political elites in the new russia (basees curzon series on russian & east european studies)

Political Elites and the New Russia

Political Elites and the New Russia convincingly argues that althoughreforms in Russia have been initiated by those close to the President, in factlocal and national elites have been the crucial strategic actors in reshapingRussia’s economy, democratising its political system and decentralising itsadministration.

This book analyses the political culture of elites under Yeltsin and Putin,discussing the extent to which they form coherent political orientations, andhow far this culture has been in step with, or at odds with, the reformpolicies of the Kremlin leadership and consequences for state stability.

Anton Steen is Professor of Political Science at the University of Oslo. Hehas written on elites and democratisation in the Baltic States and is currentlyworking on a project looking at elites and state-transformation in Russia.

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BASEES/RoutledgeCurzon Series on Russian andEast European Studies

Series editorRichard SakwaDepartment of Politics and International Relations, University of Kent

Editorial committee

George BlazycaCentre for Contemporary European Studies, University of PaisleyTerry CoxDepartment of Government, University of StrathclydeRosalind MarshDepartment of European Studies and Modern Languages, University of BathDavid MoonDepartment of History, University of StrathclydeHilary PilkingtonCentre for Russian and East European Studies, University of BirminghamStephen WhiteDepartment of Politics, University of Glasgow

This series is published on behalf of BASEES (the British Association forSlavonic and East European Studies). The series comprises original, high-quality, research-level work by both new and established scholars on allaspects of Russian, Soviet, post-Soviet and East European Studies inhumanities and social science subjects.

1 Ukraine’s Foreign and Security Policy, 1991–2000Roman Wolczuk

2 Political Parties in the Russian RegionsDerek S. Hutcheson

3 Local Communities and Post-Communist TransformationEdited by Simon Smith

4 Repression and Resistance in Communist EuropeJ. C. Sharman

5 Political Elites and the New RussiaAnton Steen

6 Dostoevsky and the Idea of RussiannessSarah Hudspith

II Author

Chapter Title iii

Political Elites and theNew RussiaThe power basis of Yeltsin’sand Putin’s regimes

Anton Steen

iv Author

First published 2003 by RoutledgeCurzon11 New Fetter Lane, London EC4P 4EE

Simultaneously published in the USA and Canadaby RoutledgeCurzon29 West 35th Street, New York, NY 10001

RoutledgeCurzon is an imprint of the Taylor & Francis Group

© 2003 Anton Steen

All rights reserved. No part of this book may be reprinted orreproduced or utilised in any form or by any electronic, mechanical, orother means, now known or hereafter invented, includingphotocopying and recording, or in any information storage or retrievalsystem, without permission in writing from the publishers.

British Library Cataloguing in Publication DataA catalogue record for this book is available from the British Library

Library of Congress Cataloging in Publication DataSteen, Anton, 1949–

Political elites and the new Russia: the power basis of Yeltsin’s and Putin’s regimes / Anton Steen.

p. cm. – (BASEES/RoutledgeCurzon series on Russian and East Europeanstudies; 5)Simultaneously published in the USA and Canada.Includes bibliographical references (p. ) and index.

1. Elite (Social sciences)–Russia (Federation). 2. Political culture–Russia(Federation). 3. Democracy–Russia (Federation). 4. Post-communism–Russia (Federation). 5. Russia (Federation)–Politics and government–1991–.I. Title. II. Series.

HN530.2.Z9E488 2003305.5´2´0947–dc21 2003041584

ISBN 0–415–30903–4

This edition published in the Taylor & Francis e-Library, 2004.

ISBN 0-203-18048-8 Master e-book ISBN

ISBN 0-203-34462-6 (Adobe eReader Format)(Print Edition)

Contents

List of illustrations viiPreface ixAcknowledgements xi

1 Russian elites and the triple transformation 1

2 Defining and surveying elites 17

3 Regime-legitimacy and political stability 25

4 Democracy Russian style 49

5 Between the state and the market 67

6 Integration in a decentralised federation 95

7 What matters for the elite’s orientations? 118

8 Decision-making cultures 127

9 The network state 141

10 The elites and the emerging Russian state 167

Appendix: additional tables 182Notes 190References 196Index 207

Chapter Title v

vi Author

Chapter Title vii

Illustrations

Figure

A7.1 Shaping of elite orientations 119

Tables

A3.1 Confidence in institutions, total elite 30A3.2 Confidence in institutions, by elite group 34A3.3 Inter-elite distrust 38A4.1 Elites who support equal influence, strong leadership

and a multi-party competition 52A4.2 Attitudes to Presidential and government powers 55A4.3 Attitudes to economic system and democracy. Pearson’s

correlations 62A5.1 Individualism and collectivism 74A5.2 Attitudes to form of ownership in various sectors 78A5.3 The state and the market as instruments for solving various

problems: total elite 81A5.4 Perceptions of future economic development 87A6.1 Perceptions of power of various levels of government 100A6.2 Perceptions of future power distribution 102A6.3 How economic transfers and taxation influence equality

between regions 106A6.4 Responsibility for providing public services 109A6.5 The opinions of various regional elites on special

agreements and federal law, 1998 114A7.1 New institutions, old legacies and post-communist

experiences influencing the elite’s orientations 123A8.1 Elites saying decision-making is ‘closed’ in various sectors 130A8.2 The importance of ‘the law’ and ‘personal contacts’ 132A8.3 The importance of the ‘law’ and ‘bargaining’ (barg.) in

various sectors as perceived by the elite 133A8.4 Strong mafia influence in various sectors 137

viii Illustrations

A9.1 The elite’s contacts with leaders of other institutions.Percentage of contacts occurring monthly or more often 147

A9.2 Members of the elite with family and relatives in leading positions in private firms and state enterprises 151

A9.3 Importance of Soviet connections in present decision-making 157A9.4 Political capital and elite contacts 160A3.1 The elite’s image of the masses’ trust in leaders of institutions 182A3.2 Mass public and the elite with no or little confidence in

institutions 183A5.1 Selected economic and social indicators for the Russian

Federation, 1990–1998 184A5.2 Individualism and collectivism among regional elites, in

1998 185A6.1 Elite attitudes to controlling tax incomes 186A6.2 Elite support for special agreements and federal law 187A9.1 Length of membership in the CPSU 188A9.2 Former status in the CPSU 188A9.3 Elected as a deputy of a Soviet legislative body 189

Chapter Title ix

Preface

Seminal events, like major wars, the demise of empires and the fall ofpowerful regimes shape new historical epochs. The fall of communismrepresents such a change of epoch that not only affects those who weredirectly involved in the previous Soviet dominated area but have universalsignificance. We have now just started to envisage the consequences ofrestructuring the world political sphere from ideological confrontations tothe politics of handling uncertainties in which weakened post-communiststate power is seeking new forms of legitimacy. In this continuously morepluralised world the ruling elites need a political foundation that goes deeperthan formal institutions and power instruments. Only internalised valuesamong the broader leadership provide the basis for a minimum level ofpolitical integration and joint actions, and this is what this book is about.Using Russia as a case, the purpose is to analyse the emerging post-communist political culture among the elites, and I will also discuss itscauses, how it is forged by past legacies and new policy visions, and whatconsequences elite orientations have for the emerging Russian state.

During 1989–90 I became involved in a wave of events following thebreakdown of the Soviet Union. My first interest and concern was thestruggle for independence of the three Baltic states that had been occupiedby the Soviet Union a generation before. The regained independence and thereorientation of these states towards democracy and market economyspurred a still ongoing project on Baltic elites. While these small states feelclose, the most nearby resident is the Russian Federation with whomNorway shares a common border in the north. During the long period of the‘iron curtain’ this border was completely closed but has in the new epoch ofpost-communist Russia become a door for mutual exchange between oursocieties.

Although relations in the North are important for coping with commonregional problems the main objective of this study is broader and hopefullyprovides a better understanding of what goes on among Russian nationaland regional elites more generally and what policy trajectories the elites maystimulate or obstruct. Obviously, their orientations and behaviour, their‘political culture’, have consequences for Norwegian–Russian relations and

x Preface

provides one justification for this book. However, the main reason is myfascination for how political culture relates to policy reforms. The reformsinitiated by the top rulers and how they confronted the national and regionalelite’s orientations I argue became decisive to the political, economic andfederal compromises following the collapse of communism. The Kremlinleadership had to cope with unprecedented pluralised elites whose politicalculture and behaviour is crucial to an understanding of the viability andfuture of democratic, economic and federal reforms. The orientations andbehaviour of Russian elites reflects not only the past but also the experiencesand uncertainties arising from the shock-like reforms and weak formal stateinstitutions of the last decade. This ‘contradictory’ elite culture may beinterpreted as an anomaly. However, as this study argues, the Russian elites‘link’ values of centralisation and decentralisation that made the new epochpossible and will have a major imprint on the coming decades not only onRussia but also on an increasingly interrelated political and economic world.

Yeltsin’s decade in power was a time of elite fragmentation. I argue thatPutin’s centralising policies were a response to a widespread desire amongfrustrated elites. The challenge of the Russian leaders is to strike the delicatebalance between functional pluralism and beneficial centralisation furtheringco-ordinated leadership. Responsible elites and the tremendous naturalresources of the country are the main factors for developing a democraticstate, not necessarily of a Western type, a prosperous economy and aprominent role in the world. I hope this book may contribute to a betterunderstanding of Russia’s potential as a state.

Anton SteenOslo, March 2003

Chapter Title xi

Acknowledgements

This book is the product of a long period of work and I am indebted toseveral persons for their assistance and help during the process. I amthankful to Arne Kommisrud who in the very early phase contributed toputting this project on track and to John Higley whose advice encouragedme to publish the results in a book and has also contributed with valuablecomments and suggestions for improvements. My gratitude goes to thefollowing who commented on the whole or parts of the manuscript: HelgeBlakkisrud, Vladimir Gel’man, Jørn Holm-Hansen, Paal Kolstoe and DavidLane. Knut Andreas Christophersen and Kersti Heloe helped with computerrunning and technical assistance, and Thomas Devold was my assistantduring the initial part of the project. Melanie Nickel was always prepared tocopy-edit various versions of the chapters. This project would not have beenpossible without the professional expertise of ROMIR (The Russian PublicOpinion and Market Research Company) who carried out the interviewswith national and regional Russian elites. The assistance of all these scholarsand experts was indispensable for improving the various versions of earlierdrafts, however, the responsibility for the final result remains totally mine.

The project was originally named ‘Governance and economic developmentin Russia: the role of the elites’ and I hope the results reported provide abetter understanding of the elite’s role in shaping new governing andeconomic institutions. Another report from the project is an anthology withcontributors from Russia, USA, UK and Norway which I co-edited withVladimir Gel’man called ‘Elites and Democratic Development in Russia’.Many thanks to the ‘Cooperation Programme with Central and EasternEurope’, conducted by the Norwegian Research Council, for the grantwithout which the project and books would not have been possible and to myown institution, the Department of Political Science at the University ofOslo, which as usual provided excellent working conditions.

xii Author

1 Russian elites and the tripletransformation

Introduction

After the fall of communism widespread optimism among the new leadersflowed from a belief that instituting a pluralist democracy, a market economy,and a decentralised government would quickly bring major benefits. However,effecting this triple transformation meant dismantling an all-encompassingstate while at the same time implementing sweeping procedural and policyreforms that would maintain the support of broader national and regionalelites. It was no surprise that such an unprecedented undertaking soon cameinto conflict with the elites’ traditional beliefs and behaviour and thereforeran into major difficulties – often as a result of the lingering legacy of thepast regime. At the same time, the main aims of the reform programme itself– democratisation, privatisation and the decentralisation of power – erodedthe necessary state instruments for successful reforms.

While both the historical perspective and the state’s capacity to rule arecertainly important, the main purpose of this study is to analyse thecontemporary political culture of the post-communist Russian elites, arguingthat their orientations account for the trajectories of political and economictransformation and the prospects for the newly emerging Russian regime.More specifically, the questions of this book are first: What characterises thepolitical culture of the national and regional elites? To what extent did or dothe elites form a coherent political culture under the regimes of Boris Yeltsinand Vladimir Putin? And to what extent is this culture congruent with thepolicy visions of the Kremlin leaders? Second, does the post-communistpolitical culture ensue from the legacy of the past, from new institutions orfrom post-communist learning? Third, I discuss some implications ofpolitical culture on the new Russian state, a state that is still in the process oftransformation.

The void of post-communism

Basically this book is about how political culture relates to institutions, bethey historical or new. Nettl (1967) maintains that two distinct types of

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‘culture’ serve as the basis for political systems: a constitutional or formalnorm culture and an elitist culture in which social interaction takes prece-dence over institutional structures and where political authority derives frompolitical elites. One implication, as Nettl (1968) argues, is that politics maybe defined as ‘an area of normlessness’ (p. 588) where a political vacuum isfilled by contending norms that elites argue are legitimate for society as awhole. Certainly, ‘normlessness’ would seem to be an apt description of thepolitical culture that has filled the void left by dismantled communistinstitutions. Linz and Stepan (1996) maintain that the quandary in whichRussia finds itself today is due to a persisting distinctly post-Sovietmentality, which helps to explain the lack of elite commitment to democraticrule. I argue, on the other hand, that the elites’ attitudes and behaviour haveemerged mainly from the transformation itself. Thus, the extent of eliteintegration or conflict is determined by confrontations, alliances, uncer-tainties, and opportunities generated by the simultaneous transformations ofthe governing system and the economy.

The concept of ‘political culture’ may be used in various ways. Here Iintend to map attitudes to governance and the economy and the behaviourof the elites and argue that this culture forms the basis of the emerging post-communist Russian state. Accordingly, although reforms were initiated bythe central executive leadership around the President, in fact the nationaland regional elites have been the crucial strategic actors in reshaping Russia’seconomy, democratising its political system and decentralising its adminis-tration. As a result, conflict has ensued mainly from discrepancies betweenthe attitudes of national and regional elites and the policy objectives of theKremlin leaders.

As elaborated in the next chapter, the actors studied comprise those whodirectly or indirectly influence policy-making. National elites include deputiesin the State Duma and Federation Council and the leaders of ministries,state enterprises, private business companies and cultural organisations,while regional elites include political and administrative leaders in theregions. The distinction between the Kremlin leadership and other leaders inparliamentary bodies, the bureaucracy and regional leaders was also impor-tant during periods of authoritarian rule in Russia and the Soviet Union.Even then the reform programmes of the national leadership to a largeextent depended on support from lower level elites, and with democratisationand decentralisation the significance of this buttressing has increasedtremendously.

As Przeworski (1991) argues, post-communist reform policies are basedon a strategy of control from above that does not envisage broad partici-pation or, consensus among all affected interests or compromises. Yet at thesame time the policy leadership needs political support that will moderate –or if lacking – undermine the reforms. In the following I argue that anexamination of the content and extent of uniformity of the attitudes of thenational and regional elites goes far toward explaining the emergence of a

2 Russian elites and the triple transformation

specifically Russian type of democracy, why many economic reforms tookother paths than those expected by Yeltsin’s advisers and why the RussianFederation has wavered between a decentralised and a re-centralised struc-ture. Discovering the attitudes of the elites and how homogeneous they arehelps us to understand their political psychology better and provides someclues about why the liberal policies of the Yeltsin reformers proved to besuch a volatile experiment, while Putin’s administration has apparently beenmore successful in putting in place a rather unique Russian regime which hasdeveloped from an unprecedented mixture of the three reform projects.

Putnam (1973), in his study of parliamentary deputies in Britain andItaly, maintains that the elites’ beliefs constitute important elements of thepolitical culture of a country, guide political action and form the basis of thepolitical system.1 One may argue that in post-communist Russia longtraditions of elite rule were simply continued (though not necessarily by ‘old’elites) in the context of new and weak institutions, thus creating legal andinstitutional uncertainties. As Baylis (1998) argues, in such circumstanceselite personalities are apt to play an unusually prominent role in politics.

