Vladimir Gel’man

Univeristy of Michigan Press

Ann Arbor

List of Figures

List of Tables

Preface and Acknowledgments

CHAPTER 1

The Politics of Bad Governance: A Framework for Analysis

CHAPTER 2

Post-Soviet Bad Governance: A Vicious Circle?

CHAPTER 3

Authoritarian Modernization: Illusions and Temptations

CHAPTER 4

Opportunities and Constraints: Policy Reforms in the 2000s

CHAPTER 5

The Technocratic Traps of Policy Reforms

CHAPTER 6

Success Stories amid Bad Governance

CHAPTER 7

The Politics of Bad Governance: Russia in Comparative Perspective

Notes

Digital materials related to this title can be found on the Fulcrum platform via the following citable URL: https://doi.org/10.3998/mpub.11621795

IT IS A GIVEN that the quality of governance makes a difference. It determines the developmental trajectories of states and nations, as well as the everyday lives of its citizens. Why are some countries governed worse than others? In particular, why is contemporary Russia governed so much worse than one would expect, judging by its degree of socioeconomic development? In the comparative perspective, contemporary Russia represents an example of a high-capacity authoritarian state that exhibits the main features of bad governance, such as a lack and/or perversion of the rule of law, near-universal rent-seeking, ubiquitous corruption, poor quality of state regulation, widespread abuse of public funds, and overall ineffectiveness of government. These features have been demonstrated in numerous recent assessments of Russia vis-à-vis many other countries, conducted by various reputable international agencies.1 The evidence presented there is endorsed by investigative journalists,2 policy analysts,3 political activists,4 and filmmakers,5 and the combination of different sources portray a rather gloomy picture of patterns of governance in Russia—this country performs worse than some of its post-Soviet neighbors6 and the other countries that belongs to BRICS (Brazil, Russia, India, China, South Africa) group.7 However, one should go beyond these critical assessments and address more fundamental questions about the sources and mechanisms of bad governance in Russia and beyond. Why did bad governance emerge and persist in certain countries, and to what extent can the quality of governance be improved over time by certain policies?

Scholars and observers have addressed these issues since ancient times but have not provided comprehensive answers as of yet. Perhaps the first full-fledged vivid exploration of issues of quality of governance appeared in visual arts. In 1338, the city council of Siena, then a medieval oligarchic republic, commissioned two sets of frescoes to decorate the council hall (Sala dei Nove) in its residence, Palazzo Pubblico, from the local artist Ambrogio Lorenzetti. The following year, Lorenzetti produced the series of frescoes, known as The Allegory of Good and Bad Government, which are still located in Palazzo Pubblico today. These artworks, justly considered masterpieces of early Renaissance secular painting, presented six scenes of contemporary Siena and its neighboring areas, and through images, reflected normative ideas of good and bad governance that are still important almost seven centuries later. Art historians,8 and political theorists such as Quentin Skinner,9 have mostly focused on the set of three frescoes that represent the Allegory of Good Government (Allegoria del Buon Governo). Such a focus is driven not only by the fact that this set has been portrayed extensively and preserved in better shape as a piece of art, but mostly because it represents the major civic virtues, such as Peace, Fortitude, Prudence, Magnanimity, Temperance, and Justice, guided by symbols of Faith, Hope, and Charity. All of these symbols and features were essential for an understanding of good governance in the fourteenth century and have not lost their relevance in the present day. In a sense, they are not much different from a twenty-first century approach to good governance, where, for example, the highly reputable Quality of Government Institute (the QoG Institute) at the University of Gothenburg has placed a major emphasis in its research on “trustworthy, reliable, impartial, un-corrupt and competent government institutions.”10

However, what about the Allegory of Bad Government (Allegoria del Cattivo Governo), which was so vividly presented in the paired set of Lorenzetti’s frescoes and is presented on the cover of this book? One should pay attention to its central character, a devious-looking figure adorned with horns and fangs, and apparently cross-eyed. This figure is identified as Tyranny, who sits enthroned, resting his feet upon a goat (a symbol of luxury) while holding a dagger. Below the tyrant, the captive figure of Justice lies bound and swaddled, while the figures of Cruelty, Deceit, Fraud, Fury, Division, and War flank him, and above the tyrant float the figures of Avarice, Pride, and Vainglory. These symbols and features, according to an advice book for the city magistrate of that time, were considered the “leading enemies of human life.”11 Since the frescoes came as a pair, the whole scene demonstrated a mirror opposite of that of the Allegory of Good Government, creating a powerful reminder to the members of the city council of what they should and should not do in governing the city.

A viewer, or a reader of this book, who is familiar with politics in contemporary Russia may find a striking similarity between the image of the tyrant in Lorenzetti’s fresco and the appearance of Russia’s long-standing ruler, Vladimir Putin. Besides the apparent visual resemblance, there are important substantive parallels between the interpretation of the nature of bad governance in fourteenth-century Siena and an understanding of this phenomenon in twenty-first-century political science. The common point is that unconstrained autocratic rule is considered the main source of bad governance both then and now, and numerous vices that result from it—be they related to deceit, fraud, avarice, cruelty, or war—cause harsh and often insuperable obstacles to justice and contribute to numerous pathologies for the development of states and societies. The question of the causes and effects of bad governance has not lost its relevance since the medieval period, and in the twenty-first century, the time is ripe to reconsider these issues from a scholarly perspective.

FIGURE 1. Rule of Law in Russia, 1996–2018, World Bank (range from-2.5 to +2.5)

This is a book about how and why Russia, a highly developed, urbanized, well-educated, and relatively wealthy country, which demonstrated a promising potential for further advancement after the collapse of Communism and a series of complex post-Communist transformations,12 became a country with a trajectory of durable bad governance over the recent decades. Even though calls to improve the quality of governance in Russia have been made many times by political leaders and top officials, during the period of the 2000s and the 2010s there was little (if any) progress in many important dimensions of governance, regarding the rule of law control of corruption and especially, regulatory quality, as figures 1 through 4 demonstrated.13

FIGURE 2

. Control of Corruption in Russia, 1996

–

2018, World Bank (range from-2.5 to

+

2.5)

FIGURE 3

. Regulatory Quality in Russia, 1996

–

2018, World Bank (range from-2.5 to

+

2.5)

FIGURE 4

. Government Effectiveness in Russia, 1996

–

2018, World Bank (range from-2.5 to

+

2.5)

What are the sources and mechanisms of governance in Russia? Should bad governance be expected to persist endlessly under authoritarian rule, or can the quality of governance be improved over time by certain policies? The recent discussions attempting to explain good and bad governance in various countries, regions, and policy areas have been quite extensive.14 The question is: How can we place present-day Russia on this global governance map? Should we consider Russia to be an outlier or, rather, a laggard vis-à-vis many other developed and developing states?

Indeed, in 1984, a Financial Times journalist noted that Russia’s predecessor, the Soviet Union, should not be regarded as “Upper Volta with missiles.”15 However, such a statement soon lost its initial meaning of juxtaposition and instead became a sort of label for the country during the period of Soviet collapse. At that time, it sounded deliberatively offensive, and most probably unjust, given the fact that Upper Volta (renamed in 1984 to Burkina Faso) was one of the poorest African nations. Almost four decades later, however, this statement has, in a sense, proved to be correct. Judging by the data from the Rule of Law Index by the World Justice Project, the Corruption Perception Index by Transparency International, and the World Bank’s Governance Matters, Russia has exhibited worse performance than Burkina Faso (still one of the poorest African nations) in five out of six key parameters of quality of governance (see table 1).

Table 1. Why Russia is Not Burkina Faso

The Sources of Post-Soviet Bad Governance: The Long Arm of the Past?

As stated in chapter 1, the following are the foundational principles of post-Soviet bad governance as a politico-economic order: (1) rent extraction is the main goal and substantive purpose of governing the state at all levels of authority; (2) the mechanism of governing the state gravitates toward a hierarchy (the “power vertical”) with only one major center of decision-making, which claims a monopoly on political power (the “single power pyramid”); (3) the autonomy of domestic political and economic actors vis-à-vis this center is conditional; it can be reduced and/or abolished at any given moment; (4) the formal institutions that define the framework of power and governance are arranged as by-products of the distribution of resources within the power vertical: they matter as rules of the game only to the degree to which they contribute to rent-seeking (or at least do not prevent it); and (5) the power apparatus within the power vertical is divided into several organized groups and/or informal cliques that compete with one another for access to rents.

These principles are the essence of an informal institutional core, or de facto constitution, of the politico-economic order of bad governance. The ruling groups build the shell of formal institutions (such as official constitutions, laws, and regulations) around this “core.” However, this shell is not just a camouflage aiming to hide the ugly face of bad governance; it also serves as a functional mechanism for authoritarian power-sharing and rent-sharing that aims to maintain a balance of power among the insiders of the regime’s “winning coalition.”19 Although authoritarianism in both its “electoral”20 and “classical” (“hegemonic”)21 formats to some extent is a mechanism of maintenance of bad governance in the political arena, it may be vulnerable because of the risks of intraelite conflicts and regime subversion. These risks emerge when the political monopolies of ruling groups are undermined and autonomy of political and economic actors becomes limited in certain ways, so regime changes or threats thereof are not so rare. But if the regime can avert these risks, then bad governance may become invincible (if one puts aside risks stemming from exogenous shocks).

Many explanations of bad governance in post-Soviet Russia are focused on the negative role of the repressive and ineffective autocratic state machinery, which is deeply embedded in centuries of Russian history. It is no wonder that its most widespread explanations relate to the effects of various legacies of the past.22 While in the case of Third World countries (which are largely perceived as hotbeds of various forms of bad governance) the whole frame of reference revolves around colonial legacies,23 but in post-Soviet countries, scholars look for sources of bad governance in virtually all stages of Russian and Soviet history. They assign responsibility for its embeddedness to the inescapable legacy of pre-Petrine Russia with its lack of private property and arbitrary rule of autocratic leaders,24 or to the legacy of Communist regime, which in its late developmental stage demonstrated decay and “degeneration” into neo-traditionalism,25 or to an overlapping of socioeconomic backwardness with imposed Soviet dominance in certain Eastern European countries.26 Some scholars who use similar arguments in their analyses of post-Soviet politico-economic order refer to terms such as “patronal politics”27 or “sistema,”28 and also focus on their effects on politics and governance through the lenses of various legacies of the past. In any case, the “legacy” argument is structural in nature: explicitly or implicitly, bad governance is assumed to be like an inherited chronic disease of the sociopolitical organism that cannot be cured at least in the foreseeable future. By its very nature, this eternal and unavoidable “matrix,”29 or “track” (koleya),30 is put in place once and forever: it cannot be changed because of irreversible path dependency. The reasoning of this analysis, however, is vulnerable to criticism because of its lack of heuristic value and its frequent reliance on the principle of fitting theory and evidence into prearranged answers. The policy relevance of the approach looks even more dubious: if in any given country or region bad governance is the product of a “wrong” history that cannot be altered, one might say that this country is best eliminated (similarly to the fate of the Soviet Union) or conquered by other states that are more capable and efficient in terms of the quality of governance. Nevertheless, in the twentieth century some countries with even more problematic matrixes or tracks of history (ranging from Japan to Turkey) took the route of radical systemic changes necessary for altering their legacies and moving onto the right path; judging from this perspective, a similar path is not precluded for Russia, at least in theory.

