing the general director of Saratov Aviation Factory, a privatized firm. Although the dismissal was apparently welcomed by a contingent of workers, the director of the factory ignored the order because the governor had overstepped his legal authority.

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Regional governments also became involved in protecting local industry from the formal effects of national price control policy, for example in the provision of electricity. In two of the three provinces Woodruff examined, regional governors did this successfully; in the third, when the regional governor tried to force enterprises to pay their electricity debts to the federal utility, their directors engineered the dismissal of the governor.56 Finally, local governments even aided, says Woodruff, enterprise exits from the monetary economy through their acceptance of enterprise tax payment in kind and other surrogate monies (wechsels).57 This effectively maintained a soft budget constraint for many enterprises. Another notorious example of this kind of political protection of local “private” enterprise concerns the attempt in 1996 to force the largest tax debtors to pay into the federal treasury. The Chernomyrdin government created a “Temporary Extraordinary Commission” (VChK) possessing considerable authority to collect back taxes through a schedule acceptable to the federal government. If an enterprise did not follow the schedule or could not pay at all, the VChK was empowered to initiate bankruptcy procedures. This federal effort to collect from delinquent enterprises, however, was soon stymied by regional governments aiming to protect local industry. Courts for the most part failed to act when bankruptcy proceedings were brought against big debtors. As it turned out, after its first several months in operation, the tax arrears of VChK-targeted enterprises had frequently increased, and few bankruptcy decisions were actually implemented.58 Adding further balance to the picture of regional governments as potentially “captured” by regional entrepreneurs are examples from a host of regions that demonstrate the extent to which regional governments themselves became active participants in the regional economy or even attempted to subordinate enterprises to their wills. For example, in Pskov oblast, the regional government created regional 56 57 58

Woodruff, p. 145. Woodruff, pp. 146–58. This account is drawn from Gustafson, pp. 209–10. He draws this history of the VChK from Russian Economic Trends, Vol. 5, no. 3, 1996, pp. 108–10; and Russian Economic Trends, Vol. 6, no. 2, 1997, pp. 105–11.

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government enterprises. In 1997, the regional government established a new enterprise, “Pskovkhleb” – a bread company – under the directorship of the deputy governor for agriculture and food processing. He pressured a private flour mill to supply flour at below-market prices so that Pskovkhleb could sell bread at a price approximately 30 percent lower than that of private bakeries. While on the one hand this may have enabled the oblast government to provide bread to the population more cheaply, on the other hand it violated a host of Russian laws, including the federal law on competition.59 Still other provinces not only banned imports into the province to protect local products but also became producers themselves by purchasing controlling shares in regional enterprises, effectively deprivatizing these companies.60 Some regional governments maintained their original shares in enterprises, establishing these regional governments as co-owners. Other scholars have characterized the relationships that emerged (or persisted) between regional business and enterprises as “feudalistic” in that they were characterized by a traditional legitimacy over an inherited realm of personal control; highly personalistic authority and discretion over decision making as opposed to reliance on law; and, more generally, a pattern of economic activity based on personal networks and mutual obligation rather than on enforceable contracts and inviolable property rights.61 Many of these behaviors are reminiscent not only of feudalism perhaps but more properly of the late Soviet political economy described earlier in this chapter.62

59

60 61

62

This example is drawn from Darrell Slider, “Pskov Under the LDPR: Elections and Dysfunctional Federalism in One Region,” Europe–Asia Studies, Vol. 51, no. 5, July 1999, p. 762. Slider, 1999. See for example Richard Ericson, “The Post-Soviet Russian Economic System: An Industrial Feudalism?” Brookings Review 1999; and Vladimir Shlapentok, “Early Feudalism – The Best Parallel for Contemporary Russia,” Europe–Asia Studies, Vol. 48, no. 3, 1996, pp. 393–411. Note that Ken Jowitt in New World Disorder: The Leninist Extinction (Berkeley: University of California Press, 1992) at p. 226 argues that personalistic rule is clearly a part of the Soviet legacy, thereby further refuting those who would blame this aspect of post-Soviet political economy on shock therapy alone.

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While it is important to note the obvious negative economic effects of the interdependent relationships between business and government at the regional level in Russia, this study directs attention to the often overlooked negative political effect that the collusive interdependence of regional governments and business had on what the central state could actually accomplish at the regional level. The regional governments and enterprise directors, who in many ways benefited but also suffered from the transition from communism, had little interest in promoting central state regulation of their activities. In order to protect their early financial and property gains and maintain the fragile economic status quo within their regions, they effectively carved up the political authority of regional governments, largely, although not exclusively, for personal financial advantage. The theory and evidence here provide a deeper understanding of why it was that the federal tax police, for example, by the admission of the director of the federal Tax Inspectorate, required the good will of the regional governor to collect taxes due to the federal budget63 ; why federal pension authorities required the cooperation of regional governments to extract pension payments from regional enterprises; and why federal organs as reputedly powerful as the Ministry of Internal Affairs (successor to the KGB) could be resisted and stopped by regional economic interests in cahoots with regional political authorities.64 In short, the Russian central state only weakly penetrated regional politics and faced strong resistance to many of its policies in the heartland. Moreover, the Russian state-building project became stalled and the state’s governing capacities were limited in the post-Soviet era because the goal of firmly entrenched elites at the regional level was to keep the central state from regulating or otherwise interfering with their activities. Rather than building the state by extracting resources from society, these interests subverted central state reconstruction and undermined central state governing capacities to preserve what they extracted, and continue to extract, from the state itself. 63 64

Interview with Sergei Almazov, director of the federal Tax Inspectorate (or Tax Police), February 1999, as cited in Gustafson, p. 201, fn. 34. This last example is drawn from Slider on Pskov.

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The materials in Chapters 3 and 4 demonstrate the degree to which central state penetration of politics in the periphery was actively resisted at the local level. Chapter 5 then details empirically how the collusive relationship described above brought about this situation. It is to these tasks that I now turn.

3 Governing Russia Patterns of Regional Resistance to the Central State

As noted in Chapter 1, historically Russia has always presented distinctive governing challenges. As far back as Ivan the Terrible, Russian rulers have lamented the great distances between Russian administrative outposts and the obstacles to coherent state policies this distance alone presented. Perhaps, then, it should come as little surprise that successive leaders of the contemporary Russian state have faced frustration in trying to convey authority across this vast expanse. Adding to the difficulties presented by Russian geography is the fact that population density (8.5 people per square km) is among the lowest in the world, and communications infrastructure even in the twenty-first century is often primitive to say the least.1 Yet, while the challenges of Russia’s geography have been more or less constant throughout its long history, different regimes have had varying degrees of success in conveying state authority across territory.2 In the immediate post-Soviet period, however, the central state faced particularly widespread and persistent challenges to its authority

1

2

Statistics on Russia’s population per square kilometer were calculated from The World Factbook, 2000, and can also be found at “Country Statistics at a Glance,” FactMonster.com. For a good discussion of governance challenges and population density in another developing-country context, see Jeffrey Herbst, States and Power in Africa (Princeton, N.J.: Princeton University Press, 2001). The most authoritative account of center–periphery relations in the late imperial period remains Frederick Starr, Decentralization and Self-Government in Russia 1830–1870 (Princeton, N.J.: Princeton University Press, 1972).

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beyond the Kremlin walls. This chapter begins by very briefly exploring the main mechanisms by which the Russian periphery was ruled during the Soviet period. This section contrasts the hypercentralization of the Soviet period with the rapid decentralization and sharply reduced governing capacities of the late Soviet and then post-Soviet Russian state in the first decade following the Soviet collapse. The chapter then moves to an examination of the patterns of regional defiance of central authority across time, policy area and region.

soviet mechanisms of central control and their disintegration During all but the final few years of the Soviet system, central dominance over the periphery was ensured by a multi-layered and overlapping system of institutional subordination.3 The four institutional cornerstones of the center’s control over the periphery were the Communist Party, the unitary system of soviets, the vertical organization of ministries, and the planning mechanisms of the economy. Under the Soviet system, the Communist Party of the Soviet Union (CPSU) exercised overarching control of the center over the periphery. The Soviet Union itself comprised fifteen separate union republics, of which the Russian Socialist Federated Soviet Republic (the RSFSR), the predecessor of the Russian Federation, was the largest. The RSFSR was further subdivided into eighty-eight territorial units, divided into three categories: (1) sixteen autonomous republics; (2) forty-nine oblasts and six krais, plus the two specialstatus cities of Moscow and Leningrad (now St. Petersburg); and (3) fifteen autonomous oblasts and autonomous okrugs (geographically located within the borders of some autonomous republics, oblasts, and krais). The autonomies (autonomous republics, autonomous oblasts, and autonomous okrugs) were organized around one or several of the hundred or so ethnic groups located on the territory of the RSFSR (thus the Tatar Autonomous Republic, the Buryat Autonomous 3

This section is adapted from my “The Russian Central State in Crisis: Center and Periphery in the Post-Soviet Era,” in Zoltan Barany and Robert Moser, eds., Russian Politics: Challenges of Democratization (New York: Cambridge University Press, 2001), pp. 103–34.

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Republic, etc.). Oblasts and krais were essentially administrative units. Oblasts, primarily populated by ethnic Russians, were not attributed any particular ethnic character, whereas krais combined characteristics of both oblasts and autonomous republics. In practice, however, krais were (and remain) administratively indistinguishable from oblasts. Fourteen of the fifteen union republics had their own Party organizations. The RSFSR, however, was included in the all–Union Party structures until 1990, when a Russian Communist Party was founded. Within the RSFSR, the CPSU had provincial party organs in all of the eighty-eight subnational units. These began at the autonomous republic and oblast levels and descended to the district or county (raion) level, city level, village level, all the way down to the Primary Party Organizations that were present in all places of work. Each level was dominated by the next highest level such that the oblast and autonomous republic Party organizations were at the top of the territorial hierarchy. In the RSFSR, oblast and autonomous republic Party organs were subordinate only to the Central Committee of the CPSU. The first secretary of the oblast or autonomous republican Party committee (obkom) was therefore the undisputed political boss of the region – termed “prefects” by Jerry Hough in the late 1960s, as noted in Chapter 2. Because party organizations were designed to parallel state organs of power, the basic state legislative units were (in descending order of administrative authority) autonomous republican and oblast soviets, raion soviets, city soviets, and village soviets. Despite modest attempts at reform in the 1960s and 1970s, “administration at the local level was effectively an extension of central authority.”4 Further buttressing the hierarchical system of top–down control was firm center–periphery linkage through the “unitary system of soviets” or legislatures such that each was subordinated to the next highest level. As important, the soviets were dominated by the corresponding Party organizations. The second-longest-serving General Secretary of the Communist Party (after Stalin), Leonid Brezhnev modernized the original Bolshevik principle (initiated under Lenin during the Civil War) of Party supremacy in Article 6 of the 1977 Constitution of the Soviet 4

Hill in Kathryn Stoner-Weiss, Local Heroes: The Political Economy of Russian Regional Governance (Princeton, N.J.: Princeton University Press, 1997), p. 64, fn. 64.

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Union. Article 6 identified the Communist Party as “the leading and guiding force of Soviet society and the nucleus of its political system, of all state organizations and public organizations.” In practical terms, this meant that the Party maintained control over local soviets, often supplanting their authority. The Party dominated the soviets through a range of instruments, not the least of which was control over the nominations of deputies to sit in regional legislatures. These deputies, in turn, elected an executive committee of the soviet (ispolkom), and generally the overlap between the chief functionaries of the local party organization and the ispolkom was significant, if not perfect. Finally, the vertical structure of the myriad ministries that ran practically all aspects of social, cultural, political, and economic life in the Soviet Union ensured further centralization. Administrative agencies at the regional and local levels were subordinated to the department or ministry at the next highest level: Thus the city education department [was] subordinated to both the executive committee of the city soviet and the oblast education department. The oblast education department in turn [was] responsible both to the executive committee of the oblast soviet and the republican ministry of education. The executive committee itself [was] subordinated to both the local soviet and the executive committee (or Council of Ministers) at the next territorial level.5

The dictates of the planned economy meant also that local soviets had virtually no independent authority to establish their own spending priorities – they were decided by bureaucrats in the central government in Moscow. In sum, the Soviet system of multi-institutional subordination ensured a high degree of centralization and rendered regional governments little more than administrative, not policymaking (and certainly not central policy–flouting) organs. As the Soviet system began to unravel in the late 1980s, however, so too did this vertical system of central control over the periphery. This was in part hastened by the holding of free elections to regional soviets (or legislatures) in the spring of 1990, loosening the stranglehold of the CPSU on the machinery of government. The Party itself collapsed following the attempted August 1991 coup against the then president 5

Jerry Hough and Merle Fainsod, How the Soviet Union Is Governed (Cambridge, Mass.: Harvard University Press, 1979), p. 490.

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of the Soviet Union, Mikhail Gorbachev, although its death knell was sounded when Gorbachev lifted Article 6 in the spring of 1990 just as Russians elected new regional legislatures in popular contests. In the summer of 1991, as the new president of Russia, Boris Yeltsin, took the extraordinary step of banning the Party in all places of work in his republic. This was later declared unconstitutional. At the time, however, it seriously damaged the authority of the Party across Russia and, in the absence of consolidated alternative political organizations (democratic or otherwise), the Party’s demise helped to weaken further central control over regional political and economic actors in the periphery. As I noted briefly in Chapter 2 and is worth reiterating here, the gradual erosion of the power of central ministries over the economy in particular was brought about initially through a series of half-baked reforms under Gorbachev in the late 1980s. Throughout the late 1980s the staffs of the huge bureaucracies were slashed and the ministries were subjected to a series of ill-conceived reorganizations.6 This led to a reduced role for planning agencies and federal bureaucracies in regional economies and contributed to the emerging independent authority of powerful enterprise directors. Finally, Yeltsin’s political jockeying with Gorbachev in 1990 and 1991 for Russia’s supremacy over the unraveling USSR also undoubtedly hastened the devolution of power. His now-infamous exhortation to regional leaders within Russia to grab more power from Moscow paralleled his own struggles against Union supremacy and Gorbachev’s desperate attempts in 1991 to hold the Soviet Union together.7 Yeltsin likely did not anticipate, however, just how much autonomy Russia’s regional governments would grab throughout the 1990s. Nor did he anticipate the effect their efforts would have on the Russian central state’s ability to govern. In 1990–1 the “autonomous republics” of Russia changed their names to “republics” to denote what they considered to be their newly elevated status as near-juridical equals to Russia itself, although still units within the unraveling Soviet 6 7

Peter Rutland, The Myth of the Plan: Lessons of Soviet Planning Experience (La Salle, Ill.: Open Court Publishers, 1985), p. 208. See Jeffrey Kahn, “The Parade of Sovereignties: Establishing the Vocabulary of the New Russian Federalism,” Post-Soviet Affairs, Vol. 16, no. 1, January–March 2000, pp. 58–89.

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state. Four (including Adigai, Gorno-Altai, Karachai, and Khakassia) of five autonomous oblasts also unilaterally raised their status to that of republic (making the total number of republics twenty; ChechenIngushetiia’s division into two republics at about the same time created an additional republic, making the total twenty-one). This too, was the beginning of a dangerous precedent. By declaring themselves republics, these autonomous oblasts grabbed increased jurisdiction over their own territories. As a result, by 1991 the Russian Federation comprised twenty-one republics, forty-nine oblasts, and six krais; the two special-status cities of Moscow and St. Petersburg, both of which had oblast status; ten autonomous okrugs; and one autonomous oblast. The Chechen republic, of course, declared itself independent (and waged two wars of independence with the contemporary Russian Federation from 1994 to 1996 and from 1999 on). The Chechen leadership does not consider the republic to be a part of the Russian Federation today, but it is still counted as such because its formal relationship with Russia is yet to be decided conclusively. Figure 3.1 shows the administrative divisions of the Russian Federation in 1991 at the time of the Soviet Union’s demise. In part, the confrontation in Russian center–periphery relations stemmed from the institutional vacuum left in the wake of the collapse of the Soviet Union. Boris Yeltsin proved himself particularly adept at tearing apart the institutional bulwarks of the Soviet state, but the task of building new institutions that might have enabled him to actually govern his country proved far more difficult. Initial resistance to the new central state was both a reaction to Soviet hypercentralization and a result of the clash of views between central authorities and regional political leaders regarding the appropriate distribution of power between levels of government. The center favored a national federal system – a type of “federalism from above” – wherein the central government would clearly take the lead in determining the distribution of power between itself and the federation’s constituent units, whereas regional leaders advocated (and continue to advocate) a more contractually based federal system, wherein regions would sign individual or collective agreements with the central state that would govern their membership in the federation. The “war of laws” in which regions passed laws that directly contradicted

50

figure 3.1: The Territorial Divisions of the Russian Federation.

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federal law, and chronic noncompliance with existing federal law of the 1990s between the federal center and almost all of Russia’s eightynine provinces, should all be viewed in the context of these conflicting perspectives on the shape of the Russian state.8 But in exploring the patterns of regional noncompliance with federal law and the constitution through the 1990s, it is also clear that the simultaneity of the political and economic reform processes made regional governments (and some more than others) particularly resistant to central authority in economic policy areas.

the battle over the shape of the post-soviet russian state Conflicts in center–periphery relations in Russia arose early in the reform process. The legislatures created through popular election in 1990 introduced the notion of accountability to local politics. Not unreasonably, if regional legislators were to be held responsible by constituents for the political and economic conditions of their regions, then they wanted more control over key policy instruments (or at least used the pretext of increased public accountability to demand more control from the center). This period was punctuated by the frequent practice of regional governments’ withholding tax revenues from federal authorities, and periodic refusals on the part of some regions to follow central policy prescriptions in areas such as privatization.9 Initial steps toward negotiated autonomy included the three federative agreements of 1992 (which were long on promise but short on meaningful transfer of power from center to periphery), and then an initial set of bilateral treaties in 1994.10 These included the treaty between the federal center and the Republic of Tatarstan in February 1994 and similar bilateral treaties between the center and six other republics by the end of the same year. Eventually, however, the central government moved far enough away from its initial conception of “federalism from above” to sign additional treaties with thirty-three 8 9 10

For more on these examples of center–regional conflict, see Stoner-Weiss, 1997, Chapter 3. Natal’ia Gorodetskaia, “Irkutsk Refuses to Pay Taxes into the Federal Budget,” Nezavisimaia gazeta, May 22, 1992, p. 2. Stoner-Weiss, 1997, pp. 85–7.

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other constituent units of the federation in 1996 and 1997.11 By the time Boris Yeltsin handed the baton of central authority to Vladimir Putin in December 1999, there were forty-two such treaties in all.12 Despite this penchant for cutting bilateral deals with particular regions, the central government authorities also intended for the 1993 Constitution of the Russian Federation to serve as the defining document for center–periphery relations. It incorporated two articles (71 and 72) enumerating exclusive federal and shared federal and regional areas of jurisdiction, but it did not include an article enumerating or exclusively reserving certain powers for the regions. In the wake of the breakup of the Soviet Union and the violent showdown between the president and the Supreme Soviet of October 1993 (in which many regional governments supported the latter), President Yeltsin and his team of constitutional drafters thought that by not enumerating the exclusive rights of regions, they were in effect proscribing the independent policy authority of regional governments. They intended to work this out through what Yeltsin would later term “political” agreements with errant regions, like Tatarstan.13 Tatarstan, therefore, established its relationship with the federal center on a unique basis – “contractual” rather than constitutional.14 The Tatarstan treaty was signed only a few weeks after the adoption of the Russian constitution in December 1993. Sergey Shakhrai (then chair of the presidential commission charged with signing bilateral agreements on behalf of the federal government) explained that the Tatarstan treaty was not intended to serve as a model for other regions. Instead, Shakhrai argues that it “was politically necessary to eliminate

11

12

13 14

Nikolai Petrov and A. Titkov, “Geokhronologiia” (Geochronology), Politicheskii Landshaft Rossii (The Political Landscape of Russia) Biulleten’ No. 2–3, September– October 1997 (Moscow: Carnegie Endowment for International Peace), p. 13. Full texts of the treaties and agreements signed from February 15, 1994, through June 13, 1996, are published in M. N. Guboglo, ed., Federalizm vlasti i vlast’ federalizma (Moscow: State Duma of the Russian Federation, Committee on Federal and Regional Policy, and the Russian Academy of Sciences, Institute of Ethnology and Anthropology, 1997). Those treaties and agreements signed in 1997 are most easily available, I have found, through signatory regional government and republican administrations. See also V. N. Lysenko, “Razdelenie vlasti i opyt Rossiiskoi Federatsii” (Division of Power and the Experience of the Russian Federation), in Guboglo, ed. Federalizm vlasti i vlast’ federalizma, pp. 166–93. Boris Yeltsin, Radio Address, October 31, 1997. Lysenko, p. 172. Chechnya also did not sign the 1992 agreements. Its intransigence resulted in outright war with the Federation, the results of which are well known.

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the separatist tendencies that existed in the republic between 1990 and 1993, to establish a legal path to resolving the problem of stability and to normalize the relations of power.”15 The problem, of course, was that signing such an agreement with one constituent unit opened the door to further demands for special treatment from other regions. In sum, the Tatarstan treaty set a dangerous precedent and had the effect of raising the status of one member of the federation despite the constitution’s explicitly stating that all members were of equal status (article 5, point 4). Naturally, other regions sought to rectify this situation, and it is here that we see the center becoming more reactive than proactive in its relations with many of the eighty-nine regions of Russia. For example, as Shakhrai himself described it, “Beginning in 1994–5, gradually the procedure arose of preparing and signing agreements on the division of subjects and authority between federal and regional organs of state power. . . .”16 Although he insisted that the basis of federal relations in Russia was constitutional and not contractual, noting that the constitution of 1993 foresaw the possibility of such agreements,17 Shakhrai’s own accounting of the process by which bilateral agreements were signed indicates that the practice was not intended to be as widespread as it became. In sum, while key central officials like Shakhrai continued to pay lip service to their conception of “federalism from above,” established on a national-constitutional basis, their actions indicated that in fact they had succumbed to the contractually based conception of the Russian Federation favored by a majority of Russian provincial leaders. The treaty system, however, did not serve to rationalize separation of powers or establish a transparent system of Russian federal relations more generally. The treaties (dogovora) themselves were relatively general statements regarding the nature of the division of powers and shared powers between the particular subject of the federation and federal institutions. All the treaties were slightly different, although they contained some common elements. They were accompanied by a series 15

16 17

Sergei Shakhrai, “Rol’ dogovornykh protsessov v ukreplenii i razvitii rossiiskogo federalizma” (The Role of the Treaty Processes in the Strengthening and Development of Russian Federalism), in Guboglo, ed., Federalizm vlasti i vlast’ federalizma, p. 152. Shakhrai, 1997, p. 153. Shakhrai, 1997, p. 156.

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of agreements (soglasheniie) that could be signed any time after the treaties were initially ratified. The agreements were far more detailed than the treaties with respect to specific policy purviews and were, therefore, rather wildly different for each region depending on particular policy concerns and resource endowments. Sverdlovsk oblast, for example, signed eighteen agreements ranging from the region’s investment policy, to use of natural resources, to health and cultural policies, in addition to its original treaty. In contrast, Kaliningrad signed only three agreements: one on education and science, another on cultural questions, and the third on maintaining law and order in the region.18 Further, regions could propose additional agreements after they signed their original treaties.19 Many, but not all, of the agreements were made for a set period of time (generally two to five years). According to the terms of these time-bound agreements, they could be canceled by either party (the region or the federal center) on the condition that each side provided the other with notice at least six months prior to the expiration of the agreement of their intention to do so. If no such notice was provided, the agreements were automatically renewed for an additional two to five years.20 According to the Presidential Decree (No. 370) of March 12, 1996, the treaties and accompanying agreements were not to violate the constitution of the Russian Federation, could not change the status of a subject of the Federation, could not add to or change what is enumerated in articles 71 and 72 of the constitution, and must respect the supremacy of the constitution.21 On this basis, in the view of central officials, the treaties and agreements were not intended to be 18

19

20

21

See the “Treaty on the Division of Power and Authority Between the Organs of State Power of the Russian Federation and Organs of State Power of Sverdlovsk Oblast” as well as the 18 soglasheniie. All are published in Guboglo (1997), pp. 313–19 and 652–90. Kaliningrad’s agreements are in Guboglo (1997), pp. 642–8. For example, Sverdlovsk oblast concluded its agreement on the regulation of land relations and the administration of land on May 29, 1996, although its original treaty with Moscow and other agreements were signed on January 12, 1996. See Guboglo (1997), p. 870. A statement to this effect appears at the end of all the agreements between Sverdlovsk oblast and Moscow, although no such statement appears at the end of the agreements with Kaliningrad, and only a few other regions’ agreements contain this statement. See Guboglo (1997). Shakhrai, 1997, p. 157.

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extra-constitutional documents and were supposed to merely “concretize areas of joint jurisdiction specific to each subject of the Russian Federation, taking into account the specific peculiarities of each region.”22 In reality, however, a number of the treaties and agreements actually did either contradict the constitution or went beyond what was envisioned in articles 71 and 72. For example, areas that in the constitution of the Russian Federation were ascribed to the federal government exclusively (article 71) appeared as areas of joint authority in many treaties. This type of constitutional violation appeared in the treaties of North Ossetiya (point 3, article 4), Kabardino-Balkariia (point g, article 4), Tatarstan (point 2, article 3), and Bashkortostan (point 2, article 4), where the treaties granted these regions the right to defend state and territorial integrity. Another notable example is the authority both Sverdlovsk and Udmurtiia gained in their treaties over the functioning of enterprises in the defense complex (article 2, point g of the Sverdlovsk treaty; and article 2, part 7 of Udmurtiia’s treaty).23 Further, in a number of agreements, areas that were again to be exclusively reserved for the Russian Federation government were included in lists of authorities for subjects of the Federation – for example, participation in international relations, the establishment of relations with foreign states and conducting agreements with them (Tatarstan, article 2, point 11); the establishment of national banks (article 2, point 12, Tatarstan; and article 3, point 11, Bashkortostan), and questions of republican citizenship (article 2, point 8, Tatarstan; article 3, point k, Kabardino-Balkariia; article 3, point 1, Bashkortostan).24 Finally, areas that in the constitution were identified as spheres of joint jurisdiction between the federal government and the subjects of the Federation at times appeared in the treaties as the apparently exclusive authority of several of the subjects of the Federation – for example, the defense of the rights of citizens (Tatarstan article 2, point 1; Kabardino-Balkariia, article 3, point j; Bashkortostan, article 3, 22 23 24

Shakhrai, 1997, p. 158. These and almost twenty other areas where many of the treaties violate the constitution are cited in Lysenko, “Razdelenie vlasti” (1997), pp. 184–5. Again, more examples can be found in Lysenko (1997), p. 185, and through careful comparison of the treaties and the constitution.