It is widely argued that the elites who held power in Russia after 1991inherited both a specifically Soviet political culture and institutions andnotions dating back to the pre-Soviet period. The reforms thus collided withthe legacy of Russia’s past and this inheritance was the context in which thetriple transition in economics, politics and the federal governing structureunfolded. In other words, old collectivist orientations clashed with opportu-nity structures emanating from the radical top-down initiated reformprojects. At the same time, new organs of political representation, theprivatisation of state property and the newly decentralised governmentalstructures institutionalised uncertainties and provided favourable circum-stances for elites to reorganise, formally and informally, in ways that madeco-ordinated governance and policy implementation hazardous and unpre-dictable.

The focus of this study is mainly on patterns of elite orientations andbehaviour, but also on how they are shaped and their consequences forpolitical stability and the rebuilding of the state. I argue that the impact ofthe legacy of the past may be overestimated. First of all reforms and newinstitutions created massive uncertainties and unintended consequences inthe exercise of power, in the policy trajectories and their implementation thathave been formative for the elites’ reorientations and hence on the process ofstate-building in Russia. After the turbulent Yeltsin years, where a dramaticsplit emerged between ambitious Kremlin leaders and confused elites, Putin’smain achievement has been to soothe the political process by bringingreforms, political structure and the elite’s political culture into closer corre-spondence. Certainly, post-communist Russia is a fascinating laboratory tostudy Nettl’s (1968) thesis of how elite preferences and interaction takesprecedence over institutional structures, therby filling a political vacuumwhere state authority derives from elites.

Russian elites and the triple transformation 3

Transformations and the elite’s responses

Just before the demise of the Soviet regime a series of reform ideas waspresented in the ‘500 days programme’, elaborated during 1990 by a group ofliberal economists in Michael Gorbachev’s administration. The programmemade explicit the close connection between economic reform, democrati-sation and decentralisation of power, arguing that

Economic reform is impossible to implement with orders from theCentre. . . . People no longer want to tolerate a situation in which keydecisions that shape their lives are made without participation. Thecentral role in the transformation is given to the governments of therepublics and to local authorities.

(Aron 2001: 402)

While Gorbachev hesitated to go ahead with the programme because ofopposition from the conservative establishment, Yeltsin argued that themoment should be seized without delay, and shortly after he was electedPresident he returned to the programme with strong determination. However,since the programme was presented within the framework of the USSR,Yeltsin was soon confronted with the dilemma of first dismantling the statebefore the programme could be implemented.

Although each task in the programme was in itself an enormouschallenge, Boris Yeltsin and his team argued that since all the problems wereinterrelated the project needed to be tackled as a whole. If the old politicalinstitutions were not dismantled and power decentralised to the regions, theyreasoned, privatisation of state property and market institutions would notbe possible. As Elster et al. (1998) underline more generally for EasternEurope, the historically unique simultaneity of the transition to democraticrule, reorganisation of the economy and the consolidation of nationalterritory meant that no existing model for their implementation could berelied upon. In the article ‘Capitalism by democratic design?’ Offe (1991)argues that the very simultaneity of the three transformations ‘generatesdecision loads of unprecedented magnitude’ (p. 871). The reforms would notonly obstruct one another but also constituted an open invitation foropportunism. In other words, the power elites were in a position to constructpolitical and economic institutions to their own advantage.

What is more, Yeltsin’s decision to give priority to economic restructuringover political reforms, Linz and Stepan (1996) argue, weakened the state, thedemocracy and the economy. Because the reforms were highly intercon-nected and had widely different time horizons they produced unexpectedinteraction effects and outcomes. In this extremely uncertain environmentelites had to recast their mental horizons and create a ‘political psychology’suitable for tackling unprecedented problems. The purpose here is to analysehow the elites responded to these uncertainties.


The basic premise of this study is that the attitudes of the Russian elitereflect a specifically post-communist political psychology, emanating bothfrom the new opportunities offered by liberal policies and institutions andfrom a more ingrained cultural legacy. Thus, the orientations of the elites arethe critical filter of the tripartite reform programme ordered by the Kremlinleaders. Because the Kremlin policy elite are vastly dependent on the lower-level elite’s support and loyalty, the latter’s attitudes have been crucial for thecountry’s recent economic reforms, the type of democracy that has emergedand the capacity of the federal administration to govern. I argue that fromthe early 1990s onwards the elites were subjected to strong cross-pressures thatemanated from impatient Kremlin policy leaders and their political allies, frompopular discontent, and from clever and vigorous business and other sectoralelites who took advantage of a weakened state to enrich themselves. Thesecross-pressures fragmented the elite and resulted in many unexpectedcoalitions and policy outcomes. To this extent, popularly elected, administra-tive, business, regional and other decision-makers became ‘strategic elites’ whocontrolled the levers that determined whether reforms would be realised.

Obviously, elite games during the 1990s were harsh and ruthless but doesthis necessarily mean that their basic orientations were at odds? I argue thatthe vertical clashes of preferences between the reforming Kremlin leadershipand other elites, in particular the State Duma during the Yeltsin era, shouldbe distinguished from horizontal conflicts among national and regionalelites. To what extent these elites’ orientations diverge and in which areas areempirical questions and the topic of this study. I argue that both theturbulent Yeltsin period and the more orderly Putin era may be explainedby the rather homogeneous and traditional orientations among a broadsegment of national and regional elites.

While the elites express preferences for certain political institutions andpolicy solutions, they also ‘construct realities’ about what their decision-making environments should look like. This canvas of interests and cognitivepredispositions forms the background for political action. The purpose hereis also to investigate the Russian decision-making culture, asking whether theelite perceive decision-making to be taking place in a legal-rationalist orclientelistic culture and to what extent they take part in networks.

Thus, the intention is not to investigate actual decision-making. The linkbetween attitudes and actions is in any case extremely difficult to determine,particularly when elites other than the strictly ‘political’ are included. Theaim is rather to illuminate a certain post-communist elite belief system. I wantto investigate the level of regime support and orientations toward democracyand authoritarianism, market and state, decentralisation and centralisation,clientelism and legalism and network behaviour and how these patternsrelate to the various Kremlin leaders’ efforts to organise the polity and imple-ment economic reform policies.

The basic questions, then, are how legitimate and stable is the post-communist Russian regime? What type of democracy is taking root? What is


the link between democracy and the market economy now that the centraleconomic planning system has been dismantled? What will be the role of thestate and the market? What model of territorial integration and sharing ofresponsibility between governing levels is to be followed in the future? Andwhat type of decision-making characterises elite thinking and behaviour?The elites’ values, perceptions of realities and reported behaviour presum-ably will provide some clues and, I argue, taken as a whole will illuminate thepolitical basis of the emerging Russian state.

The Russian elites: fragmented or integrated?

Russia’s central leadership and its national and regional elites have by nomeans constituted a unitary formation since 1991. Controversial reformsand new decision-making structures have split the elites both horizontallyand vertically, a fragmentation manifested in numerous deep, and some-times quite brutal, conflicts and power struggles (Higley and Lengyel 2000).As David Lane (2000) indicates, there were no clear-cut alliances or basiccleavages between elite groups. Elite divisions may rather be characterisedas constantly changing and are as unpredictable as pragmatic interestsdictate.

Nevertheless, the widely differing recruitment paths and conflicts do notnecessarily imply a fragmented elite when it comes to basic orientations. Iargue that the broadly coinciding elite beliefs about institutions and policiesfound in this study in fact suggest a rather integrated elite, though not oneunited by consensus. A consensual elite, like those in most Western countries,places boundaries on destructive games, owing to its internalised norms ofmutual trust and legitimate institutions. In Russia, consensual elite relationsstem not from a common feeling of agreement about the codes for politicalcompetition but from loyalty to the national sovereign – the President.Under communism loyalty could be controlled by the use of force oreconomic incentives. When such mechanisms are weak or absent, theKremlin leadership either has to confront the national and regional elites ormoderate its policies.

While elite conflicts over the market economy, democratic functioningand federalism have inhibited Russia’s progress greatly since 1991, elitebehaviour has also changed. During Boris Yeltsin’s presidency, intense con-flicts between the presidential entourage and the Supreme Council and laterwith the State Duma were a key feature of the elite configuration. Why, then,did elite relations become generally more harmonious after Vladimir Putintook office? A commonly held view is that Putin’s authoritarian ruling stylesimply inhibits opposition. Alternatively, one may view Putin’s regime as aresponse to a widespread wish among the national and regional elites for lessradical policies and more resolute leadership. Vladimir Gel’man (2003)characterises the peaceful elite relations under Putin as ‘imposed consensus’,a major tool for re-integrating the elites. As the editor of the Russian daily


Izvestia explains: ‘Traditionally, Russia wants to see a leader with a stronghand . . . but at the same time, it wants this person to have some democraticconvictions’ (Newsweek, 19 November 2001). Putin was ideally suited for theparadoxical combination of authoritarian and democratic values in Russiansociety.

Thus, the widely held picture of conflicting national and regional elites ischallenged in this study. I argue that although behaviour may be antagonisticand there may be voracious competition for positions and resources, themain issue is to what extent the elite agrees on basic values related to thepolitical regime (type of democracy and federation) and distributionalregime (the balance between state and market). Their support for informalpolitical and administrative practices (clientelism and personal networks) isan alternative to government by ‘dictatorship of the law’ or Western-style‘rule of law’. Such institutions function merely as a façade for informalpractices (Gel’man 2003), but their consequences may be not only arbitraryrule from the centre but also more elite autonomy. Obviously, there existedmajor conflicts between the executive and other elites during Yeltsin’s periodas president. However, these conflicts between reformers and other elites donot necessarily imply antagonism among elites in legislatures, administrationand business.

Of special interest is what the data reveal about the restored politicalhierarchy and recentralised government that Vladimir Putin has sought toinstitute since assuming high political office in 1999 and 2000. I argue thatwhile the elites’ support for Putin’s regime is based on their desire for afirmer political hand, it does not constitute servile submission to Kremlinrulers. New formal democratic institutions and informal practices sheltertheir powers, and because they constitute the political basis of Putin’s regimethe national and regional elites continue to be primarily an independentforce shaping the future of Russia.

Reforms and counter-reforms in Russian history

Waves of upheavals and counter-reactions oscillating between more or lessauthoritarian regimes are not a new phenomenon in Russia. In a book writtenin the late Soviet period Alexander Yanov (1987) maintains that Russianhistory through the centuries can be described in terms of frequently occurringcycles of stagnation, reforms and counter-reforms, where the outcomesdepend on the Kremlin’s relations with national and regional leaders.

He illustrates how various ‘regime crises’ have often provided the impetusfor such cycles, citing as examples the political and economic reforms of PetrStolypin under Tsar Nikolai II in 1905 and Gorbachev’s reform policiesfollowing the stagnation period under Leonid Brezhnev. He argues that whilea ‘systemic crisis’ like the one of 1917 binds the leadership in certain verystructured ways, regime crises nevertheless allow the leadership variouschoices. Thus, the Russian leadership chose to counter the stagnation of the


Brezhnev era with a programme of restructuring and political moderni-sation, but Russia could equally well at that point have entered into a phaseof increased despotism and a more closed system, as happened in 1929 andunder various Tsars.

‘Systemic crises’ are rare in Russia, but when they occur they are followedby major and ultimately irreversible changes, like those brought about by theOctober Revolution of 1917, which ensued from the February reforms. If weaccept Yanov’s premise, how should we then interpret the 1991 demise ofcommunist rule, Yeltsin’s erratic reform policies and Putin’s swing back to amore authoritarian political style and state-oriented economic policies?

Whether the regime change of 1991 was a systemic change of the samekind as that of 1917 is a matter for debate. The ‘success’ of communistideology was largely dependent on the ruthless use of state violence andindoctrination that destroyed the Russian middle-class and profoundlychanged basic ways of thinking among the people. Yeltsin’s problem was toreform Russia in a liberal context. Carrying out painful reforms while at thesame time dismantling the state increased the power of the national andregional elites enormously so that little could be achieved without enteringinto co-operation and compromises with these groups. As Yanov says, theliberal economic reforms in the late Soviet period consisted largely ofrhetoric without any serious political strategy for their implementation.This made the top leadership dependent on the national and regional elites,who controlled the institutions and mechanisms for putting its policies intoeffect.

In Russia major segments of the previous elite were transplanted whole-sale into the new regime so that, compared with other post-communistregimes, there has been a remarkable degree of continuity in the Russianelite. Although the political and economic system changed substantially andyounger, reform-oriented people were recruited into some of the commandpositions, the cast of actors and operators from the previous system remainedmore or less intact and simply circulated from one position to another.Therefore, Yeltsin’s bold plan for a triple transition was hampered from theoutset, because the national and regional elites who were supposed to imple-ment the reforms did not have a proper understanding of liberal ideas ofdemocracy and economy, thus constraining the government from imple-menting its self-proclaimed liberal ideology.

The reformists, with their all-too-idealistic image of the Western model,claimed that a reduction in state responsibility and intervention wouldautomatically nurture new attitudes and behaviour among both the elitesand the population. When these positive effects failed to materialise Yeltsin’sresponse was to sack leading members of the central leadership, in particularthose in the cabinet, who seldom remained in office for longer periods.Representative institutions, capitalism and decentralisation made the elitesmore difficult to control. However, the centre tried to compensate for this by


negotiating deals with the governors and cultivating the support of thefinancial oligarchs. Nevertheless, the economic disaster, the fragmentingtendencies of the Russian Federation and the weak presidency could notcontinue indefinitely, and as the 1990s drew to a close pressure for politicalchange was building up.

Tim McDaniel (1996) regards Yeltsin’s top-down reforms as a strangecombination of traditionalism and modernisation that has a number ofprecedents in Russian history. The superior ability of the ruler fused withtechnocratic ideas of social engineering creates a type of ‘surgeon state’.A contradiction arises when this type of state deprives itself of theinstruments to govern, thereby undermining both democracy and capi-talism. Yeltsin not only broke with the idea of the omnipotent state,2 he alsodeparted from the more traditional images of the state held by the nationaland regional elites. McDaniel argues that Yeltsin could have broken withthe classical logic of failure of reform in Russia if he had presented a visionof the future that linked reforms with adjusted notions of state responsi-bility for equality and welfare, thereby connecting reforms and traditions.What type of political system might emerge from such a double strategy isquite open. As Richard Sakwa (1998) argues, a wholesale transformationfrom the past that still takes account of historic traditions is conduciveneither to liberal democracy nor authoritarian rule but is something quiteunprecedented.

Yeltsin burnt his bridges to the past by entering into a massive confronta-tion with both the elites and the general population. Putin’s achievement hasbeen to use the state to rebuild confidence among the elites. Combiningtraditional Russian ideas of strong leadership with state responsibility forlaw and order and people’s welfare created a political atmosphere of stabilitywithout undermining the elite’s newly won political and economic oppor-tunities.

If the Russian experience of democracy, decentralisation and a marketeconomy was so discouraging, why did a full-fledged ‘systemic change’ notoccur, for example in the form of a military take-over supported by broadsections of the elite, the population and the Communist Party? Putin’saccession as President in March 2000 represents a counter-force, but withinthe context of pluralist power-sharing as formulated in the RussianConstitution. In fact Putin’s take-over as President was orchestrated byYeltsin. As a political realist he saw that while liberalism could not work inRussia without the support of the elites, neither was it possible to return toSoviet-type centralisation. Putin was authorised to use the power of thePresidency to find a ‘third way’ of political and economic development. Thereaction is quite understandable because it is in tune with the Russian idea ofa strong ruler responsible for order and economic redistribution who alsorespects the wish for some degree of independence by the elites and the needto decentralise power to the regions.