In terms of answering empirical questions, one should consider that the rise of post-Soviet bad governance was a consequence of the purposeful actions of political and economic actors who aimed to maximize benefits for themselves during the process of redistribution of power and resources in the turbulent post-Soviet environment. For example, in the case of RZhD, the governance of the biggest state-owned company by Yakunin did not result from the legacies passed down in this sector or in the Russian economy as a whole. Neither Kaganovich nor his MPS successors ever dreamed of a degree of freedom like Yakunin’s in arbitrarily governing their respective domains. Of course, political decay during the last decades of the Soviet Union greatly contributed to large-scale exploitation of public resources for the private purposes of top state managers, and instances of bad governance such as the infamous “Cotton Affair” in Uzbekistan in the 1980s were most probably just the tip of the iceberg.31 Overall, however, in the Soviet Union instances of uncontrolled rent-seeking were limited at that time and never considered a norm of elite behavior. Rather, RZhD was turned into its CEO’s fiefdom after the distribution of rent sources among the members of the post-Soviet “winning coalition”32 led by Putin and his close allies. The maximization of power in politics and the maximization of rents in the economy should be perceived as rational goals of the ruling groups who achieved them in several post-Soviet countries in the wake of political regime changes and market economic reforms. Some analyses of the dynamics of political and economic changes after the Soviet collapse have demonstrated that complex transformations make it easier to achieve these goals, where otherwise they could be more difficult.33 The new politico-economic order has served as an instrument of the ruling groups, and institutions have maintained its continuity and solidified the existing configurations of political and economic actors. Unlike the legacy argument, a focus on purposeful institution-building treats post-Soviet bad governance as an outcome of conscious “poisoning” of the social and political organism by certain actors belonging to the ruling groups. However, identifying possible cures for this kind of disease is far from straightforward.

That said, there is no reason to deny that “history matters”34 for an understanding of bad governance. Rather, the question is framed differently: How exactly did this “mattering” of the past become a constituent pattern in the practice of governing the state today and tomorrow? Regarding governance, the legacy of the past is loosely understood as a set of historically established obstacles to good governance that emerged before the Soviet collapse for various reasons and persisted for an indefinite period. But this perception of a legacy fails to explain why it has a different impact on various countries and policy areas and how exactly it affects post-Soviet institutions and practices. In search of alternatives to determinism, Stephen Kotkin and Mark Beissinger redefine “legacy” as “a durable causal relationship between past institutions and policies on subsequent practices or beliefs, long beyond the life of the regimes, institutions, and policies that gave birth to them.”35 They also outline several causal mechanisms for transferring institutions and practices from the past to the present and the future, including: material or “parameter setting”; organizational and institutional or “fragmentation” and “translation”; and ideational or “cultural schemata.” Many legacies of parameter setting relate to the limitation of certain institutional and/or policy choices due to material constraints left over from the past; organizational and institutional fragmentation involves direct inheritance of some parts of previous institutions from the old regime, while translation means using old institutions for new purposes; and cultural schemata refers to perceptions generated by past regime practices that make a certain sort of conduct either normal or unacceptable.36 Parameter setting results from certain limits set by the physical and technological infrastructure inherited from the Soviet past that posed major barriers to structural reforms.37 By contrast, cultural schemata, modes of thinking and perceiving reality, were embedded in the past but outlived it and gave birth to the new post-Soviet normative ideal, which could be labeled a “good Soviet Union.”38 This has served as the basis for a “mental model”39 for post-Soviet elites and societies and affected organizational and institutional legacies to a great degree as a normative ideal.

One might argue that various legacies of the past affect the present and the future mostly because of how they are transferred. This is especially true for ideational legacies: “history matters” if certain actors can use it purposively for achieving their goals in various areas, including governing the state. The time horizon for the impact of these legacies cannot be indefinitely long. In post-Soviet Eurasia, it is relevant for the recent life experience of one or two generations who often interpreted the Soviet collapse and subsequent post-Soviet political and economic changes as a major trauma and framed their perceptions of the late-Soviet experience as a paradise lost. When it comes to the mechanisms for bringing these legacies into the current agenda, material, organizational, and institutional legacies impose high costs on improving the quality of governance and contribute to the preservation of the status quo. But the scale of these costs may decrease over time because of the emergence and spread of new institutions and practices not embedded in the past. Meanwhile, ideational legacies define understanding of the means and possible goals of the process of institution-building and serve as tools of ruling groups in this process.

In essence, the “legacy of the past” is largely a socially constructed phenomenon in post-Soviet Eurasia and beyond and should be regarded not as a structural constraint but as an agency-driven phenomenon. Regarding governing the state, cultural schemata work as instruments for maintaining bad governance in two mutually related ways. First, they establish a retrospective vector of public discussion where the Soviet past is considered the main (if not only) “point of departure.” History is not only a subject for historians but penetrates all aspects of public life in the region. The imagined past experience has become a normative marker in projecting the future of post-Soviet Eurasia, including but not limited to state governance. This is why previous institutions and practices have become building blocks for institution-building and policy-making. Fragmentation and translation serve as means to achieve these goals. Second, referring to the past has become the key argument in legitimating political and policy choices, other mechanisms of governance, institutions, and policies not related to the past (irrespective of their adherence to best practices of good governance) are often not perceived as legitimate by society at large. In a sense, the instrumental use of such a legacy in Russia is not so different to the slogan “Make America Great Again,” so vigorously and successfully promoted by Donald Trump in his 2016 presidential election campaign. In other words, ideational legacies (in Russia, in the United States, or elsewhere) are phenomena intentionally produced by elites to serve their political goals of power maximization.

The “good Soviet Union,” an imagined politico-economic order that somehow resembles that of the Soviet past while lacking its inherent flaws, bears little resemblance to the late-Soviet experience. I believe that these elements of the Soviet legacy are selectively and deliberately chosen for the sake of power maximization of the post-Soviet ruling groups. They include the hierarchy of the power vertical, “cadre stability” on all levels of government (that is, low elite circulation), a closed recruitment pool of elites and their formal and informal privileged status, state control over major media, state repressions toward organized dissent, and so on. Meanwhile, other elements of the late-Soviet politico-economic order, such as relatively low inequality and certain state social guarantees, have been discarded without meaningful resistance. In addition, the “good Soviet Union” includes certain features that did not exist in the real Soviet Union but are very important for ruling groups: not only a full-fledged market economy and no shortages of goods and services, but also a lack of institutional constraints on rent-seeking and the creation of an external interface for legalization of incomes and status abroad. The assertion that the “good Soviet Union” is a deliberate construction by post-Soviet ruling groups and their entourages is no wild exaggeration. In the 2000s, they obtained that which they wanted but which was unavailable to their late-Soviet predecessors in terms of status, power, and material well-being, and their efforts to preserve this normative ideal have borne fruit in many ways.

The use of the Soviet legacy as a set of real and/or imagined building blocks for post-Soviet institution-building and practices of governing the state contributed to the preservation of the status quo of bad governance through fragmentation or translation of this social construct into major choices and solutions. Examples include the transformation of government structure after the Soviet collapse regarding the state apparatus,40 and practices of control and accountability in law enforcement agencies,41 both of which extended the lives of outdated institutions and organizations, thus contributing to the ineffectiveness of government. This approach affects policy-making regarding the organization of state bureaucracy and its motivations.42 As a result, the “good Soviet Union” as a normative ideal has not produced incentives to overcome bad governance and improve government effectiveness, even should these be declared policy goals. Rather, the “good Soviet Union” as a foundation of the post-Soviet “mental model” has become a successful instrument for the legitimation of a politico-economic order of bad governance—at least within the mid-term perspective, until the current generation of post-Soviet rulers and citizens leaves the public scene.

To summarize, the role of the “legacy of the past,” which has preserved bad governance in post-Soviet Eurasia and beyond may be primarily considered in ideational terms: these normative ideals and role models affect policy choices and many organizational and institutional solutions. This legacy, which has allegedly doomed some countries to corruption and ineffectiveness, is largely a social construct that is created and maintained by ruling groups for the sake of power maximization. The countries of Eastern Europe and the Baltics have to some extent denied this normative ideal and thus increased their chances to overcome bad governance. However, those countries of post-Soviet Eurasia that see the sources of modern government in their imagined glorious or inglorious past could create a vicious circle of bad governance.

THE AUTHORITARIAN MODERNIZATION PROJECT sounds tempting in various political and social settings. This project is perceived in the narrow sense as a set of technical policy measures aiming to achieve a high level of socioeconomic development through rapid economic growth, while the broad aspects of political modernization (that is, political freedoms) either remain beyond the current modernization agenda or are postponed to a distant future. The attractiveness of authoritarian modernization, advocated by numerous scholars and experts during the Cold War,1 greatly increased in the twenty-first century fueled by recent economic advancements in China and once again endorsed by numerous experts, policymakers, and citizens across the globe.2 There is a strong temptation to implement successful socioeconomic policies with a free hand, without the constraints and defects inherent to democracies, as authoritarianism allows the government to be insulated from the impact of political parties and policy preferences of the mass public.

Post-Communist Russia may be regarded as an instance of this phenomenon: not only are ideas and policies of authoritarian modernization deeply rooted in Russia’s Soviet and imperial past, but its current agenda also fits certain interests and expectations of both Russia’s elites and society at large.3 To a certain degree, authoritarian modernization became Russia’s response to the numerous challenges of the complex process of post-Communist transformation of Russia, which included simultaneous political regime changes, economic reforms, and state-and nation-building (known in the jargon of the 1990s as the “dilemma of simultaneity” amid the “triple transition”).4 During this process Russia’s elites and citizens alike sacrificed democracy for the sake of a market economy and a strong state,5 and this choice affected various dimensions of Russia’s further development including the quality of governance.6 I argue that the pursuit of authoritarian modernization in post-Communist Russia became one of the main origins of the politico-economic order of bad governance in the country. This is why it is necessary to explain how authoritarian modernization emerged as a mainstream of Russia’s political and socioeconomic trajectories and how this project has contributed to bad governance.