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point 1), formation and use of Republican Precious Metals and Stones Fund (Iakutiia, article 1, point j), and a system of state organs, their organization, and their activities (Tatarstan, article 1, point 7; Kabardino-Balkariia, article 3, point g; Bashkortostan, article 3, point 2), to name but a few areas.25 A federal law signed in June 1999 (“On the Principles and Ordering of the division of areas of jurisdiction and authority between organs of state power of the Russian Federation and organs of state power of the Subjects of the Russian Federation”) was intended as a mechanism by which to resolve these violations of the Russian constitution, but these violations remained in many regions well into 2000.26 When he ascended to the Russian presidency in March of that year, Vladimir Putin quietly put an end to the treaty-signing process and moved to dissolve all but fourteen of the treaties within his first two years in office. Those that remained in force, however, were among the more far reaching and ambitious (for example, the treaty with Tatarstan that was renewed for a five-year period in 1999), and their presence served to render Russian federal relations perennially asymmetric. Putin likely chose to dissolve many of the treaties in recognition of the fact that they had done little to rationalize a transparent system of center–periphery relations in Russia. The treaties had, in fact, not stemmed the rising tide of regional noncompliance with federal laws and the constitution. A majority of regions, in practice, exercised autonomy beyond what was provided for in either these bilateral agreements, the 1993 constitution, or existing federal law.

patterns of regional noncompliance with federal law and the constitution (1994–1999) Moreover, despite the treaty system and even following the adoption of the constitution of the Russian Federation in December 1993, through 25 26

Lysenko (1997), p. 186; treaties of the respective regions in Guboglo, 1997. Natal’ia Vladimrova Valamova, “Konstitutsionnaia model’ rossiiskogo federalizma,” and Tat’iana Andreeva Vasil’eva, “Stanovlenie federativnykh otnoshenii i praktika Konstitutsionnogo Suda Rossiiskoi Federatsii,” both presented at the conference “Rossiiskii federalizm” konstitutsionnye predposylki i politicheskaia real’nost’,’” Irkutsk, Russia, October 1–2, 1999.

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to his resignation at the end of 1999, Boris Yeltsin found himself in the unenviable position of attempting to establish authority over a country that he had earlier, in his battles with Mikhail Gorbachev, “sought to render ungovernable.”27 Even during the treaty-signing process, examples abounded of regions’ legislating in direct opposition to federal law and the constitution from 1994 to 1999. They run a gamut of regions and policy areas, and their frequency rose and fell over time.28 For example, in 1996 the Ministry of Justice reported that of the 44,000 regional legal acts it reviewed, including gubernatorial orders, it found that “nearly half did not correspond with the Constitution of the Russian Federation.”29 In 1998, a similar report was issued indicating that in the first three-quarters of the year, 30 percent of regional acts were found to violate the constitution and federal law.30 Noncompliance spanned legal, economic, and social policy areas. For example, North Ossetiia, Voronezh, Samara, Arkhangel’sk, Irkutsk, Tiumen’, and Omsk all passed legislation restructuring their judiciaries, a right exclusively reserved to the federal government by article 71 of the constitution. Other regions maintained illegal tariffs and taxes (Kareliia, Volgograd, Nizhnii Novgorod, Novosibirsk, Belgorod, and Moscow).31 Still other regions introduced their own land codes in advance of a federal law on private land ownership. Other regions claimed the right to ratify international treaties and even revise federal borders.32 27 28

29 30 31

32

Woodruff, Money Unmade, pp. 80–1. For further examination of the extent to which de facto policy autonomy has fallen to Russia’s eighty-nine regions, see Kathryn Stoner-Weiss, “Central Weakness and Provincial Autonomy: Observations on the Devolution Process in Russia,” Post-Soviet Affairs, Vol. 15, no. 1, January 1999. See the Izvestiia (November 4, 1997) report as reproduced in the Institute for East– West Studies Russian Regional Report (Vol. 2, no. 38, November 6, 1997). Russian Regional Report (New York: Institute of East–West Studies), October 1998. Izvestiia (November 4, 1997) in the Institute for East–West Studies Russian Regional Report (Vol. 2, no. 38, November 6, 1997). See also Pavel Vysotskii, “O konstitutsionnoi zakonnosti v Rossiskoi Federatsii,” Chelovek i pravo, no. 13, 102, November 1998, p. 2. The author is the First Deputy Head of the Department of Constitutional Law in the Ministry of Justice of the Russian Federation. “Justice Ministry Warns Regions That They Are Not Complying with Federal Legislation,” in Institute for East–West Studies, Russian Regional Report, March 6, 1997, Vol. 2, no. 9.

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Political structures and citizen rights were also notorious areas of regional assertiveness. An estimated fifty-one of eighty-nine regions violated provisions of the law on local government such that some regional governors illegally appointed mayors of cities in their regions rather than hold elections for these posts.33 In a host of regions, political leaders (including the mayor of Moscow) maintained restrictions on freedom of movement and choice of a place to live that is guaranteed by the Russian constitution. Despite the fact that the Constitutional Court ruled that such restrictions were clear violations of the constitution, the residency permit system persisted in many regions of Russia (including Moscow oblast and the city of Moscow, and Adigea, Kabardino-Balkariia, Karachaevo-Cherkessiia, Krasnodar, Stavropol’, Voronezh, and Rostov oblasts).34 In addition, the mayor of Moscow (Russia’s most populous city and its financial and political center) steadfastly refused to implement the federal government’s housing policy.35 Still other regions violated both the constitution and Russian electoral law in maintaining immigration quotas and/or language and educational requirements and age quotas for prospective voters on their territories.36 Further, the Russian Ministry of Justice claimed that [a]lmost all of the constitutions and charters [basic legal documents of republics and oblasts, respectively] of the subjects of the Federation [eighty-nine subnational units] in sections dedicated to topics of jurisdiction between federal organs of state power and organs of state power of subjects of the Federation contain violations of the provisions in articles 71 and 72 of the Constitution of the Russian Federation.37

33

34 35

36 37

“ . . . While Administration Cracks Down on Other Regions,” Institute for East–West Studies, Russian Regional Report, Vol. 3, no. 5, February 5, 1998. The specific reference is to the practice of Novosibirsk’s governor, Vitalii Mukha. Vysotskii, p. 2. For more on both of these stories, see “Newly Elected Governors Grapple with Moscow, Regional Problems,” Institute for East–West Studies, Russian Regional Report, Vol. 3, no. 2, January 15, 1998. For more on Luzhkov’s refusal to implement federal housing policy see also “Moscow Mayor Spars with Boris Nemtsov Over Housing Reform,” Insititute for East–West Studies, Russian Regional Report, Vol. 2, no. 17, May 15, 1997. Vysotskii, p. 2. Vysotskii, p. 2.

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The most common kinds of violations of these two articles of the constitution included questions of ownership and use and distribution of natural resources, with subjects of the federation claiming ownership despite the fact that the federal government had legal jurisdiction. Similarly, regions and republics frequently introduced unconstitutional laws regarding the administration and distribution of federal property located on their territories. Others introduced laws establishing financial, credit, and hard currency regulations – a right reserved exclusively for the federal government in article 71. Finally, some regions even passed laws regarding the organization and activities of federal executive power (like branches of federal ministries) located on their territories and over which they had no legal jurisdiction.38 According to analysis from the Ministry of Justice, the constitutions and charters of some regions (for example, Ingushetiia, Kalmykiia, Tatarstan, Bashkortostan, Tyva, Kabardino-Balkariia, and Irkutsk oblast and Khanti-Mansii autonomous okrug) claimed the supremacy of their laws over federal law. Others even foresaw the possibility of suspending federal law on the territory of the region if it contradicted the constitution or charter of the region (Sakha, Bashkortostan, Tyva, Komi, and Tatarstan).39

analyzing the patterns of regional resistance to the central state Systematic sources of data on regional noncompliance with federal authority proved impossible to come by, but previous analyses of the issue were limited to sporadic reports from the Russian Ministry of Justice. As a result, I sought a methodology that would allow me to discern more systematically the temporal, spatial, and policy patterns of Russia’s war of policy authority through the 1990s. To do this, I compiled a modest database from a variety of electronic news sources. My research team searched Russian national newspapers for articles containing reported instances of regional noncompliance with federal law and the constitution from January 1994 (the month immediately 38 39

Vysotskii, p. 2. Vysotskii, p. 2

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following the adoption of the constitution in December 1993) through December 1999 (the end of the Yeltsin era).40 By 2000, Putin had started cracking down on the Russian press such that it became an increasingly less reliable source of material for this project. Although in many ways it would be ideal to have a data set culled from data collected from the Russian Ministry of Justice, I abandoned hope of ever gaining access to it after being unceremoniously rebuffed in several attempts to do so. Nonetheless, the data set I managed to compile from the database of articles provides a good sense of the scope of the phenomenon. Although the number of violations in our data set appears to be far smaller than indicated by the sporadic reports issued by the Russian Ministry of Justice, nonetheless there is good reason to think that this sample is representative of what is possibly a larger population of violations. That is, there may be biases in the ways in which newspapers reported these violations, but there is little reason to think that these biases are systematic or that they would render these data unrepresentative. Indeed, it is possible that the data we gathered are more representative of the total population of violations than reports by the Ministry of Justice in that newspaper coverage may be more objective. With these data, I am able to explore the general patterns of noncompliance across time, policy area, and region. The database provides 40

This data set was compiled using the Lexis Nexus electronic database as well as Radio Free Europe/Radio Liberty Electronic Archives and the Eastview Publications electronic archives purchased by Firestone Library at Princeton University. The search of Russian national newspapers (that is, with news coverage and circulation across the country, rather than any particular region) generated approximately 500 articles cataloging regional noncompliance with the constitution. With the assistance of two of my graduate students, Eric McGlinchey and Marc Berenson, I devised a list of policy areas by which to classify noncompliance into nine categories (economic, social, electoral requirements, the judiciary/legal, taxation, trade, citizenship, regional government structure, and misdirection of federal funds). Next, my team coded the articles gathered from the database so that each infraction was assigned a policy area. Many of the articles yielded more than one infraction per region, so the final number of observations was 846. These data provide a thumbnail sketch of the extent of the center’s noncompliance problem in the regions. I do not know if the various newspapers emphasized one region over another in their reporting, or if some acts of compliance were simply easier to observe and were therefore over-reported. In thinking about this problem, however, I have no sense of the ways in which biases would run or what weighting scheme would make sense in attempting to correct for this problem in the data. I am confident these data are the best available, however.

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100

80

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Count

40

20

0 1 Q 94

1 Q 95

3 Q 94

1 Q 96

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3 Q 99

Quarter 1st Evt figure 3.2: Regional Violations of Federal Law By Quarter, 1994–9 (Count = Number of Violations, 1st Evt = First time noncompliant event appears in the newspapers).

an excellent picture of the phenomenon to which Putin reacted so strongly in 2004 by ending the practice of democratically electing regional leaders at the provincial level. Variations Across Time Figure 3.2 indicates, clearly regions became bolder in their dealings with the central state through the 1990s.41 Although reported instances of noncompliance appeared to peak toward the end of the decade, there was a slow but steady increase in reported noncompliance through the 41

We have some confidence that the temporal patterns we observe are not merely a result of fluctuations in the quality of newspaper coverage of the phenomenon through the 1990s in that Ministry of Justice reports issued regularly from about 1996 onward also indicate a steady increase in reported infractions. Thus, the patterns the Ministry reported seem to parallel what our data show.

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six years for which we have data. It is important to note the other political and economic events with which the central state was dealing that might have influenced regional government behavior in becoming more or less compliant at particular points in time. First, noncompliant activity on the part of regional governments appears to have peaked when the national economy was in crisis. As the economy recovered somewhat, noncompliance slackened. This was the case in the year or so–long runup to the financial crisis in August 1998; and by 1999, when the economy began to show signs of recovery (the first year of positive GDP growth), noncompliance tapered to pre-crisis levels. Second, it is notable also that noncompliant activity was consistently high from the third quarter of 1996 through the third quarter of 1999, following the first Chechen conflict and immediately prior to the second. During the three-year period of relative calm in Chechen– Russian Federation relations, regional governments stepped up their political/legal defiance of central authority, perhaps less fearful of (violent) retribution given the disastrous performance of the Russian military in Chechnya. Moreover, following the spike in noncompliance in 1998 after the financial crisis, noncompliance remained high as regional governments sought to protect their localities from the fallout of the devaluation of the ruble in particular. This illegal behavior was relatively short lived, however, and noncompliance declined steadily and then rather precipitously as the second Chechen conflict began in the fall of 1999. This big dip in noncompliant behavior then may have been a result both of the start of Russia’s (still mild) economic rebound and Putin’s resumption of the Chechen conflict following several incidents of domestic terrorism. This second Chechen conflict was far more popular among the Russian electorate than the first conflict, and it may be that regional governments made a strategic calculation, as they appear to have done during the first conflict between 1994 and 1996, that this was not a good time to aggressively pursue more legal and political challenges to central state authority. Variations Across Policy Areas Figure 3.3 shows the general patterns of violations by policy area. The fact that four (general economic, taxation, trade, and misdirection of

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So

G

Violation Type figure 3.3: Patterns of Noncompliance by Policy Area 1994–1999. Key to Violation Type General Economic = Includes violations of anti-monopoly regulations, pursuit of independent banking policies, pursuit of independent land, property or real estate laws, imposition of price controls, privatization violations. Social = Includes civil/human rights abuses, violations of social welfare provisions, crackdown on regional media, violation of federal ban on death penalty, violations of language rights. Electoral= Electoral requirements for candidates and voters, local parliamentary immunity from prosecution, non-Russian language requirements for candidates, residency requirements for candidates, etc. Judicial/Legal = Includes illegal judicial appointments, interference in the adjudication of law, usurpation of federal judicial or law enforcement authority, introduction of separate legal system (Sharia Law in Chechnya). Taxation = Includes introducing regional taxes in areas where federal government has exclusive tax authority; other violations of federal tax law. Trade = Includes pursuing international trade deals without the express consent of the federal government; maintaining trade restrictions on goods entering or exiting the region. Citizenship= Includes residency registration requirements, regional laws indicating that regional citizenship is primary and citizenship in the Russian Federation is secondary for regional residents. Regional Structure = Includes statements within laws or constitutions of regions indicating that the regional document supercedes federal law and the constitution; infringing on the rights of cities by appointing mayors; creating institutions that would administer regional policies in an area that is exclusively federal jurisdiction. Misdir. Fed Funds = Misdirection of federal funds to regional projects including using federally transferred funds for a purpose other than that directed by the federal government; violations of federal budgetary policies.

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federal funds) of the nine policy areas into which we sorted reported instances of noncompliance concerned financial–economic issue areas indicates that the preponderance of reported regional noncompliance concerned money flows into and out of regions. Combined, the three main economic categories, labeled in Figure 3.3 as general economic, trade, and misdirection of federal funds to regional purposes, constituted three of the top five violation categories – respectively 171, 81, and 78 violations for a total of 330 violations (of 846 in the data set) or 39 percent of the total violations. If we add taxation (58 violations) to this total, then violations directly related to the struggle over economic policymaking authority between center and periphery in Russia constituted 46 percent of total violations included here. Further, although the category entitled Regional Structure encompasses the greatest number of violations, 196, a majority of the violations that we included in this category were also clearly closely intertwined with regional economic policy. Violations concerning regional political structure and authority encompassed statements within laws or constitutions of regional governments that proclaimed the supremacy of regional over federal law, or that created regional institutions for administering policy in an area that was to be exclusively federal jurisdiction; generally these intersected with economic policy areas in that the violations made changes to regional administrative structures with strong economic ramifications. These included, for example, declaring regional ownership of federal property located in a particular region, as described earlier in this chapter, or announcing jurisdiction over a federal economic agency in the region. Regional governments were far less interested in challenging federal authority in areas of social policy, where we uncovered only 62 reported violations. This was likely because policy responsibility for expensive social programs was undesirable for cash-strapped regional governments and so challenges to federal authority in this policy area were fewer. Indeed, the abuses of social welfare provisions included in this category are not so much instances of regional authorities’ grabbing policy authority as much as their simply shirking responsibility for unfunded federally mandated programs and thereby violating federal laws. Figure 3.4 compares the rate of noncompliance in all economic policy areas (classified in Figure 3.3 as general economic, tax, trade,

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all all social

all econ

96

0 1999Q3

1994Q1 yq

figure 3.4: Noncompliance in Economic and Social Policy Areas Compared with Total Violations in All Policy Areas.

and misdirection of federal funds) with the rate in all social policy areas (social, judicial legal, and citizenship in Figure 3.3). Clearly, economic policy was the focus of noncompliance in the regions over time. Variations Across Territory In examining patterns of noncompliance by region with these data, we find further support for the argument that regional economic interests were often at stake in resistance to central authority. As a group, the most frequent noncompliers were the twenty-one ethnically non-Russian republics of the Russian Federation, as opposed to the ethnically Russian oblasts. Only two oblasts were among the top ten noncompliers, for example. See Table 3.1. In terms of the total number of violations, the 21 republics (comprising 24 percent of the total number of Russia’s 89 subnational units) accounted for a disproportionately high number (513 or 60.1 percent) of all violations in the data set. Further, Table 3.2 breaks down the

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table 3.1: Top ten regional noncompliers by region type (republic or oblast/krai) Rank 1 2 3 4 5 6 7 8 9 (tie) 9 (tie) 10

Oblasts

Kemerovo Primoriia

Republics

Number of Violations

Chechnya Kalmykiia Bashkortostan Tatarstan Mari-El Karachaevo-Cherkesiia Sakha Komi Udmurtiia

123 65 50 37 32 25 24 21 20 20 19

number of violations of each type of region by the nine policy areas described in Figure 3.2. In particular, in looking at the proportion of policy type that each type of region claimed, we see that the twenty-one republics accounted for 34.5 percent of what we classified as economic violations, 82.3 percent of social, 82.6 percent of electoral, 86 percent of judicial and legal, 37.9 percent of taxation, 48.1 percent of trade, 64.7 percent of citizenship, 77.8 percent of regional structure, and 37.2 percent of misdirection of federal funds. If we exclude the Chechen Republic from the data as an outlier given that its leadership viewed the republic as a separate country with its own legal system and economy, Table 3.3 indicates that the remaining 20 republics still outpaced the 55 oblasts and krais and the two special-status cities of Moscow and St. Petersburg (included under the category “Oblasts”) in total number of violations of federal law and the constitution (390 versus 322) or 19.5 violations per republic and 6.4 per oblast. The ten autonomous okrugs and one autonomous oblast of the Russian Federation (categorized as “autonomies” here) clearly did not play a leading role in the noncompliance battles of the 1990s (with only eleven violations in total among them, or one per geographical unit). This was most likely a result of the fact that their interests were subsumed in the noncompliant actions of the oblasts in which they

67

Economic Social Electoral Judicial/legal Taxation Trade Citizenship Regional structure Misdirection of federal funds Total

Policy Type 34.5 3.1 5.9 2.5 11.2 13.0 3.7 6.2 13.7 100.0

111 10 19 8 36 42 12 20 44

322

% of Total N Events Events

Oblasts

38.1

64.9 16.1 17.4 14.0 62.1 51.9 35.3 10.2 56.4

% of Policy Type

513

59 51 90 49 22 39 22 152 29

N Events

100.0

11.5 9.9 17.5 9.6 4.3 7.6 4.3 29.6 5.7

% of Total Events

Republics

60.6

34.5 82.3 82.6 86.0 37.9 48.1 64.7 77.6 37.2

% of Policy Type

11

1 1 0 0 0 0 0 4 5

N Events

100.0

9.1 9.1 0.0 0.0 0.0 0.0 0.0 36.4 45.5

% of Total Events

1.3

0.6 1.6 0.0 0.0 0.0 0.0 0.0 2.0 6.4

% of Policy Type

Autonomies

table 3.2: Violations of federal law or the constitution by region type and policy area, 1994–9

846

171 62 109 57 58 81 34 196 78

N Events

100.0

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

% of Policy Type

Total

68

Economic Social Electoral Judicial/legal Taxation Trade Citizenship Regional structure Misdirection of federal funds Total

Policy Type 34.5 3.1 5.9 2.5 11.2 13.0 3.7 6.2 13.7 100.0

111 10 19 8 36 42 12 20 44

322

% of Total N Events Events

Oblasts

44.5

66.9 37.0 17.8 34.8 62.1 53.8 40.0 12.8 56.4

% of Policy Type

390

54 16 88 15 22 36 18 112 29

N Events

100.0

13.8 4.1 22.6 3.8 5.6 9.2 4.6 28.7 7.4

% of Total Events

Republics

53.9

32.5 59.3 82.2 65.2 37.9 46.2 60.0 71.8 37.2

% of Policy Type

11

1 1 0 0 0 0 0 4 5

N Events

100.0

9.1 9.1 0.0 0.0 0.0 0.0 0.0 36.4 45.5

% of Total Events

1.5

0.6 3.7 0.0 0.0 0.0 0.0 0.0 2.6 6.4

% of Policy Type

Autonomies

723

166 27 107 23 58 78 30 156 78

N Events

100.0

100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

% of Policy Type

Total

table 3.3: Violations of federal law or the constitution by region type and policy area, 1994–9 (excluding Chechnya)

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were geographically located. Further, for several of the autonomies – in particular, Yamalo-Nenets and Khanti-Mansii, located in Tiumen’ oblast – their political struggles tended to be concerned with negotiating more policy autonomy with the oblast leadership, in some ways paralleling the battles of the other regions of Russia with the central state during this period. The high number of republican violations in the social policy areas as well as electoral violations and those concerning citizenship and the establishment of their own judicial and legal systems in particular indicates that for republics as a group, noncompliance was not limited strictly to economics. Many republican violations included the attempts of regional elites to establish their respective republic as a more or less juridical equal of the Russian Federation ostensibly in pursuit of greater ethnic self-determination. Indeed, aside from social policy (violations of human rights being a leading area with 35 violations), most of Chechnya’s 123 violations were in the areas of judicial/legal structure as a partial result of the republican leadership’s declaring Sharia law in the mid-1990s (generating 34 violations) and regional governmental structure (generating 40 violations) such that the republic’s leadership repeatedly declared independence from the Russian Federation and unilaterally elevated its status to that of nation-state. In most other republics, the pattern was the same, although not nearly as extreme as in Chechnya, in that violations tended to reflect the desire to elevate the republic’s status to a near-juridical equal of the Russian Federation. Pursuant to this, violations that involved changes to the structure of republican governments (declarations of the supremacy of republican law over federal law if the two conflicted, for example) were disproportionately high relative to oblasts (112 violations for republics and 40 for oblasts), as were violations of federal electoral law to the advantage of republican electoral laws. Often, electoral violations included ethnic and language requirements for candidates for republican office – that is, for example, establishing republican laws requiring that candidates speak the language of the titular nationality in violation of federal electoral law specifically proscribing such requirements for electoral office. Nonetheless, economic authority over their regions clearly remained a primary, if not the only, concern for republican and oblast political

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actors alike. Indeed, with Chechnya (the outlier) removed from the data set in Table 3.3, the economic policy category becomes the area in which there were the greatest number of violations (166). The mean rate of noncompliance in this policy area for the 20 republics is 2.7, and for oblasts it is 2.2, making it the area in which noncompliance was third highest for republics (behind regional structure with a mean of 5.6 violations per republic and electoral violations with a mean of 4.4 violations) and highest for oblasts. It should also be noted, of course, that pursuit of more cultural self-determination and pursuit of economic authority are not at all independent projects, for more of one could certainly lead to more of the other. In the statistical analysis that follows, clearly republican status made a big difference among regions in determining which were most likely to defy central authority. But among republics and nonrepublics alike, economic variables mattered more than the percentage of the population that was ethnically non-Russian in identifying the most recalcitrant regions. Variations in Regional Economies and Noncompliance Patterns Given that economic policy appeared to be a main battlefield between Russia and its periphery, and that my argument is that the source of regional challenges to central state authority is in fact resistance to central regulation of economic issues in particular, it is worth exploring in greater detail the relationship between regional economies versus other variables that might cause regions to be more or less noncompliant with the central state. A natural question to explore is, What drives the tendency of republics to be more noncompliant than oblasts in particular? Further, within region types, why are some republics and some oblasts far more noncompliant than others? The comparative politics literature provides a rich trove of hypotheses that we can submit to statistical tests. It may be, for example, that the non-Russian republics are more resistant to the central state’s incursion into their affairs or more determined to set policy independent of central state dictates in the interest of ethnic self-determination. This theory suggests that republics with a lower concentration of ethnic Russians and/or a higher concentration

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of non-Russian ethnicities would be more likely to be noncompliant with central state law. Relatedly, it may be that poorer republics are determined to gain increased control over their regional economies, perhaps to sustain their ethnic project.42 Alternately, however, challenges to central state authority may come from republics that have the most to lose if the central state becomes overly involved in their affairs. This hypothesis, then, suggests that it is republics which have more industry or more enterprises with strong market presence that are more likely to resist the central state through noncompliance. Work by Daniel Treisman regarding the roots of Russia’s apparent “ethnic revival” in the early 1990s indicated that ethnic regions with high industrial output and that were major raw materials producers or had high industrial exports showed greater separatist activism.43 It seems reasonable, therefore, to explore these and other variables in explaining differences between the degree of republican noncompliance with the central state during the same period and beyond. Similarly, with respect to oblasts where the population is predominantly ethnically Russian, there were significant variations in rates of noncompliance. As with the republics, variations among oblasts could as easily be explained by relative regional economic structure or power. That is, oblast leaders tended to be most noncompliant in economic policy areas in order to protect what property and privilege they have managed to amass during the first decade of the transition from plan to market. Thus, we might see higher rates of noncompliance among regions that have significant industrial sectors, are net donors to the federal budget, and have a higher number of enterprises with significant market share of a particular product. A positive coefficient for this last measure – the number of leading enterprises within a region – would also provide some initial support for the argument I advanced in Chapter 2 regarding the political economy of noncompliant behavior. 42 43

See for example Donald Horowitz, Ethnic Groups in Conflict (Berkeley: University of California Press, 1985). Daniel S. Treisman, “Russia’s ‘Ethnic Revival’: The Separatist Activism of Regional Leaders in a Postcommunist Order,” World Politics, Vol. 49, no. 2, January 1997, p. 239.

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72 table 3.4: Explanants of noncompliant behavior

Variable Republic Donor status % population Russian Leading enterprises Industrial production Constant R squared N

Model 1 (Oblasts, Model 2 Republics & Republics, Oblasts Only Autonomies)

Model 3 Republics Only

Model 4 Oblasts Only

15.4a (3.1) 1.24 (2.97) −0.008 (0.047)

12.8a (3.10) − − 3.4 (3.43) 9.57c (4.86) −.967 (3.04) −0.0494 (0.0636) −0.183c (.088) .0527 (.0493)

.385b (0.213)

0.141c (0.173)

1.45c (1.35)

.1999c (.170)

0.0010b (0.000046) 2.29 (0.213) 0.44 88

.000125b (.0000428) 6.56 (5.62) 0.43 77

.000125b (.000034) 22.6(8.4) .29 20

.000119b (.0000561) −1.92 (4.33) 0.24 57

Chechnya is excluded from these models. a = significant at .01 or better; b = significant at .05; c = significant at .1. I report robust standard errors to control for heteroscedasticity in the data.