Elites, power and regime

If elites are regarded as crucial actors in political and economic develop-ments, it is essential to be clear about their characteristics and the reasonsfor their importance. The social science literature dealing with elitesaddresses three main questions: Who are they and how unified are they?How important are they for democratisation and policy outcomes? Andwhat forces shape the elites?

The question of what constitutes an ‘elite’ has been answered differentlyby what might be conveniently labelled the ‘power school’ and the ‘plural-ists’. Building on the classic works of Mosca, Pareto, and C. Wright Mills,the ‘power school’ asserts the existence of an integrated governing or powerelite that controls any modern country’s political regime and makes all mainpolicy decisions. While there are other and contesting elite groups, thesemanage to influence only secondary aspects of government policy. Thisthesis of a core elite has been challenged sharply by scholars who depictelites in modern democratic systems as much more pluralistic (Dahl 1961,1971). In their view, there is no dominant or integrated elite but ratherconstantly shifting constellations and coalitions of more or less equallypowerful and organisationally distinct elite groups. Elite configurations varyand co-operation is determined not by common ‘elite interests’ but by thetype of government policy that influences the interests of various elite groups.While the pluralist model of elite behaviour is rooted in societal interests andis posited on long-term experience with Western democracies, the conditionsfor post-communist elites are quite different. Because Russian democracy isnew and its elites cannot clearly be classified along socio-economic cleavages,the question of elite differentiation remains an open one to be exploredthrough empirical research. One major purpose of this study is to provide amore informed answer to the question of the extent to which elite pluralismis developing in Russia.

Higley and his collaborators have sought to combine these opposingperspectives by arguing that political elites in stable democracies are, in fact,both strongly integrated and widely differentiated or pluralistic (Higley andBurton 1989; Higley et al. 1991; Higley and Pakulski 1995). They contendthat such ‘consensually integrated’ elites are a stable democracy’s sine quanon. In several of their most recent writings (e.g. Higley and Lengyel 2000),they have depicted Russian elites as falling well short of consensual integra-tion during the 1990s, although they base this assertion on the scatteredobservations of numerous specialists on Russian politics and not on anyconcrete data that actually measure how near or far the elites are from con-sensual integration. There exist numerous theoretical and empirical studiesabout elite pacts and regime change, but few solid conclusions have so farbeen drawn about the elite’s political culture and its long-term consequencesfor democratisation in Russia.3


While the elite theories maintain that elites are the decisive force for regimechange and democratic development, others argue that the elite is but one ofseveral major variables shaping political and policy outcomes. In Samuel P.Huntington’s well-known formulation, elites may be the most proximatevariable, but other variables – such as the level of economic development,institutional configurations, a population’s cultural homogeneity or hetero-geneity, etc. – must also be taken into account (Huntington 1991: 37). Inparticular, scholars who adopt a neo-institutionalist approach regard politicaloutcomes and economic policies as the products of formal rules andinternalised norms that leave relatively little room for elite choices. In thisview, the behaviour and orientations of the elites reflect bonds of loyalty toorganisations and institutions erected by the policy leadership. In the Russiancontext, the new organisational-institutional matrix that has followed the1991 transition will gradually produce new modes of elite behaviour andorientations. But if this is so, why have reforms been impeded more oftenthan not?

A third, socially deterministic school in elite studies portrays elites asmirrors of societal and economic conditions. The Marxist wing of this schoolregards the social composition, actions and orientations of elites as mirroringthe unequal power balance between the ruling and the oppressed socialclasses. Another wing takes a less rigid and simplistic view, portraying elitesnot so much as mirroring social class relations but as being shaped by path-dependent historical and cultural trajectories. This theory of the significanceof past legacies and institutions has gained widespread popularity amongscholars analysing ‘the failure’ of the Russian economic experiment (Hedlund1999). Others who prefer a softer variant of this hypothesis argue thatelements of the legacy of the past may merge with new opportunities tocreate beneficial economic exchange networks that are different from both themarket economy and state control (Stark and Bruszt 1998).

Elite renewal

One of democracy’s defining characteristics is that elites do not constitute amonolithic, ideologically united group but instead are pluralistic and partlyautonomous from one another and are prepared to compete peacefully forpolitical power. In democracies the behaviour and orientations of the eliteare tied quite closely to their positions in the political hierarchy, their insti-tutional affiliations and the categories of supporters they seek to mobilise.From this perspective, the demise of the conspicuously undemocratic Sovietregime presumably involved the replacement of an ideologically united andsharply hierarchical set of elites with a plurality of elites located inside andoutside the state sector who competed peacefully with each other for domi-nance in a democratic ‘game’. This, at least, is what theories of democratictransition lead us to expect in the Russian case. Certainly since 1991 Russian


elites have not displayed the marked outward unity that was characteristic ofthe Soviet period until at least the mid-1980s. But neither have their post-1991 behaviour and orientations coincided with the kind of ‘game-ruleconsensus’ that is thought to be characteristic of elites in stable democraticpolitical systems.

Some scholars have analysed the extent of elite change between the Sovietand post-Soviet periods in terms of continuity and renewal, that is, whetherthe old Soviet elites were replaced by entirely or largely new elites. One well-known finding is that elites who headed the old nomenklatura structuremainly rotated their positions before and after 1991, so that in this area atleast evidence of wholesale elite renewal is mostly absent (Kryshtanovskayaand White 1996; Mawdsley and White 2000). Another well-known finding is,however, that in the uppermost political positions there was, in fact, somerenewal, with younger and better-educated reformers displacing the topechelons of the procrustean Soviet elite (Lane and Ross 1999). It seems clearthat marked elite continuity overall, coupled with significant elite change inkey political areas have both been important features of Russia’s democratictransition.

Although the elite’s social biography is interesting, insofar as the relation-ship between recruitment and orientation is a vague one and often previousregime supporters are found to have adopted a very liberal orientation, it isevident that orientation and behaviour are not simply products of people’sbackgrounds and previous positions. In this study, at any rate, the actualorientations of Russian elites are accorded greater importance than theextent of their continuity and renewal.

During the 1990s the elite were composed of generally young, neo-liberalreformers who gathered around Boris Yeltsin and who staffed much of hispresidential administration. Their overriding goal was economic reform andtheir importance lay in initiating market reforms, especially the privatisationof state property. However, this elite lacked the means for implementingtheir reforms in any comprehensive way. At the same time, two other sets ofelites acted as major brakes on the reform process. One was the key power-holders in the array of political, economic, administrative, media and otherinstitutions at the national level – what I call the national elite. The other wasthe parallel array of power-holders in Russia’s 89 regions and autonomousrepublics – the regional elite.

The problem has been that the new representative institutions providedfor by the Constitution adopted in late 1993, the ‘oligarchisation’ of theeconomy and the erosion of central power to the regions that accompanied –some would say ensured – Yeltsin’s rise to power after 1989 fragmented boththe national and the regional political elite quite severely, leaving few of theirmembers with strong incentives to implement the reform directives emanat-ing from the Kremlin leadership. Basically the change of regime constituteda reallocation of power away from an ideologically integrated core elite in


favour of autonomous elites, bringing us to the important question of howintegration of elite orientations relates to basic societal structures andpolitical stability.

Elite culture and political stability

In all societies political stability rests on a minimum level of normativeintegration among the elite. Almond and Verba’s (1965) classical analysis ofcivic cultures maintains that political stability rests on the extent to which apolitical culture is ‘congruent’ with the structure of the polity, or in theirown formulation: ‘Each kind of polity – traditional, authoritarian, anddemocratic – has one form of culture that is congruent with its own structure’(p. 33). Later, the idea of compatible cultures sustaining political stabilityhas been elaborated and classified by Douglas and Wildavsky (1982).Molenaers and Thompson (1999), for example, argue that political culturemay be essentially categorised into four main types of social integrationbased on ‘individualism’, ‘hierarchy’, ‘egalitarianism’ and also ‘fatalism’.Stable democracy emerges from a certain mix of the four cultures and thesame can be said for viable economic performance and functional federalgovernance. They argue that if only one culture dominates the result will beextremism and fragmentation. For post-communist Russia, I argue, politicalstability and state formation may be explained by the elite’s support to thesetypes of political cultures.

Harry Eckstein’s ‘congruence theory,’ with its more explicit elite focus,maintains that political stability follows when elite attitudes are congruentwith authority patterns characteristic of the society in question. WhileEckstein’s original theory was concerned with congruent values among elitesand hierarchically subordinate social groups (Eckstein and Gurr 1975), theidea of ‘congruent authority patterns’ may also be applied to vertical relationsbetween the Kremlin leaders and institutionally defined elite groups at thenational and regional levels. As mentioned above, this is also the ideaunderlying Higley and his associates’ argument about elite integration anddemocratisation, of which ‘consensually integrated elites’ are just one typeconducive to political stability.

During the 1990s the Russian elites were obviously in severe conflict overpolitical issues and competing for access to positions, so elite unity wasweak. Nevertheless, regular elections took place, albeit not always in keepingwith Western standards. Higley and Lengyel (2000) argue that by the end ofthe decade the Russian elites were severely fragmented and that Russia couldtherefore best be described as an ‘unconsolidated democracy’ with thepotential for a more authoritarian regime. In their view Russian elites remainseverely fragmented, engaging in unchecked political struggles that approxi-mate zero-sum games. But if this is so, why has no major elite group to dateclearly violated or sought to destroy the formal democratic procedures that


were adopted a decade ago and that, by and large, appear to have beenstrengthened in the years since? The aim of my study is to describe theunderlying value patterns among the Russian elite that sustain a specific typeof democracy and economic system that is ensuring stability.

Since government is composed of elite groups, one has to look for varia-tion in authority patterns among elites. In particular, intra-state congruenceamong different levels of the elite is supposed to have a stabilising effect.Political stability will follow when elite groups are in agreement aboutcommon norms and modes of interaction, although these may not neces-sarily live up to the standards of genuine democracy. It seems rather obviousthat the main achievement of Vladimir Putin was to establish a largelyconservatively orientated consensus among the elites, thereby breaking thedevastating stalemate between the Kremlin leadership and the elites that hademerged under Yeltsin. According to this perspective, ‘congruence’ betweenelite levels becomes more important for political stability and economicprogress than the actual ‘democratic content’ of their orientations.

The focus on orientations and values may suggest to some readers thatthis is a ‘culturalist’ analysis. However, I do not regard historical traditionsand early socialisation as shaping elite orientations and values in anycomprehensive or uniform way. Elite orientations and values are shaped justas much by new opportunity structures and responses to political and policydilemmas that arise during reform processes. I do not reject the legacy of thepast – on the contrary it may account for much of the elite’s attitudes andbehaviour – but the salience of traditions must be seen in connection withhow radical reforms are and what social impact they have. Elites do notsupport or oppose reforms in a vacuum, that is, without paying attention tothe problems to be solved and the effectiveness of the policies proposed bythe central elite. Moreover, they interact amid much uncertainty, so that thesuccess or failure of reforms must also be viewed as the result of eliteattempts to grapple with uncertainty and find solutions to highly novelproblems.

One main theme in my analysis is that, because of the uncertain and novelcircumstances in which they find themselves, national and regional elitesinevitably differ in how they respond to the reforms promoted by key powerfigures. This means that reforms initiated by the policy leadership inevitablyrun into trouble. During the 1990s the strength of commitment to marketreforms, fully representative political institutions and decentralisedgovernment varied greatly among central and regional elites in Russia. Theproblem the uppermost elites in Moscow faced was how to persuade orcompel many other elites, both at the centre and in the regions, to bear thecosts of reform and to accept the demolition of collective institutions inwhich elite power and much relative elite security had long been anchored.As we shall see, this was no small task.

Their political discourse might be analysed through an examination oftheir speeches, other public utterances and sundry documents produced by


them. These could then be synthesised and arranged in broad categories.However, the elite’s political discourse can also be analysed through theanswers that representative samples of them, including political, adminis-trative and business elites on the national and regional levels give to specificquestions in survey studies of the sort that were conducted in 1998 and 2000.Although the transition process was chaotic and elite competition quitebrutal, the system did not disintegrate. The task is, therefore, to identify howcommon elite values keep Russia together while also protecting their newlywon opportunities, thereby preventing a return to authoritarian rule andcentral planning. Since the surveys cover the same or corresponding elitepositions under both Boris Yeltsin’s and Vladimir Putin’s periods in power, itis possible to investigate to what extent orientations coincide between elitegroups and whether they have altered from one president to another.

The structure of the book

The next chapter discusses the concept of ‘elite’ and how it is used in theempirical analysis and gives an overview of the data used in the elite survey.It also considers the methodological and technical challenges encountered ininterviewing elites, such as problems of representativity. Chapter 3 exploresthe issue of legitimate rule in Russia, asking to what extent elites have con-fidence in various institutions in politics, society and the economy andwhether they trust each other. In Chapter 4 the main topic is what type ofdemocracy Russia is and what the relationship is between democraticdevelopment and market preferences. Chapter 5 deals with the type ofeconomic system emerging in Russia after the introduction of the marketand asserts that a specifically post-communist type of mixed economy hasbroad support. The problems discussed in Chapter 6 are the new federalstructure and the centre–periphery relationships. I ask how the elitesappraise power-relations and functional divisions between the central andregional governments. Chapter 7 discusses possible explanations for theattitudes to democracy, economy and federation analysed in the previouschapters. Are elite attitudes influenced by relations with the executive and thestate’s capacity to cope with problems? Does the legacy of the past, suchas early socialisation or position in the Soviet system, matter? And howimportant is post-communist experience, including late socialisation andideological orientations?

The last two empirical chapters deal with decision-making cultures andthe consequences of the new regime for elite interaction. Chapter 8 analysesattitudes to legal-rational decision-making in contrast to clientelism andpatronage, asking to what extent the elites prefer ‘rational’ or ‘traditional’ways of decision-making. Chapter 9 focuses on elite behaviour in networks,investigating contact patterns between elites. Chapter 10, the concludingchapter, argues that the Russian elite’s belief system is conducive to theunprecedented post-communist regime currently emerging. This regime is


characterised by sympathy for strong leadership and state-led capitalism andsupport for democratic participation rights, small business and a ratherdecentralised federation, and it is underpinned by weak state instrumentsand informal decision-making mechanisms.


2 Defining and surveying elites

Introduction

Elite studies based on a sample of respondents and a large number of struc-tured interviews share some features with surveys that analyse representativesamples of a total population. In both cases, the samples are intended to saysomething about the universe of units. At the same time, elite surveys alsohave some distinctive features of their own as regards both respondents andsampling methods. Elite interviews provide a unique opportunity to study agroup of people occupying key positions of power and political influence.

One thing that distinguishes elites from respondents in a general popula-tion survey is that the social markers, attitudes and behaviour being studiedare those of premise-setters and decision-makers who, by the nature of theirformal position, have the potential to influence political outcomes. Thus,elite studies will be of special relevance in the study of politics and policy-making. Analysing the attitudes of important strategic actors can be assumedto yield a better understanding of how political processes are influenced and,ultimately, which preferences and interests may prevail in a given state.

In this study the elites are defined more broadly to include influentialfigures from a number of spheres other than politics. The term will be usedin the singular – the elite – to talk about the elite as such with shared propen-sities and interests; and in the plural – the elites – to indicate groups ofleaders, defined by institutional positions, and with varying opinions andbackgrounds. Common to the elites is that they influence political decision-making processes in some way, either directly or indirectly.

How integrated these elites are and whether there exists an identifiable‘power elite’ marked by continuity, cohesion and coinciding interests is, ofcourse, a matter for empirical investigation. This will probably vary, depend-ing on what issues are on the agenda and how specifically a set of issues isdefined. In a country like Russia, characterised by weak institutions, instabilityin political and economic relations and shifting elite alliances, the existenceof a unified power elite is likely to be more hypothetical than axiomatic.