The main problem of authoritarian modernization is that “success stories” of its policies are relatively rare, with the major notable exception of China. In the second part of the twentieth century, autocracies demonstrated a much higher diversity of economic growth rates and developmental trajectories than democracies. In fact, this diversity led to Dani Rodrik’s comment (cited in chapter 1) about the uniqueness of success stories like Singapore amid many stories of failure like the Congo: a few examples of building effective states and prosperous economies in autocracies coincide with numerous cases where dictators drive their countries into decay and deterioration. From this perspective, the political and economic trajectories of post-Communist Russia resembled pendulum-like swings. In terms of the political regime, after the great liberalization under Gorbachev, during the 1990s and especially in the 2000s, the country quickly deteriorated into a personalist electoral autocracy.7 In terms of socioeconomic development, after the deep and protracted transformation recession of the 1990s, Russia demonstrated impressive growth in the 2000s, which resulted not only from the steep rise of global oil prices but also from policy changes launched by the government.8 In terms of state-building, Russia avoided the threat of disintegration in the 1990s and greatly strengthened its coercive and distributive capacity in the 2000s,9 yet remained an inefficient state with a poor quality of governance.10 Some authors have argued that these tendencies are natural for a country with the highly problematic legacies of Communism11 and weak linkages with the West,12 but have expressed hopes that they may be overcome over time through decades of growth and development with preservation of the political status quo.13 However, other observers (including the author of this book) have expressed major skepticism of such hopes and prospects.14

Since 2014, after Russia annexed Crimea and dragged itself into a major conflict with the West against the background of its geopolitical ambitions, rising economic problems, and questioning if not complete denial of policy goals of growth, development, and international integration, the agenda of authoritarian modernization in Russia has been dramatically challenged. No one believes that the experience of the golden age of rapid economic growth and great expectations from 1999 to 2008 will return, at least in the foreseeable future. Yet now the time is ripe to reconsider the role of the authoritarian modernization project in Russia’s political and economic changes at the end of the twentieth and the beginning of the twenty-first century with an emphasis on the central ideas, institutions, and policies that contributed to this project and its implementation. This focus will help to explain the role of authoritarian modernization in the making of bad governance in Russia. Discussing these issues is essential not only for an understanding of the logic and peculiarities of post-Communist changes in Russia but also for mapping Russia’s trajectories onto the global map of varieties of modernization, both in contemporary and historical comparative perspective.

Indeed, why have Russia and its neighbors in post-Soviet Eurasia pursued authoritarian modernization after the Soviet collapse (unlike some countries of post-Communist Eastern Europe)? What is the ideational agenda behind this project and why does it dominate Russia’s post-Communist political landscape? What are the mechanisms that maintain this project and how have they adopted, absorbed, and affected various institutions and practices of governance in Russia? Why has this project brought diverse results in various policy areas, and why have the consequences of certain policies become rather controversial from the viewpoint of governing the country? And why, despite so many controversies, shortcomings, and flaws, has this project remained attractive in the eyes of a large proportion of Russian elites and Russian citizens? This chapter is intended to address some of these questions and propose several tentative answers, which will be also discussed in the following chapters, aimed at analyzing the impact of the authoritarian modernization project in post-Communist Russia on Russia’s politics of bad governance.

The Discreet Charm

of

Authoritarian Modernization

The concept of modernization (like any major concept in the social sciences) has its own distinct history. Since the boom of modernization theory in the 1950s and 1960s,15 through nearly universal criticism in the 1970s and 1980s, there has been a large question mark hanging over the term “modernization.” However, more recently this conceptual framework has been revived with regard to analyzing the influence of social, economic, political, and cultural changes on the developmental trajectories of states and nations in a comparative and historical perspective.16 This is why in present-day scholarly jargon, modernization is merely associated with progress and development in various directions (be it human capital, economic prosperity, and/or political freedoms) as well as with certain policies in various areas aimed toward such progress in one way or another. These policies are often labeled “reforms,” although some critics tend to portray them in a negative light as instances of “neoliberalism.”17 Scholars of different disciplines and academic schools attempt to discover the causal mechanisms of developmental progress and regress in various countries and understand the logic of why some of them over time tend to move toward the “open access order”18 and the prevalence of “inclusive” economic and/or political institutions, while others do not.19

One of the most contentious issues of modernization, which arises in numerous discussions, is related to the impact of political regime dynamics on modernization—to what extent the success and failure of modernization depends upon democracy and/or authoritarianism. Can socioeconomic development be pursued successfully simultaneously with political democratization (“broad,” or democratic modernization) or rather, should economic growth and development precede political opening (“narrow,” or authoritarian modernization)? Yet, from a distant historical perspective, major European modernizations were authoritarian nearly by default,20 and in the second half of the twentieth century this issue came to the forefront in the atmosphere of bipolar rivalry between Communist and capitalist systems during the Cold War. At that time, some proponents of development theories, alongside international organizations such as the World Bank, openly endorsed ideas of authoritarian modernization, mainly for political purposes21 perceiving them as an instrument for countering Communist expansion and opposition to populist economic policies.22 This approach is deeply rooted in scholarly literature23 and is fueled by success stories of various authoritarian reforms, ranging from South Korea in the 1960s–1980s to Chile under Pinochet. The idea of authoritarian policy-making was popular at that time among many international experts in the World Bank and other agencies, as they believed that authoritarianism would be able to implement those unpopular policies that are so often blocked under democratic regimes.

The triumphant perception of global democratization after the end of the Cold War24 was short-lived, and discussions on the advantages and disadvantages of authoritarian modernization, dating back to the 1960s, reemerged within the context of post-Communist changes.25 Support for the project of narrow authoritarian modernization came from the proponents of the Chinese developmental trajectory amid numerous problems of democratic development in various parts of the globe.26 These discussions were also relevant in the Russian domestic context, as sacrificing democratization for the sake of economic reforms became a mainstream of Russian politics and policy-making soon after the Soviet collapse against the background of the “roaring” 1990s.27 This approach was vigorously advocated in 2009 by then-president Dmitry Medvedev in his manifesto on Russian modernization.28 Judging from this perspective, contemporary Russia may be regarded as a laboratory for authoritarian modernization, with its dilemmas, challenges, and constraints. Since the failure of Gorbachev’s reforms, when political opening and inconsistent economic half-measures contributed to the collapse of the Soviet Union, Russia’s rulers have tended to limit or curtail political freedoms and prioritize economic development and state-building in their agenda. While this development has brought mixed and controversial results, the question of the impact of various factors on implementing the authoritarian modernization project remains open, and reexamining the post-Communist Russian experience with an emphasis on its ideas, institutions, and policies might shed some light on these issues. In particular, how did the sources and mechanisms of authoritarian modernization in Russia (and elsewhere) affect the rise of bad governance?

The main arguments for the authoritarian modernization project—in Russia and elsewhere—are both ideational and pragmatic (their lines are complementary rather than antinomies). In terms of ideas, the authoritarian modernization project is based upon normative criticism of the political and social empowerment of citizens in modernizing countries as a source of major instability, conflict, and disorder.29 A sequence that implies a gradual construction of a strong and efficient state and long-term economic growth and development, as well as possible postponement of democratization for many decades, is considered a desirable alternative; although it is not a combination of the best of both worlds, it is at least an avoidance of their worst combination. In pragmatic terms of conducting policy reforms, authoritarian modernization is preferred over a democratic one because the process of democratization as such presents a risky environment for building efficient states and markets. In essence, democratic regimes are full of inherent defects that make economic reforms problematic. Among these defects, the following are the most important:

competitive elections result in “political business cycles,” which contribute to short-term populist policy solutions and prevent the implementation of long-term developmental plans;30

the separation of powers allows powerful veto players to block major policy decisions and/or dilute their substance;31 moreover, for federal states, the difficult combination of horizontal and vertical separation of powers may contribute to the risks of “joint decision traps”;32

multiparty governments and coalition politics result in adopting compromise policies, which also bring instability because of the fragility of party cooperation;33 and

WHY ARE SOME SOCIOECONOMIC reforms successful while others are not? To what extent do the political regime and its institutions affect the outcomes of major socioeconomic reforms? Can a reform-minded nondemocratic leader, supported by a team of well-qualified experts, modernize his/her country without the fear of losing in free and fair competitive elections? And what of the conditions supporting (or opposing) the successful implementation of such a narrow program of authoritarian modernization?

The Russian experience of socioeconomic reforms in the 2000s can be perceived as a crucial case of authoritarian modernization in the context of post-Communist social and political changes. In 2000, when Vladimir Putin came to power, the Russian government proposed an ambitious and large-scale program of economic and social reforms in Russia. Some of these reforms were initiated by the liberal economists who had greatly influenced the policy agenda in the 1990s.1 In the 2000s, they sought to implement their ideas under more favorable circumstances. The 1990s had been marked by a deep and protracted economic transformation recession, a major decline of state capacity, and constant intraelite conflicts; by contrast, the 2000s became a period of high economic growth, recentralization of the Russian government, and large-scale support for Putin’s leadership from major political and economic actors and from Russian citizens. Although the policy reforms of the 2000s contributed to the improvement of the quality of governance in Russia, their outcomes have failed to meet the expectations of optimists and pessimists alike. A decade later, the reformers themselves assessed the implementation of their programs, and their leading figures, such as German Gref and Yevgeny Yasin, realized that fewer than half of the proposals had been implemented, and only a few had been successful. (A more precise calculation made in 2016 by the team of the Center for Strategic Research found that only 36 percent of policy changes had been implemented.) Several proposed measures stopped at the stage of discussing good policy alternatives, and among those reforms that have been implemented successfully, some have had a series of unintended and undesired consequences.2

It is necessary to explain this diversity of outcomes of policy reforms, considering they occurred nearly simultaneously and within nearly the same economic and political circumstances. A synchronic comparative analysis allows me to disregard certain factors such as the impact of the Soviet legacy or public opinion of the Russian people: I do not assume that these factors were unimportant, but they do not explain why some reforms succeeded and others failed. At the same time, the widespread statements that tend to explain the troubles of policy reforms through the resistance of interest groups (“oligarchs,” siloviki, regional leaders, and other rent-seekers),3 the rise of global oil prices, or Putin’s interest in consolidating his personal political power4 are limited and insufficient. They do not adequately explain why the tax reform of the 2000s became a success story, but the reform of the system of social benefits (monetizatsiya l’got) faced numerous problems. Why was the reform of the school graduate evaluation system implemented despite considerable costs, while the reform of the state administrative apparatus and the full-scale reorganization of federal government agencies in fact led to an increased number of bureaucrats and their empowerment? Putin, oil, and siloviki alone are not responsible for the variation in the outcomes of reforms that were launched almost simultaneously and under similar conditions. This chapter attempts to explain the factors and mechanisms behind the successes and failures of the 2000s’ policy reforms in Russia. I focus on the one hand on the impact of electoral authoritarianism and the poor quality of the state on policy changes, and on the other hand on the institutional factors that affect the vertical and horizontal fragmentation of the Russian government and the inefficiency of its policies.