I am able to test these hypotheses through regression analysis, reported in Tables 3.4 and 3.5.44 These results indicate that noncompliance through the 1990s was highly correlated with a region’s status as a republic, but that in republics and oblasts alike, noncompliance was driven by the industrialized structure of a region’s economy and the presence of economically powerful enterprises located in the region. In republics, it was also driven by wealth (a republic’s status as a net donor to the federal budget as opposed to its being a net recipient), although natural resource endowments also appeared to matter in model 3a in Table 3.5. This indicates that while non-Russian ethnicity matters somewhat in explaining a republic’s noncompliance pattern, clearly economic variables matter more. Models 1 and 2 in Table 3.4 indicate that a region’s status as a republic makes a big difference in determining the degree to which it is 44

I report Ordinary Least Squares regression results here. On the advice of a number of colleagues, I also ran the data using Poisson regression techniques. The results of the Poisson regressions turned out to be virtually identical to the OLS results, and so, for simplicity and ease of interpretation by the average reader, I report the regressions in OLS form. I am grateful to Mark Fischle, Larry Bartels, and Joshua Tucker for recommending this path and method of presentation of results.

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table 3.5: Republican natural resource endowments (oil, gas, diamonds, etc.) and noncompliant activity Variable

Model 3a (Republics Only)

Donor status % population Russian Leading enterprises Volume of Industrial Production Raw materials exports as a percentage of total Russian Federation exports Constant R squared N

−1.20 (6.70) −0.115b (.051) 3.52c (.818) .0001804a (.0000139) 1.11c (.53) 12.8 (3.8) .84 14

a

= significant at .01 or better; b = significant at .05; c = significant at .1. I report robust standard errors to control for heteroscedasticity in the data.

likely to be noncompliant with federal law and the constitution, as indicated by the highly significant and large coefficients for the republican dummy variable in both models. But if we look into why this might be, we see that non-Russian ethnicity (in models 1 and 2) does not appear to play a significant role. Although the coefficients for percentage of a region’s population that is ethnically Russian are negative (indicating that the lower the ethnic Russian population, the more likely is noncompliant behavior), neither is significant at .1 or better. Thus, in these models, whether a region is predominantly ethnically Russian or non-Russian does not matter in determining whether it will defy central state authority. The noncompliant phenomenon does not appear to have ethnic self-determination at its root when we do not distinguish between region type. The only indication of ethnicity mattering in determining a region’s behavior comes in model 3, which examines variation in noncompliant behavior among republics only. Here, we see a small negative coefficient (but significant at .1) for percentage of the population that is ethnically Russian. Among republics only, then, there is some evidence that non-Russian ethnicity matters somewhat in explaining noncompliant behavior. Significantly, however, variables designed to measure the effect of regional economies on noncompliant behavior are more compelling in explaining the patterns of regional behavior. Although, as a measure of wealth, a region’s status as a net donor to the federal budget does not

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have a significant effect on its propensity for noncompliant behavior in models 1, 2, and 4, the sign is positive.45 Among republics alone, however, in model 3, a region’s status as a net donor to the federal budget has a large effect on a region’s noncompliant activity (a donor republic did not comply 9.57 times more than a nondonor republic) and is significant at the .01 level. Interestingly, this variable falls out as significant when we add a variable measuring resource wealth (regional percentage of Russian Federation raw materials exports) in a refined version of this model (3a). Republics that constitute a larger percentage of national resource wealth have 1.11 more noncompliant events than those that do not (significant at the .1 level). Donor status likely falls out of this model as significant because donor republics are those that have a high percentage of natural resource exports. Thus although a region’s relative wealth as measured by donor status appears to be less important in model 3a than in model 3, the fact that natural resource wealth makes a difference in explaining why some republics were more noncompliant than others is strongly suggestive of an economic (and perhaps natural resource) basis to republican resistance to the central state. Further, in all five models, the coefficient measuring the effect of the volume of industrial production by region (in millions of rubles 1998) on frequency of noncompliance, for example, is positive and consistently significant at .05. This jibes with Treisman’s findings concerning industrial republics and their assertive behavior toward the central state early in the 1990s. But the results here indicate that the relationship appears to hold at the oblast level as well.46 Further, and perhaps most significantly for the argument concerning the strength of economic interest groups on regional politics, the coefficient of the measure that we employ to test the economic importance of particular enterprises to a region’s economy (the number of leading enterprises having over 35 percent of 45

46

In other versions of the model I included regional per capita gross domestic product for 1998 and it was never statistically significant in any of the five models, suggesting that wealth alone is not what drives the behavior of the regions toward the center as much as economic structure. Note that in another version of model 3, I added a variable to measure the interactive effect of a region’s status as a republic and volume of industrial production that produced a coefficient of .00001777, statistically significant at the .07 level.

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market share of a particular commodity) is both positive and statistically significant in all five models. The coefficient for this variable is particularly large in models 3 and 3a, which look only at republics. Again, this is highly suggestive of the argument that it is regional economic structure among the republics that helps to explain the behavior of political elites toward the central state. These variables also prove significant for oblasts.

generalizations about noncompliance patterns Three main generalizations emerge from the noncompliance patterns, all of which point to the importance of regional economies in explaining their behavior toward the central state. First, regarding temporal variations, events at the center apparently affected the noncompliant activity of regional governments. In particular, although events in Chechnya might have played a role in explaining the temporal pattern of regional noncompliance with federal law and the constitution, noncompliant activity clearly increased when the national economy worsened in the 1990s and tapered off when the economy became more stable. Second, the link between the condition of the Russian economy and noncompliance is particularly important when viewed in conjunction with the patterns of noncompliance across policy area and type of region. The data showed that almost half of all recorded violations were related to regional finances or economics, and that republics as a group were more noncompliant than oblasts in particular. Third, regression results presented in Table 3.4 confirm that republican status is a key indicator of noncompliant behavior. But beyond this, it appears that economic variables are also crucial in explaining republican behavior. A republic’s status as a net donor to the federal budget, its industrialized structure, and the presence of large, economically powerful enterprises made it more noncompliant with central laws and the constitution. Among oblasts, the non-Russian ethnic factor did not seem to matter in determining regional behavior, but as with republics, economic measures (with the exception of donor status, which was not significant), including volume of industrial production and the presence of economically powerful enterprises within the region, mattered more.

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These findings, then, provide some initial support for the notion that the source of noncompliant behavior was rooted in the interaction between regional politics, economic structure, and the coalitions that they generated.

conclusion As pressure for economic development in Russia reached the breaking point, the tasks of governing continued to grow more complex, urgent, and numerous, yet the central state’s capacity to meet these challenges in the periphery proved increasingly under siege through the 1990s. Challenges to central authority came from the regions best situated to help the central state economically. As the data in this chapter demonstrate, these regions were at the forefront of the political resistance to the central state in the periphery. Chapter 4 examines the degree to which regional leaders in Russia may have also resisted central state infrastructural capacity and whether the patterns of such resistance paralleled the patterns of noncompliance.

4 Inside the Russian State Assessing Infrastructural Power in the Provinces

As I noted in Chapter 1, the central state’s capacity to implement its programs and policies can be measured in a variety of ways. Where Chapter 3 used a data set derived from Russian media reports of regional noncompliance with federal law and the constitution in order to discern patterns across time, policy area, and region, this chapter explores in greater detail the patterns of relative central state infrastructural or administrative capacity in the regions. For despite all of the evidence in the preceding chapter of regional threats to central state capacity through noncompliance with federal law and the constitution, it is possible that regional politicians may have passed legislation that presented a serious challenge to central state capacity only to make a political point, but their policymaking and policy implementation activities tended to basically abide by federal norms nonetheless. If this were true, then simply citing examples of widespread legal noncompliance with federal power would mask the reality of federal control over Russian public administration in the regions. One method of addressing this possibility is to actually ask public officials in the periphery about how policy was made and implemented concretely, and what influenced both of these processes in the 1990s. This chapter, therefore, evaluates the concrete power balance between the central state and the periphery through interviews with 824 public officials in 72 of Russia’s 89 provinces.1 Local teams of Russian 1

It is easier to list which of Russia’s eighty-nine regions were not included in the interviewing process than those that were. Because of the danger involved in going to the

77

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interviewers conducted face-to-face interviews between September 30 and November 30, 1999. As with the previous data set in Chapter 3, the timeframe for this survey provides an excellent picture of the balance between center and periphery in Russia at the end of the Yeltsin era and the set of problems that Putin sought to remedy when he became president of Russia in 2000 and that apparently persisted in some form through the fall of 2004 (by Putin’s own admission) when he opted to move to a system of appointed regional governors. In each of the seventy-two regions, we attempted to interview the same twelve officials, although as expected some refused to participate. Still, the response rate was strikingly high (approximately 90 percent), providing a robust data set with which to examine various aspects of Russian central state infrastructural power. The twelve targeted officials included three groups of respondents: heads or deputy heads of federal agencies posted in the provinces, heads or deputy heads of regional administrative (executive) departments, and the three top elected officials in each region. First, in an effort to gain a better picture of the types of linkages that existed among parts of the federal bureaucracy, and to assess the degree to which federal agencies followed central state as opposed to regional directives, we interviewed the head or deputy head of each of three federal “social” funds. These are akin to the Social Security

North Caucasus in the fall of 1999, neither Chechnya nor Ingushetiia was included in the sample. In addition, it proved impossible to complete interviews in the city of Moscow, Moscow oblast, or Leningrad oblast. Because we were primarily interested in the relationship between republics and oblasts and krais and the center, none of the ten autonomous okrups nor the one autonomous oblast in Russia was included. The survey was conducted in cooperation with Aleksandr Gasparishvili and Sergei Tumanov of the Opinion Research Center, Moscow State University. We employed the network of interviewers Gasparishvili and Tumanov constructed in the provinces during the 1990s. Teams of interviewers conducted person-to-person interviews of a list of respondents that we provided. On average, interviews lasted forty minutes. I am also grateful to Beth Mitchneck of the Department of Geography and Regional Development at the University of Arizona for her assistance in devising the survey instrument and in generously providing copies of her questionnaire, part of which is replicated here, and which she used in a similar survey of public officials at the city and oblast levels in Russia in 1997. For more on Mitchneck’s survey and results see her “The Regional Governance Context in Russia: A General Framework,” Urban Geography, Vol. 22, 2001, and her “Regional Governance Regimes in Russia: The Case of Yaroslavl’ and Udmurtiia,” in Jeffrey W. Hahn, ed., Regional Russia in Transition: Studies from Yaroslavl’ (Washington, D.C.: Woodrow Wilson Center Press, 2001).

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Administration in the United States, or national health insurance or social insurance agencies in other countries. In our Russian sample, we included the Social Security Fund (sixtyeight respondents), the Medical Insurance Fund (sixty-eight respondents), and the Pension Fund (sixty-nine respondents). These are among the largest federal agencies in Russia and are responsible for collection of social assistance payments, provision of national health services, and pension collection across the country. Moreover, the tasks they are supposed to perform affect the lives of almost all of the Russian population. The quality of their operations, therefore, matters a great deal to average Russians. Further, the public officials employed in these funds in the provinces were on paper under the exclusive jurisdiction of their respective federal agencies in Moscow. Both the chair and deputy chair of regional branches of these funds were supposed to be appointed by and could be removed only by the government of the Russian Federation.2 Thus, the officials we interviewed who were running branches of these funds in the provinces were federal, not regional, public officials. I should note, however, that these agencies by no means exhausted the possible sample base of federal agencies operating in the provinces. On average, there were between fifty and seventy-five federal agencies in operation in any given province of Russia. However, because it was not possible to gain access to all federal agencies (and indeed, attempting to do so may have jeopardized our ability to execute the survey in that the federal security services might have objected to further intrusion), I chose a group of agencies that were comparable to one another in their tasks and that were clearly supposed to be federally as opposed to regionally regulated. They also possessed sizable budgets relative to

2

A. P. Alekhin, A. A. Karmolitsii, and Iu M. Kozlov, Administrative Law of the Russian Federation (Moscow: Zertsalo Press, 1998), p. 220. Note that a few regions (e.g., Tatarstan) had negotiated special agreements with the federal government that enabled them to retain hiring and firing authority over these officials. I have removed from the sample the two regions where this was known to be the arrangement. Further, although social welfare, for example, is an area of shared federal provincial jurisdiction according to article 72 of the Russian constitution, this does not apparently mean that federal bureaucrats are responsible to provincial politicians in such policy areas. Rather, on paper, shared jurisdiction really means divided responsibilities such that federal agencies (like the social welfare fund) perform a set list of functions, while regional agencies perform a separate list of functions.

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those of other federal agencies in the provinces. Finally, the services that they were supposed to provide were of political, economic, and social importance to both federal and regional governments, although pension provision might have mattered more to regional governments than taking control of health services or social welfare that might cost regional governments money. Thus, while the tasks these agencies performed were comparable, I anticipated that there might be some variation among them in the degree to which regional governments might attempt to interfere with their operations. The second group of respondents included the heads or deputy heads of six regional and republican departments (or ministries) of the administration. These included the departments of the economy (sixty-nine respondents), health (seventy-one respondents), education (seventy-one respondents), social welfare (seventy-one respondents), trade (sixty-four respondents), and agriculture (seventy-one respondents). I chose these departments to provide a mix of both economic and social policy to see whether there was any variation in central infrastructural capacity in one policy area versus another. Specifically, because the patterns of provincial noncompliance with federal law (noted in Chapter 3) indicated preliminarily that regional governments tend to be more noncompliant in economic rather than in social policy areas, I wanted to be able to explore whether there was a similar pattern within Russian public administration. That is, I wanted to see whether Russian regional governments or central state agencies tended to predominate more in economic policy than in social policy. Further, following the former Soviet practice of dual subordination, these departments were officially under the supervision of both the regional government and the respective federal ministries in Moscow. In designing this research program, then, it seemed reasonable to ask this group of actors which of the two levels of government actually influenced their work more in practice as well as to what degree nonstate actors played a role in their activities. Finally, in order to compare the responses of elected officials versus appointed officials on what factors or actors influenced their policy decisions and policy implementation, in our sample we posed many of the same questions to the three top elected officials in each region. These included the regional or republican governor or president or his or her deputy (sixty-six respondents), the head of the regional or republican

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legislature or his or her deputy (sixty-eight respondents), and the mayor of the capital city of the region/republic or his or her deputy (sixtyeight respondents). In the interest of conserving space and parsimony, I include here only the responses of regional governors and presidents of republics. The questionnaires on which the survey was based included both open-ended and closed questions to try to elicit as full and wide-ranging responses as possible. These interviews, in turn, were followed up by about thirty longer interviews in four focus regions to which I and research assistants traveled in order to ensure the accuracy of the survey responses and to delve more deeply into the operations of Russian public administration. It is important to emphasize that in all of these interviews, public officials were not asked their opinions about Russian politics today. Rather, they were asked sets of questions regarding their own career paths, their own policy priorities in the near and longer terms, and, quite specifically, how policy was made and implemented in the region in which they were employed (the key actors or sets of interests involved). As a result, the nine appointed officials (the heads of the three federal funds and the six heads of departments of regional administrations) were asked quite explicit questions about the influence their bureaucratic superiors in Moscow had over policy in their bailiwicks as well as the relative influence of local political and social actors. Significantly, the elected political officials (governors of oblasts or presidents of republics) generally supported their answers. The picture of the inner workings of the Russian state that this unique survey of officials provides indicates the relatively strong influence of regional versus central power in the concrete workings of government even in areas where the central state was supposed to predominate. In sum, then, the survey conveys a deeper understanding of the public policy implications for central state capacity in the provinces beyond the anecdotal evidence of provincial officials’ usurping central state authority that has hitherto been available in the Russian press.

career paths All three groups of officials responded to a series of questions about themselves and their career paths. Of the 824 officials included in our sample, 26.8 percent (or 221 respondents) were from 19 of the 21

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republics and 73.2 percent (or 603) were from 53 of 55 oblasts and krais of the Russian Federation. In addition, 62.6 percent were the leaders of their respective institutions (that is, heads of departments or funds or top political officials like mayors or governors) while 37.4 percent were deputy leaders. The average age of respondents was 49.1 years; 78.8 percent were men, 21.2 percent women; and virtually all had completed secondary or post-secondary education. The mean number of years worked in their current positions was 7.78, indicating that most respondents had gained their current positions since the collapse of the Soviet Union in 1991. Only 2.7 percent (or 22 respondents) reported that they had previously worked within the apparatus of the Communist Party of the Soviet Union (CPSU). While some of the foregoing is perhaps superficially encouraging – suggesting that few officials in high office in the post-Soviet state are holdovers from the old regime – more detail on their work histories makes this picture slightly fuzzier. Almost a quarter of them worked previously in the organs of executive power at the local level (either in the city or regional government) during the period preceding the collapse of the Soviet Union, an additional 28 percent worked in stateowned enterprises, and an additional 5.7 percent worked in organs of regional or local legislatures. In addition, 70.5 percent of this group of respondents reported that they held high ranks in their former positions – that of either the primary leader or the deputy leader. In sum, at least half of the respondents had ample experience in the old system, and more than two-thirds of this group held some sort of high leadership position under the old regime, if not necessarily the Communist Party of the Soviet Union. The implications of this are not insignificant if we follow James Q. Wilson’s maxim that bureaucrats are the products of their training, for at least a quarter of those respondents in our sample received their training in public administration under the Soviet system.3 Within Soviet public administration, political loyalties and personal ties were primary to professional advancement as opposed to efficiency or productivity. These aspects of public administration are not unique to Russia, of course, but they are likely more extreme in the post-Soviet 3

James Q. Wilson, Bureaucracy: What Government Agencies Do and Why They Do It (New York: Basic Books, 1989).

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Russian context given the longevity of the Soviet system and the absence of clear administrative norms of civil service behavior in the post-Soviet era. Moreover, the behavior of Russian public officials documented through the survey should be viewed with this as background and may put into better context the unofficial as opposed to official influences on the behavior of public officials. Influences on the Professional Activities of Federal Agents in the Russian Provinces I begin by exploring the perspectives of federal field agents based in the Russian provinces on what influences their professional activities the most and what factors are most important in fulfilling their tasks. To do this, I turn first to a brief analysis of the responses of the heads or deputy heads of the three federal social funds included in our survey. I designed a series of questions to probe the degree to which regional political, social, and economic forces, as opposed to their superiors and administrative directives emanating from Moscow, influenced the activities of these federal-branch officials. Table 4.1 presents a mixed picture regarding the functioning of organizational hierarchies. Respondents were asked to indicate on a scale of 1 to 5 (where 1 is not at all and 5 is a great deal) the degree to which various groups and organizations influenced their fund’s activities. The higher the mean score reported in the table, therefore, the more influence a particular group or organization has. On the one hand, central state officials, as we might expect, are clearly highly influential in the activities of the federal funds. Table 4.1 shows that both the normative acts of the federal fund and the leadership of the heads of federal funds strongly influenced the central state officials’ activities (with means of all respondents from the funds shown in the last column of the table as 4.63 and 4.61, respectively). A large number of respondents, however, indicated that the regional governor or president of their republic was also strongly influential (mean of 4.56 for all respondents, again shown in the last column of the table). The difference between the paired means of the head of executive and the normative acts of the federal fund as well as between the head of executive and the heads of the federal funds was statistically significant at the .01 level. There was also little variation but

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table 4.1: Influences on Fund Activities. (Q. To what degree do the following organizations and groups influence the activity of your department, administration or fund?) Respondents were asked to indicate their response on a five point scale: not at all = 1, a little = 2, moderately = 3, a good deal = 4, very strongly = 5. Means were calculated such that the higher the mean, the greater the degree of reported influence. Means are reported in regular type, standard deviations appear in parentheses.

Degree of Influence: Normative Acts of Federal Funds Leadership of Federal Funds Heads of executives of regions (presidents in republics and governors in oblasts) Presidential representative

Mean of all Federal officials Federal officials (Excluding No Response) in Republics in Oblasts N = 204 N = 56 N = 148 4.71 (0.62) 4.65 (0.65) 4.55 (.90)

4.61 (0.94) 4.59 (0.85) 4.57 (1.36)

4.63 (.86) 4.61 (0.80) 4.56 (1.33)

2.63 (1.37)

2.92 (1.52)

2.85 (1.39)

no statistically significant difference between the reported degree of influence of heads of executives between respondents in the ethnically non-Russian republics included in the sample versus the oblasts (with means of 4.55 and 4.57, respectively). In sum, this is a surprisingly high degree of influence given that the elected heads of regional executives (presidents of republics and governors of oblasts) are not supposed to have any direct influence over federal officials in their regions. Adding further complexity to the picture of the extent to which federal state infrastructural power influences the actions of federal officials stationed in the provinces is the weak influence of the federal government’s main agent in the periphery – the presidential representative.4 Only 13 percent of respondents from federal funds indicated that the presidential representative had a very strong influence over 4

Because the survey was conducted in the fall of 1999, these references to the presidential representative are to that office prior to Putin’s May 2000 reform.

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their activities, with more than 20 percent indicating he had no influence on their activities whatsoever. The mean score, therefore, for the influence of the presidential representative was the lowest of all organizations named – 2.85, although this office was slightly more influential in oblasts than in republics. (The difference between the paired means of the presidential representative and the regional head of executive for all regions was significant at the .01 level.) The presidential representative is a good example of a failed attempt on the part of the central government to rein in the provinces. On paper, the job of the presidential representative was to both serve as the eyes and ears of the federal executive in the provinces and to coordinate the actions of branches of federal agencies at the regional level. But based on the extent to which he reportedly influenced the activities of federal fund officials, clearly this mechanism of institutional coordination and oversight was failing. Indeed, judging from these responses, contrary to expectations when the post was created in 1991 (and revamped in 1998 and then again in 2000 under Putin), the presidential representative clearly provided no significant counterweight to the influence of regional governors on federal officials based in the provinces. Aside from asking about the degree to which various agencies and organizations influenced their regular activities, we asked federal fund officials to name those organizations, groups, and leaders that were most effective in helping to implement the programs and responsibilities of their agencies. Significantly, the respondents from the funds reported that the sources of funding for their respective agencies were largely federal. Despite this, however, the tremendous influence of heads of regional executives in the work of the federal funds – again without any official capacity in this regard, and with little overt fiscal influence – is striking. Table 4.2 demonstrates that in terms of actually accomplishing concrete tasks on the ground, heads of executives (regional governors of oblasts and presidents of republics) and different departments of the oblast executive prove slightly more helpful – mentioned 30.12 percent and 11.02 percent of the time, respectively – than do the leadership of the federal funds and federal organs of power (ministries) – 27.1 percent and 8.09 percent, respectively. Other local forces, like local organs of self-government (that is, city- and county-level governments), the mass media, unions, and regional business circles, also play

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table 4.2: Organizations Identified as Most Effective in Implementation of the Policy Priorities of Three Federal Funds. (Q. Name please three organizations, groups or leaders from the following list with whom you work most effectively in implementing the priorities of your fund. Note that the total number of mentions exceeds the number of respondents (205) because respondents were permitted to indicate up to three responses.)

Organization, Group or Leader

Total Number of mentions

Percent of Total Number of Mentions

Local Business circles Unions Political Parties and Movements Other social organizations Means of Mass Information Church Leadership of the federal fund Head of executive power of the oblast Presidential representative in the region Different oblast departments Federal organs of power Local organs of self-government None of the above Total Number of Responses

16 30 0 1 26 2 161 175 9 64 47 46 3 581

2.75% 5.16% 0.00% 0.17% 4.48% 0.34% 27.71% 30.12% 1.55% 11.02% 8.09% 7.92% 0.52% 100.00%

notable roles in the functioning of the federal funds. Societal organizations and political parties play little or no role in the work of the funds. Moreover, while superiors in Moscow clearly played an important role in the functioning of these three federal agencies (as we would expect), regional governments sometimes proved as or even more important. Follow-up interviews in four focus regions that we completed to ensure the accuracy of the survey and to fill in some of the rich detail of these relationships support this perspective. For example, in Orenburg oblast the head of the regional branch of the federal pension fund reported quite cheerfully that while her salary was technically paid by the federal fund in Moscow, and the building in which her offices were housed belonged to the federal fund, the governor of the region himself had recently promised her a new apartment in a more desirable building. She noted that not only could the regional administration provide important perks to federal fund employees (like housing), she

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could not fulfill the mandate of her office without the support of the governor of her region. His relationships with regional enterprises were absolutely crucial in extracting pension fund revenues. “By necessity,” she explained, “we are part of a united team. Regions with effective federal funds work this way.”5 The closeness and dependency of the funds on regional political actors is somewhat surprising given that, strictly speaking, the local funds were branches of federal agencies. Thus, regional and local officials lacking official jurisdictional authority assumed significant jurisdictional responsibilities over federal agents posted in the provinces. This may explain why regional officials appeared to have the authority to grab money intended for the payment of pensions at the regional level, for example. In practice, they often held greater sway in the lives of federal-branch officials than did distant federal bureaucrats in Moscow. Two further examples amplify this perspective. In the republic of Bashkortostan, the executive director of the Medical Insurance Fund simultaneously held the post of assistant minister of Public Health. He was, therefore, in one position a federal public official and in the other a regional public official. In an interview he noted, “By Russian Federation Law I should not also be an assistant minister of the Bashkortostan Public Health Service . . . and Director of the federal Medical Insurance Fund. It is as though I provide a check on myself.” When asked how he dealt with these divided loyalties, he replied, “I am first accountable to the Republic administration, secondly to the Republican Ministry of Public Health Services and third to the Federal Fund in Moscow.” He also confirmed that when federal fund directives from Moscow contradicted republican government policy or law, “the government comes first. The Moscow Fund could write for an explanation or tell me they don’t like something. They can criticize me, but order me they cannot.”6 Second, beyond the federal funds included in my survey, there is some evidence that regional governments had effective control over other key federal agencies. An enduring problem for the Russian central 5 6

Author’s interview with the head of the Orenburg branch of the Pension Fund of the Russian Federation, May 11, 2000. Interview with the head of the Bashkortostan Medical Insurance Fund, June 21, 2000.

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state throughout the 1990s was tax arrears. Significantly, in both 1995 and 1996 tax arrears to the federal budget grew faster as a proportion of total tax collected than did arrears to regional budgets.7 This was rooted in Russia’s confused system of public administration such that federal bureaucrats often appear to serve regional as opposed to central state interests. Daniel Treisman and Andrei Shleifer report, for example, that the federal State Tax Service (STS), established in 1990, on paper collected all taxes except customs duties, which were collected by the State Customs Committee. Like the funds, on paper these organizations were exclusively federal bodies, and regional agents working in them ostensibly took their orders from Moscow. In practice, however, STS employees admitted that they had only limited control over the regional offices . . . staff was recruited predominantly from members of the regional administrative bureaucracy, usually from the relevant region’s finance department. There was no system of geographical rotation like that employed by the U.S. Internal Revenue Service, and the career path of advancement from regional to central tax offices was too exceptional to provide incentives for hierarchical loyalty.8

Corroborating the information provided in the survey materials and additional in-depth interviews, Treisman and Shleifer also report that such “historically established ties” between federal tax collectors in the regions and regional governments were enhanced by the material dependency of STS officials on regional officials for housing and at times wage supplements.9 Moreover, the foregoing demonstrates that while administrative superiors in Moscow still held considerable influence over the activities and priorities of their agents based in the provinces, regional political interests were as or more influential in practice. Federal agencies showed signs of capture by provincial politicians, and this may be one important cause of some of the policy compliance problems the center faced in the periphery in the past ten years. 7 8 9

Andre Shleifer and Daniel Treisman, Without a Map: Political Tactics and Economic Reform in Russia (Cambridge, Mass.: MIT Press, 2000), p. 121. Shleifer and Treisman, pp. 118–19. Shleifer and Treisman, p. 119.