After the change of regime the Russian elite became more verticallydifferentiated, so it is useful to distinguish between the ‘core elite,’ the

Chapter Title 17

‘national elite’ and the ‘regional elite.’ All belong to the elite in the sense ofoccupying key positions of influence at different, though not necessarilysuperior or subordinate levels. The core elite, or what may be called theKremlin leadership is to be found in the highest echelons of the powerhierarchy. In the case of Russia this would include the President and his chiefadvisors, members of the Presidential Security Council and members of theCabinet. While getting access to such leaders is extremely difficult, themiddle elites – the political and administrative leaders at the next level down– are generally more willing to be interviewed. From a methodological pointof view this may also be an advantage. These people represent greatercontinuity, as they are less likely to be shaken by the sudden gusts of windthat were particularly characteristic of political life in Russia during Yeltsin’speriod of government.

In the present study, what is termed the ‘national elite’ includes politiciansin the State Duma and Federation Council, leading officials in federalministries and the directors of state-owned enterprises and private businesses.They also include the ‘cultural elite,’ i.e. the heads of cultural institutions andleading figures in the mass media and education. The regional elite is definedgeographically and includes leaders at the regional and local levels. However,there is no sharp dividing line between national and regional leaders, sinceregional leaders are also represented in national decision-making bodies likethe Federation Council and the State Duma. In these cases only thoseleaders who have no position in the centre are classified as the regional elite.

One important aim of this study is to establish a better empirical foun-dation for determining how integrated or fragmented the elite’s orientationsare. Pluralistic elites are defined by a differentiation of roles rooted insocietal interests. The demise of communist rule was an institutional revolu-tion that gave rise to parallel transitions in politics, the economy and thefederal administration. While the elites are clearly operating within thesenew institutions, the question is what effect the institutional changes havehad on their orientations. The main object of this study is to map theseorientations and study how they may have changed over time. In analysingelite behaviour, I take a more indirect approach, asking respondents abouttheir contacts with other leaders in an effort to find out more about their‘network behaviour.’ This is important in a situation where hierarchicaladministrative structures are weak and respect for the rules of the game isshaky, for here elite networks may have a crucial role to play in keeping vitalstate functions running.

Seen in formal terms, variation in institutions would imply ‘elite-pluralism’in the sense employed by Dahl (1971). However, it is not possible to deter-mine, either in formal or in definitional terms, whether the elites arecharacterised by competition, as implied by a pluralistic model, or by closedco-operation, as a ‘power elite’ model would imply (Mills 1959). Furthermore,co-operation between elites may be clandestine and still involve a consider-able degree of competitiveness and conflict. A fundamental question is if the


Russian elite moves in the direction of ‘consensually integrated’ elites, asdefined by Higley et al. (1991), and compete for power and influence, whilesharing some basic values and a common interest in adhering to the ‘rules ofthe game.’ And, if so, are these rules and shared values of the same type asin established democracies?

Selection of elites

Elite surveys raise the question of which elites shall be included. The validityof the results will depend largely on the sampling of the respondents(Hoffman-Lange 1987). However, in seeking to cope with the complexities ofthe real world, elite studies necessarily involve a considerable number of adhoc choices when it comes to selection (Moyser and Wagstaffe 1987). In thisstudy, pragmatic considerations of who it is possible to include in a surveyhave been combined with more theoretical considerations about whichinstitutions are important in decision-making processes. The main selectioncriterion has been to include leaders from institutions with the greatestpolitical, administrative and economic importance. In the aggregate therespondents from different institutions constitute a rather representativesample of the national and regional elite.

In elite studies a distinction is commonly drawn between three approaches:the positional, reputational and case-study methods (Putnam 1976). Thepositional method assumes that actors with important formal positionsbelong to the elite. The reputational method holds that well-informedobservers can provide the necessary information on who has power. Whenseveral such observations coincide, this then indicates elite status. Underlyingthe case-study approach is the assumption that an in-depth study of one ormore central decision-making processes can reveal who has influence. Sincethe purpose here is to study the orientations of leaders who have aquiredpositions in certain institutions, the positional approach would appear to bethe most useful. Further, it is not difficult to argue that this stratum ofleaders directly and indirectly influences decision-making.

Structured, face-to-face interviews were conducted with 980 respondentsin leading positions in 1998 and 605 in 2000. The following eight institutionswere included, with the number of respondents in brackets: prominentpoliticians in the State Duma (100), members of the Federation Council(30), leaders in the federal administration and ministries (100), directors ofstate enterprises (50) and private businesses (50), leaders of educational,cultural and media institutions (50) and political and administrative leadersat the regional level (1998 (600); 2000 (225)). Owing to reduced researchresources, fewer members of the regional elite were interviewed in the 2000survey although it covered the same regional categories as in 1998.

Of the original lists of respondents (target respondents), one third couldnot be interviewed for various reasons. Some of the Duma members had notime or it was difficult to locate them. Some members of the Federation

Defining and surveying elites 19

Council were busy campaigning in their home regions, others refused to beinterviewed because of the political situation, while some still were onholiday in their home areas. A few directors of state enterprises also refusedto be interviewed, citing the hard economic times in their company.

If interviewing the person on the original list proved impossible, it wasgenerally simple to find leaders in similar or related positions who werewilling to be interviewed – either the heads of another Duma committee,another governor or head of a regional parliament in the Federation Councilor directors of other state or private enterprises. Alternatively, interviewswere held with their next in command: deputy directors and head of sectionsin the ministries; deputy directors in enterprises; and deputy heads ofparliamentary committees in the State Duma.

As far as possible the same or synonymous positions were covered in the1998 and 2000 surveys. Similar guidelines were followed in elite studiescarried out in Estonia, Latvia and Lithuania by the author (Steen 1997).However, the Russian elite survey also included a centre–periphery dimen-sion, which meant that regional elites were given a relatively broader repre-sentation. The selection of institutions and elites conforms with what havebeen defined as strategic elites (Keller 1972), which are separate from thecore elite. Such middle elites are institutionally diverse but all exerciseinfluence, directly or indirectly, on decision-making.

Religious leaders, artists, writers and media figures may also indirectlyinfluence decision-making process by pushing hot issues high on the politicalagenda through, for example, by informal contacts or media coverage.However, a demarcation line had to be drawn and they have not beenincluded in this study. Another important group in Russia today is militaryleaders, but gaining access to this group is difficult in the extreme, so theyhave not been incorporated either. Another group not included in the studyare the leaders of so-called ‘interest organisations’. The problem is that civilsociety in Russia is still relatively undeveloped, often making it difficult todecide whether one is dealing with a proper institution with an apparatusand members or merely the leader of an organisation that exists in nameonly.

In selecting respondents, several criteria were employed. Political elites inthe State Duma and the Federation Council were easy to identify. The aimwas to obtain a representative sample in terms of political affiliation andimportance, so the criterion for selection was leadership either of a partygroup or of one of the main committees in the State Duma. Certain problemsdid arise, however. In the 1995–2000 State Duma, one party had no electedleader for a period, while the leaders of some of the other parties were nolonger members of the State Duma but had taken up posts in the Cabinet orin the ministries. The point of departure for determining party affiliation wasthe situation at the time the elections to the Duma were held. In the case ofsome respondents this had to be adjusted, since they had changed partyallegiance since then. Representatives to the State Duma and the Federation


Council were classified as representatives of these two institutions ratherthan as members of the regional elite, even though they represented regions.For this reason, the deputy leaders of the regional parliaments and thedeputy governors and their associates were interviewed as representatives ofthe regional elite.

The greatest challenge lay in the selection of respondents from the privatebusiness and state enterprises, because the ownership structure was oftenunclear. Available business-directories listing the names of firms and theirdirectors as well as other comprehensive databases of Russian firms wereused. Not all state enterprises in Russia are totally state-owned, so anenterprise was defined as ‘state-owned’ if more than 50 per cent of the sharesin that company were in the hands of the state. Approximately 40 per cent ofthe heads of state enterprises interviewed were the directors of totally state-owned companies, while the remainder were directors of enterprises withmixed ownership. The state enterprises selected for the study all had between800 and 3,500 employees.

Obtaining information on employees in private firms, however, was not asimple matter. The private enterprises selected for this study were estimatedto have between 100 and 1,200 employees, with an average of approximately150. In all these enterprises, interviews were conducted with the director ordeputy director, though in some cases with executives at a lower level. Asmost major enterprises have their head offices in Moscow, the interviewswere generally conducted there. This, however, meant excluding directors ofcompanies in the processing and refining sectors (fisheries, mining, etc.),where the head offices are often located in the regions rather than in thefederal capital.

Including all the eighty-nine subjects of the Russian Federation wasclearly unfeasible. Five main groups of regions were chosen by consultingexperts, and some federal subjects were selected from each of the followingcategories: geographically central, geographically peripheral, reform-oriented,regions marked by stagnation and regions with large ethnic minorities. Someof the categories obviously overlap but the classification is neverthelessuseful because it differentiates between dominant structural characteristics.Due to fewer research resources in the 2000 survey, only fourteen federalsubjects were included, compared with the twenty surveyed in 1998. It wasalso necessary to reduce the number of respondents in each region fromthirty in 1998 to fifteen in 2000. The regions covered in both years areindicated below with an asterisk. In both years as far as possible, half theregional leaders were classified as ‘political’ and the other half as ‘adminis-trative,’ although these positions often coalesce in the regional governingstructure.

The geographical dimension was the most straightforward, with a distinc-tion being drawn between central regions1 (Moscow*, Moscow Oblast, StPetersburg* and Leningrad Oblast) and regions in the periphery (Murmansk*,Arkhangelsk*, Primorye* and Kaliningrad*). Another clear dimension is


the ethnic regions with a predominant ethnic group (Tatarstan*, Komi*,Kabardino-Balkaryia* and Sakha/Yakutia). These regions may also beclassified as belonging to the periphery.

Most difficult was the classification in economic terms. ‘Reform regions’were defined as those either having introduced, or intending to introduce,measures to change the economic system (Nizhniy Novgorod*, Samara*,Saratov* and Sverdlovsk). Those in the category ‘stagnant regions’(Udmurtiya*, Voronezh*, Stavropol and Krasnodar) are characterised byfew reform measures and the preservation of old economic structures. I didnot use as criteria economic indicators like standard of living or economicgrowth, since these were found to correlate only marginally with the cate-gorisation employed here.

How the interviews were conducted

Compared with population surveys, elite interviews are special. For onething, elites are well educated and consist of people whose answers cannoteasily be neatly compartmentalised. There are three kinds of interview:structured, semi-structured and unstructured. The large number of respon-dents made it impossible to carry out unstructured or semi-structuredinterviews, so the only feasible option was structured interviews. Never-theless, whatever the loss in nuances and reflections more informal interviewsmay entail, the fixed categories of response have the advantage of beingeasier to systematise, more general conclusions can be drawn and anypotential subjectivity on the part of individual interviewers is neutralised.Some of the question formulations relating to democratisation and economicsystem have been adopted from earlier elite and population surveys that havebeed conducted in Western Europe and in Russia (Putnam 1973; Reisinger etal. 1994; Wyman et al. 1995; Miller et al. 1995, 1997).

Second, because elites are influential and active participants in politicaland administrative processes they may be reluctant to reveal their preferencesor supply information on their backgrounds. This problem was solved byguaranteeing complete anonymity for the respondents. As can be seen fromthe tables, very few of the respondents refused to answer the questions. It isreasonable to assume that if the elites wanted to hide their opinions it wouldhave been more natural to refuse to reply than to give false answers.

The interviewing and coding were carried out by ROMIR (Russian PublicOpinion and Market Research), which is one of Russia’s leading opinionsurvey institutes, based in Moscow. It was established in 1992 by specialistsin the fields of sociology, psychology, statistics and IT. ROMIR belongs toGallup International and participates in international interview projects likeEurobarometer, World Values Survey and RISC (Research InternationalSocial Change). ROMIR undertakes market surveys, studies of social andpolitical conditions, media surveys, etc. Its main activity has been surveysinvolving representative samples of the population, but ROMIR has also


carried out elite interviews, especially in the business sector. In the elitesurvey reported here, use was made of the considerable interviewing appar-atus available to ROMIR in Moscow and in some 40 regions in Russia. Theinterviewers were specially trained in interviewing elites.

The first round of interviews was conducted in the period June–September1998, with the bulk of the interviews (93 per cent) carried out in June andJuly. On average, each interview lasted one hour; the shortest was 40 minutesand the longest took 2 hours and 40 minutes. In cases where the position wasvacant at the time, interviewing was postponed until the new person hadstarted work. Of the interviews, 94 per cent were conducted at the respon-dent’s workplace, 3 per cent at home and 3 per cent in some public venue.Since a large proportion of the national elite work in the capital, Moscowwas the main location of the survey, where 42 per cent of the interviews wereconducted, with 9 per cent in St Petersburg and the remaining 52 per cent inthe regions. All interviews with regional leaders, except those from regionalstructures in Moscow and St Petersburg, were carried out in the regions.

The great majority of interviews were undertaken during the period whenSergei Kirienko was prime minister – i.e. between the dismissal of ViktorChernomyrdin and his replacement by Sergei Kirienko in April 1998 and theappointment of Yevgeny Primakov in September 1998. Approximately 4 percent of the interviews were carried out after the political-economic crisiserupted on 17 August 1998, while less than 1 per cent of the interviews tookplace after Primakov had been appointed prime minister. Therefore, whilethe first round of interviews was probably only marginally influenced by thespecial circumstances of the August crisis, the interviews obviously tookplace during a very turbulent period of Yeltsin’s presidency.

The second round of interviews was undertaken in summer 2000, follow-ing Vladimir Putin’s formal inauguration as President in March. Putin hadfunctioned as acting President following the resignation of Yeltsin on NewYear’s Eve 1999. Of these interviews, 91 per cent took place in June and July2000, with the final 2 per cent held at the beginning of September. In thesecond round, 92 per cent of the interviews were conducted at the respon-dent’s workplace and the remainder in their home or in a public place, ofthese, 61 per cent took place in Moscow, 9 per cent in St Petersburg and theremaining 30 per cent in the regions.

While the number of respondents constituting the national elite wasapproximately the same in 1998 as in 2000, as mentioned above the numberof regional respondents was reduced in 2000, which accounts for their lowershare of total respondents. Consequently, there were two options: either toreduce the number of 1998 regional respondents to tally with the smallernumber interviewed in the 2000 survey, thereby forfeiting information;or else to leave the 1998 survey results intact and face the problem ofcomparing groups of different sizes. I chose the latter option. Since it isimportant to have the broadest possible selection of regional respondentsand since in the following chapters the responses are generally considered


for elite groups separately, one has to be careful only when comparingthe total elite. Even then, the imbalance between national and regionalelites is not necessarily a major problem because of the large number ofrespondents.

The response levels were high, exceeding 95 per cent for most questions.One may well ask why busy top-echelon leaders were willing to be interviewed– especially in a situation of considerable political turbulence when noremuneration of any kind was offered to the interviewees. The respondentswere offered a summary of the main results and about a half in both roundswanted such an abstract which was sent to them in autumn 1998 andautumn 2000. The motives for participation probably vary. A positiveresponse could be interpreted as an expression of good will towards aserious polling institution, as a way to get fresh information about eliteorientations or else leaders may simply feel it is important to be able toexpress their opinions.

Presentation of results

The way data is presented has to be connected to the purpose of the study,the state of research in the field and available theory. The aim is here to bringforward evidence about the political culture among the Russian elite, noparallel studies exist and there is no systematic theory. The approach istherefore mainly inductive by describing what are the elite’s orientations, butit also attempts to explain these orientations and their implications for theRussian state.