Russia’s Policy Environment

in

the

2000s: Institutions and Incentives

The influence of major political institutions such as the separation of powers and electoral and party systems on policy-making has been widely analyzed, but mostly focusing on democratic political regimes,5 while the effects of authoritarian political institutions on policy outcomes have been underexplored.6 Under authoritarianism, parliaments and political parties perform a secondary role in decision-making at best.7 The main policy-making agent is the government, which is appointed and controlled by the authoritarian leadership. In terms of institutional design, present-day Russia is a typical case of the “dual executive” within the framework of a presidential-parliamentary model.8 The Russian president, as a popularly elected head of state, can appoint and dismiss the cabinet as a whole as well as its individual members. Although the prime minister is approved by the State Duma, he is dependent on a president who can undo any of the prime minister’s decisions and can issue presidential decrees that the government must follow. Thus, the Russian institutional design intentionally ensures that the government hold a minimal level of autonomy and perform technical (rather than political) functions. Its role is reduced to implementing the tasks posed by the president and performing routine, daily administrative work in social and economic policy areas.9

This model of state governance, codified in the 1993 Constitution, was inherited from both the Soviet model (based on an informal division of labor between the Central Committee of the Communist Party of the Soviet Union and the Council of Ministers) and the Russian Imperial model (based on the monarch’s control of both the royal court and the cabinet of ministers). From an authoritarian regime’s perspective, this model has both advantages and disadvantages. The main advantage is the opportunity for the president to replace top officials if they are inefficient and/or politically disloyal, or if the president intends to change his policy. In addition, such a model allows shifting the responsibility for policy implementation and switching the blame to the government rather than the president (in the 1990s, Yeltsin used this method quite frequently, reshuffling his government several times). At the same time, citizens’ assessment of economic policy performance is an important source of mass support of political leaders;10 therefore the president is genuinely interested in successful government in terms of its performance. The problem is that the coexistence of the president with a capable and popular government can lead to an erosion of the presidential political monopoly; a successful prime minister can challenge the incumbent in the next electoral cycle as an opposition-backed candidate and/or a potential successor (as shown by the cases of Yevgeny Primakov in Russia and Viktor Yushchenko in Ukraine).11 The combination of great managerial efficiency and unconditional personal loyalty to the boss is rare among top state officials. As a result, the rise of the principal-agent problem is deeply embedded in this model.

A low level of government autonomy leads to the transformation of the cabinet of ministers from a collective entity of key decision-makers to a technocratic set of officials responsible for implementing the commands of the president and/or prime minister. The president (or in some instances, prime minister)12 “hires” individuals for executive positions, considering them to be technocratic managers rather than politicians. Hence, the cabinet in this system of governance is neither a group of officials who are politically responsible before the parliament nor a team of professionals who share common policy goals and methods. The prime minister is responsible for coordinating this complicated web of relationships. He is dependent on numerous deputy prime ministers who supervise various state agencies (at times, there have been as many as ten of these deputy prime ministers in Russia). As a result, policy-making under these conditions turns into a complex and often inefficient series of bargains and ad hoc agreements between several state agencies. Top officials must spend countless resources to win intragovernmental struggles.13 This is why policy-making under these conditions is often perceived by observers as a difficult process.14

In Russia’s case, policy-making becomes even more complicated due to additional institutional flaws. First, the state agencies responsible for national defence, state security, and foreign affairs have been directly subordinated to the president since 1994 even though their chiefs are also members of the government and should be subordinated to the prime minister as well (later, other state agencies were also added to this list). Second, in order to resolve the principal-agent problem, presidential control has been imposed on the government; this role is performed by the presidential administration, directly subordinate to the head of the state (the Central Committee of the Communist Party performed the same function during the Soviet period). This model intentionally creates parallel governance structures that often compete during the policy process and therefore hinder decision-making.15 Third, the key ministers and/or deputy prime ministers who are personally linked to the president can influence major policy decisions, bypassing the web of agencies or even bypassing the prime minister. Anatoly Chubais and Boris Nemtsov (two first deputy prime ministers) in 1997–199816 and Aleksey Kudrin and German Gref (ministers of finance and of economic development, respectively) in 2000–200417 successfully employed this policy strategy. Finally, several presidential decrees are often prepared without the involvement of the governmental officials responsible for certain policy areas. As a result, these presidential decrees sometimes cannot be implemented properly. In addition to horizontal fragmentation (between governmental agencies and other federal executive offices), vertical fragmentation between the federal government and its branches at the subnational level also plays a significant role. In the 1990s, a full-scale decentralization of governance contributed to the capture of territorial branches of federal agencies by the regional elites. In the 2000s, a recentralization of state governance reestablished the federal center’s political control over regional authorities but did not establish a division of competences and resources between federal and regional governments. The shift to a hierarchical subordination of territorial governance exacerbated the agency problem in relationships between the center and the regions.18

Given these institutional arrangements, one might argue that the Russian executive, even in routine governance, must deal with aggravation of principal-agent problems in relations both between the president and the executive and within the government. This complicates the coordination of different state agencies and their actions and contributes to a protracted policy-making process and/or the making of inefficient decisions. Under these circumstances, the implementation of a full-scale reform program faces serious obstacles. Any bureaucracy is known to be interested in preserving the status quo.19 Russian political institutions are not capable of overcoming hidden resistance from bureaucrats, especially if and when policy-making requires interdepartmental coordination between different layers of the power vertical and numerous gates of the federal government. If reforms need concerted, large-scale, and highly coordinated action from various segments of the federal and regional bureaucracies, this becomes a major problem for policy changes. The lack of political accountability and the inefficiency of mechanisms of centralized control20 pushes officials to minimize their efforts to implement policy changes approved by the president. The more significant the involvement of the bureaucracy in policy implementation, the stronger the resistance it experiences from most officials. The policy reformers may be endorsed by a few ideologically driven proponents of these reforms and/or by policy entrepreneurs who expect to achieve personal gains from successful policy implementation.

At the beginning of the 2000s, favorable political conditions for policy reforms appeared to emerge in Russia. Due to rapid economic growth after a long and protracted recession,21 Putin gained significant popular support. After the 1999 parliamentary election, the Kremlin was able to establish a pro-presidential majority in the State Duma that approved almost all of the Kremlin’s initiatives.22 Strengthening state capacity23 and recentralizing state governance24 allowed the Russian government to reduce the influence of rent-seekers in policy-making. But the major driver of policy reforms at that time was Putin’s unequivocal support for implementing socioeconomic changes. These circumstances opened a window of policy opportunity25 that had been closed in the second half of the 1990s.26

The concept of the reform program (“the Gref Program” or “Strategy 2010”) was developed in the first months of 2000 by the experts at the Center for Strategic Research (CSR, Tsentr strategicheskikh razrabotok). Under Putin’s patronage, this center aimed to develop the previous decade’s policy proposals. The choice of policy options and Putin’s policy positions were influenced by the previous experience of the 1990s. Putin prioritized27 building a strong and efficient state that would provide long-term economic growth based on financial stabilization and a successful fiscal policy. Improvement of the quality of governance was also listed as one of the priorities of the Strategy 2010 program. Indeed, the weakness of the Russian state and its fiscal crisis are justly considered to be the ultimate cause of policy failures and poor quality of governance in the 1990s.28 Therefore, major reforms in these policy areas became the key points in the reformers’ agenda at the beginning of the 2000s. At the same time, social policy changes that would contribute to societal development in the medium-term perspective were not declared to be top priorities, even though half of Gref’s program was devoted to policy changes in these areas. Under electoral authoritarian regimes, social policies are often perceived not as a strategic goal of government but as a means of providing electoral loyalty.29 The experience of both the 1990s30 and the 2000s demonstrates that the Russian case is not an exception.

Despite the CSR’s role as a think-tank, there was no headquarters that managed or even coordinated various reforms. They were implemented as a set of inconsistent measures controlled by specific ministries. Mikhail Kasyanov, the prime minister from May 2000 to February 2004, did not participate in preparing Strategy 2010. His views often contradicted the policy ideas of key ministers that developed this program.31 His successor Mikhail Fradkov did not become a significant political actor. In practice, all important decisions (including large-scale reorganization of the Russian government in 2004) were made by the president. In some cases, the responsibilities for reforms were concentrated in one governmental agency, but often they were divided between several ministries and agencies in both the center and the regions. While some reforms required only the one-time adoption of a package of legal acts, others included a sequential chain of actions that required coordination of various actors over a long period of time. Theoretically, one can expect that inconsistent and protracted policy changes will be implemented in an inefficient way,32 especially under conditions of an electoral authoritarian regime; as such, without immediate positive results in the short term, these reforms may be blocked and ultimately fail.

Thus, the features of the Russian bureaucracy and the institutional design of the executive imposed major constraints on the implementation of reforms in the early 2000s. The possibility of overcoming these obstacles depends, in my opinion, upon three factors: (1) the strategic priority of certain reforms for the president; (2) implementing a given reform by reformers who are concentrated in a single powerful agency; and (3) reform requiring one-time governmental actions that are implemented within a short period of time (see table 3).