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Influences on the Activities of Heads of Departments of Regional and Republican Administrations Where federal agencies still held some sway at least over the activities of fund branch officials, the influence of the central state over appointed officials within the regional executive (or administration, as it is often called) was far less. As noted earlier, on paper the departments and committees of the regional administration were supposed to be dually subordinated to federal and regional agencies. This was an administrative holdover from the Soviet period. In practice, in the post-Soviet era, the picture was quite different, providing further evidence of the wavering infrastructural capacity of the post-Soviet central state de facto in the provinces. The 417 representatives (included in our sample) of regional and republican departments of executive power were asked a series of questions designed to probe the various influences on their decision-making processes: what factors influenced the general activities of their departments and with what groups, individuals, and institutions they worked most effectively in implementing their policies. Table 4.3 provides some insight into the relative strengths of federal versus regional factors influencing departmental activities. If we divide the table into two sections – the first section for regional influences and the second for federal – it is striking how much more influential regional institutions were over federal policy instruments in the activities of regional departments of the administration. Governors of oblasts and krais and presidents of republics were by far the most significant influence on the activities of the departments of the administration (mean score of 4.88, shown in the last column of the table). While it was not surprising that the heads of regional administrations have the most influence over agents of their administrations, it is notable how much more influential they were compared with federal ministries in particular (3.57), considering the official fiction of dual subordination. (The differences between these two paired means are significant at the .01 level.) Also notable in Table 4.3 is the smaller degree of influence of federal law (4.18) as compared with regional law (4.27). (The difference between this set of paired means is significant at the .01 level.) Further, federal financing appears to be a relatively important factor in the

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table 4.3: Factors Influencing Activities of Departments. (Q. To what degree do the following factors influence the activity of your department? Respondents were asked to indicate their response on a five point scale: not at all = 1, a little = 2, moderately = 3, a good deal = 4, very strongly = 5. Means were calculated such that the higher the mean, the greater the degree of reported influence.)

Degree of Influence: Regional Influences: Agreement between oblast/repub. Exec. and leg. Powers Other Departments of the regional administration Ag’t between oblast administration and city Governor/President of region Decisions of Oblast Legislature Federal Influences Federal Law Presidential Decrees Presidential Representative Federal Ministries Federal Financing

Economic Departments N=200

Social Policy Departments N=210

Means of all Excluding No Response N=410

4.27 (1.03)

4.39 (.87)

4.33 (.96)

3.57 (1.03) 4.05 (1.05) 4.86 (.41) 4.30 (.85)

3.64 (1.06) 4.41 (.80) 4.90 (.34) 4.25 (.86)

3.61 (1.03) 4.25 (.96) 4.88 (.38) 4.27 (.85)

4.18 (1.00) 3.81 (1.24) 2.68 (1.30) 3.43 (1.15) 3.39 (1.65)

4.19 (.91) 3.85 (1.13) 2.72 (1.28) 3.70 (1.04) 3.90 (1.37)

4.18 (.95) 3.83 (1.18) 2.70 (1.29) 3.57 (1.10) 3.65 (1.53)

activities of departments of regional administrations (with a mean score of 3.65), but it was less important than any single regional factor but one (the influence on one department within the administration on another). (Again, differences between the mean of responses regarding the influence of federal financing were paired with each of the means depicting regional influences, and differences were significant at the .01 level.)

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Finally, if we compare responses across policy type (economic versus social), we can see a few interesting similarities and differences in regional versus federal influences on departmental activities. Respondents from departments that were more strongly focused on economic policy (the departments of agriculture, trade, and the economy) as opposed to social policy (social welfare, education, and health departments) appeared to be slightly more heavily influenced in some respects by regional than by federal factors. For example, the decisions of the oblast legislature appeared to matter slightly more to the activities of regional departments with economic foci (4.30) than they did for departments more closely tied to social policy (4.25), although clearly oblast legislation is important to both sets of departments. Further, the decisions of federal ministries to which these departments also reported appear to be slightly less important to the activities of regional departments concerned with economic policy than those concerned with social policy (means of 3.43 and 3.70, respectively, with the difference between the paired means statistically significant at .01). Federal financing also appeared to be more important for departments working in the social policy realm than in the economic policy realm (with means of 3.90 and 3.39, respectively). Although the difference between this pair of means is relatively small, it is statistically significant at the .05 level. This variation makes sense in light of the fact that traditionally, the Soviet state poured resources into some social policy areas (education, for example), and so the post-Soviet Russian state was apparently expected to continue this tradition.10 The slight increase in the importance of federal funding to health, education, and social welfare departments may also be reflective of the fact that regional governments, strapped for resources, were hesitant to take on greater financial responsibilities in these areas and so were willing to let the central state assume greater responsibility in this regard. Differences between factors influencing these two policy types are not huge, however, and the same general pattern is discernible for both. For example, for both sets of departments (economic and social), heads of the regional executive (governor or republican president) were by far 10

Barbara Nunberg, The State After Communism: Administrative Transitions in Central and Eastern Europe (Washington, D.C.: The World Bank, 1999), p. 162.

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table 4.4: With whom do you work most effectively in implementing the priorities of your department? (Total n = 417) Respondents were asked to indicate up to three organizations. As a result, the total number of responses exceeds the 417 respondents in this part of the survey.)

Total Number of Mentions Local/Regional Business circles Entrepreneurs from other regions Unions Political Parties and movements Other social organizations Media Church Oblast/Republican legislative organs Leadership of oblast administration Local organs of self-government Federal organs of power total

Percent of Total Number of Mentions

138 21 26 2 13 68 2 184 351 206 149

11.9% 1.8% 2.2% 0.2% 1.1% 5.9% 0.2% 15.9% 30.3% 17.8% 12.8%

1160

100.0%

the most influential factors in the activities of the departments surveyed, with means of 4.86 and 4.90 respectively (the difference between this pair of means was not statistically significant). Finally, in both instances very few regional factors were less influential than any single federal factor. Indeed, only in the cases of the influences of other departments of the regional administration for both economic and social policy departments (means of 3.57 and 3.64, respectively) and only in the case of the influence of agreement between the regional administration and the city for economic departments (mean of 4.05) were means of regional influences smaller than the mean of any single federal factor. The group of departmental representatives also indicated what societal groups and institutions they worked with more or less effectively in implementing the policy priorities of their departments. (Results are reported in Table 4.4.) Respondents were asked to name three organizations or institutions (in no particular order) and were invited to add to the list we provided. Assistance in implementing policy was understood as ranging from providing funds or other material assistance to providing publicity or organizational and technical resources.

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Significantly here too, regional heads of executives are by far the most important force in policy implementation, with 30.3 percent of mentions. Regional legislatures and city governments are also important to the policy implementation process with 15.9 percent and 17.8 percent of mentions, respectively. Federal organs of power (including federal ministries and committees) placed fourth with 12.8 percent. Following very closely, however, were regional business circles. This category includes heads of regional enterprises and may also be taken, in at least a few cases, to mean regional criminal groups. It is striking that this group is only slightly smaller (11.9 percent) than are federal organs of power in terms of influence on regional departmental administrators. Moreover, the evidence in this section indicates that relative to regional administrative and political bodies, federal infrastructural power was lower, and this may be the root of the regional noncompliance problem. Federal authorities and organizations had less influence in determining policy priorities at the regional level than did regional state forces. Federal authorities and organizations clearly had considerably less influence over the activities of departments of regional administrations than did regional political forces (both legislative and executive in particular). Given the striking degree of influence regional heads of administrations (governors in oblasts and presidents in republics) in particular had over federal agencies (the funds) and over agencies that were ostensibly dually subordinated to federal and regional officials (the departments of regional administrations), it is important to examine in greater detail the influences upon these top elected political officials. Influences on the Activities of the Executive Branch in the Regions The group of political officials in the regions responded to a virtually identical set of questions as the group of appointed regional officials working in the various departments of regional administrations. Table 4.5 provides comparative detail regarding federal versus regional influences on the general activities of regional heads of executives. As with Table 4.3, regional factors were almost universally more influential than federal factors. While federal financing and federal law were clearly important to the activities of the administrations in the

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table 4.5: Factors Influencing the Activities of Regional Administrations (Executives) (Q. To what degree do the following factors influence the activities of your administration? Respondents were asked to indicate their response on a five point scale: not at all = 1, a little = 2, moderately = 3, a good deal = 4, very strongly = 5. Means were calculated such that the higher the mean, the greater the degree of reported influence.)

Degree of Influence: Regional Influences Agreement between oblast/republican executive and legislative branches Departments of the regional administration Agreement between oblast/republican administration and capital city Decisions of Oblast/Republican Legislature Federal Influences Federal Law Presidential Decrees Presidential Representative∗ Federal Ministries Federal Financing

Means of all Excluding No Response (N=72) 4.61 (.72) 3.34 (1.08) 4.23 (.99) 4.31 (0.81) 4.13 (0.89) 3.75 (1.08) 2.60 (1.33) 3.23 (1.00) 4.25 (1.01)

∗

Note that in a few regions there was no presidential representative at the time of the interviews. Responses were deleted from these regions.

provinces (with means of 4.13 and 4.25, respectively), neither of them was more influential than agreement between branches of government at the regional level (mean of 4.61), nor the decisions of the regional legislature alone (4.31), although financing was slightly more influential than agreement between the oblast administration and the administration of the capital city of the province (4.23). (Differences between paired means were significant at the .01 level.) Federal ministries proved slightly less important an influence over the general activities of the administration than did regional departments (means of 3.23 and

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3.35 respectively, with a statistically significant difference of .05 between paired means). Presidential decrees proved less influential (mean score of 3.75) than federal laws (4.13) and the decisions of regional legislatures in particular (4.31) with differences between these two pairs of means significant at the .01 level. As with the responses in Table 4.3 from representatives from regional departments of the administration, regional heads of administration reported that presidential representatives have little influence on the activities of their governments (mean score of 2.60). The fact that decisions of the regional legislature are reported by both heads of administrations (Table 4.5) and representatives from departments of the administration (Table 4.3) to be more influential on their decision processes and activities than are federal laws may provide some basis for the resiliency of noncompliance. In both tables as well as in Table 4.1 (the funds), regional governors were consistently the most powerful force in regional politics – more important than any single federal force, including federal law and, somewhat surprisingly, federal financing. Moreover, the evidence in Tables 4.3 and 4.5 in particular suggests that if federal law were to conflict with regional law, regional law would likely triumph in practice. This provides some of the administrative underpinnings of chronic regional noncompliance with federal law. Finally, in addition to federal versus regional organs of government, heads of regional executives reported with which societal forces they worked most effectively in implementing the priorities of their administrations. This is reported in Table 4.6. Somewhat unexpectedly, regional business circles were mentioned by far the most frequently, garnering 26.7 percent of mentions. In fact, while federal organs of power do appear to be of use at the policy implementation stage (garnering 18.2 percent of mentions), the federal level is mentioned far less than regional business interests. Other social forces that, in more developed democracies, we might expect would influence policy implementation – like the church, unions, or other voluntary social organizations – were mentioned rather infrequently (between 0.6 percent and 3.4 percent of total mentions), although the media proved surprisingly effective with 10.7 percent of total mentions. In sum, these results provide a complex picture of the relationships between central and regional components of the Russian state. The

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table 4.6: Groups, Organizations with which Heads of Executives Work Most Effectively in Implementing the Priorities of Their Administrations. (Q. With whom do you work most effectively in implementing the priorities of your administration? Total N = 207 Respondents were permitted to mention up to three groups or organizations.)

Number of Mentions

Percent of Total number of mentions

Local/Regional Business circles Entrepreneurs from other regions Unions Political Parties and movements Other social organizations Media Church Oblast legislative organs Federal organs of power Local organs of self-government (city governments)

135 25 17 15 9 54 3 75 92 54

26.7% 5.0% 3.4% 3.0% 1.8% 10.7% 0.6% 14.9% 18.2% 10.7%

total

505

100.0%

survey of public officials provides some empirical underpinning to the pervasive regional noncompliance with federal authority that persisted in Russian regions. Regional governments effectively usurped policymaking authority (and economic policy authority in particular) more than the center “delegated” it. Russia did not witness a gradual and natural creation of a nascent federal system as much as a rapid, damaging decentralization that left the central state unable to effectively regulate or implement policy in the periphery. Federalism is generally taken to require the autonomy of at least two levels of government, each sovereign in their specified spheres of policy.11 Yet in Russia, the central state became so disempowered in the regions that it is fair to argue that the system of center–periphery relations at the end of the 1990s and the presidency of Boris Yeltsin did not meet this baseline requirement of federalism. As a result, Russian 11

William Riker, Federalism: Origins, Operation, Significance (Boston: Little, Brown, 1964), p. 3.

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decentralization did not help to promote competition among regions for investment and labor, nor to reduce trade barriers – key ingredients for growing markets – because these require not just the devolution of economic policymaking authority to regional governments but also a central state strong enough (even if limited in the scope of its responsibilities) to regulate basic market functions across the country. The Russian central state under both Yeltsin and Putin did not merely tolerate mild or limited transgressions of its policies and regulations merely to avoid a major upheaval of the political and social system or, alternatively, because tolerating such transgressions was a “go along to get along” strategy to make the system function. That is, unlike the U.S. experiences with prohibition laws or school segregation, for example, where the federal government tolerated violations of its laws to prevent serious social disruptions, in the Russian case the range of transgressions was so great that it is hard to see how or why the central state or society at large would benefit from “going along.” Further, there is firm evidence that the center sought to prevent these transgressions – from appeals to the Constitutional Court, to a careful cataloging of noncompliance by the Ministry of Justice reported in Chapter 3, to regulations demanding that regional officials respect the autonomy of federal officials working in their provinces, to demands that violations of federal law and the constitution be retracted and corrected. Clearly repeated regional transgressions of federal authority hindered the capacity of the central state to ensure the delivery of public goods. Instead, noncompliance with federal authority was undergirded by the dependence and often co-optation of central bureaucrats in the provinces and by the actions of regional bureaucrats all under the thumbs of powerful regional heads of administration. This represented a real erosion of central state infrastructural capacity. The next chapter endeavors to demonstrate empirically how and why this happened.

5 Retrenchment over Reform Obstacles to the Central State in the Periphery

This chapter explains the patterns of noncompliance and eroding central state infrastructural capacity in the provinces through the 1990s that were established in Chapters 3 and 4 and to which President Putin so strongly reacted by the end of 2004 (described in detail in Chapter 7). In presenting this explanation, I build empirically on the theoretical argument presented in Chapter 2 regarding the negative effect on central state capacity of the collusive relationship between regional government actors and enterprise directors. I begin, though, by discussing contending arguments regarding how the central state exercised its authority in the provinces in the past, including a discussion of the strengths and weaknesses of mechanisms of Russian fiscal federalism and strategies on the part of the federal government to deal with regions bilaterally in an effort to “divide and conquer” them politically. I argue that none of these responses to regional resistance actually struck at the core of the problem – the business–regional government nexus. The persistence of regional compliance documented in Chapter 3 and the responses from policy actors that are presented in Chapter 4 indicate that instruments like withholding transfer payments or subsidies and subventions to errant provinces or signing bilateral treaties with some regions but not others turned out to be blunt weapons in the battle to gain better implementation of federal policy more generally.

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Instead, this chapter demonstrates that there is a positive correlation between noncompliance with federal law and the constitution and the degree to which political actors reported moderate to heavy influence on their activities by regional business groups. This correlation appears to strengthen according to degree of business group influence and the economic variables (for example, the volume of industrial production and the number of large enterprises in a region) identified as important in explaining variations in noncompliant behavior in Chapter 3. This finding provides some empirical support to the argument that the source of resistance to central state regulation of regional politics and economics was not errant regional politicians or corrupt bureaucrats alone. Rather, it was a narrow group of economic interests that benefited initially from the Soviet collapse. They were able to turn the privatization program to their advantage and further entrench themselves in the Russian provinces. Through their interdependence with regional government officials in Russia, they successfully resisted central state incursion into their activities. In some regions, depending on regional economic assets, these groups were stronger than in others, which accounts for some of the variation across regions of Russia in noncompliance with federal laws and the constitution. In sum, the empirics here indicate that these groups, often in cooperation with regional officials, actively worked to block central state regulation of their activities either through law or administrative edict. They preferred, instead, to stall Russia’s state-building project by persistently undermining what the central state could accomplish in the periphery. Moreover, in the absence of resilient political institutions, they proved quite effective in resisting the Russian state.

the center strikes back? Some scholars argue that in fact the Russian center in the past maintained some control over regions through strategic dispensation of budgetary transfers. Daniel Treisman has argued that regions and republics that “most adroitly manipulated the weapons of early sovereignty declarations . . . managed to extract substantially more [from Moscow]

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than those that were more docile.”1 By effectively buying off the most aggressive and noncompliant regions, Treisman maintains, Moscow was able to stem a secessionist tide in the early 1990s. That is, despite sovereignty declarations by a number of republics of the Federation, only Chechnya actually attempted to secede, while others gained budgetary concessions from Moscow in return for their remaining in the Federation. The picture of the central state that this argument provides is that of a coherent unit able to act adroitly and resolutely, if in a limited way. But faced with the array of examples (in Chapter 3) of regional governments’ defying the central government through the late 1990s, and the rather confused system of public administration evident in Chapter 4, it is difficult to accept this conceptualization of center–regional relations as completely accurate. While Treisman may be correct that the center’s strategic distribution of budgetary funds helped to curb regional secessionism – perhaps the most extreme form of noncompliance with the central state – in the early 1990s, this practice does not appear to have been successful in stemming the tide of smaller, regular infractions against federal law and central policy as the transition continued. Indeed, regions that the center allegedly bought off in this way tended to be among the biggest noncompliers later in the post-Soviet period, as documented in Chapter 3. This kind of “legal separatism” and noncompliance was clearly pervasive.2 It is this de facto regional autonomy that proved particularly damaging to central authority and the policy effectiveness of the central government in practice in the provinces. So, at best, even if control over fiscal flows was an important instrument in curbing regional secessionism, then it proved an imprecise and clumsy instrument in curbing less dramatic, but equally damaging, regional grabs for power from the center. Certainly, President Yeltsin forced compliance with the constitution and federal law in certain key instances in some regions,3 but these 1 2

3

Daniel Treisman, “The Politics of Intergovernmental Transfers in Post-Soviet Russia,” British Journal of Political Science, Vol. 26, 1996, p. 327. The term “legal separatism” comes from former First Deputy Prime Minister, Anatolii Chubais. See “Center Continues to Rail Against ‘Legal Separatism,’” Institute for East–West Studies, Russian Regional Report, Vol. 1, no. 10, November 6, 1996. For example, Yeltsin issued a decree to compel Udmurtiia’s parliament to follow a Constitutional Court ruling and end its practice of appointing mayors in the

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tended to be interventions on big issues of symbolic importance to the federal government. In the long run, this kind of direct intervention was not feasible in the range of areas that were beyond the president’s personal control and in situations of limited information. Similarly ineffective was the center’s practice of strategically distributing patronage to key regional elites, perhaps to impede their collective action against the center by dealing bilaterally with regions rather than as a group.4 These methods of attempting to tame regional interests were expensive and grew increasingly unreliable as the center ran out of money and privileges to distribute. In the section that follows, I demonstrate in part why regional recalcitrance proved so persistent through the 1990s and why, upon assuming the Russian presidency in 2000, Vladimir Putin reacted strongly, although not necessarily more effectively than Boris Yeltsin, to quell aggressive regional elites.

winners take all? business and regional government resistance to the central state Chapters 3 and 4 demonstrated that regional governments in Russia tended to pass legislation and challenge central state infrastructural capacity in ways that affected economic conditions in their regions.5 I have hypothesized that this was because the root of regional resistance to central state capacity lay in the relationships prevalent between regional governors, in particular, and powerful regional business groups. Even violations that seemingly had little direct economic basis had clear economic effects. For example, the underlying cause of a region’s establishing a citizenship requirement for voters or language requirements for elected officials in contradiction to the federal constitution was to limit and control who was entitled to select regional leaders,

4 5

republic. See “Newly Elected Governors Grapple with Moscow, Regional Problems,” Institute for East–West Studies, Russian Regional Report, Vol. 3, no. 2, January 15, 1998. Steven L. Solnick, “The Political Economy of Russian Federalism: A Framework for Analysis,” Problems of Post-Communism, November–December 1996, pp. 13–25. The title of this section comes from Joel S. Hellman, “Winners Take All: The Politics of Partial Reform in Post-Communist Transitions,” World Politics, Vol. 50, no. 2, 1998.

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who those regional leaders would be, what policies they would pursue, and whose interests they would promote. Regional violations of federal housing and privatization policies were designed to ensure that regional interests controlled valuable real estate assets. Restructuring of judiciaries was another strategy to control mechanisms by which ownership disputes might be resolved, ensuring once again that regional interests were protected and advantaged. The popularity among regional leaders of imposing illegal tariffs and taxes on goods entering many regions is evidence of another widespread strategy to ensure that local goods and services were privileged over those from outside the region. Restrictions on freedom of movement through the residency permit system that persisted in many regions was a strategy for limiting labor mobility in local production facilities, thus maintaining the prevailing economic balance of power and preventing further reform. The proliferation of regional licensing and regulatory policies was aimed at limiting the incursion into the regional economy of new business that might further upset the economic balance of forces if not controlled by a political “insider.”6 Finally, declarations of regional ownership of natural resources were further mechanisms by which regional governments, under the influence of or in close cooperation with regional economic interests, aimed at ensuring that they benefited the most from what lay under their soil. The usurpation of federal control over field agents that is documented in Chapter 4 demonstrates how far regional political and economic elites could and would go in resisting central state regulation of their economies as well as the extent to which they cooperated with one another in implementing regional policy in violation of federal law. In an effort to demonstrate the importance of this relationship in explaining regional government behavior toward the central state and thus the basis of resistance to central state capacity in the provinces, I begin by exploring this theory statistically. In a series of four relatively simple models, built from the models in Chapter 3 but with a variable added from the survey responses of regional governors from Chapter 4, I am able to say with some confidence that the basis of regional resistance to the center lay in the political economy of the 6

See Andrei Shleifer, 1997; Aslund, 1997; and Frye and Shleifer, 1997, for examples.

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table 5.1: The Basis of Resistance: The Business-Governor Nexus and Noncompliance

Variable Frequency Of Non-Compliant Events

Model 1 (Oblasts, Republics)

Model 2 Republics Only

Model 3 Oblasts Only

Model 4 Top Non-Compliers (over mean of 8 events)

Business Group Influence On Governor Republic

1.67∗ (.954)

4.49 (3.55)

.624 (.615)

5.48∗∗ (2.51)

11.31∗∗∗ (3.23) 3.47 (4.10) −.095 (.099) .093 (.18) .000129∗∗ (.0000593) 4.6 (8.33) 0.45 66

−

−

−

12.06∗ (6.9) −.295 (.194) .443 (2.16) .0000584 (.0000376) 14.16 (8.64) 0.35 18

−

5.74 (4.41) −.301∗∗ (.149) −.026 (.18) .0000663 (.0000614) 14.78 (12.40) 0.37 28

Donor status %population Russian Number of Leading enterprises Volume of Industrial Production Constant R squared N

− .084 (.023) .000146∗ (.000080) .519 (2.38) 0.23 48

Chechnya is excluded from these models. ∗∗∗ = significant at .01 or better; ∗∗ = significant at .05; ∗ = significant at .1. I report robust standard errors to control for heteroscedasticity in the data.

regions and specifically collusive relationships between business and government. Model 1 in Table 5.1 includes all oblasts and republics (n=66) for which I have data when combining both the regional noncompliance with federal law and the constitution data set and the survey on regional public officials. It is encouraging for my theory that when I reran the regressions from Chapter 3 on frequency of noncompliant events, including a new variable drawn from the survey data of Chapter 4 designed to measure business group influence over the elected regional governor or president of the republic, the coefficient is reasonably large and significant at .1. That is, in regions where governors reported that regional business groups had a strong influence on setting the priorities of their administrations, those regions had 1.67 more violations. This model also confirms the importance of many of

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the economic variables in explaining the frequency of noncompliance uncovered in Chapter 3, although it is likely that because the number of regions for which we had responses on the business influence variable was only 66 (as opposed to the 89 included in model 1 in Chapter 3), only republic status and volume of industrial production are shown to have a significant effect on frequency of noncompliant events in this model. Still, other variables that were important in Chapter 3 in explaining patterns of noncompliance, like a region’s status as a donor and the number of leading enterprises located on its soil, while not shown to be significant at an acceptable level in this model, have positive coefficients as indicated in the previous regression analysis in Chapter 3. Similarly, the percentage of the population in the region that is non-Russian is negative, as we would expect from Chapter 3, although it is not significant at an acceptable level. When I ran the model for republics only (model 2 in Table 5.1), the decreased number of observations likely affected the significance of many of the coefficients that previously had proven important in the comparable model in Chapter 3 (model 3, Table 3.4). A republic’s status as a net donor to the federal budget, however, remained important such that donor republics committed 12.6 more noncompliant acts than republics that were net recipients of federal funds (significant at .1). Of importance to the theory advanced here, it is highly suggestive that the coefficient for the business group influence on the governor variable is large and positive (4.49), although not (quite) significant at an acceptable level. The same is true for the coefficients for number of leading enterprises in the republic and volume of industrial production. Finally, the coefficient measuring the effect on frequency of republican noncompliance of the percentage of the population that is non-Russian is in the expected negative direction, although not significant at an acceptable level. Moreover, while not definitive, this model is strongly suggestive of the importance of these variables on republican noncompliant activity, although not conclusive. In model 3 of Table 5.1, I examine variations within oblasts only. Here, the trends are similar to those in model 2 (republics only), although the coefficient for the positive influence of business groups on governors is smaller (.624). We might expect this because the rate of noncompliance among oblasts is smaller in general, as we know from Chapter 3. Although not (quite) statistically significant at an acceptable

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level, the coefficient here is positive, as the theory would predict. The coefficient for volume of industrial production is positive and significant at the .1 level, however, as in model 4 in Chapter 3 (Table 3.4). Finally, model 4 in Table 5.1 examines possible influences on those 28 regions having greater than the mean number of noncompliant incidents (8) for all 66 regions in the data set. Here we see some very compelling evidence that business group influence matters a great deal in explaining noncompliant behavior, although a few other variables that were significant in model 1 (Table 5.1) diminished in importance. The coefficient for business group influence on the governor is 5.48 and significant at .05, indicating that in regions where the reported influence on the governor by business groups was high, the region committed more than five noncompliant acts. The percentage of the population that was not ethnically Russian also appeared to be important in explaining the behavior of the most noncompliant regions in this data set; but with a relatively small coefficient of −.301, it is not as important as the influence of business groups on the leading political figure in the region, the governor. Donor status, as in model 1, had a large, positive coefficient, as my theory would predict (5.74), but was not quite significant at an acceptable level. The same is true for volume of industrial production. Moreover, model 1 provides reasonably good support, and the accompanying three models are at least strongly suggestive of my main contention – that resistance to the central state in the provinces was largely determined not so much by ethnic variables as by political– economic relationships. The influence of local business interests on the most important elected political figures (regional governors or presidents of republics) played an important role in explaining noncompliant behavior, as do key economic variables. The micro foundations of this relationship are supported increasingly by work from other political scientists and economists that focuses on the business, as opposed to the regional government side, of this relationship, as my data do. Timothy Frye, for example, in a fall 2000 survey of 500 firms in 8 Russian cities, found a similarly cooperative relationship between many regional businesses and governments. The managers of the firms in Frye’s survey indicated that competition was a fairly important problem with a rating of 2.9 on a scale of 1 (no problem) to 5 (a significant

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problem). Indeed, Frye’s respondents indicated that competition was a more significant problem than either corruption or bureaucratic interference (with scores of 2.4 and 2.0, respectively).7 It is protection from competition that regional governments can offer preferred businesses. In return, regional governments extracted from regional businesses increased revenues through bribery, taxation, or arbitrary inspections. Frye characterizes the business–government relationship, therefore, as one of “elite exchange” of services as opposed to one of merely business capture of regional government. In particular, Frye found that “regional governments were particularly likely to reward state owned firms with favorable treatment and to punish new private firms.”8 In addition, confirming the nature of the relationship between regional government and business actors in Russia that I uncovered through my survey of regional government, Frye’s business respondents indicated that “many firms relied on direct contacts with state officials, such as the governor . . . to press for advantages.”9 Frye also found that of the firms that claimed to be successful lobbyists (in that they purported to have had direct influence over the preparation of regional legislation), 43 percent reported that they had received some tangible aid from government (such as a tax break, subsidy, or credit on favorable terms).10 In return, successful lobbyists provided benefits for state agents, according to Frye’s data: “For example, results . . . suggest that successful lobbyists bear a higher regulatory burden [number of times firms are inspected each year] than do other firms in the sample.” Firms that were successful lobbyists also were visited more regularly by tax inspectors as well as subject to some form of price controls.11 As Frye notes, it is not uncommon in the developing world for bureaucrats to impose price controls in order to extract bribes as a condition for removing them. Moreover, Frye concludes

7

8 9 10 11

Timothy Frye, “Capture or Exchange? Business Lobbying in Russia,” Europe–Asia Studies, Fall 2002. (Page references here are to the version of the article available at http://psweb.sbs.ohio-state.edu/faculty/tfrye/published/CaptureOrExchangetext .pdf.) Frye, 2002, p. 16. Frye, 2002, p. 16. Frye, 2002, p. 18. Frye, 2002, pp. 18–19.