Some will find that the following chapters are overloaded with statisticalinformation. I have tried to limit the number of tables but since I intendto investigate the degree of elite-consensus it was paramount to include thedistributions among all elite groups. Thus, the tables had to be rather space-consuming. The alternative, of just presenting the aggregates or summarisingthe information in words is not statisfactory here: a lot of the relevantinformation would have been lost and the reader would have had littlechance of critically viewing the reliability of the data. This study is in manyrespects exploratory and not purely theory testing which justifies this ratherbroad presentation of data.


3 Regime-legitimacy andpolitical stability

Belief that the structure, procedures, acts, decisions, policies, officials, orleaders of government possess the quality of ‘rightness’, propriety, or moralgoodness and should be accepted because of this quality – irrespective of thecontent of the particular act in question – is what we mean by ‘legitimacy’.

Robert A. Dahl1

I was suddenly struck by the thought that democracy can never become reallystabilized. For just when freedom gets stabilized, people will begin to take itfor granted; and if they do, freedom will be in danger.

Karl Popper2

Introduction3

Following the demise of communism, for the first time the elite could openlyexpress critical attitudes towards institutions and their leaders, the mainfeature of the democratic process. But the new freedoms almost tore theRussian state apart. The dilemma is that stable democracy also requires acertain level of support for political and societal institutions and theirleaders. Acceptance of institutions by both the elite and the masses helpsto prevent disruptive conflicts. Stable institutions are a prerequisite fordemocracy, and they acquire legitimacy only through general approval andin particular endorsement by the elite. In the Russian case the challengeduring Yeltsin’s period was how to mobilise support when economic ‘shocktherapy’, poverty and a weak state undermine the incentives for this support.Conflicts may nourish democracy only to a certain point. As the RobertDahl quotation underscores, beliefs in the system as such or its leadersas possessing certain qualities are crucial to stability. With Putin’s re-centralisation policies the dilemma may change to how far can support tocentral authorities go before democracy is endangered, as the quotationfrom Karl Popper assumes.

Boris Yeltsin’s period of political and economic reform spurred wide-spread elite-fragmentation. The first question, therefore, is what actually was

chapter 25

the level of support following this change of basic state institutions – anepoch characterised by rather extreme elite antagonism. The other questionis how elite attitudes may have changed after Vladimir Putin’s more centralisedrule was introduced. Has the level of confidence among the elite increasedbecause of more authoritarian central leadership? And what are the implica-tions for the type of democracy which is developing in Russia?

Support may be ‘diffuse’ and related to the value of the institution assuch, or it may take the form of more ‘specific’ support for the leaders of theinstitution in question and the actual outputs they produce. Most wouldagree that for democracy to be stable, leaders and the masses must have aminimum level of confidence in institutions, and members of the elite musthave a basic level of trust in each other. A change of regime away fromauthoritarian rule makes the question of regime support particularly crucialsince democracy presupposes backing to its main institutions. The purposeof this chapter is to find some evidence for how solid this support is inRussia among the elite and how elite confidence in institutions compares tothat of the mass public.

While mass confidence in state and societal institutions is often consideredthe hallmark of democratic governance, elite support for institutions hasbeen less studied. The Russian change of regime in 1991 was a processinitiated and dominated by the elite, and apathy among the masses remainedwidespread even once democracy had been established. Therefore, theproblem of legitimacy in Russia should be analysed from both an elite andmass perspective.

According to democratic theory, elites are by definition not fullyautonomous. They interact with the mass public, and their justification isderived from this interaction. Certainly, most post-communist elites do nothave a very close relationship with the public. Since mass support is mostly aquestion of elite-initiated mobilisation, a main element of democratic rule istherefore the elite’s image of mass support for the leadership. Here I willinvestigate various aspects of regime legitimacy, asking whether the Russianelite has confidence in basic political and societal institutions; to what extentmembers of the elite trust each other; how the elite perceives mass supportfor public leaders; and how positively the masses view institutions comparedto the elite.

Confidence: implications for democracy and stability

According to Higley and Burton (1989), the development of legitimate andstable political regimes in Western countries initially depended on ‘consensualunified’ elites who, while divided over political issues, agreed on commonnorms concerning institutional support and mutual trust. These normsdeveloped gradually over a long period and were absorbed into Westernpolitical culture. The post-communist countries, particularly Russia, arequite different in this respect.

26 Regime-legitimacy and political stability

Institutions, be they parliament, ministries or political parties, are thearenas for mobilising and regulating conflicts among the elites. ‘Institutions’may also, however, be taken to mean functions like law-enforcement by thejudiciary, the police or the military; socialisation carried out by educationalinstitutions; or the market as an institution for distribution of resources.Pluralist societies should develop critical attitudes towards these institutions.Democracy is founded on criticism, but if that criticism goes beyond ‘soundscepticism’, which is not easy to define, it obviously has implications for thecapability of the institutions and in the longer run for political stability.

Trust among leaders lends much of the substance to the functioning ofpolitical and social systems. In informal relations and networks, trust amongthe participants is a basic element for a stable exchange of views, informa-tion and give-and-take agreements. The inter-personal aspect of legitimacy isespecially relevant in the Russian context, where the rules of the game andthe institutions are not yet a fully integral part of political culture.

Democratic government requires mass as well as elite support in order toperform vital state functions.4 But what are the roots of legitimacy – are theyto be found in support for institutions (‘the form’) or in support for leadersand their decisions (‘the content’)? Easton (1975) and Gabriel (1992) assertthat the most basic kind of legitimacy comes from support for institutions assuch, irrespective of policy outputs and leader success. According to Offe(1997), confidence in democratic institutions should be ‘diffuse’ becausethese are valued for their own sake. In this type of paradigm, confidence isunderstood as fundamental and diffuse attitudes. Confidence in institutionsmeans that people have trust in basic structures and processes that by theirvery nature sustain vital functions or have the potential to do so. Confidenceresults more from a general adherence to political and societal symbols thanfrom satisfaction with policy output or popular leaders.

The alternative, ‘specific support’ approach presupposes that elites andthe mass public act in response to how institutions contribute to their ownwell-being and the kind of opportunity structures they provide. One wouldtherefore expect the output of institutional activities and the leaders respon-sible for decisions, to determine the pattern of attitudes. According to Barry(1970), the policy performance of democratic institutions over a period oftime gives legitimacy to the political system. Therefore, as Smith (1972: 9)asserts, ‘value-related explanations take on a subordinate role’ for legitimacyand support.

If trust arises from the ability of institutions to produce policy outputs,confidence will depend upon how the outputs from institutions meet theexpectations of the elite and the masses. Low confidence will stem not fromdistrust in institutions as such, but from poor performance feeding back onthe institutions. ‘Specific’ support is instrumental and directly related to howperformance meets short-term expectations and implies a substantial de-stabilising potential in times of economic crisis. Economic recession andmalfunctioning in society may reduce belief in institutions, but not necessarily

Regime-legitimacy and political stability 27

lead to a desire to change them. A real crisis occurs when the elite proposesto replace one institution with another.

According to Mishler and Rose (1999) the foundation of legitimacydiffers between new and established democracies. New democracies aresupported mainly for what they do, while established democracies are valuedalso for what they are, because of long-term political socialisation. Economicgrowth and a reasonable distribution of resources may be crucial, but thereis no immediate relationship between economic misery and political insta-bility. An economic and social crisis has to be converted into a political crisisby the political leadership of a country. The barrier for institutional crises isconsiderably lower when the elite has not been fused with democratic tradi-tions. However, as the Russian development illustrates, poor state-perfor-mance has more raised the question of viable compromises than a desire ofreturning to the totalitarian past. The fascinating challenge is to understandbetter the new forthcoming alternative that cannot so easily be put intocurrent regime categories.

Leaders are operating ‘between’ the institutions ‘as such’ and their perfor-mance. In one sense they are ‘specific’, easy to identify and therefore proneto be blamed or praised for decisions and results. However, some leadersmay acquire an ‘institutional aura’, whereby their acceptance is based moreon charisma than on performance. Max Weber’s distinction between‘charismatic’, ‘traditional’ and ‘legal-rational’ forms of governance points tothe fact that legitimacy may be derived from several sources. Regimelegitimacy may come both from institutional arrangements and from leaderswith special personal qualities. In the following the main focus is on ‘legal-rational’ rule which presupposes confidence in institutions, and on oneaspect of ‘charismatic’ rule – trust among leaders. Analysing the combinedconfidence in both the institutions and its leaders allows a broader approachto be taken to the problem of ‘legitimacy’ and political stability.

Trust in leaders and confidence in institutions should be treated ascomplementary modes of political support. A consolidated democracy willscore high on both counts, while in a less consolidated system the elite willhave low trust in both leaders and institutions. Since trust in institutions andleaders need socialisation of democratic symbols over time, one wouldexpect ‘diffuse’ support to be low in Russia. Further, the severe elite-competition, many zero-sum games and poor policy outputs are conduciveto little ‘specific’ support. One hypothesis is that Russian elites end up withlow levels of confidence in institutions and little inter-elite trust.

Legitimacy of a political system not only rests on the elite’s beliefs, butthe mass public’s confidence should also be included; however, such atti-tudes may be ambiguous since they are both ‘constructed’ and ‘objective’.The elite’s images of mass attitudes are constructed images of society whilemass attitudes are also expressed objectively in opinion surveys. These twoapproachers are compared in the last section. To the extent that elite imagesof mass confidence are simular to actual mass confidence in institutions is a


substantial indicator of both elite–mass relations and the foundations ofRussian democracy.

Confidence in institutions

The large number of institutions included here makes it useful to identifysome main categories. The distinction between ‘public’ and ‘private’ or‘government’ and ‘non-government’ is often used in the study of support forinstitutions in Western countries (Rose 1984). Listhaug and Wiberg (1995)propose an empirically reductionist approach and differentiate between‘order institutions’ (such as the police and the army), and others. In a studyof mass confidence in institutions in the Baltic states a distinction was drawnbetween ‘old’ and ‘new’ institutions and between ‘policy-making’ and ‘policy-implementing’ institutions (Steen 1996). Here it was found that institutionswith a direct effect on people’s lives, like the bureaucracy and the market,were more prone to low confidence than institutions with less tangible andmore symbolic functions, like the Church and educational institutions.Keeping these ways of differentiating institutions in mind, I will focus onhow the open conflicts between institutions in Russia, especially the strugglebetween the State Duma and the President during Yeltsin’s period, influencedconfidence. A very pertinent question is how the new State Duma elected in1999 and President Putin’s entrance on the political arena in 2000 impingedon the political climate among the elite. Table 3.1 shows the Russian elite’sconfidence in various political and societal institutions.

For the average of all institutions the elite is split approximately down themiddle for both years, with one half expressing some confidence and theother half exhibiting low or no confidence. On average, only 5–6 per cent ofall institutions have full confidence for the two years. The highest score inthis category is for the Church and armed forces with 11–13 per cent. At theother end of the scale we find that about one fourth have no confidence at allin the presidential administration, political parties, the press, TV and radioand police.

Separating the institutions into government and non-government showsthat confidence in government institutions is split. As of 1998 the FederationCouncil and, in particular, the regional and local governments, enjoy a highlevel of confidence. The State Duma also has a relatively high degree ofsupport. By contrast, the executive power – consisting of the President andhis administration, the cabinet, civil servants and the judiciary – enjoyconsiderably less confidence. In fact, the President and the Presidentialadministration during Yeltsin’s period had an extremely low loyalty scoreamong the Russian elite. Later, the confidence in the President dramaticallychanged under Putin. From a low position in 1998 the President attained thehighest score in 2000, with an increase in the confidence score from 33 percent to 75 per cent.


30 Political Elites and the New Russia

Tab

le 3

.1C

onfid

ence

in in

stit

utio

ns,t

otal

elit

e (%

)

Ful

lQ

uite

a lo

tN

ot v

ery

muc

hN

o co

nfide

nce

Mea

nsco

nfide

nce

confi

denc

eco

nfide

nce

at a

ll1

2

34

1998

2000

1998

2000

1998

2000

1998

2000

1998

2000

Ave

rage

all

inst

itut

ions

56

4244

3837

1513

2.6

2.6

Pre

side

ntia

l adm

inis

trat

ion

23

2430

4642

2824

3.0

2.9

Polit

ical

par

ties

21

1924

5554

2420

3.0

2.9

Pre

side

nt3

1730

5840

2128

42.

92.

1P

riva

te b

usin

ess

12

2837

5347

1814

2.9

2.7

Pre

ss1

125

2453

5221

242.

93.

0T

V a

nd r

adio

11

2524

5351

2125

2.9

3.0

Tra

de u

nion

s1

130

3349

4519

202.

92.

8C

ivil

serv

ants

10

3531

4854

1615

2.8

2.8

Polic

e2

134

3043

4421

252.

82.

9C

abin

et2

340

6245

3113

42.

72.

4Ju

dici

ary

32

4131

4147

1521

2.7

2.9

Stat

e D

uma

54

5252

3337

107

2.5

2.5

Chu

rch

1113

4653

2821

1512

2.5

2.3

Reg

iona

l gov

ernm

ent

118

5856

2531

66

2.3

2.4

Fed

erat

ion

Cou

ncil

76

6458

2430

56

2.3

2.4

Arm

ed fo

rces

1012

5363

2920

85

2.3

2.2

Loc

al g

over

nmen

t11

762

5522

315

62.

22.

4E

duca

tion

sys

tem

119

7275

1414

32

2.1

2.1

Res

pons

e ra

te 1

998:

94–8

% fo

r al

l que

stio

ns,e

xcep

t fo

r ‘c

hurc

h’w

ith

90 p

er c

ent.

N=

980

Res

pons

e ra

te 2

000:

93–8

% fo

r al

l que

stio

ns,e

xcep

t fo

r ‘C

hurc

h’an

d ‘p

olit

ical

par

ties

’wit

h 91

per

cen

t.N

=60

5.

Que

stio

n:‘P

leas

e,te

ll m

e ho

w m

uch

confi

denc

e yo

u ha

ve in

eac

h of

the

inst

itut

ions

list

ed.C

hoos

e am

ong

the

four

alt

erna

tive

s,w

here

1 is

‘ful

l con

fiden

ce’,

2is

‘qui

te a

lot’

,3 is

‘not

ver

y m

uch’

and

4 is

‘no

confi

denc

e’’.

‘Don

’t kn

ow/n

o an

swer

’is

trea

ted

as m

issi

ng v

alue

s.T

he in

stit

utio

ns w

ith

low

con

fiden

ce a

re a

tth

e to

p (h

igh

mea

n) a

nd t

hose

wit

h hi

gh c

onfid

ence

are

at

the

bott

om e

nd o

fth

e ta

ble.

The

que

stio

n fo

rmul

atio

n is

ado

pted

fro

m T

he W

orld

Wid

e Su

rvey

.

The administrative apparatus of the state, including the Presidential admin-istration, civil servants and the judiciary have not benefited from change ofPresident. They seem to be in a permanent crisis of confidence reflecting adeep traditional Russian suspicion of the bureaucratic apparatus.

The low level of confidence in the executive combined with a fairly strongbelief in elected institutions and regional government underscores the maintensions between Russian government institutions as of 1998. In 2000 thiswas turned upside down: the elite has considerably more trust in the centralpower and became more sceptical to regional and local government althoughthese institutions still enjoy a relatively high level of support. The elite quiteclearly wants a firmer hand in the central power with an attraction to personalleadership but not necessarily a return to centralised and authoritarian rule.

Singling out the order institutions, 36 per cent of the elite supported thepolice in 1998, but just 31 per cent in 2000. The Russian army has a quitehigh confidence level, which increased from 63 per cent to 75 per cent in thisperiod. Allegations of a corrupt and inefficient police force may explain thelow level of confidence in the police, whereas the economic crisis and reportsof decline in morale among the soldiers and officers have obviously not hadany substantial impact on the confidence of the elite in the armed forces asan institution. The widespread desire to preserve the Russian Federation andavoid further fragmentation after the Chechnya problem obviously mobilisednational feelings and support for the main integrative power instrument ofthe state: the military forces.