Table 3. Factors of Success of Policy Reforms

HOW DOES POLITICS AFFECT policy and vice versa? Why are these two dimensions of political development so often at odds and how this does this relationship affect the quality of governance? Very often, power struggles, the essence of politics, inhibit efficient policies, and this is why numerous projects of policy reforms are implemented only partially and/or in a distorted way or result in unanticipated and undesired outcomes. There are many reasons for contradictions between politics and policy—including political business cycles that put policy changes between elections into question, ideational polarization of political actors whose policy priorities differ widely, and the inability to reach major policy agreements that may block any changes or even lead to policy decisions that make the situation worse than the previous status quo. Examples of the juxtaposition of politics and policy are numerous across countries and time periods. Thus, it is no wonder that many politicians, policymakers, and experts around the globe can endorse the bold statement of Russian economist and former minister of economic development Alexey Ulyukaev: “The main question of every evolution is constraining political power: how to provide competent decision-making which will depend upon knowledge and experience and not upon voting results, and how to achieve a ‘regime of non-interference’ of politics in other spheres of public life.”1

In fact, a “regime of non-interference,” if and when it has been achieved in those political and institutional contexts where policy decision-making does not depend upon voting results, has seldom brought positive effects from the perspective of quality of adoption and implementing policy decisions. To a large degree, this disjunction is acute for authoritarian regimes, where voting results do not directly affect possession of political power.2 Yet major advancements from policy reforms in authoritarian regimes are relatively rare.3 Moreover, authoritarian leaders sometimes have a vested interest in the inefficiency of their own policies, since it may be used as a mechanism for maximizing political power—the “bad policy as good politics” paradox.4 As I stated in the preceding chapters, these leaders and the members of their winning coalitions are beneficiaries of the politico-economic order of bad governance and have little interest in having it undermined from within. That said, many autocrats are proponents of efficient policies aimed at rapid and sustainable economic growth and socioeconomic development of their respective states. In democracies, politicians may also attempt to insulate policy from politics,5 but the results of reforms in various policy areas are not always in line with the expectations of supporters of the regime of non-interference.

The unavoidable and irreconcilable contradiction between politics and policy, widely discussed in the literature,6 has often stimulated searches for mechanisms to improve the quality of policy intended to limit its dependence on the directions being taken by politics. Following William Easterly, I will label these mechanisms “technocratic”—as opposed to political mechanisms, which imply that decision-making in both politics and policy arenas is conducted by the same legitimate actors. The goal of this chapter is to analyze the opportunities and constraints inherent to technocratic mechanisms of governance in terms of policy-making and the effects of policy reforms on the quality of governance in post-Soviet Russia. In the 1990s competitive and polarized politics were at odds with market reform policy and were widely perceived as a hindrance to economic transformation.7 Conversely, in the 2000s, some policy advancements in Russia were achieved at the expense of degradation of politics.8 The insulation of policy changes from politics has not always led to success,9 and certain policy outcomes paved the way for the rise of authoritarian tendencies10 but brought mixed results at best during the entire post-Soviet period—illustrating the inherent weaknesses of the political mechanisms for governing the state.

Explaining why following technocratic recipes has brought policy successes in some cases and not others requires an in-depth analysis of technocratic mechanisms for governing states, one that will reveal the opportunities and constraints inherent to technocratic policy reforms (described in chapter 4). The argument of this chapter is that, given the key role of rent-seeking in governing post-Soviet Russia, attempts at significant policy reform and improving the quality of governance using technocratic mechanisms meet major resistance from interest groups and parts of the bureaucracy (who often unite their efforts in informal coalitions). At the same time, the regime of non-interference has left little room for the emergence of broad and sustainable pro-reform coalitions. This is why the personal priorities of political leadership have become the main, if not the only, source of policy reforms. Yet they are often insufficient for successful achievement of the goals of policy changes and can even turn into an obstacle to these reforms. The experience of policy changes in the 1990s–2010s in Russia has demonstrated the range of vicissitudes faced by the technocratic model of policy reforms in unfavorable political and institutional environments.

The structure of the chapter is as follows. After theoretical considerations regarding mechanisms of interaction between politicians, bureaucrats, and technocratic policy reformers in nondemocracies, I present an overview of some policy reforms in Russia and their implementation during the 1990s–2010s within the framework of analysis of the regime of noninterference of politics in policy. Possibilities and opportunities for realist alternatives to the technocratic model of policy-making are discussed in the conclusion.

The Technocratic Trap: Dictators, Viziers, and Eunuchs

Technocratic policy reforms are deeply embedded in global history. Most policy changes in the past, both successful and unsuccessful, were conducted in various states and nations within the framework of a technocratic model of policy-making. Political leaders exerted a firm control over politics, and due to domestic and international challenges opted for policy reforms intended to reduce costs and increase benefits, both for their countries and for themselves. But since policy reforms require professional skills and expertise, while their results are unpredictable by definition, it is no wonder that the role of reformers has been delegated to those officials and/or professionals who have certain specialized competences and may be blamed for policy failures in case of undesirable outcomes. In fact, policy reformers in various areas are similar to company managers hired by the owners (in this case, political leaders) to accomplish strictly defined tasks. With that said, policy reformers enjoy a degree of autonomy in their respective areas and are accountable only to their bosses. Political leaders, in turn, benefit from a monopoly on decision-making and policy evaluation, and therefore, can insulate the substance of the reforms from public opinion and, to some extent, from interest groups. Many historical reformers fit this description, ranging from Colbert and Turgot in absolutist France to Witte and Stolypin in Tsarist Russia, and from the “Chicago Boys” in Chile under Pinochet to the Opus Dei technocrats during the last decades of Francoist Spain.

At first sight, this institutional design facilitates the autonomy of technocratic policy-making from politics in both democracies and nondemocracies (even though the nature of politics in these regimes is different). However, it leads to an aggravation of principal-agent problems, and their scope increases with the scale of policy changes. Political leaders are unable to judge the credibility of policy proposals and the quality of their implementation. At best, feedback on policy outcomes reaches the top of the power hierarchy too late (or, conversely, too early in the case of reforms that may bring fruits only in the long term). At worst, especially in authoritarian regimes, this feedback may be heavily distorted and contribute to poor political decisions.11 Asymmetric relationships between political leaders and technocratic reformers are similar to those between company stakeholders and managers: their interests and incentives differ hugely by definition. The alternative to the technocratic model of policy-making is the political model, which implies that legitimate political leaders and/or parties themselves develop and approve major policy decisions (though these decisions are often based on external expertise) and bear political responsibility for policy outcomes, thus being unable to shift the blame onto technocratic reformers.12

However, the mode of interaction between political leaders and technocratic reformers is more vulnerable in terms of principal-agent relations: policymakers concentrate the power resources involved in their own hands, and those resources can be used (or rather, abused) for political purposes. Unlike top managers of companies who cannot overthrow the stakeholders who hired them, top-level technocrats may not only betray political leaders and join the ranks of the opposition, but also even transform from policymakers to politicians and take power for themselves. These risks increase alongside challenges to the political status quo (regardless of policy outcomes), thus raising tensions between political leaders and technocratic policy reformers. Successful and capable technocrats may be even more dangerous for political leaders than their unsuccessful and incapable colleagues, especially in authoritarian settings where power losses and regime changes usually result from intraelite conflicts and breakdowns of informal ruling coalitions.13 This is why political leaders are often tempted to prioritize the loyalty of technocratic policymakers over their competence. As Georgy Egorov and Konstantin Sonin convincingly demonstrate, the weakening of autocrats’ political positions often contributes to the replacement of efficient technocrats (“viziers”) with loyal yet inefficient ones, thus decreasing the quality of policy-making.14

Examples of betrayal of political leaders by their competent yet disloyal viziers may be considered an extreme version of aggravation of principal-agent problems. Although these practices are relatively uncommon, political leaders will still employ various techniques to prevent the disloyalty of technocratic policymakers without damaging their policy efficiency. In addition to oversight and monitoring of technocrats to reduce information costs, they also promote internal competition between state agencies and informal cliques within the state apparatus and at times constrain technocrats’ freedom of decision-making. Also, some policies face a formal and/or informal veto from political leaders (these two options are not mutually exclusive but rather complementary). The windows of opportunity for technocrats regarding policy changes are limited both in terms of the policy areas to which they are granted access and in terms of the scope of their influence on policy outcomes. The weakest link here is not the development of plans and programs of reforms but their implementation by the state apparatus, which is usually not controlled by the technocrats and has little or no incentive for policy reforms regardless of their content. If the quality of the state apparatus is poor, then the technocrats’ chances of successfully implementing their plans and programs (even when their hands are completely untied in conducting policy reforms) are slim. Therefore, technocrats limit themselves to partial solutions, diminishing the scope and domains of policy reforms to those specifically protected by political leaders who may grant their patronage to these changes for various reasons. These solutions are less risky in terms of disloyalty of technocratic reformers, but the benefits of the resulting policy advancements for political leaders and their countries are also far from obvious. This is why good intentions of improvements in certain policy areas may contribute to further worsening of the situation.

However, the most important challenge for technocratic policy reforms lies not along the lines of conflict between political leaders and policy reformers and is not even related to the resistance of the bureaucracy to policy changes (whether open or concealed) but arises from the policy influence of interest groups operating both within and outside the state apparatus. The gap between politics and policy-making opens a window of opportunity for “distributional coalitions”15 and numerous rent-seekers, whereas technocrats’ opportunities to build efficient informal (let alone formal) pro-reform coalitions are markedly limited. The struggle between technocratic policy reformers and rent-seekers over policy decisions was at the heart of the turbulent changes in Russia in the 1990s and the 2000s.16 However, the subordinated status of technocrats makes them vulnerable in terms of politics. Within the framework of the political model, politicians and/or parties may use the popular mandate to launch policy reforms in at least the early stages of political business cycles. Meanwhile, under the conditions of the technocratic model, these opportunities can disappear at any given moment if rent-seekers become more influential in behind-the-scenes lobbying and/or if opponents of the reforms successfully establish coalitions of potential losers from the policy changes.17 Although insulation of reformers from these influences may reduce the risk of policy changes being curtailed, it also reduces the political support available to technocrats and may provoke them into tacit alliances and compromises with rent-seekers.18 In essence, technocratic reformers can reach success only when their plans coincide with the priorities and preferences of political leaders. This is why the major political resource of technocrats is their ability to sell policy recipes to political leaders using bright covers and attractive labels whenever those leaders are willing to buy their proposals. Under the conditions of the politico-economic order of bad governance, this venture is questionable to say the least, and it comes as no surprise when the reforms become unsustainable, and are ultimately distorted, diminished, or revised—and not always because of the outcomes of the actual policy. Moreover, policy failures do not so much bury technocrats’ reform plans as such but diminish the chances of their implementation by the same teams of reformers.

The combination of negative features that shapes the technocratic model of policy-making are: (1) aggravation of principal-agent problems; (2) risks of disloyalty and attempts at their evasion; (3) limited resources and powers of technocrats against the background of; (4) resistance from interest groups; and (5) limited opportunities for pro-reform policy coalitions. These factors make technocratic reforms unreliable and unsustainable. Under these conditions, technocrats may fall into a trap where their overall role in policy-making diminishes over time, yet they have few opportunities to advance major changes while they still can. Policy areas and zones where positive changes are possible are reduced to a limited number of pockets of efficiency with unfavorable odds of extending them to other policy areas; while the technocrats’ discretion is limited to the development of policy programs in the form of advice and consultation without power over the adoption of key policy decisions or control over their implementation.