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that “the successful lobbyists . . . did receive benefits from the state and also provided some benefits for state officials.”12 Similar patterns in business–government relations were uncovered by analysts from the World Bank in 2002. In a study of thirteen regions in Russia, analysts found that government activity in business significantly affected the degree of competition of markets: [T]here is a continuing – albeit metamorphosized – direct role of government in the marketplace, which more often than not has a negative impact of diminishing new business entry, largely benefiting the “old” economy firms. In particular, the case studies reveal incestuous “captured” relationships between government agencies and incumbent businesses, where their joint actions directly influence the extent to which new competition can thrive.13

In case studies of firms in the regions included in the study, World Bank analysts also found that “the competitive success of many . . . of the firms investigated was significantly determined by privileged relationships they enjoy with governmental authorities – especially local administrations, less so federal agencies. . . . ”14 Concurrent with the theory and evidence from my study and Frye’s, this analysis of regional firms and governments finds that protection from competition was among the most valuable services that regional governments provided to local business. Barriers to market entry through direct subsidies, dispensing marketing rights, and controlling access to land and real estate as well as to licensing are among the ways in which regional governments protect key regional enterprises from new entrants into their markets.15 Finally, further evidence of the mechanisms of these collusive relationships between regional business and government against the interests of the central state in particular comes from close examination of bankruptcy in Russia. Protection from the brunt of the federal bankruptcy law is a prime example of the menu of services regional 12 13

14 15

Frye, 2002, p. 21. Harry Broadman, ed., Unleashing Russia’s Business Potential: Lessons from the Regions for Building Market Institutions, World Bank Discussion Paper no. 434 (Washington, D.C.: The International Bank for Reconstruction and Development/The World Bank, 2002), p. 3. Broadman, p. 6. Broadman, pp. 6–7.

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governments could offer to important local enterprises in return for expensive rents and side payments. In direct contradiction to the intent of the 1998 federal bankruptcy law, this kind of “collusion between regional governors and managers leaves external creditors [including the federal government] without effective legal mechanisms for collecting claims.”16 In addition, it rendered the federal bankruptcy law ineffective in forcing managers to restructure inefficient firms and was therefore a drag on the national economy. Bankruptcy laws obviously should protect creditors as well as encourage the effective restructuring of inefficient firms and force managers to live within the firms’ means. But Ariane Lambert-Mogilianski, Constantin Sonin, and Ekaterina Zhuravskaia find that by using their considerable influence over arbitrage court judges at the regional level, Russian regional governors have been able to manipulate the bankruptcy process to protect regional enterprises from creditors, including the federal government. They explain the process in the following way: Governors may benefit from their influence on the courts in various ways: they may extract rents from the managers of insolvent firms in exchange for protection from losing control in bankruptcy. Regional authorities may also receive benefits from the managers of profitable enterprises who fake insolvency. The latter use bankruptcy procedures (under regional influence) to avoid federal taxes and debt repayments to creditors outside the region. Governors may also use their influence to prevent the bankruptcy of large enterprises for political reasons.17

Although there have been more bankruptcies in Russia on paper since the introduction of the 1998 Law on Bankruptcy, a close examination of the companies that went bankrupt reveals that in fact bankruptcy often did little to induce restructuring or managerial changes. As a result, it did little to harden managerial budget constraints and improve firm performance. This was largely due to the discretion afforded arbitration court judges during bankruptcy proceedings such that the arbitrage court could decide whether or not to restructure, liquidate, or dismiss bankruptcy proceedings. 16 17

Ariane Lambert-Mogilianski, Constantin Sonin, and Ekaterina Zhuravskaia, “Capture of Bankruptcy: Theory and Evidence From Russia,” mimeo 2002, p. 21. Lambert-Mogilianski, Sonin, and Zhuravskaia, p. 2.

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Significantly, Lambert-Mogilianski, Sonin, and Zhuravskaia find that firm liquidation tended to happen more often to small and rarely to medium-sized enterprises, while the imposition of external management procedures (where an external team of managers is supposed to take over at the firm) “is positively related to the size of a firm, profitability of the industry, strength of the governor in the region where the firm is operating, tension between the governor and the federal center, federal tax arrears in the region, and opacity of the tax collection system in the region.”18 Yet external management also apparently did not result in employee layoffs or significant restructuring. Indeed, this group of authors characterizes the external management option as “incumbent management” because “in reality the ‘external management’ procedure does not result in management change.”19 They show that it tended to happen in large firms with large cash flows because the tax possibilities were good for the regional governor, there was a potentially steady source of bribes and side payments by actually maintaining the incumbent management in the process, and high employment at these firms was significant for the governor politically (after all, employees are regional voters). Moreover, this study of the bankruptcy process details the nature of business–government relations and the extent to which collusion thwarts central state efforts to regulate the economy at the regional level. In “capturing” the bankruptcy process, “the managers of large enterprises and regional governors collude to expropriate the federal government and investors from outside the region.”20 Firms that should have been dissolved or thoroughly restructured effectively remained in business with incumbent managers firmly in control. This is yet another striking example of how and why federal policy and interests were so frequently thwarted in practice at the regional level.

conclusion This chapter has endeavored to illustrate empirically the theory put forward in Chapter 2 regarding the detrimental effect that regional 18 19 20

Lambert-Mogilianski, Sonin, and Zhuravskaia, p. 32. Lambert-Mogilianski, Sonin, and Zhuravskaia, p. 5, fn. 9. Lambert-Mogilianski, Sonin, and Zhuravskaia, p. 5.

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government–business collusion had on Russian central state capacity at the regional level. Regions where governors reported stronger influence by regional business on their activities were regions in which rates of noncompliance with federal law and the constitution were indeed higher. The foundations of this relationship were further supported by evidence from other analysts who have explored the business, as opposed to only the government, side of this relationship. Until the central state devises institutional reforms that break the business– government nexus at the regional level, reliable implementation of federal law will likely remain elusive in Russia regardless of whether the system for selection of regional leaders is democratic or not. Chapter 6 explores the role that political parties and a functioning national party system might have played in helping to better integrate regional and national politicians in the face of powerful regional economic interests. This, in turn, might have enhanced central state capacity in Russia’s provinces.

6 Weak National Parties, Weak Central State

One way in which the Russian state might have become better vertically integrated in the past, and might perhaps do so in the future, is through the creation of unifying political institutions. In other political systems, political parties have served as links between national and local political actors. Political parties within the context of a competitive electoral system are one method by which to interrupt the collusive relationship between regional business and government that can be so detrimental to the creation of a unified political, economic, and legal expanse. Political parties are key institutions for building democracy and also key institutions in maintaining a cohesive state. Parties serve as conduits between civil society and the state, and also between center and periphery. They can promote coherence in policy platforms across nation-states. In short, parties can solve collective action problems by integrating the polity as well as by aggregating interests. But with the collapse of the Communist Party of the Soviet Union under Gorbachev, and the limited role that both Boris Yeltsin and Vladimir Putin ascribed to political parties in their respective presidencies, it is hard to see a truly national party system that stretches from center to periphery developing in present-day Russia. Indeed, Putin’s moves by 2004 away from electoral democracy at the regional level may well have permanently doomed the process.

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Using regional election results from the first several rounds of gubernatorial and legislative elections in the Russian provinces, I demonstrate the low degree of partisanship among regional politicians in particular in Russia that persisted from 1994 (and the first substantive round of elections in the provinces) onward. Consistent with the claims of the preceding chapters, I argue that the nature of Russia’s dual economic and political transitions made the underdevelopment of political institutions preferable for regional political elites who benefited from the early stages of economic change. That is, they preferred what I have called previously a “partial reform equilibrium” in political institutional development so that they could avoid widening the sphere of accountability for their decisions in order to protect the gains they made in the early stage of the economic transition. Strong political institutions – like competitive political parties that penetrate the periphery – render transitional winners (in this case regional political elites) more broadly accountable to wider societal interests as well as to national political actors rather than to the narrow group of regional business that helped keep them in office. In post-Soviet Russia, regional political elites worked against party development in order to control the pace and scope of political inclusion and to protect their early transitional gains. In the absence of regional elections as of February 2005 (when the law appointing rather than electing regional executives went into effect), their dominance of provincial politics was assured. There is no reason to assume, then, that in eliminating any semblance of electoral accountability of the executive branch of regional governments suddenly there will be an increase in central authority and provincial accountability to central state actors. On the contrary, Putin’s attempt to strengthen central control over provincial politics by limiting democratic elections may have the effect of merely consolidating the hold of hundreds of “minioligarchs” in the provinces. In this chapter I argue that stunted party development in Russia’s provinces promoted poor central state linkage to the periphery and contributed further to a weakening of central state capacity through the post-communist period. This chapter includes a discussion of the implications of stunted party development for Russian state integration and past and future political and economic development.

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some background on russian political party development With four elections to the State Duma completed between 1993 and 2003 and the election of a new president in 2000 and his reelection in 2004, a Russian party system, although fragile, was perceptible. Using comparative measures, we can discern the rough outlines of an institutionalizing, if obviously not yet institutionalized party system – at least with respect to elections for the Russian State Duma, Russia’s lower house. Party factions were active and somewhat enduring within the Duma; party identification among citizens, while still low comparatively, appeared to be increasing; and we can speak of trends in national legislative elections such that at least some parties endured from one electoral period to the next. Yet, despite these positive gains, a peculiar, and possibly enduring characteristic also developed – a failure of parties to have penetrated significantly the political institutions of most of Russia’s provinces. The representation of national parties in both regional legislatures and executives was strikingly low throughout the post-Soviet period. Further, in most regions, regional political party development also faltered. The lack of institutionalization of political parties in the provinces had troubling implications for the future of Russia’s fragile democracy and the development of state capacity. No democracy in the world exists in the absence of political parties. Parties serve a variety of important functions. In democracies, parties act as conduits between civil society and the state, and also, therefore, between center and periphery. But from the perspective of enhancing state governing capacity, parties can promote coherence in policy platforms within nation-states. Parties can solve collective action problems between central and local governments; in doing so they integrate the polity as well as aggregate interests. They help, “bury private or personal preferences for the sake of general social objectives.”1 Parties are supposed to accomplish these tasks in at least three ways: First, they are supposed to broaden political loyalties and “institutionalize participation beyond the village.”2 Through recruitment and 1 2

Samuel P. Huntington, Political Order in Changing Societies (New Haven, Conn.: Yale University Press, 1968), p. 23. Huntington, p. 36.

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training, parties also systematize and incorporate new and varied interests and leaders into the political process. Second, parties, through programs, define policy. Third, through organization, parties also assist in ensuring policy implementation by linking national and local political actors. If a representative from the provinces owes his or her electoral victory to the agency of the president or head of the party, “presumably [s]he is willing to do what the President asks without much hesitation, thereby also eliminating the President’s cost of bargaining.”3 While this does not altogether eliminate the high costs of bargaining with local politicians, it can at least lower those costs.4 As a result, Martin Shefter notes, parties within a competitive electoral system are “institutions of representation, but also of control.”5 An important task of political parties in Russia and elsewhere, then, is not just the aggregation of interests within society and their representation in a national legislature but also the enhancement of the stability and authority of a political system by linking political actors at various levels of the polity. But because of the pervasive and persistent under-institutionalization of political parties of all ideological stripes outside of Moscow since the collapse of the Soviet Union, Russian parties have failed to provide many of these benefits. In particular, as Chapters 3, 4, and 5 have shown, the Russian state remained poorly integrated both politically and infrastructurally. In the next section of this chapter, I discuss in a preliminary way in what sense Russia’s party system can be seen as making progress toward institutionalization at the national level. I note that while there is visible progress toward institutionalization of all-Russian parties in national politics on some measures, throughout the post-Soviet period there was remarkably little progress on the part of national parties in penetrating provincial politics. I then provide data on the degree to which parties lacked a presence in Russian provincial politics. The next section tests various hypotheses for why all-Russian parties were weakly represented in provincial legislatures and among executives in particular. Echoing earlier parts of this book, this section puts forward 3 4 5

William Riker, Federalism: Origins, Operations, Significance (Boston: Little, Brown, 1964), pp. 93–6. Riker, p. 96. Martin Shefter, Political Parties and the State: The American Historical Experience (Princeton, N.J.: Princeton University Press, 1994), p. 16.

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the argument regarding the importance of entrenched economic interests in regional politics and why these interests have shunned meaningful links to political parties, preferring instead an equilibrium of under-institutionalization and partial reform. The final section brings the chapter back to the central issue of the book in discussing the implications for central state capacity of a lack of an all-Russian party presence at the provincial level. I make the point that Putin’s limitations on democratic accountability in the provinces will do little to increase central state authority and capacity because the Russian political system lacks linking institutions like truly national political parties within a competitive electoral system.

to what degree is russia’s party system institutionalizing? How Do We Evaluate the Degree of Institutionalization of a Party System? A reasonable definition of political institutionalization is Samuel Huntington’s: “Institutionalization is the process by which organizations and procedures acquire value and stability.”6 Particularly helpful is Huntington’s emphasis on institutionalization as a process and not a singular or sudden event. In the post-Soviet Russian case, it is only now (after more than a decade of transition) that we can even begin to speak of a gradual political institutionalization. As a result, it would be a mistake to interpret the following discussion regarding the degree to which Russia’s federal-level party system (that is, the party system within and elections for the State Duma) is institutionalizing as an argument that it is now fully formed, institutionalized, and more or less immutable. My intention instead is to point out the fact that Russian parties are especially unsuccessful in penetrating politics in the provinces and that this lack of success has grave implications for the further development of central state capacity. Comparative political theory offers various methods and approaches to the evaluation of party system institutionalization. Most of these, however, have been derived from the experiences of mature 6

Huntington, p. 12.

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democracies in Western Europe in particular. Scott Mainwaring has noted that these theories, therefore, are not wholly satisfactory for newer, third-wave democracies.7 For example, the social cleavage approach and emphases on ideological difference in party system formation of Seymour Martin Lipset and Stein Rokkan, Giovanni Sartori, and others clearly explain the development of some party systems better than others. In many third-wave democracies social cleavages may be less pronounced and other forms of cleavage (ethnicity, old versus new economic interests, etc.) may be more salient in party system formation and institutionalization. Finally, theories derived from the experiences of more advanced democracies, in focusing on ideological and social cleavages, tend to emphasize more the influence of societal forces in party system formation rather than the elite influences that appear important in newer transitional settings where civil society is weak or nonexistent. That is, in the older literature, there is an emphasis on the process of party system formation and institutionalization as bottom–up (from societal cleavages) rather than top-down (from elite choices). This older emphasis is not wholly appropriate for the analysis of more recent attempts to transit to democracy, nor dual economic and political transitions in the post-communist world in particular.8 Research, therefore, on political institutionalization in other “thirdwave” transition attempts provides a more useful comparative reference point for post-Soviet Russia. Mainwaring, with Timothy Scully, compares Latin American party systems along four dimensions that incorporate, but also extend and greatly refine, the measures other scholars of countries where democratic practice was established much earlier.9 Mainwaring and Scully begin with the important point that the degree of institutionalization of a party system is a continuous, not a dichotomous variable. At one end of the spectrum of institutionalization, therefore, are fully institutionalized party systems, while at the other are inchoate party systems. Most party systems lie between the two extremes. 7 8 9

Scott Mainwaring, Rethinking Party Systems in the Third Wave of Democratization: The Case of Brazil (Stanford, Calif.: Stanford University Press, 1999), pp. 22–3. Mainwaring, p. 22. See also Herbert Kitschelt, “The Formation of Party Cleavages in Post-Communist Democracies,” Party Politics (1995), p. 448. Scott Mainwaring and Timothy Scully, eds., Building Democratic Institutions: Party Systems in Latin America (Stanford, Calif.: Stanford University Press, 1995), p. 5.

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Among the advantages of Mainwaring and Scully’s schema is how well their measures lend themselves to comparisons across country contexts, as well as comparisons across time within party systems. Further, the characteristics of institutionalized party systems that they identify translate relatively easily into concrete comparative measures. Moreover, along various dimensions, their approach enables a researcher in any (aspiring) democratic country context to evaluate in what ways a party system can be seen to be institutionalizing – or even deinstitutionalizing, as the case may be. To what degree then, did the Russian political party system for the national parliament show signs of institutionalization? Along some measures, the Russian system at the end of the 1990s through the early Putin era could be seen to be moving – albeit haltingly – away from the inchoate end of the continuum toward institutionalization. However, although some of the evidence presented here provides clear indications that Russia’s party system is in some ways institutionalizing, other measures, particularly those indicating the degree of territorial penetration of the party system, demonstrate that the system was far from institutionalized. As a result, the quality of Russian democracy in both center and periphery remained relatively poor. Just as Putin attempted by the fall of 2004 to build authoritarianism without authority because of a lack of state infrastructural capacity, he and Yeltsin both contributed to the construction of democracy without pluralistic representation at the provincial level. Measuring the Degree of Institutionalization of Russia’s Party System Stability and Patterns of Party Competition Regarding Mainwaring and Scully’s first measure – the stability of interparty competition and the regularity of patterns of party competition – Russia’s party system after as few as three national elections to the State Duma could be seen at least in rough outline. There was at least some continuity in the parties’ gaining representation in the Duma, although parties did come and go in post-Soviet Russian politics with startling frequency. Through Yeltsin’s and the first term of Putin’s presidencies, Russia had a mixed electoral system for national legislative elections such

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that 225 seats of the 450 seats in the Duma were elected through proportional representation while the other 225 seats were elected through single mandate elections. Between the first three elections to the State Duma in December 1993 and December 1999, three parties (the Communist Party of the Russian Federation, Yabloko, and the Liberal Democratic Party of Russia under Vladimir Zhirinovsky10 ) consistently cleared the 5 percent barrier that parties must break through in order to gain representation in the national legislature through party list voting. In addition to these three parties, a fourth more fluid grouping (the name of which and membership of which have changed between electoral periods) consistently represented the government at the time of the election – a “party of power.” Thus, a “three plus one” party system was visible in rough outline in Russia at the national level, as indicated in Table 6.1. As Table 6.1 indicates, while there has been tremendous volatility in terms of the rise and fall of national parties in Duma elections, three parties – Yabloko, the Communist Party of the Russian Federation (KPRF), and the Liberal Democratic Party of Russia (LDPR) – consistently cleared the 5 percent hurdle in parliamentary elections from 1993 to 1999. Of these parties, only Yabloko failed to cross the 5 percent threshold in 2003 as well. In addition, a rotating “party of power” (in 1993 Russia’s Democratic Choice, in 1995 Our Home Is Russia, and in 1999 and 2003 Unity/United Russia) consistently jumped the 5 percent barrier to gain representation through party list voting. Further evidence of the recognition by candidates of the need to join political parties to win national office can be found in the decrease in the number of independents winning seats in the Duma since 1993 (although fewer candidates won as independents in 1995 than in 1999, indicating that this is not a linear process). Moreover, these data demonstrate that there is some, although limited, stability in the party system, providing at best a rough pattern to party competition at the national level in Russia. 10

Note that in the 1999 Duma elections, the LDPR initially failed some registration requirements and Zhirinovsky re-registered the party under the name “Zhirinovsky’s Bloc,” although Zhirinovsky referred to the bloc as the LDPR throughout the election and its candidate list was virtually identical to the LDPR’s originally submitted list. The Bloc should therefore be considered to be the LDPR in form if not in name.

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table 6.1: Proportion of National Vote of leading parties (those having cleared the 5 percent PR barrier at least once) in Elections to the State Duma in 1993–2003. (Source: Central Electoral Commission of the Russian Federation; Richard Rose, Stephen White, and Ian McAllister, How Russian Votes [Chatham, N.J.: Chatham House, 1997], pp.123 and 224–5; Michael McFaul, Henry Hale, and Timothy Colton, “Putin and the ‘Delegative Democracy’ Trap: Evidence from Russia’s 2003–2004 Elections,” Post-Soviet Affairs , Vol. 20, no. 4, pp. 285–319.) Electoral Year

1993

1995

1999

Yabloko PR % *Total Seats

7.86 23

6.89 45

5.93 20

4.3 4

LDPR PR% *Total Seats

22.9 64

11.2 51

5.98 17

11.45 36

KPRF PR % *Total Seats

12.4 48

22.3 157

24.29 114

12.61 52

Agrarians PR % *Total Seats

7.9 33

3.8 20

Women of Russia PR % *Total Seats

7.86 23

4.6 3

Party of Unity and Concord PR % *Total Seats

6.76 19

0.4 1

N/A 0

N/A 0

Russia’s (Democratic) Choice PR % *Total Seats

15.5 70

3.9 9

N/A 0

N/A 0

NDR PR % *Total Seats

N/A N/A

10.1 55

Unity (United Russia in 2003) PR % *Total Seats

N/A N/A

N/A N/A

23.32 73

37.57 222

Union of Right Wing Forces PR % *Total Seats

N/A N/A

N/A N/A

8.52 29

3.97 3

Rodina (Homeland) PR % *Total Seats

N/A N/A

N/A N/A

N/A 0 2.04 0

1.19 1

N/A N/A

2003

4 2 N/A 0

N/A 0

9.02 (continued)

Resisting the State

120 table 6.1 (continued) Electoral Year

1993

1995

1999

Fatherland/All-Russia PR% *Total Seats

N/A N/A

N/.A N/A

Number of Deputies Elected as Independents of 450

141

78

114

68

Total # Parties Running

13

43

26

23

13.33 67

2003 N/A 0

* Total Seats denotes total number of seats won in both proportional representation and single mandate contests. N/A indicates that the electoral organization in question did not exist or did not meet registration requirements in time for the election. The total number of deputies elected may not sum to 450 in any given year because some seats went unfilled and elections for those seats were postponed.

Citizen Perceptions of Parties The degree to which citizens were becoming connected to parties, Mainwaring and Scully’s second criterion of institutionalization, can also now be evaluated in Russia. Citizen perceptions of parties are particularly important because of the role that parties play in democracies. Parties are a crucial mechanism by which citizens are incorporated into the competitive political process. Although parties are almost universally negatively regarded and mistrusted in post-Soviet Russia, presumably because of the overarching and threatening presence of the Communist Party since 1917, there is evidence of rising voter identification with federal parties over the last decade as well. In 1993, Richard Rose, Stephen White, and Ian McAllister found that although most respondents in a national survey were anti-party and/or did not identify themselves with any party, 22 percent of voters in national elections were either strongly committed or committed partisans.11 Only two years later, however, prior to the second elections to the State Duma in December 1995, Timothy Colton found a jump in partisanship. In a national sample of voters, Colton found that 49 percent of respondents were partisans (classified as either strong, moderate, or weak). In contrast to the results cited by Rose, White, and McAllister, Colton also found the margin of nonpartisans to partisans 11

Rose, White, and McAllister, p. 138.

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to be strikingly thin, with nonpartisans accounting for 51 percent of respondents.12 Alternate ways of posing questions that might uncover partisanship may account for some of the differences in results here, as Colton himself points out. However, the difference in figures may also indicate an actual increase in partisanship between Russia’s first and second parliamentary elections. Colton’s data do appear to be particularly conscientiously derived in that citizens were asked a series of questions to probe their partisanship. Thus, there is good reason to believe that levels of partisanship among Russian voters increased between these first two “founding” elections to the State Duma.13 Significantly, also, there is some preliminary evidence of partisanship at times other than elections, suggesting that voter attachment is not just a transitory, electoral phenomenon. Colton reports that in 1995 a Russia-wide survey of 1,541 adults in January–February 1998 (at almost exactly the midpoint between the 1995 and 1999 elections to the State Duma), he and his colleagues found that 32 percent of respondents described themselves as partisans.14 Moreover, while in the aggregate Russian voters are generally anti-party, as time passed, they established party attachments. (Notably, however, in the case of United Russia, support for the party by 2003 had become strongly linked to Vladimir Putin himself.15 ) There is also, of course, variation among parties as to which had more firmly committed partisans. Rose, White, and McAllister and Colton are in agreement that the Communist Party had the largest percentage of partisans, particularly before the Duma elections of 2003. In 1995, Colton found that of the partisans in his sample, 28 percent (or 14 percent of all citizens) could be counted as supporters of the KPRF, which is approximately as much as the second-ranking LDPR, third-ranking Our Home, and fourth-ranking Yabloko combined.16 12 13

14 15 16

Timothy J. Colton, Transitional Citizens: Voters and Elections in Post-Soviet Russia (Cambridge, Mass.: Harvard University Press, 2000), p. 150. See Arthur Miller, William Reisinger, and Vicki Hesli, “Leader Popularity and Party Development in Post-Soviet Russia,” in Matthew Wyman, Stephen White, and Sarah Oates, eds., Elections and Voters in Post-Communist Russia (London: Edward Elgar, 1998); and Ted Brager and Joshua Tucker, “The Emergence of Mass Partisanship in Russia, 1993–6,” American Journal of Political Science, Vol. 45, no. 1, Winter 2001. Colton, p. 166. McFaul, Hale, and Colton. Colton, p. 151.