Among state institutions that are not so easily classifiable as ‘govern-mental’ or ‘order’, the education system has a very high confidence score inboth years, with 83–4 per cent. The elites are themselves very well educated –more than 90 per cent have a university degree – and during the Soviet periodthe education system had a reputation for high quality. This sector has prob-ably come through the transition period more unharmed than other institutionsand therefore represents both continuity of certain values and opportunitiesfor the future, which may explain the high support level.

Elite support for non-government institutions is in general low. Confidencein political parties is very meagre, with only 21 per cent of the elite express-ing some confidence in 1998, although increasing to 25 per cent in 2000. Aminority also expressed positive attitudes towards private business, in 199829 per cent, but extending to 39 per cent two years later. While still beingregarded with suspicion among a large majority of the elite, business under afirm central hand seems to be more attractive than the chaotic capitalismduring Yeltsin’s period. The press, radio and TV have especially low andstable confidence scores with 25–6 per cent. Confidence in trade unions isalso scanty. The only exception among non-government institutions is theChurch. It enjoys quite a high level of confidence, 57 per cent rising to 63 percent in the period. Obviously, the symbolic aspects of this institution havestrong appeals to religious and traditional feelings among the elite, even after70 years of atheist rule. In the political sphere many probably regard the


Church as a way of compensating for the disruption of societal norms thatfollowed the demise of communist ideology. In the political sphere theChurch’s high legitimacy among the elite has obviously laid the basis for theincreasing political influence of the Church-leaders.

In summary, the Russian elites exhibit an amazing combination of positiveorientations to traditional institutions and new representative state organs,and scepticism to bureaucratic and societal institutions. Since political partiesare a key institution in any democracy, and private business is the backboneof a market economy, the very low level of support for these institutions is acause for concern. It says something essential about the type of political andeconomic system that is emerging from the legacy of totalitarian rule andthe centrally planned economy. Market reforms and a multi-party systemwere introduced as Yeltsin’s key reforms, and yet a decade later the elite isstill very sceptical about these new institutions that are intrinsic to thedevelopment of a civic society. But one should not be tempted to interpretthe figures as a wish for total change of economic and political regime. Oneinterpretation is that they are expressing ‘sound scepticism’ to chaotic politicalparties and raw capitalism that probably will lead to modifications of thepolitical and economic system more in accord with Russian state traditions.The main signal for such a prospective development is the broad supportfor a strong central leadership, in other words President Vladimir Putin’sprogramme for political and economic re-centralisation.

Elite groups and confidence

The Russian elite is not a uniform group. Even during the Soviet period, therewas a certain degree of pluralism and competing elite groups within thecentralised nomenklatura system. Elite competition was often connected toregional interests and clan traditions. Since the change of regime the insti-tutionalisation of heterogeneous elite groups has formalised new arenas for theelite-game. When they used the term ‘consensually unified elites’ to describestable Western democracies, Higley et al. (1998) were referring to commonlyheld attitudes among the elite regarding support for democratic institutions.As shown in Table 3.1, Russian federal elected institutions enjoy considerablesupport among the elite, while the others have low confidence. The questionhere is whether this picture is also valid among the various elite groups.

If confidence in institutions across elite groups is one main requirementfor consensus and stable democracy, it is important to know which elitegroups support which institutions. One may assume that elites will primarilyrally around their own institution and that they will trust their own sectormore than other sectors. Elites with positions in governmental institutionswill tend to trust state institutions and be more critical of non-governmentinstitutions. On the other hand, elites in the non-governmental sector may beexpected to be sceptical towards public institutions and have a higher level oftrust in private institutions.


Table 3.2 compares confidence in institutions among the eight groups ofrespondents. Figures in shaded boxes show internal confidence inside thesame or similar groups. Figures in bold indicate the highest confidencescores. The other figures indicate external confidence between different elitegroups.

Central representative institutions

A large proportion of the central political elite (members of the State Dumaand the Federation Council) has confidence in the State Duma, and thelegislators are also quite confident in themselves. Support from leaders ofstate enterprises and, in particular, private business is much lower. The StateDuma comes under attack not only from the economic sector but also fromgovernmental institutions, but it seems to face this criticism with a high levelof self-confidence. There is less variation in support for the Federation Councilin 1998, which was the most popular institution among all groups except forthe cultural elite. Moreover, its members are almost unanimous in theirsupport for their own institution and, as expected, in regional government.Two years later the status of the Federation Council changed and especiallyleaders of state enterprises and private businesses became more negative.

The central government sector

Confidence in the cabinet among the State Duma deputies is very low in1998 (23 per cent) compared with other elite groups and rose as high as 60per cent in 2000 reflecting the attraction to Putin’s stronger leadershippolicies. Certainly the policy change resulted in a sharp increase in confidencein the cabinet among all the other elite groups as well. As might be expected,the profound conflicts dominating the final years of Yeltsin’s period hadsevere effects on the legitimacy of the presidency: confidence in the Presidentamong the deputies in the Duma was at a very low level with only 13 percent confidence in 1998. It was also low or moderate among other elitegroups, with the exception of the deputies of the Federation Council where amajority supported the President probably because of the good relationscreated by favourable deals with the President and the governors. As aconsequence of Vladimir Putin’s re-centralisation policies the popularity ofthe presidency skyrocketed to between 71 per cent and 86 per cent confidenceamong all elite groups, even for those who might fear having less power thanbefore – governors and regional leaders for example.

The material exhibits an interesting change of attitudes in the bureau-cracy. In 1998 the leaders in the ministries express quite high trust in theFederation Council and the Cabinet but only a minority has confidence inthe President and his administration. In 2000 the top bureaucrats evidentlyfound Vladimir Putin much more attractive by doubling the level ofconfidence from 40 per cent to 80 per cent but they still are quite critical of



Tab

le 3

.2C

onfid

ence

in in

stit

utio

ns,b

y el

ite

grou

p* (

%)

Con

fiden

ce in

:

Sta

teFe

d.C

abin

etT

he

The

C

ivil

Reg

iona

lP

riv.

Pol

.T

he p

ress

Dum

aC

ounc

ilP

resi

dent

Pre

side

nt’s

serv

ants

govt

.bu

sine

sspa

rtie

sE

lite

grou

p:ad

m.

Stat

e D

uma

1998

8470

2314

1120

5426

4616

2000

7762

6071

2631

5733

4012

Fed

.Cou

ncil

1998

6997

6156

4650

100

4534

1020

0060

100

8386

5547

100

5932

25

Fed

.adm

in.

1998

4865

6140

3148

5420

2214

2000

5868

7880

3141

6722

2324

Stat

e en

terp

r.19

9841

6343

2917

2164

3213

3420

0030

4864

6417

1553

412

33

Pri

v.bu

sin.

1998

3060

3433

2112

6470

2134

2000

3047

5957

2016

4670

2135

Cul

ture

1998

4648

3834

2417

6426

1438

2000

4658

5878

2418

4743

1632

Reg

.gov

t.19

9858

7442

3527

4173

2618

2720

0060

6563

7944

3669

3927

22

Tota

l19

9857

7142

3325

3669

2921

2520

0056

6465

7534

3263

3925

24

Res

pons

e ra

te 1

998:

94–8

% fo

r al

l que

stio

ns,e

xcep

t fo

r th

e ‘C

hurc

h’w

ith

90%

.N=

980.

Res

pons

e ra

te 2

000:

96–8

% fo

r al

l que

stio

ns,e

xcep

t fo

r ‘C

hurc

h’w

ith

91%

.N=

605.

*The

cat

egor

ies

‘ful

l con

fiden

ce’a

nd ‘q

uite

a lo

t co

nfide

nce’

are

mer

ged.

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his administrative apparatus. Obviously, the leaders of the ministries want astronger President but not a stronger competing administration.

The Presidential administration and the civil servants scored very lowamong the Duma deputies in 1998. Elite groups in private business and stateenterprises were also very critical. While the level of support is still moderatein 2000 the increase in support comes mostly from the Federation Council,the State Duma and leaders in regional government. The support for astronger presidency seems to spill over to more acceptance also of Putin’sadministrative apparatus but only among the central and regional politicalelites. The same positive tendency cannot be said about civil servants ingeneral. Confidence remains at a low level and is also declining among somegroups.

Regional government enjoys considerable support among all elite groups,in particular the Federation Council. The 100 per cent confidence rating mayno doubt be attributed to the fact that the members during this period exofficio were recruited directly from the regions as governors or leaders ofregional parliaments.5 While over time leaders of federal administration havean increasing trust in regional government the trend is negative for privatebusiness leaders, leaders of state enterprises and cultural institutions wholost a lot of confidence in the regional government during the end of the1990s.

The non-government sector

Private business had a very low level of confidence among all respondents in1998, except for business leaders themselves – 70 per cent of whom trust theirown sector – and among the respondents in the Federation Council. Twoyears later, private business is evidently more accepted, with an extraordi-narily high score among cultural and regional elites. Political parties ingeneral enjoy the least confidence of all institutions. An exception is thesomewhat higher support they get from deputies in the State Duma and theFederation Council, since these naturally have closer relations to the partiesthan other elite groups. However, there is little reason for optimism becauseof few indications of any rise in popularity during the period. The press, too,has a very low standing among all central, regional and local governmentalelites. However, it does get some support from the cultural elite, privatebusiness and state enterprise leaders. The support from cultural leaders maybe explained by the direct connections between this group of respondents(which includes leaders of the mass media and newspapers) and the mediasector. The relatively high level of confidence among leaders in privatebusiness may be related to the close investment links between business andthe media in Russia. Why leaders of state enterprises are relatively sympa-thetic towards the press may be explained by the blurred borderline betweenprivate and state business which both see the media-sector as a partner withwhom they have quite good relations.


In summary

The varying confidence in institutions among elite groups indicates afascinating pattern of conflicting and converging orientations amongRussian elites. The considerable anomalies in the extent to whichgovernment institutions in Russia trust each other are astonishing. Whilevery few deputies in the State Duma in 1998 say they have confidence inexecutive institutions, members of the Federation Council are quite positivetowards the executive, including the President and his administration as wellas civil servants. The State Duma deputies trust the Federation Council,despite its positive relations with the President under Yeltsin and this patternof confidence illustrates the central position of the Federation Councilduring the 1990s as a mediator between the critical opposition in the StateDuma and an impatient reform oriented President.

In terms of legitimacy the Federation Council is a fascinating case duringthe turbulent period around 1998, enjoying a high level of confidence amongall elite groups in the government and non-government sectors. By and largethis confidence is reciprocated on the part of the State Duma deputies. Whilethe Federation Council members continue to express trust in other institu-tions also after 2000, several of the other leaders become more scepticalabout the Federation Council, indicating a declining status after 2000. Thesemore sceptical attitudes fit in well with President Putin’s strategy of re-centralisation of power by reducing the influence of the governors.

The widespread impression that by 1998 the regions had attained a fairlystrong position is supported by the data exhibiting a regional elite6 whoexpressed critical attitudes to the political centre, except for the FederationCouncil, their own stronghold in Moscow. After 2000 the attitudes of regionalleaders to the political centre are becoming considerably more positive whilethe support to the Federation Council shrinks. In fact, although attainingmore regional autonomy during the chaotic Yeltsin period their support forYeltsin was meagre while their representatives in the Federation Council hadmore positive attitudes to the President. One explanation is that since thereforms had very high social costs in most regions these leaders wanted amore stable and predictable central power which consequently enhancedtheir support for President Putin, his administration and the Cabinet quitedramatically. President Putin very quickly took the initiative to reduce thepower of the Federation Council. The paradox of increasingly more positiveattitudes of its members towards the president illustrates the general tendencyof elite integration around a vitalised central power.

One may conclude that central governmental institutions connected withthe President, and in particular non-government institutions, faced a deepcrisis of legitimacy in 1998. This fits in with the widespread picture of Russianpolitics during that period as having a very fragmented centre with a lack ofpower instruments and regions that were striving for more autonomy andassuming increasing responsibility for policy-making and implementation.


At the same time, some of the attitudes expressed indicate some degree ofintegration, in particular with regard to the Federation Council. As both afocus of elite confidence in Russian politics and as an institution that itselfhas a high level of confidence in governmental and non-governmental insti-tutions, the Federation Council was in a potentially strong position to mediatebetween fragmented elites.

However, these devastating adversary processes could not continue andthe Russian elite had by 2000 achieved the stronger central power theydesired. With the new President starting his programme of strengthening thecentral authorities, not only the actual locus of power has changed. Moreimportant, the wave of enthusiastic support from leaders in both the stateand non-state sectors has made the central power more legitimate among theRussian elites, thereby enhancing the possibilities for stable rule.

Trust between leaders

In the tradition of Almond and Verba (1965) and later Putnam (1993), acertain level of basic trust in other persons is a prerequisite for a democraticpolitical culture. However, studies of mass attitudes in post-communistsocieties show that the trust level is low and indicate that trust in others is lesssignificant for democratic development than the ‘political culture’ approachsuggests (Miller 1993; Miller et al. 1997). If public inter-personal trust is notcrucial for democratic rule, trust between elites is probably more essential.

Given a situation where a new generation of ambitious, well-educatedyoung ‘Westernisers’ is challenging the former nomenklatura, one mightexpect elites to be especially critical of each other. Lane and Ross (1999)attribute the disruptive forces in Russia mainly to conflicts between the newascendant class of intellectuals who have adopted Western-style, market-oriented thinking, and the conservatives in the central and regional bureau-cracies. After comparing elite configurations in several post-communistcountries, Higley et al. (1998) were less categorical about elite fragmentation,and came to the more cautious conclusion that even if the Russian eliteappears fragmented and unstable, it also has the potential for consensus andunity. Therefore, one may argue that since elites are themselves a part of thesystem of government, they will have a sense of responsibility for the‘common good’, avoid disruptive conflicts and therefore identify with otherleaders.

There is a notable lack of systematic empirical studies that address theissue of trust among elites and how to operationalise ‘trust’ is not an easytask. In Table 3.3 inter-personal distrust among the elite is measured byattitudes to two statements.

In general, members of the elite exhibit very sceptical and permanentattitudes, with more than two-thirds of the respondents expressing distrustin other leaders.7 The respondents agreed particularly with the statementthat politicians put their own interests before those of the country. Thus, at


face value the overall figures indicate quite a fragmented elite with lowinternal cohesion and such attitudes are stable and independent of who isthe acting President.

Looking at the various elite groups, the situation in 1998 was that thecentral political elite in the Federation Council and the State Duma, and localgovernment leaders tend to be the most trustful. Bureaucrats in ministriesand regional government leaders form a second group which expresses lesstrust. Leaders in the cultural sector and in state enterprises, and privatebusinessmen, have a considerably lower trust score than the other elites.

The members of the Federation Council tend to be considerably lesscritical towards ‘public leaders’ than to ‘politicians’, underscoring their roleas more understanding with the executive than the State Duma duringYeltsin’s period. Even if elites in general have little trust in other leaders, thecentral politicians in the State Duma and especially in the FederationCouncil, had a larger potential during the 1990s for interpersonal trust. Twoyears later the political elite has moved towards somewhat extendedaccommodating attitudes, especially in the Federation Council. On the otherhand distrust has increased among bureaucrats and private business leaders.What then, may explain these differences?

The ranking of elite groups can be explained by proximity to politicaldecision-making. Those who are on the sideline of the political process andoperating in mass media, education, culture and in the new economy feelparticularly alienated towards leaders involved in politics. Here, distrustprobably stems more from mass media coverage of scandals and generalimpressions than from personal knowledge of political life. Those involvedin political decision-making know the processes better from their own experi-ence with political bargains than the ‘outsiders’.