To put it succinctly, if viziers remain loyal to political leaders but lack major leverages of influence, they may become “eunuchs” of a sort. They often maintain a formally high status that serves as a reward for loyalty and camouflages their inability to exert meaningful influence on policy-making, let alone politics, in their states. In the end, the boundary between technocrats and rent-seekers may be blurred: even if the top echelons of the Russian state agencies are staffed by professionals responsible for problem-solving,19 their presence does not change the overall picture of bad governance. Rather, technocrats perform important functions of fool-proofing:20 they may protect autocrats from the most dangerous policy failures, which may result from incompetence and/or their subordinates’ excessively voracious rent-seeking appetites (similar to those of Yakunin, described in chapter 2). Yet under conditions of bad governance, policy reforms as such cannot become a magic bullet to diminish the negative effects of this politico-economic order. Technocrats themselves cannot improve the quality of governance, and may be not very interested in doing so, lacking strong positive performance incentives.

These flaws and limitations of the technocratic model are universal and not related to particular countries or historical periods. However, under the conditions of the politico-economic order of bad governance they are aggravated over time.21 These factors are inescapable and push political leaders, even if they opt for policy reforms, to concentrate their efforts on a narrow front of top-priority reform projects at best and pay less attention to policy changes in other areas. In the worst cases, they are tempted to revise their priorities and to sacrifice reforms to the benefit of the coalition of bureaucrats and rent-seekers. In addition, the dependence of political leaders in Russia on “regime cycles”22 places priority on those policy changes that may bring relatively quick positive outcomes, while long-term development plans often remain on paper. Due to these factors, even if technocratic reformers enjoy full support from political leaders and overcome resistance from rent-seekers, they are limited in the time and scope of their plans and are often convinced that their cause is hopeless from the very beginning. Policy programs are often subject to self-censorship even at the planning stage, while implementing some reforms becomes filled with bureaucratic tricks, unworkable administrative compromises, and the rejection of key elements.23

How does the technocratic model of policy reform in autocracies really work in general and in Russia in particular? Why does it survive regime changes, only adjusting to changing circumstances, and what is its impact on the quality of governance in Russia and elsewhere? Why do technocratic policy reforms bring success in some cases but result in failure in others? How sustainable is the technocratic model and to what extent do political models present acceptable and realistic alternatives? Some of these issues are explored and highlighted in this chapter.

WHILE THIS BOOK DESCRIBES present-day Russia as a case of bad governance, the main objection to this description is related to the fact that Russia (both now and in the past) has demonstrated certain major achievements of state policies in various fields, and some state-directed projects and programs may be labeled success stories in international comparisons. Recent achievements of this kind have been analyzed at the level of several of Russia’s regions,1 of certain sectors of the economy (such as agriculture),2 and of some state agencies (such as the Central Bank).3 Their impact is important and visible enough that one should not dismiss these cases merely as minor and negligible exceptions, the specifics of which only confirm the overall rules of bad governance. At minimum, one must pose a question about the causes and mechanisms that allow major successes amid the grim picture of notorious inefficiency, ubiquitous corruption, and widespread rent-seeking involved in governing the Russian state. Moreover, the in-depth deviant case analyses of these outliers will aid in a better understanding of the general trends of bad governance through identification of its limits. In other words, when and under which conditions can the state happily turn from bad governance to good governance, at least for a while, and why may such a wondrous conversion occur in certain cases when in others it does not?

The literature on developmental policies beyond the global West has paid attention to “pockets of efficiency”4 or “pockets of effectiveness”5—state-directed priority projects that are intentionally designed and implemented under special conditions under the patronage of political leaders. Some of these projects have brought not only short-term successes but also major long-term returns and outlived their initial conditions and intentions. However, the list of possible causes of such success stories is quite diverse and includes several organizational, institutional, and technological factors, and quality of management and personnel, which often tend to be considered country-specific and context-bounded.6 Similar tendencies might be relevant for research on Russia. For example, in his comprehensive overview of innovation projects in pre-Soviet, Soviet, and post-Soviet Russia, Loren Graham focuses on the efforts of certain creative individuals and collective drivers of technological progress vis-à-vis the rigid system of state governance and the political and institutional environment, which was unfavorable for developmental projects.7 Although it is hard to object to these observations, his focus of analysis leaves unanswered the question of why state policies sometimes paved the way to major breakthroughs (such as the Soviet space project, briefly mentioned by Graham), while other times they resulted only in a waste of resources? The analysis of success stories faces not only the need for conceptual homogenization of a diverse empirical field even within the same country (let alone cross-national research) but also the framing of theoretical and disciplinary scholarly perspectives. For Barbara Geddes, the explanation of pockets of efficiency in Brazil and other Latin American states is driven entirely by institutional accounts;8 the comparative analysis of Michael Roll mostly focuses on the political leadership and organizational settings;9 and Graham, in turn, offers a path-dependent perspective on exceptional successes in Russia amid numerous failures.10 Thus, instead of generalization of analyses of success stories, the research agenda meets with increasing fragmentation.

This chapter does not aim to present universal and comprehensive explanations of success stories in Russia and beyond but proposes a slightly different view on the causes and mechanisms of these phenomena. I argue that effectively implementing priority projects and programs by the Russian state might be understood as the other side of the coin of bad governance. First, the political leadership under conditions of bad governance needs success stories of national development, not only in terms of policies but also as a tool of politics due to their effects on domestic and international legitimation of regimes and leaders. Second, the actual achievements of success stories may perform the functions of both material and symbolic conspicuous consumption in the eyes of elites and masses alike. Meanwhile, political demand for success stories provides certain incentives for policy entrepreneurs among mid-range and top-level bureaucrats who may pursue their upward career mobility and/or priority status and funding while also working toward achieving some broadly defined developmental goals.11 The problem, however, is that these incentives for policy entrepreneurs are often unsustainable because of their dependence upon patronage from political leaders, making institutionalization of success stories a difficult task. Moreover, given the fact that some success stories are often implemented under special deliberately designed conditions, their multiplicative effects, or trigger effects12—that is, the extension of success stories to other projects, organizations, sectors, or regions—are relatively rare. Due to these constraints, some success stories were short-lived, and their returns diminished over time: they not only failed to improve conditions of bad governance but in fact even reinforced the status quo. These tendencies are widespread in contemporary Russia and in its Soviet (if not pre-Soviet) past; they do not contradict the overall pattern of bad governance in the country and may even serve as inherent attributes of this politico-economic order.

The structure of the chapter is as follows. After presenting the case of one of the most well-known success stories in Russia, the Soviet space program, I discuss the role and impact of success stories under conditions of bad governance and emphasize their constraints, which are related to the priorities of the political leadership, the incentives of policy entrepreneurs, and the mechanisms for managing top priority projects against the background of a shortage of resources. Further, I focus on the dilemmas of state policies under bad governance in Russia and highlight the effects of diminishing returns of success stories due to these constraints. The prospects and implications of success stories for Russia’s development are considered in the conclusion.

“But We Are Making Rockets”

Before turning to an analysis of the story of success and the story of failure of the Soviet period, one important disclaimer is necessary. As argued in chapter 2, I consider bad governance in present-day Russia to be a product of interest-driven rent-seeking efforts of post-Soviet leaders and elites rather than an effect of various legacies of the past. At first glance, the focus on certain examples from the 1950s–1960s may seem to contradict this argument. However, the rationale of the case studies presented below is a little different. I refer to them in order to explore the issue of the causes of extraordinary achievements amid the overall mediocrity of the government’s performance, regardless of the nature of the poor quality of governance. Even though the political system and economic foundations of governing the Soviet Union after Stalin13 were quite different from those in Russia in the early twenty-first century, it would not be a wild exaggeration to claim that both the Soviet Union and present-day Russia have underperformed in terms of quality of their governance, albeit for different reasons and with different consequences for the respective countries. This is why looking at the relatively rare examples of outstanding overperformance of state-driven programs and projects in different political and institutional contexts may help us to understand why good apples may grow on bad apple trees, even though the trees we are looking at may be of different sorts.

It is hard to find a more salient example of a developmental success story in post-World War II Soviet history than the space program with its exceptional achievements such as the first Sputnik orbital launch (1957) and the first human mission in space, conducted by Yuri Gagarin (1961).14 This success story was greatly appreciated at the time and is still perceived positively by many Russians: according to a 2008 nationwide mass survey, it was rated as the second most important event in Russian history after victory in the Great Patriotic War of 1941–1945.15 Indeed, the advancements of the space program served as a profound demonstration of the technological progress of the Soviet Union and contributed to an attractive domestic and international image of the country and its political leadership within the context of the Cold War. However, the success of the Soviet space program was short-lived: the major breakthrough of the 1950s–1960s turned into a plateau in the 1970s–1980s, its material and symbolic returns diminished over time, and subsequent events after the Soviet collapse contributed to Russia’s recent shift toward the second echelon of the global space superpowers. What were the causes of this trajectory, and why is the experience of the Soviet space program important for understanding the strong and weak sides of success stories in Russia, both in the Soviet and in the post-Soviet period?16

The success of the Soviet space program would have been impossible without the efforts of two key individuals. The chief designer Sergei Korolev (1907–1966) was not only an outstanding organizer of science and technology who effectively coordinated a huge number of individuals and organizations and brilliantly implemented quite a few technologically complex and innovative devices and solutions; he was also (if not above all) a successful policy entrepreneur who was able to persuade Nikita Khrushchev to make the space program as a whole and especially a human mission in space his personal top policy priority.17 Khrushchev, in turn, desperately needed success stories, especially in the early stages of his leadership when he was pursuing domestic and international legitimation and took major risks that proved to be justified in the case of the space program.18 Khrushchev was emotional, ill-tempered, and not a very competent leader: he often advanced certain policy innovations that brought only limited success (as in case of the Virgin Lands agricultural program), and even trusted charlatans such as the (in)famous academician Trofim Lysenko.19 The implementation of the Soviet space program, and especially of human space missions, was an expensive extension of the rocket segment of the arms race, and a possible defeat on this front vis-à-vis the United States (driven by differences in the resource endowment and relative economic weights of the two countries) could have proved sensitive for the Soviets in many ways. However, Khrushchev accepted these risks and provided his personal patronage to the space program and top priority funding for human space missions, despite fierce resistance from the Soviet military.20

The outcome of these efforts greatly exceeded the wildest dreams of both Korolev and his political patron Khrushchev. The Soviet Union won twice on the space front because of the successful launch of Sputnik and especially Gagarin’s orbital flight against the background of a belated start by their American rivals who had lagged at the beginning of the space program and had been faced with numerous technical problems. The outstanding success of the early stages of the Soviet space program opened new horizons for Korolev and his team: they received carte blanche to implement its new stages, of which the first and foremost was the human mission to the Moon, where the Soviet Union entered competition with the United States known as the “Moon race.” As for Khrushchev, the symbolic benefits that he (and the Soviet Union as a whole) received because of the successes of the space program and its demonstrative effects, multiplied by domestic and international propaganda,21 were highly visible, especially given the increasing scope of the numerous problems the Soviet leadership faced in the early 1960s. However, the symbolic benefits brought to the Soviets by Sputnik and Gagarin only partially compensated for the high political and economic costs of the Berlin Wall, the Cuban missile crisis, the shootings at workers’ protest rallies in Novocherkassk, and the need to buy grain from abroad.22 Even then, these benefits were short-term, and their positive effects were only temporary.