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There exists then, the curious (but by now well known) phenomenon of the Communist Party of the Russian Federation (the successor, after all, to the detested Communist Party of the Soviet Union) as consistently one of the most appealing parties to a significant number of “post-communist” Russians.17 In sum, there is at least preliminary evidence of a gradual increase in partisanship among the Russian citizenry between 1993 and 2003. In comparison with United States and Britain, where only 13 percent and 8 percent, respectively, identified themselves as nonpartisans, Russian partisanship was still low.18 But given the short period of time that Russian parties have had in which to establish a political presence, their progress toward institutionalization on this measure is rather striking. Elite Perceptions of Parties Reverting to Mainwaring and Scully’s framework, a third measure of institutionalization concerns elite perceptions of parties. In a more institutionalized democratic political party system, parties in elections are viewed as the central means of determining who governs. As Adam Przeworski and others have also argued, for institutionalization to take place, serious politicians must view parties and elections as the most important vehicle for gaining power.19 Russia’s scorecard on this measure is mixed. Clearly, most political elites in Russia perceived the need to form organizations, call them political parties, and use their labels in national elections. That said, as has already been noted, there was startling fluidity in membership of elites in parties, and many parties rose and fell between electoral periods. The elections to the State Duma in 1999 are an excellent example of this with Unity (by 2003 known as United Russia and the most recent incarnation of the government’s “party of power”), second only to the KPRF in proportion of the popular vote, having been formed slightly

17 18 19

This makes the KPRF’s lack of success in provincial elections even more puzzling. Robert Moser, “Independents and Party Formation: Elite Partisanship as an Intervening Variable in Russian Politics,” Comparative Politics, January 1999, p. 162. See for example Adam Przeworski, “Institutionalization of Voting Patterns or Is Mobilization the Source of Decay?” American Political Science Review, Vol. 69, March 1975, pp. 49–67; John Aldrich, “Why Parties?”: The Origin and Transformation of Political Parties in America (Ann Arbor: University of Michigan Press, 1995).

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123

less than three months prior to the December election. By 2003, United Russia had eclipsed the KPRF in the Duma. Many all-Russian parties (both relatively old and new) were similarly focused on a single personality and had the leader abandoned the party, it likely would have dissolved. Nonetheless, older parties persisted, like Yabloko (until 2003, when it failed to clear the 5 percent threshold for representation in the Duma through the PR system) and the KPRF, which consistently ran candidates in national legislative and presidential elections from 1993 onward. The organizations of both of these parties appeared somewhat larger than their leaders. Moreover, although elites (particularly provincial elites) often switched party affiliations between national elections, or held several party affiliations during a single electoral campaign, their propensity toward forming electoral organizations, and the overall decline in the number of deputies winning national office as independents since 1993, indicates that elites attributed some value to political parties in elections to national political institutions. The fleeting existence of many of these organizations, however, and the fluidity of elite membership in them, cautions against arguments regarding deep institutionalization of the Russian party system at the federal legislative level in the immediate post-Soviet period. Organization Mainwaring and Scully note the importance of solid party organizations, discipline in factions in the legislature, and penetration of parties into not only national institutions but local political institutions as well. In the Russian case, organizational measures also help to highlight the contrast in the way in which the party system was developing in the center as opposed to the provinces. Clearly parties, for all their other weaknesses, had a presence in national legislative institutions and had even penetrated the executive to some degree. (Although neither former President Yeltsin himself nor President Putin ever carried a formal party label, certain cabinet members did so.) Thomas Remington and Steven Smith’s work on the organization of the Russian Duma also shows that party organization and faction discipline existed in the Russian legislature and even helped to provide some logic to law making.20 20

Thomas Remington and Stephen Smith, “Theories of Legislative Institutions and the Organization of the Russian Duma,” American Journal of Political Science, Vol. 42, no. 2, April 1998, pp. 545–72.

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Significantly, however, as the next section demonstrates, as weakly institutionalized as Russia’s party system appeared at the federal level, its most significant organizational challenge was penetration of the country’s heartland. For despite the fact that the Russian party system made some halting progress away from the inchoate end of the party system spectrum toward the institutionalized end in the first decade since the Soviet collapse, parties and the party system more generally were even weaker outside Moscow. We might conclude from this, therefore (and in contrast to the apparent conclusion of Vladimir Putin), that it was not democracy that failed Russia in the provinces but the confluence of patronage and cronyism that emerged as the currency of Russian provincial politics in lieu of a competitive party system.

national parties in provincial politics There has been a series of opportunities for most parties competing in federal elections to the State Duma, and Russian presidential elections to contest races in the provinces. These include the elections in 1993–4 to the reformed regional legislatures (regional dumas or assemblies); the reelection of these bodies in 1995–7 (most were originally elected for only a two-year period); the 1996–7 elections for regional governors across Russia; and the reelection of both regional governors and republican presidents as well as regional and republican legislatures throughout 1998 and 1999 and again in 2003–4.21 The last election for a regional governor in Russia was held in Nenets Autonomous Okrug on February 6, 2005, just prior to the law introducing the new system of appointing governors going into effect.22 As a result, between 1993 and 2005 all-Russian political parties have had literally hundreds of opportunities to affect electoral outcomes and, by extension, political practice in the provinces. Yet, with a few exceptions, they accomplished neither of these tasks. I begin by looking at the earliest electoral periods for provincial legislatures (also known as regional dumas) in Table 6.2. 21

22

I am particularly grateful to Nikolai Petrov of the Moscow Carnegie Center for providing me with a tabulation of regional legislative results from the 2003–4 period in particular. See Julie Corwin, “Last Direct Election of Regional Governor Held,” RFE/RL Daily Report Online, February 7, 2005.

125

a

+++

++

+

N/A [1.4] 0.3

6.3

7.3

KPRF %

NDR% [RC in ’93–4]

0.5

0 0.1

0 1.1

1.6 2.2

5.7 11.5% (336)

13.8

Percent (#) Deputies with all-Russian Party Yabloko % LDPR % APRF % Other % Affiliation

5.3% (155)a

N/A

Percent (#) Deputies with Local Party Affiliation

83.2%

86.2+++

Percent (#) Deputies with No Party Affiliation

From Darrell Slider, “Elections to Russia’s Regional Assemblies,” Post Soviet Affairs, vol. 12, No. 3, July-September, 1996. From Vyboryi v zakonodatel’nie organi fosudarstvennoi vlasti sub’ektov Rossiiskoi Federatsii 1995–1997., Moscow: Tsentral’naia Izbieratel’naia Kommissiia, 1998. This is based on subtraction of the percentage of deputies with all-Russian party affiliation subtracted from 100% of deputies elected during this electoral period. The number of deputies elected from regional parties was not reported separately for this electoral period. 86.2% of deputies without any party affiliation whatsoever is, however, an estimated figure and the true figure may be just slightly lower if deputies with regional party affiliations are included in it. This information is not available to my knowledge. The point remains, however, that only 13.8% of deputies elected had all-Russian party affiliations. This figure comes from my own analysis of the electoral statistics for each region of Russia published by the Central Electoral Commission of the Russian Federation in Vybory v zakonodatel’nye (predstavitel’nye) organy gosudarstvennoi vlasti sub’’ektov Rossiiskoi Federatsii 1995–1997: elektoral’naia statistika.

Dec. 1993– Dec. 1994 (79)+ Jan 1995–1997 (72)++

LEADING PARTIES: Years of Legislative Elections (# of regions holding elections)

table 6.2: National Parties in Regional Legislative Elections, 1993–1997.

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National Parties in Regional Legislative Elections Table 6.2 provides a basic description of the degree to which national parties penetrated provincial legislatures in the first two regional electoral periods.23 In the first electoral period, 79 regional legislative elections were held in 1993 and 1994; 13.8 percent of newly elected deputies carried a political party affiliation, while 86.2 percent carried no party affiliation.24 The low party penetration of the periphery in this electoral round is in some ways peculiar given that parties had just fought national elections to the State Duma and some regional elections were even held concurrently with national parliamentary elections. Presumably, all-Russian parties could have used the regional branches they may have developed to fight parliamentary elections in December 1993 for the advancement of their parties in the regional races that were either held concurrently or followed soon after. For the most part, however, the main all-Russian parties that did best in the 1993 elections to the State Duma proved unable to make significant electoral inroads to the newly formed regional legislatures. One might be able to understand this given the context in which the national and local parliamentary elections took place. In the wake of the October shelling of Parliament, President Yeltsin had temporarily banned opposition parties and called snap elections for the new State Duma. Although the Communist Party of the Russian Federation (KPRF) did field candidates in these elections in December 1993, some other opposition organizations did not. It also was difficult for these young and often poorly organized parties to field candidates in the regional legislative elections that followed. Despite this, however, the KPRF appeared to capitalize on its success in the State Duma elections (leveraging some of its old CPSU networks), managing to elect the highest number of deputies to regional legislatures – 6.3 percent of all deputies elected. The Agrarian Party of Russia, which garnered

23

24

I break the electoral periods of Russian provincial legislatures into two phases – the first was from 1993 to 2001, when all but a few legislatures were elected by single mandate elections; the second phase was from 2002 onward when a system of mixed PR/single mandate elections to these legislative bodies was introduced across Russia. Darrell Slider, “Elections to Russia’s Regional Assemblies,” Post-Soviet Affairs, Vol. 12, no. 3, p. 261.

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1.6 percent of all elected deputies to regional assemblies, followed the KPRF. These two parties received a combined total of 7.9 percent of all deputies elected to regional legislatures in 79 regions. Although they were by far the most successful parties in this initial round of legislative elections in the provinces, their relative victories hardly amounted to a sweep of Russian regional assemblies. Parties of the democratic center did particularly poorly, as the table indicates. While all-Russian parties might have been expected to do poorly in regional legislative elections in 1993 and 1994 because both parties and legislatures were young and weak, context cannot really explain the continued low penetration of parties in the periphery in subsequent elections to regional legislatures in 1995–7. The Central Electoral Commission reports that more than 17,900 candidates participated in elections for a possible 3,021 electoral mandates in 72 of Russia’s 89 regions between 1995 and 1997.25 Of this number of candidates approximately 25 percent were nominated by electoral organizations or electoral blocs (two or more parties in combination), while 75 percent of candidates ran as independents. Overall, of 2,934 deputies elected, 16.8 percent had party affiliations, but 83.2 percent did not. Of that 16.8 percent, only 11.3 percent had national party affiliations, while the remaining elected deputies (5.3 percent) were sponsored by local party organizations, having no ties to national parties whatsoever. The KPRF, Yabloko, and the Liberal Democratic Party of Russia (LDPR), three of the parties that crossed the 5 percent hurdle in the national PR vote for the State Duma in all three national elections since 1993, did have at least some representation in a few regional legislatures. But even for the KPRF, this hardly demonstrates a controlling interest in regional politics. Paralleling elections to the State Duma, the left opposition at that time certainly was more successful in regional legislative elections than “democratic/centrist” parties. However, they were in no way as successful in the provinces as in the federal-level Duma elections where in 1995 and 1999 the KPRF alone garnered more than 20 percent of the vote. Undeniably, the KPRF did reach furthest into the periphery, but its degree of penetration was less than impressive. In 1995–7, it registered 25

Vybory, p. 584.

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776 candidates in 46 subjects of the Federation and 215 candidates in 37 subjects were successfully elected. This amounted to an average of slightly less than 6 deputies per legislature in fewer than half of all those legislatures for which elections were held in this period.26 As in the first round of provincial legislative elections in 1993–4, the Agrarians were also relatively successful, winning 32 seats, but this also amounted to a handful of deputies in a handful of regions.27 Further continuing earlier trends, the democratic/centrist parties fared much worse; NDR ran candidates in 16 regions, but 10 deputies won in only 6 regions; Yabloko ran candidates in 19 regions, and 15 candidates won in only 5 regions; Democratic Choice of Russia ran in 11 regions and won only 3 races in 2 regions. Interestingly, Vladimir Zhirinovsky’s Liberal Democratic Party of Russia (LDPR) had among the more developed regional party structures (second only to KPRF), running more than 400 candidates in 48 regions but winning only 3 races in 2 regions. Although the Communists could correctly claim to have the largest number of elected deputies in the regions, it is difficult to argue that the KPRF maintained a powerful hold on politics in the periphery. Further, the KPRF’s support was geographically limited to those regions where it had done well in parliamentary elections – Russia’s agricultural red belt. Even here, however, the Communists hardly ever managed to claim more than 50 percent of deputies elected in any of this group of oblasts (ten of twenty-five in Stavropol; thirteen of thirty-five in Belgorod; ten of sixteen in Volgograd; eleven of forty-five in Voronezh; eight of twenty-five in Riazan).28 Subsequent elections to regional legislatures demonstrate the same pattern. The few elections that took place in 1998 (and for which reliable data were available) indicate that all-Russian party influence was perhaps declining even in regional legislative elections. Seventeen legislative elections took place in 1998, mostly in traditionally Communist (KPRF) strongholds in the Black Earth region of Russia. The KPRF won seats in fifteen of seventeen elections but clearly lost some support in areas where they had previously been especially strong 26 27 28

Vybory, p. 635. Vybory, p. 635. Vybory, p. 637.

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in 1993–7. Finally, as in the previous two electoral periods, in 1998 other parties continued to win only a handful of seats in regional legislatures.29 On average, therefore, since the first electoral period in 1993 through 1998, more than 80 percent of winning candidates in regional legislatures have consistently spurned all-Russian party affiliations and voters in these elections even appeared to prefer candidates without party affiliations – be they national or regional. That is, the problem was not only that there was an insufficient number of candidates running with party affiliations in regional elections, but also that the candidates who carried party affiliations were often passed over in favor of candidates who ran as independents. More striking, although the data are somewhat incomplete, the number of deputies winning seats in regional legislatures during this early period having an all-Russian party affiliation might have been declining. According to Table 6.1, in 1993 and 1994, 13.8 percent of elected deputies in provincial legislatures declared a national party affiliation, whereas in the subsequent round of elections between 1995 and 1997, this number dropped slightly to 11.5 percent, such that 88.5 percent of deputies in the provinces did not have national party affiliations compared with 86.2 percent who did in 1993–4. This is particularly interesting given the fact that Russia’s main political parties worked steadily to develop their regional organizations and increased the number of candidates they ran in regional elections between electoral periods. Thus, where we might expect to see an increase in the number of deputies in regional legislatures elected with all-Russian party affiliations, in fact we see a slight decrease since 1993.

Regional Executive Elections Of particular note beyond the apparently poor penetration into provincial legislatures of parties of all stripes was the poor showing of national parties in the regional executive (collectively, “gubernatorial”) elections. It is possible that national parties failed to penetrate regional 29

See Vladimir Kozlov, “Vybory v Regionakh” in Nikolai Petrov, ed., Regiony Rossii v 1998: Ezhegodnoe Prilozhenie k Politicheskomy al’manakhu Rossii (Moscow: Carnegie Center, 1999), pp. 156–66.

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legislative elections because regional legislatures, since Yeltsin’s 1993 replacement of the relatively more powerful soviets with the smaller and less powerful regional assemblies, may not have been considered a particularly big prize for fledgling Russian political parties with limited financial resources. That is, these bodies had and still have less real power than regional executives, so parties might reasonably not go to much trouble to expend scarce resources in electing their candidates. But as we know from Chapter 4, regional executives possess real political power. The office of governor was a political jewel in any region of Russia. In light of this, we should expect that all-Russian political parties might have devoted considerable effort in electing their preferred candidates. Indeed, analyses of the initial (and biggest) gubernatorial elections that took place between 1995 and 1997 indicate that pro-Kremlin and opposition forces did in fact make great efforts to influence the outcomes of these elections.30 The results indicate, however, that even in elections where the stakes mattered and the office up for grabs actually held considerable power, Russian national parties, regardless of political stripe, still fared poorly. For example, of the 153 “real candidates” in this initial set of gubernatorial elections, only one-third had a discernible ideological orientation.31 So fuzzy were some candidates’ affiliations that the two major opposing ideological blocs in the elections – the pro-government AllRussian Coordinating Council (OKS), backed by the Yeltsin administration; and the KPRF’s umbrella organization in the provinces, the Popular Patriotic Union of Russia (NPSR) – both claimed victory in the elections.32 This is a result of the fact that, in some instances, “the NPSR even supported the same candidate backed by the Yeltsin

30

31

32

For example, Marc Zlotnik, “Russia’s Governors: All the President’s Men?” Problems of Post-Communism, Vol. 43, no. 6, pp. 26–34; Steven L. Solnick, “The 1996–97 Gubernatorial Elections in Russia: Outcomes and Implications,” Post-Soviet Affairs, Vol. 14, no. 1, January–March, 1998; and Jeffrey W. Hahn, “Regional Elections and Political Stability in Russia,” Post-Soviet Geography and Economics, Vol. 38, no. 5, 1997, pp. 251–63. Michael McFaul and Nikolai Petrov, “Russian Electoral Politics After Transition: Regional and National Assessments,” Post-Soviet Geography and Economics, Vol. 38, no. 9, 1997, p. 533. “All Sides Claim Victory in the 1996 Gubernatorial Elections,” Institute for East– West Studies, Russian Regional Report, Vol. 2, no. 1, January 8, 1997.

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government.”33 In other cases, although a candidate may have run and won with an ostensibly Communist label, the Presidential Administration in Moscow declared the winner a moderate with whom they could work and so claimed the new governor as a win for their side anyway. One observer noted that the NPSR played little independent role in nominating (or financing) candidates and played a “more limited role in extending endorsements to candidates already on the ballot.”34 Overall, there is general agreement that the role of parties in these elections was limited – even the role of the Communist Party and its affiliated organizations. Despite the frequent claim that the Communist Party of the Russian Federation was, at the time, Russia’s only truly national party,35 of the seventy-three governors elected between 1995 and 1997, only nineteen (26 percent) carried an unambiguously Communist orientation.36 Our Home Is Russia and Yabloko fared even worse in these early gubernatorial elections. This is despite the fact that Yabloko had pervasive grassroots organizations, and Our Home Is Russia was considered to be the party of power in both the center and the periphery in this period. But, “in the fifty gubernatorial elections of 1996–1997, Yabloko ran only a handful of candidates and won only one vote.”37 Vladimir Zhirinovsky’s misnamed Liberal Democratic Party of Russia, despite doing surprisingly well in elections to the State Duma in 1993 and 1995, also managed to win only one gubernatorial race between 1995 and 1997, echoing its poor performance in provincial legislative elections during the same period. Moreover, as their subsequent actions in office demonstrated, “none of the winners were likely to feel strong bonds of loyalty” to any ideological camp.38 In 1998 ten more gubernatorial elections took place. In four of these elections, incumbents managed to maintain their offices, while in six, they were defeated. Only in one of the ten regions was the winner clearly a partisan of any all-Russian party (Smolensk, where the new 33 34 35 36 37 38

McFaul and Petrov, p. 545. Solnick, 1998, p. 10. Akimov interview in McFaul and Petrov. McFaul and Petrov, p. 533. McFaul and Petrov, p. 542. Solnick, 1998, p. 18.

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governor was a Communist). Following the patterns established in the 1995–7 elections, winning candidates for governor more often than not spurned the sponsorship of any of the leading all-Russian parties.39 Of seven elections held in 1999, only in one region (Belgorod) could the Communists clearly claim a victory. In all the others, either candidates were reported to have been nominated by a group of voters, candidates were nominated by a few regional parties (as in the case of Sverdlovsk), or all-Russian parties nominated candidates, but those candidates consistently lost the elections.40 Finally, in the forty-four gubenatorial elections that took place in 2000, party identification and/or support continued to mean little in practice. Instead, incumbency mattered more than party identification: “In almost every case where incumbent governors managed to move up election dates and therefore give their competition less time to prepare, the incumbent won.”41 Paralleling previous trends, both the current “party of power” (by 2000 it was Unity) and the KPRF claimed victory – many times in the same region because victors had overlapping or otherwise unclear party sponsorship. Moreover, of the forty-four governors elected, twenty-nine incumbents were victorious in 2000; twelve Communists were reelected; seven candidates supported by the Kremlin were elected, slightly fewer than the eight candidates who won as independents. The remaining successful candidates were ostensibly sponsored by one or several other parties that ran candidates in the 1999 Duma elections. Again, following earlier trends, winning Communist candidates reportedly maintained very loose ties to their party. Winning Communist candidates and non-Communists alike tended to emphasize their loyalty to newly elected President Putin. Indeed, election analysts reported that the only difference between the elections of 2000 and those of 1995–7 was that “during the earlier round of elections 39 40

41

Kozlov, pp. 156–66. Results of the 1999 gubernatorial elections are available on the website of the Central Electoral Commission of Russia (http://www.fci.ru/elections/default.htm). The results provided there were supplemented by the online version of the Russian Regional Report, Vol. 4, no. 33, September 2, 1999 (New York: East–West Institute) regarding Sverdlovsk’s election This quotation and other preliminary information on the 2000 gubernatorial elections come from Julie S. Corwin, “Endnote: The Incumbency Advantage,” Radio Free Europe/Radio Liberty Russian Federation Report, Vol. 3, no. 1, January 3, 2001.

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all contenders emphasized their independence from the center and the unpopular former President Boris Yeltsin.”42 In sum, since the collapse of the Soviet Union, Russian political parties have shown themselves to be particularly ineffective in organizing politics in the provinces. The evidence underscores the fact that it was not just parties on the right that were weakly institutionalized in the Russian provinces. Even leftist parties like the KPRF were far from a commanding presence in provincial politics. Parties – all national parties, but even regional parties too – were clearly not viewed as vital vehicles for election to provincial legislatures or executives. Party labels (both regional and national) were either shunned completely or easily exchanged and discarded by provincial politicians. Even where candidates whom national political organizations officially sponsored won elections, the national organization frequently exercised little influence on concrete political activity and policy outcomes at the local level. A study of regional governors by the United States Information Agency, for example, found little correlation between a governor’s stated party label and his policy preferences. Further, there is also evidence that in places where the KPRF did well in electing a relatively high number of deputies to regional legislative organs, the party did not have the strength to implement its own policies or ensure that its people always won top jobs within the legislature.43 Given the broader implications for Russian political development, it is important to test various explanations as to why the Russian party system made few inroads into provincial politics.

explaining the limited reach of russia’s party system It is not unreasonable to question whether it is simply too early in Russia’s political development to assess institutionalization. Undeniably, institutional development and consolidation are best studied over several decades rather than one. Since 1993, there have been, however, 42 43

Corwin, 2001. See Deborah Javeline, “Does It Matter Who Governs? Political Parties and Leadership Behavior in Russia’s Regions,” paper delivered to the Annual Meeting of the American Political Science Association, August 31–September 3, 1998.

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four national elections for parliament, three for president, and hundreds more at the regional level. Furthermore, many other postcommunist countries have established more institutionalized party systems within roughly the same time frame and in as many electoral periods.44 Thus, there has been ample opportunity for the Russian party system to make some steps toward institutionalization, and indeed it seemed to have moved toward this on some measures, as demonstrated earlier. It remained a party system in formation, naturally, but it did seem to be forming in a particular way – without penetration of the periphery. The vast comparative politics literature on parties and party systems presents a range of explanations for this that can generally be grouped together as institutional, sociocultural, and economic.45

Institutional Influences At the national level in Russia, clearly the introduction of a system of mixed single-mandate and proportional representation helped to promote the crystallization of a party system.46 The introduction of a system of proportional representation with a 5 percent minimum requirement lowered the organizational barrier for parties to be represented in the State Duma. (In 2005, this system was altered in anticipation of the December 2007 Duma elections such that the lower house of Russian parliament will be elected entirely by proportional representation with a 7 percent floor for parties to gain representation.) As Table 6.1 demonstrated, the number of independents gaining representation was lower in 1995, 1999, and 2003 compared with 1993. But in provincial Russia throughout the 1990s, most legislatures shunned the adoption of proportional representation electoral systems. 44

45

46

Herbert Kitschelt et al., Post-Communist Party Systems: Competition, Representation, and Inter-Party Cooperation (New York: Cambridge University Press, 1999). See for example Seymour Martin Lipset and Stein Rokkan, Party Systems and Voter Alignments: Cross National Perspectives (New York: The Free Press, 1965); Giovanni Sartori, Parties and Party Systems: A Framework for Analysis (New York: Cambridge University Press, 1976); Maurice Duverger, Political Parties: Their Organization and Activity in the Modern State (London: Methuen, 1954). Robert G. Moser, “The Impact of the Electoral System on Post-Communist Party Development: The Case of the 1993 Parliamentary Elections,” Electoral Studies, Vol. 14, 1995.

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Indeed, only four regions of eighty-nine (Krasnoiarsk, Kaliningrad, Koriak autonomous okrug, and Ust Ordinsk/Buriat autonomous okrug) established voluntarily a mixed proportional representation and single-mandate system (such that some deputies are elected by one system and others are elected by the other system) in unicameral legislatures. Sverdlovsk oblast employed a proportional representation system in one of its two legislative houses and had a majoritarian system in the other house (it is one of a few regions with bicameral legislatures). Saratov oblast initially used a mixed single-mandate and proportional representation system in initial elections to its legislature but reverted to a single-mandate system in subsequent elections.47 Because electoral rules appear to have some effect on party system institutionalization at the national level, we might expect that both national and regional parties would make better inroads into the five provincial legislatures where proportional representation electoral systems exist in conjunction with single-mandate systems. Because only five of eighty-nine regions had adopted mixed systems for their legislative elections by 1999, there is no compelling evidence that this helped all-Russian parties penetrate provincial politics, but it is worth examining these cases in closer detail to see if changing electoral rules (as the federal government mandated by 2002) would indeed hasten party penetration of the provinces. Table 6.3 demonstrates that electoral rules did seem to make a difference in the provinces for party penetration. Compared with the national average for the sixty-seven regions in 1995–7 that maintained only a single-mandate system, in the five regions with a mixed proportional representation/single-mandate system political parties – both national and regional – made significant inroads into provincial legislatures. Although very few regions had, prior to 2002, opted for a mixed electoral system, it seems plausible that an extension of mixed PR/single mandate electoral systems would help to extend the reach of national parties into the periphery. Indeed, that was apparently the assumption behind the June 2002 federal law mandating a mixed electoral system for all regional legislatures. (The ruling of the Constitutional Court of July 2003, however, that limits the ability of federal prosecutors to file suit against regions whose electoral laws failed to comply with the 47

Again, by 2002 mixed proportional representation/single mandate electoral systems were required throughout Russia for elections to regional legislatures.

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table 6.3: Mixed Electoral Systems and Party Penetration of Regional Legislatures.