Table 3.3 Inter-elite distrust (%)*

Average Agree with Agree with(1) + (2) statement (1) statement (2)

1998 2000 1998 2000 1998 2000

Total 67 65 70 66 64 64State Duma 63 57 68 65 59 48Fed. Council 54 41 76 53 33 28Fed. admin. 70 75 73 75 67 74State enterprises 77 73 76 70 77 76Private business 80 85 77 84 83 85Culture 84 70 83 69 85 71Reg. govt. 67 65 69 68 62 61

Response rate 1998: 94–7% N=980; response rate 2000: 94–6% N=605.

*Statements: (1) ‘Politicians cannot be trusted to care for the good of the country’; (2) ‘Publicleaders think more about their own gain than about the interests of the people’. The attitudeswere measured on a scale from 1 to 4, (‘fully agree’, ‘somewhat agree’, ‘somewhat disagree’ and‘fully disagree’). In the table values 1 and 2 are merged into a single category consisting ofthose agreeing with the statements and therefore expressing ‘distrust’ in leaders.

A volatile and hostile political environment and few incentives for trustingother political leaders may explain the very critical attitudes of the newbusiness leaders. On the other hand private businesses are dependent on thestate to regulate the legal and economic framework in which they operate.The new state-market companionship has obviously not been conducive totrust between the business leaders and politicians, and why should it be?Since few institutions regulate the interface between the state and society,the privatisation of state responsibilities creates what Grabher and Stark(1997: 15) have called ‘flexible opportunism’, a strategy for survival not veryconducive to trustful relations with politicians and state officials.

How important is inter-elite trust for democracy? Miller et al.’s (1997)conclusion in their study of Russian and Ukrainian elites that ‘trust inothers plays a less important role in the establishment of a democraticpolitical culture than previously suggested’, is relevant here. Those who wereless trusting of others actually saw democracy as providing institutions thatwould regulate the harsh forms of elite competition. Paradoxically, thosewho distrusted elites expressed confidence in democratic institutions. Distrustbetween elites, which is a form of ‘specific orientation’, may be separatedfrom the more ‘diffuse’ and basic confidence in democratic institutions. Itmeans that the significance of an institution is not necessarily associatedwith the quality of its leaders. Low trust in other leaders, however, does notnecessarily mean that all leaders are regarded with suspicion. A generalhorizontal distrust among people typical of traditional and paternalisticsocieties may, as Putnam (1993) describes for Southern Italy be compensatedby substantial trust in some few top leaders. As shown in Table 3.1, thedramatic increase in confidence in the Russian President after Putin came tooffice was an extremely important condition for stabilising Russia after theturbulent Yeltsin period. Putin’s programme of ‘verticalisation of power’would have remained an empty slogan without being founded on verticaltrust-relations between Kremlin and the national and regional elites.

The optimist interpretation is that as long as institutions have a certaindegree of confidence, distrust in leaders can be regarded not as a sign of crisisbut of ‘sound scepticism’ in particularly turbulent political processes insidethe framework of an emerging democracy. If trust in public leaders indicates‘cohesion’, then, strange as it may seem from Table 3.3, the political elite inthe State Duma and Federation Council form the most integrated group.From the point of view of integration the main problem is not the politicalelite that from 1998 to 2000 tends to harmonise but the elites outside thenational political sphere whose increasing level of inter-elite distrust illus-trates an emerging cleavage between politics and the rest of the state.

The elite’s images of mass public trust

One may argue that in Western countries, because of traditions of institu-tional representation, popular attitudes are absorbed into the political process


via intermediaries. In Russia and other post-communist countries the lack ofa civic culture and of intermediary institutions means that popular attitudeswill reach politicians more directly, chiefly through the elite’s conceptions ofmass attitudes. A political culture in which members of the elite traditionallysee themselves more as interpreters than as representatives of the publicinterest may have important implications for the image the elite has of itselfand for how it goes about winning support for its arguments and decisions.

Surveys of popular attitudes carried out during the early 1990s show littleconfidence in Russian leaders, particularly in the top leadership (Wyman1997: 85). To what extent popularity barometers have an effect on the leader-ship is difficult to say, particularly in Russia, where the influence of themasses is traditionally weak. On the other hand, even in elite-orientedcultures, the very rationale of the leadership is its concern, real or imaginary,for issues affecting people’s lives. Therefore, it is important to know if themembers of the elite are concerned about how the population perceives themas leaders.

The elite’s perception of popular trust in leaders is an important compo-nent of its self-image. However, while all leaders seek popular acceptance,not all have to face the electorate. Therefore, the elected political elite willprobably be more concerned with mass opinion than other elites. One maydifferentiate between four main types of ‘constructed realities’: (1) elites whothink the mass public trusts both them and other elites; (2) elites who believethe mass public trusts them but not others; (3) elites who believe the masspublic does not trust them but that other elites have such support; and (4)elites who believe the mass public trusts neither them nor other elites. Thefull results are reported in the Appendix, Table A3.1.

The general low level of mass confidence in leaders, as identified by Wyman(1997), is not reflected in how the elite views themselves, but the picture israther complex. On the one extreme the elite as a whole believes the public hasvery low trust in the leaders of private business and political parties (betweenonly 11 per cent and 17 per cent say that ordinary people trust these leaders).The bureaucrats of the federal ministries are also associated with low populartrust. At the other end of the scale, the respondents think people put majortrust in the leaders of a traditional institution like the Church, increasing from77 per cent to 81 per cent. Military leaders, the leaders of regional governmentand the leaders of the Federation Council are also perceived as having a goodreputation among the people. The political leaders of the State Duma and theFederation Council occupy a middle position enjoying a relatively high level ofsubjective trust. A very substantial and rather surprising increase is found forleaders of state enterprises and ministries.

How do the respondents’ images of mass trust in their own group comparewith their perception of trust in other elite groups? The general tendency isto view mass support for the leaders of their own institution as higher thanthe average support for all groups, except for the leaders of state enterprisesin 1998.


While the leaders of state enterprises largely perceived people’s trust inthem as very low in 1998, with only 26 per cent of this group expressing thatthey were trusted by the public, this changed dramatically a few years laterwith self-confidence increasing to 72 per cent. The alienation as of 1998 maybe explained by the special situation of state enterprise leaders during theturbulent 1990s when they were exposed to severe criticism about themalfunctioning of the economy. Obviously, attitudes have changed ratherdramatically in favour of leaders of state enterprises indicating a shifttowards support for more active state involvement in the economy. Incontrast to their colleagues in state companies, the business elite’s image ofpublic support for their own sector was quite strong in 1998 with 38 per centbut decreased sharply to 17 per cent in 2000. Their self-confident assumptionof public support as of 1998 bore little relation to the perception amongother elites of public support for business leaders while some years later thediscrepancy has disappeared.

The contrasting pattern in the self-image of state enterprise and privatebusiness leaders says a lot about how market ideology and economic reformsenhanced the self-image of business leaders during Yeltsin’s type of economicliberalism while eroding the self-esteem of state enterprise leaders. Thedata indicate widespread support for Vladimir Putin’s more state orientedeconomic policies. The rest of the elites are discerning little public supportfor business leaders but considerable popular backing for state enterpriseleaders. This picture of business leaders fits in well with the actual popularattitudes shown in the next section.

With regard to the possible combinations, some groups of respondentswere easier to place than others. The Federation Council and State Dumacome closest to category (1) characterised by a positive image of public trustin both itself and other elite-groups, with the exception of private businessand party leaders. At the other end (4) are the leaders of state enterprises,who in 1998 had a low estimation of public support for themselves, combinedwith quite a negative image of public support for other leaders. Some yearslater it is more appropriate to put this group of leaders into category 2 sincetheir self-image has enhanced while they still consider other elites, and inparticular political elites to have little popular support.

Relatively speaking, the central political elites in the State Duma andespecially in the Federation Council have the highest estimation of publictrust in themselves and their self-confidence increases quite a lot over time.Why the political leaders are generally confident that people trust them maybe explained by the fact that, as elected leaders, they see themselves as havinga mandate from the people. On the other hand public support for thebureaucratic elite in the federal ministries was not evaluated positively underYeltsin but also here the figure increased notably after Putin came to power.Another tendency is found among the regional political leadership where thelevel of self-confidence goes down, which may be explained by their reducedautonomy following Putin’s centralising policies.


The mass public and elite support

So far a perspective ‘from above’ has elucidated the problem of regime-legitimacy. Here the question is if trust in institutions at the mass level differsfrom the elite’s attitudes. Because the change of regime in Russia was elite-driven, the new institutions may be expected to enjoy more support amongthe elite than among the masses. One argument is that, while the elite will beattracted by the ‘intrinsic value’ of institutions, the masses evaluateinstitutions more in terms of their output. For the elite, on the other hand,institutions also provide personal opportunities for careers and benefits notvery closely related to the value of the institution itself.

Mishler and Rose (1995), who surveyed nine post-communist countries,excluding the Baltic states and Russia, found that 91 per cent of the publicexpressed distrust or scepticism and only 9 per cent full trust in the nationalparliaments. In 1994 72 per cent of the public in Russia expressed distrust inthe State Duma (Rose 1995). In a survey from 1994, Wyman (1997) reportedthat 25 per cent of Russians had trust in their parliament. From 1994, in thethree Baltic states – Estonia, Latvia and Lithuania – 28 per cent of thepublic had confidence in the parliament. Three years later, in 1997, popularconfidence had fallen to 25 per cent (Steen 1997). These studies of trust inparliament in new eastern democracies show that in general more than 70per cent of the public had no confidence in their parliament.

A study comparing mass and elite attitudes was conducted in the Balticstates in 1994 and 1997. The mean score for all institutions was higher forthe elite than for the public at both points of time and increased between1994 and 1997. The difference was greatest for political institutions.8 Fromthe perspetive of political stability this may be a case for concern but notnecessarily since a high level of elite support for political institutions maycompensate for low confidence among the general population. Since mystudy of Russia does not include data on mass attitudes, secondary materialis used from White et al. (1997) and from the World Value Survey. Thequestion formulations are either quite similar or identical to those used inthe present elite study, see Appendix, Table 3.2. Since the elite study lookedat a broader range of institutions, Appendix, Table A3.2 includes fewerinstitutions than Table 3.1.

The results from the population surveys in 1994 and 1997 correspond verywell, except for confidence in civil servants. The question on trust in thePresident was included only in the World Value Survey. Obviously theRussian people during the 1990s do not trust any political institution, nor dothey trust the bureaucracy, the ‘internal order’ institutions or the massmedia. On the other hand, the army and the Church score very high, witha 60–70 per cent confidence rating. The explanation is probably becausethe army and the Church are not to be blamed for the recent politicaland economic development and are connected with historical traditions ofnational pride and religious life going back to long before the Soviet period.


The other end of the trust spectrum reflects frustrations about the anarchicpolitical process during Yeltsin’s period and socio-economic outcomes of theeconomic ‘shock therapy’. More than three-quarters of the mass public dis-trust the political parties and private businesses. It should also be noted thatthe elite is considerably more sceptical about the mass media than is thegeneral public.

Is the Russian elite a vanguard for basic confidence in new institutions offragile post-communist democracies, like those in the Baltic states? Since theelite may regard democratic institutions as a value in themselves and as agroup are also more sheltered from poor outputs from a faulty economy, onewould expect the elite to be more positive than the mass public, as is the casein the Baltic states. Table 3.6 shows that for only two institutions, the cabinetand the State Duma, is the elite’s support substantially higher. Thus, unlikein the Baltic states, the public’s distrust in the party system and in privatebusiness is not compensated for by a higher level of trust among the elite. Asof 1998, the elite disbelieved the President and his administration almost asmuch as the public, with the State Duma deputies showing more negativeattitudes than the other elite groups.9 Under Yeltsin’s period low masssupport for the President was not compensated for by higher elite supportbut this changed very much after 2000. This alliance between the elite andmasses at the end of the 1990s against the President made Yeltsin’s room foraction quite limited; he simply lost the political support for his economic‘shock therapy’ not only among the general population but, more impor-tantly, among the national and regional elites.

For the cabinet there are some compensatory trade-offs at the end of the1990s. While 74 per cent of the masses have low trust in these institutions,the corresponding figure for the elite is 58 per cent decreasing to 35 percent two years later. The best trade-off under Yeltsin’s era is found for theState Duma, where more than 70 per cent of the population expressesdistrust, compared with 43 per cent of the elite.10 Except for these twoinstitutions, however, the compensation effect between the masses and theelite, which was so evident in the Baltic states, is almost absent in Russia atthe end of the 1990s.

In summary, it seems that in post-Soviet states that broke away from theformer regime in the most radical fashion, low mass confidence in politicalinstitutions and the market has been countered by fairly high levels ofsupport among the elite. This tendency is clear in all three Baltic states and ismost pronounced in Estonia, the country that went furthest in the directionof adapting to Western standards of democracy and the market and thathas the best economic record. This effect is much more visible in the Balticstates, probably because the political and economic changes coincided withthe achievement of national independence. Here, the nationally orientedelites saw support for democratic institutions and market economy as coreinstruments for demarcating national autonomy and domination of indige-nous ethnic elites.


The Russian elite’s contribution to stable democracy is expressed in theirrelatively higher confidence in the State Duma and the cabinet. Masses arenaturally critical because the poor short-term performance of these institu-tions has failed to live up to their expectations and has done little to improvetheir lives. Offe (1997) argues that democracy will be unstable if confidence isrelated solely to ‘instrumental rationality’ and institutional outputs. In hisview the transformation to democracy cannot be regarded as successfullycompleted until the population comes to value the new institutions for theirown sake. The paradox is that, in sharing rather closely the sceptical atti-tudes of the general population, the Russian elite may imperil democraticstability, while the Baltic elites, who largely disagree with their populations,constitute a better guarantee for the survival of democratic institutions.

Although the data shows that the Russian elite is to some extent critical ofthe State Duma, their scepticism is much lower than among the population.Therefore, one may argue that also in Russia the elite is acting as a ‘buffer’between fragile democratic institutions and an impatient population thatmake the democratic institutions directly responsible for poor performance.The massive elite support for the President and cabinet after 2000 andsubstantial confidence in the State Duma, is beneficial to stable democracy.As long as a powerful President and his cabinet do not disregard the positiveelite attitudes to the elected national assembly, despite popular criticism ofits being incapable of solving problems, democracy cannot be abolishedwithout major conflicts between the President and the elites. Such an out-come is not likely since the legitimacy of the President rests on the politicalsupport from exactly this elite stratum of national and regional elites withvested interests in pluralist democratic institutions.

Conclusion: high-trust state and low-trust society

Most would agree that democracy and political stability must be establishedon a minimum level of confidence in institutions and trust among themembers of the elite. Basically, the topic here has been trust in Russiandemocracy, both among the elite and the masses. Studying ‘trust’ raises threefundamental problems: how to measure trust and identify trust ‘paths’ (whotrusts whom?); how to interpret levels of trust (what are our criteria for ‘low’and ‘high’?); and how to evaluate varying levels of ‘diffuse’ and ‘specific’trust in terms of implications for democracy and political stability.

The findings reveal a rather complex picture of the elite’s confidence invarious institutions and in itself, of its perception of public trust and ofactual public confidence. When we speak of the legitimacy of a politicalregime we may be referring to the acceptance of a specific political order orelse to support for institutions and particular leaders and what they candeliver. Here I have drawn a distinction between the elite’s confidence ininstitutions and trust in leaders, where both are seen as intrinsic to democraticstability. However, one complicating feature of post-communist countries


with weak institutions and often strong leader-figures are cases of ‘person-alised institutions’, where people may not be able to distinguish between thetwo.