There are no “if” paths of alternative history, and we will never know how the Soviet-American Moon race might have gone had the Khrushchev-Korolev tandem’s drive behind the Soviet space program continued. However, the ousting of Khrushchev from the Soviet leadership in October 1964 became a turning point for his top priorities, including the Soviet space program. Soon after that, under pressure from military-industrial lobbyists, the plans for the space program were reviewed in favor of their military component, while costly human space missions lost their priority.23 In fact, the Soviet Union left the Moon race well before the Apollo program in the United States was implemented in a full-fledged way and before it reached its peak in July 1969 with man’s first step on the Moon. The events that followed this departure, such as Korolev’s premature death in January 1966, the chain of casualties during human space missions in April 1967 and in June 1971,24 and Gagarin’s death in a plane crash in March 1968, contributed to the space program gradually losing the status of success story for the Soviet Union. On a symbolic level, the struggle for space leadership with the United States was framed as a kind of draw, with the symbolic gesture of the joint Apollo-Soyuz space mission in July 1975. Yet in military terms, the space rivalry with the United States continued, and it became more and more of a heavy burden for the Soviets. In technological terms the Soviet Union was not able to demonstrate new major breakthroughs and put them into mass production; while the United States successfully launched its new Space Shuttle program in 1981, the Soviet response, Buran, did not even reach the stage of human missions.25

In essence, up until the collapse of the USSR, the Soviet space program followed a pathway of improving those technological solutions that had been proposed and/or implemented in Korolev’s times. More important, the multiplicative effects of the Soviet space program remained limited: the major success story of the Soviet Union on the space front did not contribute to new major success stories in other fields that would have a genuine strong impact on the country’s development. The Soviet space program remained a somewhat isolated “pocket of efficiency,”26 and beyond this narrow field, its influence was relatively weak: no major multiplicative effects27 were observed—quite the opposite, bureaucratic ineffectiveness became greater and greater over time against the background of the increasing crisis of the Soviet economy.28 The one-off high returns of the Soviet success story in space declined over time, and its previous achievements increasingly performed symbolic compensatory functions, something visible as early as 1964, the heyday of the Soviet space boom. At that time, the Soviet bard Yuri Vizbor in his song “The Story of Technologist Petukhov” (Rasskaz tekhnologa Petukhova) identified himself with Soviet technological and cultural achievements on behalf of the protagonist, who proudly stated: “But we are making rockets . . . and also at the top of the world in the field of ballet” (zato my delaem rakety . . . a takzhe v oblasti baleta my vperedi planety vsei). Yet the keyword in this claim is not “rockets”: it is “but” (zato). It is also worth noting that half a century after Vizbor, in 2014 the keyword “but” performed the same compensatory function after the Russian annexation of Crimea, in the form of the popular slogan “But Crimea Is Ours!” (Zato Krym nash!).

To summarize, one might argue that the Soviet space program followed a developmental trajectory that was typical for a number of other success stories in Russia and beyond: (1) top policy prioritization by political leaders who actively supported new projects and programs and offered full-scale patronage to policy entrepreneurs; (2) quick achievement of visible results because of the high concentration of resources, with a number of symbolic returns; (3) limited multiplicative effects; (4) change in policy priorities (sometimes because of changes of leaders and/or top managers of these projects and programs); and (5) subsequent loss of the status of success story.

In many ways, the success story of the Soviet space program remains outstanding against the background of other technological advancements that were not converted into major achievements due to the lack of high-level patronage and/or other policy priorities of political leadership. Benjamin Peters in his in-depth analysis of the failure of Soviet Internet presents impressive evidence of what may happen to promising ideas if they do not receive strong enough political support.29 He focuses on the sad fate of Soviet mathematician Viktor Glushkov, the major promoter of building a “unified information network,” the potential predecessor of, if not alternative to, the present-day Internet. Glushkov, a director of the Kiev Institute of Cybernetics, proposed the development of an All-State Automated System of Management (OGAS) that could pave the way to making a nationwide computer network as the main tool of governing the Soviet Union. However, Glushkov’s patrons in the Soviet bureaucracy were second-order state officials at the level of ministries and the Central Statistical Agency, while the top leaders, Brezhnev and Kosygin, remained indifferent to his project at best. In addition, the powerful Soviet minister of finance, Vasily Garbuzov, openly opposed OGAS, and in the end Glushkov fell victim to interagency rivalry. The OGAS proposal was never implemented, so the Soviet Union, which in the 1960s was very much at the state-of-the-art global level in this field, gradually lagged behind the West over the subsequent decades, and this gap was never overcome. The Soviet model of governance, with its hierarchy of the power vertical, greatly contributed to such an outcome; unlike the space program, the Soviet Internet did not turn into a success story.

Yet this trajectory of success story is not limited to the context of the Soviet experience of the 1950s–1980s, as one may compare the Soviet space program with the more recent experience of the Skolkovo innovation center in the 2010s: Skolkovo went through the same stages but in a more rapid way and with much smaller effects. During the presidency of Dmitry Medvedev this project served as a major symbol of the widely advertised plan for Russia’s technological modernization, was at the center of the president’s attention and was given priority funding by the state and business actors despite the great skepticism of some key stakeholders.30 The project aimed to achieve a breakthrough for Russia in the field of high technology, and was intended to build a new success story of international technological collaboration based on active involvement of global corporate and science leaders, ranging from Intel to MIT. However, the implementation of this project was limited in space (only a single suburban area near Moscow) and in time (only during Medvedev’s presidency) and oriented toward short-term public effects in the manner of a showcase, rather than toward long-term commercial benefits and technological advancements.31 It is no wonder that after 2012, when Medvedev lost his presidential position, the Skolkovo project stalled and lost its priority status, its funding declined as the Russian authorities no longer required major donations to Skolkovo from big business, and its initially planned role as a major driver of high technology and economic growth was all but forgotten. Subsequent developments, such as the deterioration of Russia’s relations with the West, the stagnation of the Russian economy and the devaluation of national currency, further weakened the already limited effects of the Skolkovo project. In 2013, the Russian law enforcement agencies launched a criminal investigation against the Skolkovo Foundation, accusing its top management of misuse of funds,32 while the Kremlin’s preferences in the field of high tech shifted to yet another pet project, namely the “Innovation Valley” of Moscow State University, which was conducted in collaboration with the Innopraktika Foundation, led by Katerina Tikhonova, who was labeled in the media as allegedly being the daughter of Vladimir Putin. This foundation has received major contracts from other large state companies and state agencies, but its activities remain highly nontransparent, with little by way of results visible yet. Some critics have observed that the replication of Skolkovo-type innovation projects in Moscow and other regions may be driven not by the goals of technological development but rather by intentions of diverting state funds into private pockets.33 Although the decline of Skolkovo was much more rapid and dramatic than that of the Soviet space program, they represent typologically similar phenomena of former success stories.

While analyses of pockets of efficiency as mechanisms of development conducted in Asia, Africa, and Latin America34 have underlined the key role of their institutionalization and long-term impact, Russia’s success stories are largely short-term ventures, ones that face major difficulties in their institutionalization and especially impersonalization. Over time, these “success stories” tend to lose their initially high-profile positions and undergo what has been labeled “bastardization” in the chapter 2 of this book—a systematic worsening in performance in the process of implementation and subsequent decay.35 One should note, however, that this chapter deals with real success stories, which are broadly understood here as achievements of outstanding overperformance of state-directed development programs and projects, highly visible nationally and/or internationally for at least a certain period. It is not concerned with various substitutes for real successes, such as Potemkin village-like fake demonstrative projects, or numerous examples of fraud (such as the “cotton affair” in late Soviet Uzbekistan, doping scandals in sports, and the like). Real success stories are meant to promote Russia’s development in various fields, but they are often implemented partially and inconsistently. This is why we have to understand why Russia’s success stories have not always reached their goals and have resulted in short-term achievements and how the mechanisms of their implementation are related to the overall logic of the politico-economic order of bad governance in Russia.

BY THE EARLY 2020S, Russia has seemingly entered the mature stage of its bad governance. Its authoritarian regime has been consolidated, while rent-seeking and corruption within the framework of the power vertical and the overregulated state are perceived as the only mechanisms for governing the Russian state—not only by state officials but also by a significant portion of Russian society at large.1 There is a dismal consensus among most observers that bad governance under durable authoritarianism in Russia will persist for decades (if not forever) and book titles such as “Will Putin’s System Survive until 2042?”2 have become nearly ubiquitous. At best, scholars express some hope for the long-term effects of economic growth, which alongside generational changes, may lay down favorable conditions for democratization in Russia some decades from now.3 Economic experts, however, express skeptical opinions about Russia’s prospects for sustainable growth and development in times of low oil prices and international sanctions, especially given the priorities of the country’s leadership.4 Even the political scientists’ cautiously positive outlook reminds one of a statement by the nineteenth-century Russian poet Nikolay Nekrasov who predicted the bright yet distant future of Russia in his The Railway (1864): “Alas! That the day of our joyful tomorrow // I shall not witness—and neither shall you.”5

In a broader perspective, these expectations reflect global concerns about the future of democracy and good governance worldwide amid the rise of authoritarian populism, which is harmful for politics and governance alike.6 However, the current dismal consensus among scholars over prospects for democracy and good governance in the world (and especially in Russia) is not entirely new. In a way, it looks like a replica of the previous dismal consensus of the 1970s. This was the time when the negative consequences of the Vietnam War and Watergate were considered major threats to the Western world much more than the effects of Brexit and the Trump presidency are today, when the dead end of stagflation was perceived as a predictor of the coming decline if not complete collapse of capitalism, and when almost nobody believed that Communism would end relatively soon. During these years, prominent scholars published alarmist reports about the irresolvable global crisis of democracy and capitalism, and overwhelming determinism dominated in skeptical accounts of the future of freedoms in developing countries7—all things that sound much too familiar to present-day observers. In the late 1980s, these fears turned into major hopes and high expectations, most probably demonstrating a dramatic if ill-thought-through shift from unreasonable pessimism to unreasonable optimism. These lessons from the 1970s and how the dismal consensus was overcome over the next decade—both in political and in scholarly terms—may be useful for reassessing the current state of governance in Russia and some of its post-Soviet neighbors and its further prospects against the background of declining quality of governance in various parts of the globe. To what extent are the sources and mechanisms of bad governance in Russia outlined in the previous chapters of this book country-specific and context-bounded, as opposed to representing an ongoing global trend? How does Russia’s post-Soviet experience of bad governance look in a broader comparative perspective? Which lessons may be learned from attempts to constrain bad governance in various countries, and may some of these lessons be learned in Russia? Why and how may bad governance in Russia prove its resilience vis-à-vis major exogenous shocks such as the epidemic of COVID-19 that struck all over the world in 2020? And what might we expect for the future of Russia in terms of the quality of governance? This chapter will not provide comprehensive answers to all these questions but intends to put them into a research agenda. It is an important exercise given the recent boom of studies of Russian politics and governance in the United States and beyond.8 The need for new frameworks for analysis of bad governance in Russia in a comparative perspective instead of the present-day dismal consensus is also important for further development of a research agenda and may have implications beyond the region of Eurasia.