Oblasts with Mixed PR and SM electoral systems Krasnoiarsk oblast Kaliningrad oblast Sverdlovsk oblast Koriak a.o. Ust-Ord/Buriat a.o. Average Across 5 with mixedPR/SM system Average Across all others with SM system only

% with all-Russian Party Affiliation

% with % with Regional No Party Party Affiliation Affiliation

52.2 18.8 32.4 33.3 15.8 30.3

29 15.6 41.2 11.1 5.3 15.22

10.1

4.2

19.5 65.6 26.5 55.6 78.9 49.22 85.4

Source: Central Election Commission of the Russian Federation. Data culled from Vybory v zakonodatel’nie (predstavitel’nie) organi gosudarstvennoi vlasti sub’ektov rossiiskoi federatsii 1995–1997: elektoral’naia statistika, Moskva: Isdatel’stvo “Ves’ Mir,” 1998.

June 2002 federal law requiring a mixed electoral system almost rendered this a moot issue.) But, assuming that all regions actually did adopt at least a mixed electoral system, to what extent would this institutional change actually have made the expected difference in party penetration in the provinces? The average percentage of deputies having all-Russian party affiliations across the 5 regions having a mixed electoral system was three times higher (30.3 percent as opposed to 10.1 percent) than those regions having a single-mandate system alone. This small group of regions provides tentative evidence that a mixed electoral system might also promote the development and electoral success of regional political parties. The average number of deputies elected with regional party affiliations across the five mixed-system regions was 15.22 percent as opposed to 4.1 percent in the regions with single-mandate systems. The number of deputies elected as independents in regional legislatures was significantly lower in mixed electoral systems (49.2 percent) as opposed to 85.4 percent in those regions with majoritarian systems. Because at the time of this writing only one electoral period had passed (2003–4) for provincial legislatures in 26 regions of the Russian Federation, it is not possible to say with great confidence to what degree this change has made a difference in national party penetration

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of regional legislatures.48 Changes in electoral systems evidently did make some difference in determining the degree of party penetration in the regions, but they were not a panacea for low party penetration of provincial politics in the first electoral period. The arguments I present later in this chapter to explain lack of overall party penetration also help to explain why so many regions spurned voluntarily transiting to mixed electoral systems in the 1990s. Furthermore, although the number of deputies having national party affiliations was noticeably higher in regions with mixed electoral systems, almost 65 percent of deputies elected in those regions had either no party affiliations (49.2 percent) or regional party affiliations (15.2 percent). A second institutional explanation with regard to party development in provincial legislatures is that party development shadows the development of state institutions. Where legislative institutions are weak relative to executives, party development will be weaker as a result.49 Similar arguments have been made regarding the relative strength of ` the State Duma vis-a-vis the president at the federal level, but in the national legislature parties were taken seriously and did provide a mechanism for the organization of politics. Finally, and most telling, provincial executives were very powerful and they actively shunned joining a party for regional elections as section three demonstrated. Where they did accept all-Russian party sponsorship for their own electoral bids, they tended to shed it quickly once in office. Beyond these plausible but apparently incomplete institutional explanations, ethno-cultural variables might better account for weak all-Russian party penetration of the periphery in particular. The Russian Federation, after all, is a multi-ethnic state that is divided into a complicated and unwieldy three-tier quasi-federal system with twentyone non-Russian republics at the top of the pyramid, fifty-five predominantly ethnically Russian oblasts and krais in the middle with the two special-status cities of St. Petersburg and Moscow, ten autonomous okrugs and one autonomous oblast, which are also non-Russian 48

49

Full electoral results for regional legislative elections held between 2003 and March 2005 were supplied to me by Nikolai Petrov at the Carnegie Endowment for International Peace, Moscow. Steven Fish, “The Advent of Multi-Partism in Russia, 1993–1995,” Post-Soviet Affairs, Vol. 11, no. 4, October–December 1995.

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table 6.4: Breakdown of party affiliations by oblast and krai, republic, and autonomous region in legislative and executive elections in sample years 1995–7. Territorial Delineations (# where elections held between 1993 and 1999)

Percent (avg) Deputies with all-Russian Party Affiliations

Percent (avg) Deputies with Local Party Affiliations

Percent (avg) Deputies with No Party Affiliations

Krais, Oblasts + Moscow and St. Petersburg Autonomous Okrugs and Oblast Republics

17.0

6.4

76.6

5.7

4.3

90.0

9.9

2.5

87.6

Source: Central Electoral Commission of the Russian Federation. Vybory v zakonodatel’nie (predstavitel’nie) organi gosudarstvennoi vlasti sub’ektov rossiiskoi federatsii 1995–1997: elektoral’naia statistika (Moskva: Ves Mir, 1998).

ethnic units. We might expect that where we saw strong non-Russian nationalist or ethnic movements we might also have seen regional party development and some resistance to national party incursion into regional affairs. In republics and the autonomies, particularly where strong nationalist or ethnic claims were advanced through the 1990s, we might expect to see indications of regional ethnically based parties in formation. Conversely, perhaps in ethnically Russian regions (the fifty-five oblasts and krais plus the cities of Moscow and St. Petersburg) we would see less active resistance of national political movements and more penetration of all-Russian parties than in non–ethnically Russian regions. As Table 6.4 demonstrates, at least in the elections held between 1995 and 1997 for regional legislatures (and the earliest period for which the most comprehensive data are available), there is some evidence that candidates running as part of all-Russian parties did slightly better in predominantly ethnically Russian regions (oblasts and krais) than in the ethnic republics and the autonomies in particular. In the 48 oblasts and krais that held legislative elections between 1995 and 1997, on average 17 percent of elected deputies held national political party affiliations as compared with 9.9 percent in the 12 ethnic republics holding similar elections and 5.5 percent in the autonomous areas. Significantly, however, there is little indication that ethnically based regional parties picked up the slack in the non–ethnically Russian

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regions. Indeed, deputies with regional party affiliations were marginally more plentiful in ethnically Russian oblasts and krais (with 6.4 percent) than in the autonomies (4.3 percent) or republics in particular (2.5 percent). Moreover, in those places where we might have expected that all-Russian parties would have been defeated in legislative elections by regional parties with strong ethnic messages, there was little sign of regional party representation in regional legislatures. Although there is some difference among types of territorial units in terms of party penetration, given that even in predominantly ethnically Russian regions, 76.6 percent of deputies carry no party affiliation (neither national nor regional), ethno-cultural distinctions alone do not seem to explain satisfactorily a persistent under-institutionalization of parties in Russia’s provinces. In light of the fact that ethnicity does not appear to make a huge difference in terms of party penetration of the periphery, and given also that in non-Russian ethnic regions even regional parties do not do particularly well as electoral vehicles for legislators, it is worth investigating other, possibly more powerful explanatory variables for weak party penetration of the periphery more generally. Economic factors, therefore, are a third set of reasonable explanations. It is important to reiterate that there is not tremendous variation among regions in the degree to which national parties have penetrated provincial politics (recall Table 6.2, which showed that between 1993and 1997 consistently more than 80 percent of provincial deputies were independents). Still, it is worth exploring to what degree the relative wealth of a region might influence party penetration. We might expect that in wealthier regions, national and regional political parties might have made more inroads into political life. This is because higher relative wealth might have created higher living standards and more social differentiation such that interests might become more diverse, requiring formalized political representation in the form of parties.50 Alternatively, however, following the trends in Chapters 3, 4, and 5, and if my argument is correct concerning regional elites and their aversion to institutionalization, it may be that it was in wealthier regions that party penetration was lowest. The previous empirical sections of this chapter indicate that in poorer agricultural regions, the KPRF tended to do better than other 50

Lipset and Rokkan.

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parties. (For example, Belgorod, Kursk, Penza, Riazan, Kemerovo, Kirov, Kaluga, Volgograd, Briansk, and Stavropol all have 60 percent or fewer deputies elected as independents and the highest number of deputies backed by the KPRF. Of these regions, only Volgograd had elections for a new regional duma in the period between 2003 and 2005 where almost 26 percent of deputies were KPRF, second only to United Russia with 37 percent.51 ) Conversely, in wealthy industrial regions (particularly those rich in natural resources like oil, gas, and diamonds) there tended to be less party penetration, both national and regional, into regional politics. This is particularly evident in many of the twenty-one republics of Russia and may help to explain the small amount of variation we observed previously between republics and oblasts in degree of national party penetration. In the majority of the republics throughout the 1990s, more than 90 percent of deputies were elected to republican legislatures as independents. In the three wealthiest, most politically powerful territories of Russia, and among the set of regions found to be most noncompliant in Chapter 3, the republics of Tatarstan, Bashkortostan, and Iakutiia, 90.0 percent, 98.9 percent, and 92.5 percent, respectively, of deputies were elected as independents – having neither a national nor a regional party identification. Tentatively, there appears to be a weak negative correlation between party development and all-Russian party penetration and relative wealth of a region. However, given that national party penetration and development is universally weak across Russia and variation among the vast majority of regions is not great, there is a related, more compelling argument than relative wealth or investment potential regarding why parties have failed consistently to penetrate the Russian periphery.

the equilibrium of under-institutionalization This explanation is more closely related to the simultaneity of Russia’s attempt to build proto-democratic institutions and its efforts to assemble the building blocks of a market economy. That is, although both national and regional political parties were weakly institutionalized in provincial Russia, there did exist organized local interests that 51

Petrov.

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were deeply involved in regional politics. Throughout this study of central state capacity in the Russian provinces, it is clear that there was an organizational principle in Russian provincial politics that was outside the scope of organized, formalized political parties. The partial transition equilibrium of the economy created entrenched interests in the provinces that saw little benefit in joining national parties or even in formalizing their particularistic interests as parties. Local elites (political actors in both legislatures and executives as well as regional economic elites) saw little to gain but much to lose in joining national parties, because at this stage of the post-Soviet transition from plan to market the establishment of strong political institutions, like parties, constrained their freedom to extract rents, as was shown in previous chapters. That is, local political and economic elites derived more benefit from relying on old networks than from forming new institutions, the cost of which was high – especially ones that might constrain their freedom to make decisions for private rather than for public good. Those in control of financial resources that might have helped with party building were not interested in constructing organizations that might have enabled the central state to introduce curbs on their own avenues of direct influence and authority over regional political affairs. Powerful economic interests had little interest in building political institutions like parties that might have constrained their freedom of access or expanded their political accountability to wider societal interests or national politicians. By conscientiously ignoring the task of political institution building and especially by keeping political parties weak, short-term “winners” in the political and economic transitional process ensured that the broader spectrum of “losers” had limited avenues through which to express their discontent. In this context, the benefits that the institutionalization of parties might provide in other countries undergoing political transitions were not highly prized. Rather, local elites preferred to particularize power rather than even narrowly institutionalize it through parties that might force them to share more broadly their early transitional winnings. Thus, short-term winners could continue to extract rents and acquire property with the aid of political actors whose support they effectively purchased and without fear of national institutional oversight or wider public accountability.

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Moreover, there was, then, at the regional level in Russia a universal urge to conserve and protect what had already been gained through partial economic and political reform. In those regions that gained a little more than others, in those that had more to gain from the beginning, this general urge was even stronger. This might account, therefore, for the slightly weaker party penetration we observed in wealthier regions than in poorer ones. It might also account for the general propensity of regional elites, when given the choice until 2002, to prefer single mandate to proportional representation electoral systems. Because regional elites did not want parties interfering in politics in the periphery, they were likely to avoid any change in the electoral system that might promote party system formation and the reach of national parties into provincial politics as a result. The construction of competitive national political parties that more broadly incorporated winners and losers would work against the interests of short-term winners. As Joel Hellman notes, “political inclusion can act as a restraint on winners, undermining their capacity to hold the economy in partial reform equilibrium.”52 Political inclusion through the institutionalization of parties in regional parliaments would also undermine the capacity of early reform winners to hold political institutional development in partial reform equilibrium. Thus, not only do short-term winners work to stunt further economic change that might threaten their early gains from the transition, the evidence here indicates that they also work to stunt further political institutionalization that might similarly threaten to curtail their winnings from partial economic reform. It follows then that promoting strong, competitive parties that would broaden the accountability of political actors in the periphery to wider societal interests was not likely to be a high priority for the newly emerging economic elite nor for the protectors of older economic interests in Russia in the near term. The strategies that regional economic and political elites in the provinces employed in the 1990s to restrain the influence of political parties were many. First and foremost, regional political leaders controlled the rules of electoral competition, for the most part choosing single-mandate over mixed single-mandate/proportional representation systems. Second, through regional and republican constitutions 52

Joel S. Hellman, “Winners Take All: The Politics of Partial Reform in Post-Communist Transitions,” World Politics, Vol. 50, no. 2, January 1998, pp. 203–32.

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and the legal control they exercised over the appointment of respective electoral commissions, they effectively controlled candidate registration requirements (including age, language, and residency requirements).53 Third, they often controlled the local electronic and print media such that they greatly influenced the ways in which candidates were presented to and perceived by voters. Fourth, through their often overlapping ties with local economic elites, political elites possessed independent and often significant financial means to run regional elections.54 Using these and other mechanisms, regional governors in particular more often than not actively opposed the incursion of political parties – regional or national – into provincial politics. Governor Mikhail Prusak of Novgorod, for example (a region where 100 percent of deputies in the legislature were listed as independents by the Central Electoral Commission in 1997), publicly acknowledged that he actively opposed political parties in his region because “Parties cause problems. Instead, I call our legislature the party of business.”55 Further evidence of the influence and overlap of particularistic regional economic interests on provincial politics comes from a close look at who sat in regional legislatures. The Russian Central Electoral Commission reported that In practically all legislative organs of the subjects of the Federation it is possible to meet leaders of strong enterprises and commercial structures of the region. In the Republic of Sakha (Iakutia) it is the leaders of diamond and gold enterprises, 53

54

55

See, as two examples, the requirements for the election of the president of Tatarstan and Bashkortostan in their respective constitutions. For evidence of the extent of regional control over respective electoral commissions, see for example “Veshniakov Wants Greater Control Over Regional Electoral Commissions,” in the electronic version of Russian Regional Report, Vol. 5, no. 47, December 20, 2000 (New York: East–West Institute). Myriad examples of the use of such tactics abound throughout all three major regional electoral periods (1993–4, 1995–7, 1999–2000). Recent examples of blatant and typical regional media manipulation as well as a quick change in electoral requirements to benefit the incumbent governor include the behavior of the Pskov legislature and the re-elected governor of Pskov, Evgenii Mikhailov. See “Pskov Incumbent Re-Elected by a Narrow Margin,” Radio Free Europe/Radio Liberty Russian Federation Report, No. 40, November 1, 2000. Another example of a common method of media manipulation can be found in “Tver Inspector defends Anti-Government Paper,” Russian Regional Report (electronic version), Vol. 5, no. 47, December 20, 2000 (New York: East–West Institute). Prusak’s comments in a March 3, 1998, meeting are cited in Kathryn Stoner-Weiss, “Central Weakness and Provincial Autonomy: Observations on the Devolution Process in Russia,” Post-Soviet Affairs, Vol. 15, no. 1, January 1999, p. 99.

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in the Republics of Komi and Tatarstan and Tiumen’ and Sakhalin oblasts it is oil companies. In Cheliabinsk oblast it is metallurgical factories, and in Murmansk oblast, it is the Kol’skii Nuclear Power Station.56

This results in the “strengthening of the influence of economic lobbyists on the economic policies of subjects of the Russian Federation. Aside from this is the threat of confrontation of the regional elite with the federal center in constructing the interests of the regions.”57

implications for central state capacity in the provinces When we think about what it is that institutionalized competitive party systems do in democracies, the implications of Russia’s equilibrium of under-institutionalization are cause for concern. Parties are supposed to aggregate interests as they integrate disparate parts of the polity. They help to convey electoral success into concrete policy accomplishments and provide accountability and representation to a wide swath of society. Yet in the Russian case, because the national party system in particular did not penetrate provincial politics, in the decade following the Soviet collapse few of the potential gains party systems can provide were present. The territorial under-institutionalization of a party system has important consequences not only, therefore, for democratic consolidation and the growth of political pluralism but also for national integration and central state capacity. With regard to the effect of underinstitutionalization on political pluralism, without the establishment and further development of regional and national political parties in the Russian provinces, emergent political interests will go underrepresented in provincial political institutions. Regional politics continue to be dominated by particularistic, clientelistic concerns. Putin’s eradication of elections for regional governors in the fall of 2004 (put into legal effect in February 2005), as I noted earlier, merely fully consolidated clientelism at the regional level. 56 57

Vybory, p. 636. Vybory, p. 637.

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This, in turn, has important negative implications for state integration. While having a poorly institutionalized party system in the periphery does not, in itself, pose a direct threat to Russia’s territorial integrity, it does contribute to the problem of vertical integration of the Russian state.58 In the absence of strong national political parties, central political actors – even a seemingly powerful president like Vladimir Putin – had to compete for the loyalty of regional governors with local economic interests possessing rival political agendas and autonomous economic resources, and this dynamic is likely to continue in the absence of regional elections for governor. As damaging is the fact that even if the central government were able to buy off regional political leaders strategically in return for their support on key policies, patronage of this sort is a less predictable and more costly mode of linkage. Clientelistic ties that result from a weakly institutionalized party system ensured the subordination of public interest to private interests at the regional and national levels of the state. Putin’s decision to eradicate elections for regional governors did nothing to rectify this situation. Indeed, he may have made it worse through the creation of a variety of authoritarianism lacking actual political authority in practice in the periphery of the country. One potential bright spot, however, is that elections to regional legislatures have continued with mixed proportional representation/single-mandate systems. This may help to promote at least this element of the establishment of an all-Russian party system. But real political and economic authority in the provinces lies in the executive, not legislative, branch of government. If regional executives feel no loyalty to a national party for their election to office, then bargaining costs over policy will be high for the center in its dealings with the periphery. Because political parties were not a viable means by which to reduce such costs, provincial political loyalties to central political authority will likely remain weak, fleeting, and highly personalistic. Putin’s decision to do away with gubernatorial elections entirely and rely more clearly on personal loyalty to his Presidential Administration, therefore, further enshrined clientelism rather than pluralism as the currency of Russian (provincial) politics. 58

Stoner-Weiss, 1999.

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Clientelism, rather than institutionalization, encourages further rent seeking and ensures continued corruption in government. It is, therefore, hardly a firm foundation on which to build a state more capable of sustaining any degree of sustained socioeconomic development.59 The weakness of all-Russian parties in the provinces also helped to contribute to a continued inability to implement policy evenly across the Russian Federation.60 Low institutionalization of center–periphery linkages perpetuated the vicious cycle that pervades other developmental contexts. In particular, without cohesive political parties, the tendency toward personalistic rule in both Moscow and the provinces is “difficult to translate . . . into the political ability to accomplish policy goals. Policy failures, in turn, tend to undermine popular support. The strategies for winning power thus come to be even further removed from solving developmental problems.”61 That is, without strong parties in a competitive party system to support their efforts and help implement policies, appointed political leaders will tend to back away from making tough decisions that might improve Russia’s stilldeveloping economy. The result for Russia through the 1990s in particular was a repeated and chronic cycle of weak institutions as public officials lacking autonomy from emergent financial interests and lacking the benefit of coherent, linking national institutions continued to subordinate their public service role to exogenous interests. Rather than become more able to ensure policy implementation, the Russian state became weaker as a result, as it continued to be hijacked for personal gain. I turn next, in the concluding chapter, from discussing the opportunities that were missed in Russia to build an accountable democratic political system and more effective central state to the increasingly authoritarian choices President Putin actually made in attempting to reassert central prerogatives in Russia’s regions. 59

60 61

See Huntington, especially p. 31, and Atul Kohli, Democracy and Discontent: India’s Growing Crisis of Governability (New York: Cambridge University Press, 1990), p. 198, for more on the relationship between patronage and reduced state authority. Stoner-Weiss, 1999. Kohli, 1990, p. 386.

7 The Comparative Implications of Russia’s Weak State Syndrome

Recognizing the depth and serious threat that regional recalcitrance presented to the success of Russian economic development, almost immediately after his May 2000 inauguration President Putin moved swiftly to address provincial challenges to central authority. Vowing to reestablish and reassert the strength of the Russian state and the “vertical” chain of authority from center to periphery in particular, Putin launched a multi-front war on regional resistance to the Kremlin. This effort culminated in his decision (and the Duma’s quick ratification of this proposal) to eliminate competitive elections for regional governors entirely by February 2005. As noted earlier, this was done in the immediate wake of the Beslan school hostage-taking tragedy in the fall of 2004 (where he blamed, with little evidence, regional officials for a botched rescue attempt). This was, presumably, merely a pretext for cracking down harder on regional officials who had long thwarted federal policy. This dramatic measure also amounted to an admission of the failure of previous efforts to gain control over policy in the provinces. But just as President Yeltsin, in the absence of strong, competitive political institutions, built an unconsolidated Russian democracy with limited accountability of elected officials, Putin’s solutions to Russia’s regional problem amount to an attempt to build authoritarianism lacking an authoritative state – authoritarianism without authority. That is, although Putin correctly identified the danger of regional resistance to central authority in rebuilding the Russian state as an effective 147

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policymaking and policy-implementing device, he offered incomplete and perhaps ultimately ineffective solutions unlikely to break the powerful business–government nexus in the provinces. Moreover, while Putin may have temporarily rid Russia of some of the symptoms of what ailed the central state in the periphery throughout the 1990s, he may not have cured the disease.

putin’s recentralizing agenda President Putin’s first attempt to transfer political authority away from powerful regional governors and toward the Kremlin came almost immediately after his inauguration in May 2000 within the context of his self-proclaimed “dictatorship of law.” The reform included the establishment of seven federal districts within his Presidential Administration, each encompassing approximately twelve subunits of the Russian Federation. This did not involve a redrawing of formal borders between provinces but was an administrative change in that each of the seven districts would be headed by an appointed representative charged with coordinating the tasks of the federal bureaucracy in particular, as well as attempting to check the overt flouting of central authority on the part of elected regional governors and republican presidents. At the time, this was a controversial move in that the reform was intended to place appointed presidential representatives higher in the political-administrative hierarchy than elected governors and presidents of regions. Second, in an effort to remove overly active governors from excessive regional involvement in national politics, Putin proposed, and the Duma accepted, a plan to reorganize the Federation Council, Russia’s upper house of parliament, such that regional political leaders (governors, presidents, and heads of regional legislatures) would no longer automatically gain seats. Instead, each region would be represented in the upper house by two appointed representatives – one put forward by the governor or president of the region and the other installed by a vote of regional parliament. Third, to address the noncompliance problem, Putin quickly passed through the Duma a set of laws that would allow for the legal removal of governors and regional legislatures once it was proven in the courts that these officials were knowingly passing legislation in violation of

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the constitution and federal law. Relatedly, he also issued demands that regions reverse existing contradictory legislation. Finally, in an apparent effort to reduce the asymmetries between regions in their dealings with Moscow, Putin and his administration quietly moved to dissolve all but fourteen of the bilateral treaties the Yeltsin administration had signed with forty-two regions of Russia between 1994 and 1999. Despite the somewhat heavy-handed nature of Putin’s solutions to the breakdown of central state authority in the periphery, it was not entirely clear that these changes actually did a great deal to challenge the heart of regional resistance. While he temporarily quelled the regions, without further institutional reform it remained entirely possible, perhaps likely assuming the accuracy of the trend described in Chapter 3, that were the national economy to decline again, overt regional resistance to the central state would reemerge. In creating the federal districts, for example, he simply increased the size of the central state but did not necessarily increase its effectiveness. As with the two previous iterations of this office under Yeltsin, the new representatives of the federal executive had poorly defined responsibilities. It was unclear, for example, to what degree they were supposed to oversee the actions of regional governments in general or merely federal bureaucrats in the regions.1 Their staffs were small relative to the size of a typical regional administration, and the presidential representatives were given no responsibility for spending federal funds, nor for attending to the implementation of federal laws. As with previous iterations of this office, therefore, the main task of the presidential representative was to serve as the “eyes and ears” of the Kremlin in the provinces. But as we know from the survey responses of regional governors and heads of federal funds in the provinces presented in Chapter 4, the similarly conceived previous iterations of presidential representative had little impact on concrete tasks of governing in the regions. Finally, the wide variation in how presidential representatives carried out their roles is a testament to how poorly their roles were defined 1

See Soobshchenie Press–Sluzhby Prezidenta Rossiiskoi Federatsii, 2000–05–13–002 Ukaz “O polnomochnom predstavitele Prezidenta Rossiiskoi Federatsii v federal’nom okruge.” (Decree on the authority of the representative of the president of the Russian Federation, May 13, 2000.) See also the interview with Sergei Samoilov, Head of the Presidential Administration of the Russian Federation, in the Russian Regional Report (New York: East–West Institute), August 4, 2000.

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and what they understood their functions to be.2 Further, both heads of regional administrations and federal bureaucrats, like the heads of the regional branches of federal funds, quickly became resentful of what they perceived as ineffective interference in their activities.3 Within two years, the overall effectiveness of the federal envoys as remedy to weak central state capacity in the provinces was in serious question. In a study of the results of the reform in the Southern federal district, Natalia Zubarevich reported that the governor general there had done little to stop gubernatorial patronage of local companies. She concluded, “the presidential envoy’s battle with corruption is selective, of little impact . . . and achieves its purposes only when the envoy’s interests coincide with the interests of another level of government [either city or oblast level].”4 Referring to the activities of the president’s envoy in his region, the governor of Leningrad oblast asserted that by the summer of 2002, “results are not visible” and that “We need to create the appropriate conditions for business, not set up gosplans [referring to the huge former Soviet economic planning agency].”5 Indeed, the creation of the federal districts headed by new presidential representatives merely created yet another layer of the Russian state – a strategy that has time and again proven ineffective in enhancing governing capacity in Russia.6 Comparative experience even within recent Russian history, but elsewhere as well, indicates that a bigger state is not necessarily a more capable state. Moreover, just as some regions were more assertive than others ` vis-a-vis their authority with the federal government through the 1990s, according to a 2002 report compiled by a group of Western analysts of Putin’s federal representatives, “weak governors tend to heed and meet with federal representatives, while powerful ones keep their

2

3

4 5 6

See also Peter Rutland, “The Role of the Presidential Representative (polnomochnyi predstavitel’ prezidenta): Reflections on the North-West Federal Okrug, Prepared for the East West Institute conference on Putin’s relationship with the regions,” September 21–22, 2001. See also Russian Regional Report, Vol. 6, no. 36, October 17, 2001. Robert Orttung, “Leningrad Governor Critical of Federal Reforms,” Russian Regional Report, August 2, 2002; and Robert Orttung, “Putin’s Governors General,” East–West Institute’s Russian Regional Report, Vol. 7, no. 20, June 17, 2002. Natalia Zuberevich, “Kazantsev Has Little Impact in the Southern Federal District,” East–West Institute’s Russian Regional Report, Vol. 7, no. 29, November 25, 2002. As quoted in Orttung, August 2, 2002. Cf. Chapter 1.

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distance.”7 In sum, Putin’s creation of these seven federal districts headed by representatives accountable directly to him did little to interrupt previous patterns of center–periphery relations in Russia. Putin did not use his other two main sticks on errant governors or regional legislatures. Four years after the implementation of this legislation, he had yet to remove a regional leader or disband a legislature over legislation that did not conform to the constitution or federal law. Indeed, although this authority was thought to be a way in which to rid Russia of its more recalcitrant and possibly corrupt regional leaders, such proved not to be the case. There were several opportunities to test this authority, but among the most crucial was the case of Evgenni Nazdratenko of Primorskii Krai in the Russian Far East. Nazdratenko was seemingly corrupt and long a thorn in the side of the Yeltsin administration, but rather than remove him from power and try him in the courts for corruption under the pretense of his new authority to remove governors, Putin instead chose to secure Nazdratenko’s resignation in exchange for a plum position as head of the Federal Ministry of Fisheries. Indeed, most observers assumed that Putin would be able to use his new authority to remove those leaders of regions that led the noncompliance war of the 1990s. But it is likely that the presumed popular (and perhaps international) backlash that might result from actually removing an elected representative from office rendered this weapon against the regions largely unusable. In July 2003 this authority was rendered even more useless by a ruling from the Constitutional Court of Russia in a case brought to it by the governments of Tatarstan and Bashkortostan, two of the leading noncompliant regions discussed in Chapter 3. The Court ruled that federal prosecutors based at the regional level did not have the legal authority to file cases against regional governments that passed legislation that they believed violated the constitution of the Russian Federation. According to the ruling, only the Constitutional Court itself had this authority. Given the mammoth task of monitoring the legislative output of eighty-nine regional governments and legislatures, by removing the ability to file suits against offending regional governments from the offices of federal prosecutors based in each region, the ruling rendered a serious blow to the authority of the central state 7

Orttung, “Putin’s Governors General.”

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to ensure uniformity in Russian laws.8 Some analysts predicted that this ruling ushered in a quiet counterrevolution in regional legislation against Putin’s centralizing initiatives.9 Putin’s administration suffered other legal and political defeats that left the regional leadership structures of the 1990s largely intact. In July 2002, the Constitutional Court ruled that all terms served by regional governors prior to the passage of the October 1999 federal law on the organization of regional government do not count toward the two-term limit established by the 1999 law. This meant that many regional leaders would have been able to run for third and fourth consecutive terms. In 2002 there were fifty-three governors of eighty-nine regions who could have ruled their provinces for another four to eight years such that in total their rules would have lasted for as long as twelve to twenty years.10 The relative political silence concerning the Court’s decision was widely interpreted as a retreat on the part of Putin’s administration in its effort, initiated only two years earlier, to curb the authority of regional political actors.11 Further, despite strong Presidential Administration involvement in regional elections between October 2000 and January 2002, the incumbency rate for regional governors and presidents was a startling 65.4 percent.12 There was reportedly high participation by business elites in regional elections – either trying to run candidates of their own or backing incumbent candidates in exchange for preferential tax and budgetary treatment.13 Despite the purported spread of “Unity” (now “Unified Russia”) among regional politicians, the “gubernatorial regimes” of the 1990s remained in power – with Unity’s backing or without it. 8 9 10 11 12

13

“Constitutional Court Rules in Favor of Curbing Prosecutors’ Rights in Battles with Regions . . . ,” RFE/RL Newsline, Vol. 7, Part 1, July 22, 2003. See “Constitutional Court Decision Opens Way for Quiet Revolution,” Radio Free Europe, Radio Liberty Newsline, Vol. 7, no. 137, Part 1, July 22, 2003. Vladimir Ryzhkov, “A New Era of Stagnation,” Moscow Times, July 25, 2002 in Johnson’s Russia List, #6371, 26 July, 2002. See for example Sergei Markedonov, “Chechnya in the Context of Russian Federalism,” Russian Regional Report, Vol. 8, no. 8, May 21, 2003. Rostislav Turoskii, “Itogi i uroki gubernatorskikh vyborov,” in Boris I. Makarenko, ed., Politika v regionakh: gubernatory i gruppy vlianiia (Moscow: Center for Political Technology, 2002), p. 11. Rostislav Turovskii, “Gubernatory i oligarkhi: istoriia otnoshenii,” in Makarenko, ed., pp. 76–107.

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It is also unclear as to the concrete effect on Russian federal relations of the dissolution of many of the bilateral treaties that helped to confuse the already complicated system of federalism. Notably, however, the treaties that were left in place were the ones that the federal government signed with the more notorious and persistent noncompliant regions, net donors to the federal budget in particular. Signing these agreements did little to stem the tide of noncompliance, and as a result they did little to clear up the muddy waters of jurisdictional transparency or equity. Beyond this, though, the treaties were so widely variable such that some regions like Tatarstan and Sverdlovsk negotiated considerable economic and tax privileges for themselves, while others amounted to little more than expressions of friendship and solidarity between the regional signatory and the federal government. It is unclear, then, what effect, if any, dissolving these documents would actually have on Russian federal relations and the practical authority of the central state in particular. Until the eradication of gubernatorial elections in force as of February 2005, forced resolution of noncompliance was presented as the biggest of Putin’s successes in attempting to regain control at the regional level. But serious questions as to the actual success of federal envoys in obtaining the reversal of offending legislation arose by 2003.14 In addition, the ruling of the Constitutional Court in the summer of 2003 also constituted a serious setback for the federal government in establishing a single legal expanse in Russia. Finally, even if we were to grant that between 2000 and 2003 there was some success in gaining the reversal of legislation in violation of federal law and the constitution, the durability of these successes is questionable. We know, for example, from the patterns identified in Chapter 3, that noncompliance declined when the economy began to improve in 1999 and was higher when the economy was relatively bad

14

“Daily Alleges That Envoy’s Resources Being Used for Unified Russia’s Campaign,” RFE/RL Newsline, Vol. 7, no. 136, Part 1, July 21, 2003. The piece draws from an article in Nezavisimaia Gazeta on July 18, 2003, in citing an analytical report from 2002 by the Regional Applied Policy Agency and the Regional Issues Institute which “concluded that the envoys would not likely be much help in this task [campaigning for Unified Russia in 2003] since they have proven incompetent in most areas. For example, they still have not completed their main task of bringing regional laws into compliance with federal law.”

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(1998 and the financial crisis). Buoyed by an increase in domestic production in the wake of the 1998 ruble devaluation (such that imports became too expensive for the average Russian consumer, causing a revival in domestic production), as well as by an increase in world oil prices, the Russian economy began to grow in 1999 for the first time since the Soviet collapse. At the same time, reports of regional noncompliance with federal law decreased markedly. But if past is predictor, and economic growth were to decline (indeed, the rate of growth has declined steadily since 1999, when it reached an apparent peak of 9 percent of GNP but fell to 5 percent in 2000, and remained roughly between 3 percent and 5 percent through 2004),15 regional resistance in the form of noncompliance with federal law and the constitution could return.16 Moreover, despite what Putin and his team purported, the authority and capacity of his Russian state in the provinces was not, by the fall of 2004, that different in important respects from the Russia of Boris Yeltsin.17 That is, the fundamental structural problems remained even after his first wave of “recentralizing” reforms. Apparently in frustration, therefore, he used the tragedy of the Beslan school hostage-taking incident as a pretext to try to deal more definitively with recalcitrant regional political elites. The law regarding the appointment rather than election of regional governors represented a major setback for Russia’s status as an electoral democracy. But this, and Putin’s earlier attempts to bolster the practical infrastructural authority of the Russian state relative to regional governments, did not go to the heart of the collusive relationship between certain sectors of regional business and political elites. There was in fact too much strong resistance to breaking down these relationships. There is also little reason, as I argued in Chapter 1, to assume that a retreat from democracy at the provincial level in the persistent absence of

15 16

17

These figures come from Johnson’s Russia List, November 11, 2002, and UN Human Development Index reports through 2004. Indeed, reports surfaced in the summer of 2002 of the resurgence of 1990s phenomena like barter and increased wage arrears to doctors and teachers in seventeen regions of Russia, despite federal insistence that these practices end. Stephen Holmes, “Simulations of Power in Putin’s Russia,” Carnegie Endowment for International Peace, Russian and Eurasian Affairs Program, June 2001. Available at http://www.ceip.org/files/publications.

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political institutions linking central and regional officials will actually increase the infrastructural and political capacity of the central state in the Russian heartland. This may also explain why it was, despite dizzying popularity ratings, seemingly strong support from the Duma the likes of which Yeltsin never experienced, and a growing economy, Putin in his first four years in office did little more than Yeltsin in undertaking the kind of serious micro-economic reform necessary to put Russia on a more stable economic footing in the event of a decline in world oil prices in particular. Assuming that Putin had wanted to undertake this kind of reform of the economy, as his public statements indicated, evidently he simply did not possess the political authority across the country in practice to do so. This may also help to explain why he resorted to the show trial and conviction of Mikhail Khodrokovsky – who, in building his oil-based fortune (Yukos) on the vagaries of the Russian privatization process, almost certainly broke laws, but likely no more than any other Russian businessperson at the time. Clearly, Putin hoped that by jailing Khodrokovsky and effectively renationalizing Yukos in December 2004 through a bogus auction process, he could force smaller barons of Russian business in the provinces to step back into line with his policies. In sum, both Yeltsin and Putin failed to break the business– government nexus at the regional level. Just as Yeltsin built a weak electoral democracy on top of a weak central state, Putin in turn has attempted to build authoritarianism without central state authority. Comparative Lessons of the Russian Experience The arguments that I have developed to explain poor central state penetration of Russian provincial politics and economics present a number of questions for other country contexts. The evidence here indicates that demand for formal institutionalization of political relationships and for consistency in the rule of law guaranteed by a central political authority is not necessarily inevitable. One of the main lessons of the Russian transitional experience following the collapse of the Soviet Union is the importance of institutionalization of political and economic relationships for the capacity of a state to govern. This study of Russian central state capacity has demonstrated, however, that the type of institutionalization is as important as

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the extent of institutionalization. While post-Soviet Russia did not suffer from a lack of political institutions, it clearly lacked the right kinds of institutions – those that were capable of capturing and restraining emergent social interests. This lack threatened the central state’s ability to govern the country effectively. Because the Soviet Union disintegrated from “within” rather than from above or below, as I noted in Chapter 2, its dissolution was incomplete. As a result, the task of institutional development was made more difficult in many respects. Powerful interests from the old regime endured in the post-Soviet era, and they greatly affected what course reforms would take, which institutions would prove of value, and which would not. This study of the Russian state demonstrates that clearly some elites resisted the reach of the central state under certain circumstances. A second important lesson of the post-communist experience in Russia is that just because there is a need for institutions does not mean that they will be demanded or supplied. As we see with the development of political parties, for example, we should expect resistance to political institutionalization during dual transitions. That is, the post-Soviet Russian case demonstrates that there is not necessarily an inexorable march toward political institutionalization. With respect to political party development, Robert Moser, for example, expected in Russia that “the direct election of regional and local executives should introduce party competition to this level of government and gradually erode the non partisanship of regional executives.”18 But after more than a decade of transition, there was no evidence that this was happening. Similarly, the Russian case questions the assumption of John Aldrich and others that rational politicians will opt for the stability and predictability that political parties provide.19 Instead, the findings here indicate that stalled development of the party system in the Russian provinces is a more likely outcome than further institutionalization, at least in the near term. The fact that Russia’s party system moved toward institutionalization in other ways in the 1990s suggests that the lack of

18 19

Robert Moser, “Independents and Party Formation: Elite Partisanship as an Intervening Variable in Russian Politics,” Comparative Politics, January 1999, p. 162. John Aldrich, Why Parties?: The Origin and Transformation of Political Parties in America (Ann Arbor: University of Michigan Press, 1995).

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party penetration in regional politics may have been a more enduring feature. Putin’s eradication of gubernatorial elections has made it a permanent feature of the Russian political landscape. Russia defies other well-known predictions about state and institutional development. A dominant hypothesis in the literature on the political economy of development, for example, is that following the collapse of the old regime, once bandits have stolen enough property, they will stop stealing when it becomes too expensive to protect their ill-gotten gains with private security forces. When that point of accumulation is reached, they will opt for the collective security that state institutions provide. Thus, all we need do is wait, and strong state institutions will be built as the demand for them inevitably increases. But this study of Russia’s political economy questions the universal applicability of this theory. If we conceive of the rule of law as the creation of an equitable playing field and predictability of the rules of the game, this has proven to be far from the result of Russia’s transition. Clearly, rules of political and economic conduct have developed in Russia, but they are not ones established and protected by a central state so much as by a small group of political and economic elites. As a result, they are particularistic, highly fluid, and not a firm foundation upon which to build a state capable of providing public goods and services to a population exhausted and discouraged by almost twenty years of perpetual change and uncertainty from Gorbachev to Putin. This is not to argue, however, that this situation will necessarily persist beyond what is presumably still an early stage of Russia’s transition process.20 Rather, an equilibrium of political under-institutionalization such as this is due to the very nature of dual, simultaneous economic and political changes. These dual processes are not always mutually supportive. Economic transition from plan to market does not necessarily portend political development and the institutionalization of democracy. On the contrary, the elite preferences that Joel Hellman uncovered for a partial reform equilibrium in the economy are supported by their preferences for a partial reform equilibrium in political 20

Should, for example, property rights become more firmly established, it is possible that political institutionalization will become desirable to those who benefited most during the initial transitional phase. At this point, it may well be advantageous for these short-term winners to opt to protect their winnings by institutionalizing to their advantage. There is no evidence, however, that this time has come yet in Russia.

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institutionalization. Not only do short-term winners prefer a stalled transitional equilibrium in the economy, but they preserve their early winnings by forestalling the development of strong central state institutions that might render them more widely accountable to other societal interests and a capable central state that represents them. Finally, this study demonstrates that Russia’s post-Soviet statebuilding trajectory provides an interesting contrast to the reigning paradigm of the Western European experience (which appears increasingly distinct from the contemporary experiences of developing countries more generally).21 Such a comparison helps to highlight the challenges that Russia and some Eastern European countries faced in building state capacity in the 1990s. Dominant theories of the rise of the modern state in Western Europe focus on the need for resources to fund successive territorial conquests. Charles Tilly, for example, argues that “war made states”22 in that a state’s administrative capacities were built up by the desire of ruling elites to finance their war-making activities.23 Tilly argues that “in one way or another, conquest involved administration.”24 For the most part, post-communist states face no such exigency as war to build their administrative capacities. Indeed, the conflicts of the Balkans and even Russia’s war in Chechnya appear to have done more to tear down rather than to build up state administrative capacities. But perhaps the most fundamental difference is that Western European state building depended on privately held financial resources that ruling elites had to extract from society. In the post-communist world, however, these assets lay within the state itself. This fact alone created a very different dynamic regarding elite behavior and the nature and extent of state administrative development following the demise of the Soviet state in December 1991. Where the project of elites involved in Western European state development was to effectively build up

21 22

23 24

See Jeffrey Herbst, States and Power in Africa (Princeton, N.J.: Princeton University Press, 2000), for further confirmation of this point. Charles Tilly, “War Making and State Making as Organized Crime,” in Theda Skocpol, Dietrich Rueschemeyer, and Peter Evans, ed., Bringing the State Back In (New York: Cambridge University Press, 1985), p. 170; and Charles Tilly, Coercion, Capital and European States AD 990–1992 (Cambridge: Blackwell Press, 1994). Tilly, 1994, p. 15. Tilly, 1994, p. 19.

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state institutions to extract assets from society in order to wage war and administer conquered territory, my findings argue that in contrast, the post-communist “project” has been to tear the state down through predation in order to enrich a narrow slice of Russian society, members of which were often former Soviet bureaucrats.25 They find themselves now actively resisting the institutionalization of the post-communist Russian state. 25

For an excellent analysis of this phenomenon across the post-communist world, see Venelin Ganev, “Post-Communism as an Episode of State-Building: A HistoricalSociological Approach,” presented at the Yale Conference on State-Building in PostCommunist States: Toward Comparative Analysis,” April 27–28, 2001.

Index

1987 Law on State Enterprises, 29 1993 Constitution of Russian Federation, 52 1998 Federal Bankruptcy Law, 105 1999 Business Environment and Enterprise Performance Survey (BEEPS), 38 Adigai, 48 and residency permit system, 57 adult literacy, 25 age quotas for territories, 57 Agrarian Party of Russia, 126 agreements with foreign states, 53 Aldrich, John, 156 All-Russian Coordinating Council (OKS), 129 apparatchiki, 31, 32 Arkhangelsk noncompliance in, 57 Article 6 of 1977 Constitution of Soviet Union, 46 bankruptcy, 105 Bashkortostan, 87, 140, 151 and claim of supremacy, 59 noncompliance in, 66

BEEPS, 38 Belgorod, 139 noncompliance in, 57 Beslan School hostage situation, 147 Bolshevik principle, 46 Brezhnev, Leonid, 27, 46 Briansk, 139 Bunce, Valerie (quoted), 27 business elites participation in elections, 152 career paths, 81 Central Bank of Russia, 22 central state capacity in the provinces, 144 eroding infrastructural capacity, 98 obstacles to, 98 regional resistance to, 44, 59, 101 relationship with regional components, 95 types of authority, 9 Chechen-Ingushetiia, 48 Chechnya noncompliance in, 66, 69, 75 secession attempt, 99 Cheliabinsk, 143 Chubais, Anatolii and privatization, 34 161

Index

162 citizenship requirement of regions, 101 civil service employment, 6 civil society post-communism, 32 clientelism defined, 145 collapse of communism of Soviet Union, 2 Communist Party of the Russian Federation (KPRF), 117, 126 Communist Party of the Soviet Union (CPSU), 45 constitution regional noncompliance with, 56, 67 Constitution of Russian Federation (1993), 52 CPSU, 45 December 25, 1991, 2 decentralization and competition among regions, 96 of state functions, 4 democracy and political parties, 113 Democratic Choice of Russia, 127 democratization scholarly focus on, 11 departments factors influencing activities of, 90 dictatorship of law, 148 Dogovora, 53 domestic terrorism, 62 dual subordination, 89 dvoinoe podchinenie, 80 economic policy, 90 factors influencing, 91 rebound of, 62 role of state in development, 7 variations in regional, 70

educational requirements for territories, 57 elections in national parties, 120 and participation by elites, 152 regional executive, 129 electoral systems mixed, 125 electoral violations, 69 entrepreneurchiki, 10, 31, 32 ethnicity and region’s behavior, 73 revival of, 71 Evans, Peter (quoted), 13 executive branch influences on activities, 93 expenditures of Russian states, 5 external management, 105 federal agents professional activities of, 83 federal districts creation of, 149 federal financing and economic policy, 91 and social policy departments, 91 federal law conflict with regional law, 95 influence of, 89 and regional noncompliance, 56 violations of by area, 67 federalism, 51, 96 federative agreements of 1992, 51 Frye, Timothy, 105 fund activities influences of, 84 Gaidar, Yegor, 20, 33 Gaidar credits, 22 geography difficulties presented by, 44 of Russian Federation, 2 Gerashchenko, Viktor, 22

Index GKI (Goskomimushchestvo), 34 GNP Russia’s vs. United States’, 2 Gorbachev, Mikhail 1991 coup against, 47 and Boris Yeltsin, 31 and deregulation, 29 freedoms extended by, 2 reforms initiated by, 27 Gorno-Altai, 48 Goskomimushchestvo (GKI), 34 gross domestic product, 3 gubernatorial elections eradication of, 157 Hellman, Joel, 142 hostage situation Belsan School, 147 Hough, Jerry, 29, 46 Huntington, Samuel, 12, 19, 25 hyper-federation, 4 illegal tariffs, 101 immigration quotas for territories, 57 infant mortality, 3 infrastructural power and influence on federal officials, 84 Ingushetia and claim of supremacy, 59 institutionalization degree of, 117 evaluation of, 115 and political parties, 113 signs of, 117 type vs. extent, 156 international relations participation in, 53 Irkutsk and claim of supremacy, 59 noncompliance in, 57 Ivan the Terrible, 44 Jackman, Robert (quoted), 8

163 Kabardino-Balkariia and claim of supremacy, 59 and residency permit system, 57 Kaliningrad, 134 Kalmykiia and claim of supremacy, 59 noncompliance in, 66 Kaluga, 139 Karachia, 48 Karachaevo-Cherkesiia noncompliance in, 66 and residency permit system, 57 Kareliia noncompliance in, 57 Kemerovo, 139 noncompliance in, 66 Khakassiia, 48 Khanti-Mansii and claim of supremacy, 59 political struggles of, 69 Khodrokovsy, Mikhail, 155 Kirov, 139 Komi, 143 noncompliance in, 66 Koriak, 134 KPRF (Communist Party of the Russian Federation), 117, 126, 127 Krais, 46 Krasnodar and residency permit system, 57 Krasnoiarsk, 134 Kursk, 139 Lambert-Mogilianski, Ariane, 105 language requirements for elected officials, 101 for territories, 57 Law on Cooperatives of 1988, 29 LDPR (Liberal Party of the Russia), 117, 129 legal separatism, 100 Liberal Democratic Party of Russia (LDPR), 117, 127, 129 life expectancy, 3

Index

164 Lipset, Seymour Martin, 116 literacy rates, 3 Mainwaring, Scott, 116 Mann, Michael definition of state, 7 Mari-El noncompliance in, 66 market Bolsheviks, 20, 23, 35 market entry barriers to, 105 McAllister, Ian, 120 Medical Insurance Fund, 79 minimalist state strength of, 6 mini-oligarchs, 112 monopolies deregulation of, 22 Moscow, 138 noncompliance in, 57 and residency permit system, 57 Murmansk, 143 national banks establishment of, 53 national parties and provincial politics, 124 and regional legislative elections, 124 in regional legislative elections, 120 national vote of leading parties, 146 natural resources and noncompliant behavior, 73 regional ownership of, 101 Nazdratenko, Yevgenny, 151 Nizhnii Novgorod noncompliance in, 57 nomenklatura, 10 noncompliance the Business-Governor Nexus, 103 cataloging of, 97 explanants of, 72

instances over time, 61 mean rate of, 70 and national resources, 73 patterns of, 70, 75, 98 across policy areas, 62 and republican status, 75 and resource wealth, 74 and status as republic, 72 across territory, 65 North Ossetiia noncompliance in, 57 Novosibirsk noncompliance in, 57 nuclear weapons, 25 Obkom, 46 oblast governors as party secretaries, 39 oblasts, 46 OKS (All-Russian Coordination Council), 129 Omsk noncompliance in, 57 organization of political parties, 122 organizational hierarchies functioning of, 83 Our Home Is Russia, 117, 129 partial reform equilibrium, 17, 112 partisanship, 129 breakdown of, 136 and regional politicians, 112 and Russian voters, 121 party system institutionalizing of, 115 limited reach of, 133 penetration of regional legislatures, 125 patronage of regional elites, 101 Pension Fund, 79 Penza, 139 pluralism, 11 pluralist politics development of, 6

Index policy implementation process, 92 political parties and competition, 117 development of, 112 organization of, 122 perceptions of, 122 Popular Patriotic Union of Russia (NPSR), 129 prefects, 46 Presidential Decree (No. 370), 53 presidential representative, 85 Primoriia noncompliance in, 66 Primorskii, 151 private ownership vs. state ownership, 10 privatization, 99 1992 program, 34 spontaneous, 31, 37 provincial territory and citizenship requirements, 4 compliance with central state law, 9 and currencies, 4 infrastructural power in, 77 and internal tariffs, 4 and national parties, 114 national parties in, 124 and taxation privileges, 4 Prusak, Mikhail, 142 Przeworski, Adam, 122 Pskovkhleb, 40 Putin, Vladimir, 1, 101 freedoms abandoned by, 2 and institutional reform, 4 and provincial challenges, 147 and treaty-signing process, 53 regional administrations, 89, 95 factors influencing activities of, 90–4 relationship with central components, 95 success of, 39

165 regional elections absence of, 112 regional government and governors as facilitators, 39 protection from competition, 105 resistance to the central state, 101 regional law conflict with federal law, 95 influence of, 89 regional legislatures national parties in, 124 party penetration of, 125 regional licensing and regulatory policies, 101 regulatory policies and regional licensing, 101 Remington, Thomas, 123 republican citizenship questions of, 53 republican status and noncompliance, 75 Republic of Tatarstan treaty with federal center, 51 resistance, regional to central state, 44 resource wealth and noncompliance, 74 Revolution of 1917, 1 Riazan, 139 rights of citizens defense of, 53 Rokkan, Stein, 116 Rose, Richard, 120 Rostov and residency permit system, 57 RSFSR (Russian Socialist Federated Societ Republic), 45 Russia’s Democratic Choice, 117 Russian Central Electoral Commission, 143 Russian Duma organization of, 123 Russian Federation construction of, 49 geography of, 2

Index

166 Russian Socialist Federated Soviet Republic (RSFSR), 45 Russian State post-Soviet shape of, 51 Russian State Duma, 16 Sakha, 143 noncompliance in, 66 Sakhalin, 143 Samara noncompliance in, 57 sanctions credible threat of, 7 Saratov, 134 Sartori, Giovanni, 116 Shakhrai, Sergey, 52 Shefter, Martin, 114 Shleifer, Andrei, 88 shock therapy, 20, 33 Smith, Steven, 123 socialism, 28 collapse of, 27 social policy, 78, 90 factors influencing, 91 violations of, 69 soglasheniie, 53 Sonin, Constantin, 105 Soviet Union formation of, 1 spontaneous privatization, 31 St. Petersburg, 138 state capture, 37 centralization, 25 definition of, 7 infrastructural capacity of, 9 types of power in, 9 State Committee for the Management of State Property (Goskomimushchestvo or GKI), 34 State Duma elections to, 117, 120 state ownership vs. private ownership, 10

State Tax Service (STS), 88 Stavropol, 57, 139 supply and demand, 29 Sverdlovsk, 134 Tatarstan, 140, 143, 151 and claim of supremacy, 59 noncompliance in, 66 treaty with federal center, 51 tax reform, 22 taxes, 87, 101 Temporary Extraordinary Commission (VChK), 40 terrorism, domestic, 62 third-wave democracies, 116 Tilly, Charles, 7, 14, 158 Tiumen’, 143 noncompliance in, 57 Treisman, Daniel, 88, 99 and ethnic revival, 71 Tyva and claim of supremacy, 59 Udmurtiia noncompliance in, 66 under-institutionalization, 140 Unity/United Russia, 117 USSR State Bank, 22 Ust Ordinsky/Buriat, 134 VChK (Temporary Extraordinary Commission), 40 violations electoral, 69 Volgograd, 139 noncompliance in, 57 Voronezh noncompliance in, 57 and residency permit system, 57 war of laws, 49 Weber, Max, 7 White, Stephen, 120 Wilson, James Q., 82 Woodruff, David, 30, 39

Index Yabloko, 117, 127, 129 Yakutiia, 140 Yamalo-Nenets political struggles of, 69 Yeltsin, Boris attempt to establish authority, 56 and banishment of Party, 48 banning opposition parties, 126 and forced compliance, 100

167 freedoms consolidated by, 2 and Mikhail Gorbachev, 31 reform team, 20 and requirement of federalism, 96 resignation of, 15 Zhirinovsky, Vladimir, 127, 129 Zhuravskaya, Ekaterina, 105 Zubarevich, Natalia (quoted), 150