I will start with some considerations on where governance in Russia is now and what we might expect for the future, using the conceptual lenses of “political decay” outlined first by Samuel P. Huntington9 and more recently by Francis Fukuyama.10 Then I will discuss recent attempts to diminish the most pernicious effects of bad governance in some countries and why some of these attempts have generated more positive effects than others. In the concluding sections, I will consider the role of bad governance in Russia’s response to COVID-19 and possible developments of political changes in Russia and their influence on the quality of governance.

Bad Governance and Political Decay: beyond Russia

Within the intellectual tradition of modernization studies, political development is juxtaposed with political decay, the process that leads to increasing inefficiency of social and political institutions: over time, either these institutions lose their role as rules of the game in a given society or, more often, following these rules contributes to further degradation of societies in terms of development.11 In a way, long-standing institutions can be considered structural constraints on the behaviour of individuals, including political and economic actors. In such a long-term perspective, the focus on institutions in the process of political decay mostly concentrates on their major flaws stemming from an outdated nature and excessive rigidity (usually inherited from the past), which may not respond appropriately to new challenges. In the historical perspective of longue durée, such an account may be correct. However, for a short-term horizon there is a tendency to consider institutions (primarily, formal rather than informal institutions)12 as given facts without an in-depth analysis of their genesis and evolution. Meanwhile, the analysis presented in this book offers a perspective on the role of institutions in political decay through the lenses of an agency-driven process of institution-building. In this respect, bad governance as an intentional outcome of this process may be regarded as an instance of political decay, albeit from a different perspective to those previously offered by scholars of modernization.

Political decay as a consequence of agency-driven processes is not unique to Russia; in fact, many self-interested rulers would like to govern their domains without the significant constraints imposed on them both in democracies and in non-democracies. In the turbulent times of the twenty-first century, they have often gained excellent opportunities to reach these goals and establish a politico-economic order of bad governance in various states and nations. In particular, the wave of popular discontent with the status quo, which gave birth to various populist movements and political leaders across the globe from Europe to Latin America, has contributed to their drive toward bad governance in pursuit of self-interest.13 Regardless of their origins (scholars differ greatly in their analyses of causes of contemporary populism),14 these leaders tend to distort existing institutions and/or rearrange them in order to exploit public resources for private purposes. Numerous examples ranging from Venezuela under Hugo Chavez and Nicolas Maduro15 to Turkey under Recep Tayyip Erdogan16 are quite telling in this respect. If such leaders face little or no resistance from other political and economic actors and from society at large, they may follow the path of the Russian leaders in building and strengthening bad governance. This does not necessarily mean that present-day Russia intentionally acts as a role model for other countries and exports bad governance abroad as a part of its foreign policy strategy,17 but there is no doubt that a number of politicians all over the world only dream of enjoying the scope of discretion available to Vladimir Putin.

In many ways, the recent experience of Donald Trump’s presidency could be regarded as an attempt to impose elements of bad governance on the United States.18 In placing his family members and personal cronies in key positions in the state apparatus, using American diplomacy as a tool for obtaining kompromat (compromising materials)19 on his political rivals, obstructing justice, and turning state regulations into weapons for his political dominance. However, Trump has faced strong resistance from various corners of society. American politicians, bureaucrats, media, and civil society actors have opposed his intentions and somewhat diminished the possible negative impact of Trump’s strategy: as of yet, they have not been able to build new major barriers against making bad governance but have also not let him eliminate all existing ones. This is why Trump’s effects on the quality of governance in the United States were less devastating than they could have been in many other countries under similar leadership. In the end, Trump’s poor handling of the pandemic crisis caused by COVID-19, as well as other instances of his misbehavior, contributed to his loss in the 2020 presidential contest. Given the resilience of many long-standing institutions (including fair elections, constitutional checks and balances and federalism) and the pluralism of political and economic actors, American politics prevented poisoning of its governance in the most dangerous forms, similar to those in Russia—although the experience of Trump presidency was costly for the United States in many ways.

But what can happen when institutions that can present barriers to bad governance are weak and insufficiently resilient, while resistance to populist politicians is insufficient? The recent experience of Hungary might be a prime example of such a path toward political decay. Although this country underwent the collapse of Communism and went through the process of democratization and market reforms relatively peacefully, it faced major challenges in the aftermath of the 2008–2009 global economic crisis.20 Soon after that, the post-Communist political elite was heavily discredited and the economic strategy of global integration via implementation of neoliberal policies21 lost its appeal in the eyes of major actors and society at large. Against this background, Viktor Orban and his centre-right party Fidesz gained popular support because of their fierce criticism of the previous developments in Hungarian politics and won a majority in the parliament in 2010. Since that time, the Hungarian political landscape has changed dramatically. Orban conducted judicial counterreforms, making judges solely dependent upon political appointments, imposed strict state control over the major media, put severe constraints on foreign-funded NGOs, and initiated harsh pressure on the Central European University (CEU) established and funded by Hungarian-born global billionaire George Soros—in the end, CEU was forced to relocate from Budapest to Vienna. While actively using nationalist and anti-European rhetoric to boost his popularity, Orban effectively channeled European funds to strengthen his power base, and overall enjoyed many benefits from his strategy of financial nationalism22 and other illiberal populist policies.23 It comes as no surprise that Fidesz-related businesses obtained major benefits from Orban’s rule, while the quality of governance in Hungary in the 2010s deteriorated, especially with regard to corruption and the rule of law.24 Despite numerous mass protests against monopolizing power and other antidemocratic moves by the government, Orban retained strong leverages of control. Although in 2019 an opposition-backed candidate managed to win the Budapest mayoral election, the new regulations imposed by the Hungarian government made him powerless, as all resources were transferred into the hands of government-appointed officials. Naturally, in the wake of the initial COVID-19 outbreak in April 2020, Orban effectively seized the moment to increase his formal and informal powers and widen the scope of his control over key sectors of the Hungarian economy.25

The Hungarian scholar Balint Magyar labels the politico-economic order established in Hungary after 2010 the “mafia state.”26 This pejorative term was mostly coined to be eye-catching for readers, and its validity as an analytic tool may be objected to on various grounds.27 However, the phenomenon itself may be regarded as one instance of agency-driven efforts to build and consolidate bad governance. Despite numerous peculiar features of the Hungarian case, described by Magyar in great detail, Hungary’s path toward bad governance is not so dissimilar to that of Russia (in fact, Magyar himself extended his analysis to some other post-Communist countries).28 Even though in the 1990s and 2000s Hungary was perceived by many sympathetic observers as a poster child for successful development and European integration, it was not able to obtain strong enough immunity against intentionally creating bad governance. Although in the Hungarian case the populist style of Orban and Fidesz served as a tool for demolishing barriers against bad governance, while in Russia Putin’s policies were largely antipopulist,29 these differences tell us more about the instruments for the creation of bad governance than about its actual mechanisms.

One should consider that political decay caused by bad governance should not be equated to the collapse of the state, at least in the relative short term. Rather, political decay may launch a long-term downward trajectory of economic and societal development over time.30 The main problem with this trajectory is that it has proved to be resistant to correction: once the politico-economic order of bad governance is built and consolidated, all moves toward overcoming it will become more and more difficult. At a certain point, this downward trajectory may become irreversible despite all efforts, causing a lock-in effect. This basically means that the countries poisoned by bad governance may find no way out: this is why the parallel with chronic diseases, outlined earlier, might be relevant for those countries that are deeply affected by bad governance over a long period of time. Even though their leaders and elites may realize that the pernicious effects of bad governance are dangerous not only for the futures of their countries but may also harm their own interests, they tend to avoid the use of the bitter medicine of major political and institutional changes, especially in a nondemocratic context. William Easterly vividly describes this paradox in his analysis of countries of sub-Saharan Africa.31 From this perspective, contemporary Russia may be considered a prime example of imperfect recipes for improving the quality of governance without major changes.

Preface and Acknowledgments

1. Samuel P. Huntington, Political Order in Changing Societies (New Haven, CT: Yale University Press, 1968), 1.

2. See the two-volume book by Francis Fukuyama: Origins of Political Order: From Prehuman Times to the French Revolution (New York: Farrar, Strauss, and Giroux, 2011); and Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy (New York: Farrar, Strauss, and Giroux, 2014). See also Daron Acemoglu, James A. Robinson, The Narrow Corridor: How Nations Struggle for Liberty (New York: Penguin, 2019).

3. See Worldwide Governance Indicators (Washington, DC: World Bank, 2021); http://info.worldbank.org/governance/wgi/, accessed May 31, 2021. See also Jan Teorell, Aksel Sundström, Sören Holmberg, Bo Rothstein, Natalia Alvarado Pachon, Cem Mert Dalli, The Quality of Government Standard Dataset, version January 2021 (Gothenburg: Quality of Government Institute, 2021), https://www.gu.se/en/quality-government/qog-data/data-downloads/standard-dataset, accessed May 31, 2021.

4. For an anthropological study of these issues, see Alena V. Ledeneva, Russia’s Economy of Favours: Blat, Networking, and Informal Exchange (Cambridge: Cambridge University Press, 1998).

5. See Albert O. Hirschman, A Bias for Hope: Essays on Development and Latin America (New Haven, CT: Yale University Press, 1971).