The ‘diffuse support’ approach to political stability argues that legitimacyis based on support for institutions that have an intrinsic value, irrespectiveof output. Huntington (1991) maintains that, while the legitimacy of anauthoritarian regime is dependent mainly on performance, the legitimacy ofa democratic regime rests more on acceptance of procedures and institutions.As Offe (1997) and Mishler and Rose (1999) underline, in the West, politicaland economic institutions have over time become socialised into the generalpolitical culture and adopted as part of a values system. In post-communistcountries they were established in a rather artificial manner by instrumental‘shortcuts’ and to some extent copied from abroad. In the long run insti-tutions cannot survive only on the basis of an instrumental rationality – i.e.because they are ‘beneficial’ in some sense or have a charismatic leader. Sinceall institutions experience periods when they are unable to fulfil expectationsor fail completely, ‘the only thing that can ensure their continued validityand recognition is a firmly entrenched system of beliefs that supports them –not for the reason that they are useful, but because they are ‘right’ and henceintrinsically deserving of support’ (Offe 1997: 66). While Offe and Huntingtonhave mass support in mind, their argument applies even more forcefully tothe elite’s ‘diffuse’ acceptance of institutions.

The alternative to the ‘intrinsic value approach’ is that political supportis specifically related to ‘specific’ outputs. The very understanding of‘democracy’ is relevant here. Among the Russian elite, and in particularamong the masses, a common idea of what justifies a political regime is itsability to produce material well-being. As shown by Lukin (2000), onewidespread definition of democracy among Russians is as a means ofachieving prosperity. Accordingly, only the ability of the system to provideeconomic growth and necessary public goods gives legitimacy to the regime.Inglehart (1999) found that the correlation between non-authoritarianorientations and economic growth in fifty-seven countries was substantial,suggesting that when the economy is growing, authoritarian attitudes tend todecline. Russia is among those countries scoring high on ‘respect forauthority’ and having a low GNP per capita.

Although Inglehart’s analysis did not measure support for institutions orleaders, he clearly suggests that the public’s support for the regime is relatedto economic performance. When a democratic Russia remains poor, someelites may mobilise mass support to achieve economic well-being by othermeans, e.g. by resorting to the ‘Chinese solution’ where successful economicdevelopment has been attained by an authoritarian political regime. In fact,when asked in 1998 and 2000 which country should serve as a model forRussia, more than 30 per cent of the Russian elite named China as the bestsolution, considerably higher than Germany and Scandinavia, the secondand third most-named countries on the list.11 The comprehension of a


political regime among ordinary Russians is obviously associated withinstitutional outputs and although economic decline may lead to authoritarianattitudes the democratic institutions are not necessarily jeopardised as longas the elite believes in the value of such institutions.

Of course, it is difficult to construe whether confidence in institutionsactually comes from intrinsic democratic ideas, the leaders’ charisma, theirdecisions or actual outputs. Probably confidence will stem from all these, butto different degrees depending on the kind of institution in question and onhow that institution, its leaders and performance affect the special interestsof elites and social groups. In new democracies, however, performancebecomes more directly connected to the justification of the institutions andto the leaders in charge than in established democracies, where institutionsper se are held responsible for poor performance to a much lesser degree.

The relatively high level of support among the elite for central andregional representative institutions (The Federation Council, the State Dumaand regional government), during the Yeltsin period and later under Putin,can hardly be explained by successful performance. Why, then so muchsupport? One explanation is the tradition of representative institutions underprevious Soviet and Russian regimes. Another is that a kind of ‘legal-rational thinking’ prevails among a major part of the elite, whereby thesemain state institutions came to be regarded as valuable because of theirpotential collective and integrative functions, independent of leaders andoutcomes. Supporting representative institutions is also in the elite’s owninterests, since democratic procedures are a counterweight towards a powerfulpresidency. Political pluralism, guaranteed in the Russian Constitution of1993, safeguards the influence of the national and regional elites and servesas a guarantee against a too strong centralisation of power.

The data shows that elite support varies between high confidence in repre-sentative institutions and low support for the economic and administrativesectors where expectations are directly related to outputs impinging onmaterial interests. The argument that system outputs determine supportseems to apply best to the business, state bureaucracy and ‘order’ institu-tions, where performance is visible and direct. The high level of distrust inthese institutions could be interpreted as a desire to replace them withsomething else, or at least introduce more state control through a strongerpresidency which happened with the election of Vladimir Putin.

One major cleavage in Russian politics during the Yeltsin period is exem-plified by the very low level of confidence expressed in the President and hisadministration. However, distrust in the President and widespread suspicionof public leaders more generally, as shown in the data, scarcely indicates aliberal attitude. As will be shown in Chapter 4 a large majority of theRussian elite in 1998 and 2000 regarded the idea of a ‘strong leadership’positively. But, the dissatisfaction with the President expressed in the 1998elite survey was a reflection, not of criticism of the Presidency as such butof scepticism towards the poor effects of the liberal economic policies of


President Yeltsin, lack of law and order and fears of fragmentation of theRussian Federation.

The underlying problem in Russia during the late 1990s was that miser-able economic performance and market failure split the elite over economicissues. The core elite who supported the President tended to have positivemarket preferences, while those who trusted the State Duma were scepticalabout the market. This means that attitudes to the market, based on theelite’s experiences either as part of the ‘newly rich’ class or as representativesof the poorer segments of the population, spill over into confidence in insti-tutions. The saliency of the state-market issue and left–right cleavages for theelite’s economic priorities are analysed in Chapters 5 and 7.

The political constellations in Russia, where radical economic reformswere implemented by the President and his administration while the StateDuma was intent on restricting these reforms because they benefited only afew, illustrates a rather paradoxical situation. The negative consequences ofthe ‘market economy’ for the major part of the population seem not to haveundermined but rather to have sustained the elite’s support for representativeinstitutions. The economic conflict ran directly between the President withhis liberal economic advisers and the left oriented State Duma. Many of thedeputies and also other elites regarded the representative assembly as themain stronghold for counteracting ‘raw capitalism’. Therefore the argumentthat economic misery leads to authoritarian rule has to be qualified. TheRussian case illustrates that in systems with a strong President who is maderesponsible for failed economic policies the elites tend to defend repre-sentative institutions. Another case which is the topic of the next chapter, isthat, within such a democratic-institutional context the elites’s approaches togovernance may be rather authoritarian.

President Putin’s more state-oriented economic policy has been favourablyreceived by most elites and the masses. The strategy of combining stateresponsibilities for welfare with constraining market reforms gained consider-able support. This reflects the way members of representative institutions andother elite groups have fallen into line with the presidency because of changeof policies. While support for the state’s executive institutions and theirleaders have increased, and may be favourable to political stability, this willnot necessarily lead to a more democratic process. However, many Russianswould argue that first of all the country needs stability and that a morepredictable and national oriented regime is a considerable achievement.

The main problem in Russia is the considerable scepticism towards non-government institutions and among the elites themselves. A political culturein which the values of non-state institutions like political parties and busi-nesses are seriously undermined is not conducive to the development ofeither a civil society or a market economy. The data indicate that while thelegitimacy of governing institutions is increasing, there is a long way to gobefore a viable civil society is established. In essence, civic values are foundedon elite and mass confidence in institutions and trust in inter-personal


relations, which may need generations to develop. And as long as inter-personal trust remains scant and business is seen as suspect the prospects fora liberal market is less positive. Returning to the hypothesis formulatedearlier in this chapter, one may conclude that the confidence or ‘diffusesupport’ in David Easton’s terms, in the Russian governmental institutionsincreased from 1998 to 2000. On the other hand the elite’s generalised trustin public leaders remains on a low level.

In the non-government sector confidence still remains low. Particularlydeep dissatisfaction with the new market institutions and political partieswhich form the core of a pluralistic society is likely to lead to more stateinvolvement in the economic sector and further political centralisation tobring society back to order. And this is exactly what Putin has done duringhis first years in power. While freedom imperiled Yeltsin’s democracystabilisation is jeopardising Putin’s democracy. As Karl Popper (1999) arguesin the citation in the beginning of this chapter, a stabilised democracy maybe turned towards itself when people take freedom for granted, or as in theRussian case, deposits their destiny in the hands of a strong leader. When‘stabilisation’ takes place in a context of absence of pluralist traditions somewould argue that democratic prospects are not very optimistic.12 However, aslong as the Constitution of 1993 is respected the ‘new order’ does not meana return towards a regime of the old type. The elite’s orientations presentedhere augur more elite integration under a strong president who also dependson the support from the national and regional elites. Their primary interestis in preserving their basis of power in representative institutions, a decen-tralised federation and in safeguarding business opportunities.

One important question is if the solid beliefs in governmental institutionsover time may spill over into the society and the market. If Putin’s centrali-sation policies and state-oriented capitalism is successful in generating pros-perity it may increase elite and mass support for the market and therebysustain a more viable democracy rooted in middle-class interests in a pluralistsociety. Even for a patient and understanding elite, in the longer perspective,the legitimacy of a democratic regime derives not only from the ‘intrinsicvalue’ of institutions but also from positive experiences with economicperformance and a working society.


4 Democracy Russian style

If Russian ‘democracy’ did not lead to prosperity, if ‘democratic’ Russiaremained ‘poor’, a wish to achieve prosperity by other means could emerge.

Alexander Lukin1

Introduction

After the demise of the Soviet regime the elite had to adapt itself to acompletely new and unpredictable political environment and harsh indi-vidual competition following the dismantling of state hierarchy and ‘rawcapitalism.’ These uncertainties raise questions of how the elite’s commit-ment to democracy may be challenged by a desire for more authoritarianleadership and if their orientations to democracy correlate with support fora market economy that did not fulfill its promises.

The market economy was initially established by a small group of topleaders operating as advisers to President Boris Yeltsin, with varying supportfrom the broader stratum of the national and regional elites. In a situationcharacterised by a crippled public sector, a lack of effective decision-makingand the impoverishment of major parts of the population, one would expectthe elite’s initial enthusiasm to have been replaced by a wave of more criticalattitudes to democracy, paving the way for more centralised leadership. Thischapter investigates whether the politically turbulent 1990s and largelynegative experiences with economic performance really eroded the nationaland regional elites’ support for democracy, asking what form of democracyattracts the Russian elites? And, is democratic thinking linked to the wish fora market economy?

Democracy rests on three main pillars: broad participation; a non-authoritarian leadership style; and competition for power institutionalised asa multi-party system. While it is widely accepted that in Western democraciesthese characteristics are closely interrelated, this may not necessarily be so inpost-communist democracies. In the first part the elites’ attitudes on thesedimensions are compared. The argument is that such orientations may belargely inconsistent but not necessarily threatening democracy. The secondpart investigates authoritarian inclinations more specifically asking how far


the elite will allow the President and the government to interfere withdemocratic decision-making.

The third issue to be discussed is how support for the type of economicsystem and democratic propensity is interrelated. One common argument isthat liberal political values ensue from market-based interests because themarket guarantees citizens equal opportunities and institutions to enhancetheir well-being and is therefore conducive to ‘democratic thinking’. Thus, themarket constitutes the material foundation for democratic development, andif a major segment of the elite is market-oriented this will constitute aguarantee for democratic rule. I argue that this is not necessarily the case inRussia. Democracy did not ‘grow from below’ in tandem with the develop-ment of a market. First of all democratic institutions were ‘imposed’ fromabove where the procedures put down in the Constitution of 1993 guaranteethe national and regional elites’ and the population basic political rights.Post-communist democracy is initially based on a ‘political interest’ and the‘economic interests’ will only develop following the establishing of a broadmiddle class. Thus, the sad experiences of the market experiment during thefirst decade may not necessarily imply the denouncement of democracy. Onemay argue that ‘top-down’ elite-democracy made democratic institutionsrobust against demands for political change resulting from economic misery.

Participation, leadership and party competition

Democratic attitudes may be measured in several ways and democratic gover-nance can mean different things. One commonly cited categorisation is thatof Robert Dahl (1971) based on what he calls ‘public contestation’ and‘participation’. Taking Dahl’s dimensions as a point of departure I distin-guish between the right of participation to influence political outcomes andthe degree to which leaders contest for power. These basic aspects demarcatetwo main models of democracy: ‘participatory democracy’ and ‘elite demo-cracy,’ both of which presuppose participation and competition amongpolitical parties but emphasise the people and the leaders quite differently.Here I include also a third aspect of democracy: to what extent authoritarianpsychological propensities are widespread. Beliefs that a strong leader isneeded to solve problems relates to what Putnam (1973) calls an ‘operativeideal’ of how to organise authority relations.2 It may be argued that favouringan inclusive political process and competitive political system and simulta-neous rejection of authoritarian leadership add up to solid support fordemocratic governance.

‘Participatory democracy,’ by definition, implies that universal participationis the main foundation throughout the political process and is not restrictedto elections (Pateman 1970). The participatory school values broad indivi-dual participation by citizens, thus implying scepticism towards ‘strongleadership’ as an organisational principle. The ‘elite democracy’ model, asformulated by Schumpeter (1996), holds that political competition among


elites is regulated by legitimate procedures. While this does not exclude massparticipation, the main elements in the political process are periodicelections and vigorous elites who mobilise the people as an electorate tosupport their bids for power.

Dichotomising ‘type of participation’ and ‘type of leadership’ give fourmain possibilities: (1) broad participation/soft leadership; (2) broad participa-tion/strong leadership; (3) narrow participation/soft leadership; and (4)narrow participation/strong leadership. In the first category, the elite favoursmass participation and non-authoritarian leaders. This type of democracy isfound in some Scandinavian countries, where the belief in the virtues ofpopular influence is strong and the political culture is characterised byproximity between the population and its leaders. The second category isespecially relevant in new democracies where elitist traditions are combinedwith democratic institutions. In the third type, we find a form of delegatedrule, where a belief in narrow participation is combined with a wish forliberal leaders. Elites espousing the fourth category have little faith in massparticipation and believe strong leadership is important. This type of systemcomes closest to an authoritarian political system but embraces attitudesthat may be found in any democratic state.

In principle, all these attitudinal variants may co-exist within the samepolitical system. The point is to find out how elite attitudes in Russia aredistributed among these four categories, for this will tell us a lot about whattype of democracy Russia is. Table 4.1 shows the elite’s attitudes towardspolitical participation, leadership and also to multi-party systems.

Obviously, ‘participation’ as a value is firmly rooted and the elite is ingeneral very positive about popular influence in the political process. Thedisappointments with the market economy do not seem to have had anynegative effect on attitudes to participation. Inclusiveness is not, however,the same as ‘participatory democracy’ in the broadest sense. These positiveattitudes, therefore, probably reflect more the elite’s desire for an ‘electoraldemocracy’, where the masses can be mobilised before elections. With weakparty structures and media organs controlled by a few powerful people, themasses can easily be manipulated to choose alternatives and candidates thatthe power elite support. Thus, in this sense popular participation does notrun counter to the interests of powerful elites. Among the elite groups thevariation is small and the members of the Federation Council are the mostpositive, with more than 90 per cent in favour of participation. There are nomajor changes over time among the elites, except for business leaders whoseattitude to equal influence on government policy becomes more critical.

Do the positive attitudes to political participation also imply liberal atti-tudes to leadership? In the ‘elite democracy model’ skilled leaders rule in theinterest of the people and their legitimacy stems from public support inelections. Such societies will emphasise the role of leaders and much of thepolitical process will be about the performance of charismatic personscompeting for influence. Given Russia’s authoritarian traditions and the

Democracy Russian style 51

disintegrated leadership during the 1990s, one might expect the Russian eliteto be particularly concerned about the leadership aspect of democracy.

As many as 81 per cent in both years expressed a positive attitude towards‘strong leadership’, indicating that in all elite groups a substantial majoritycan be classified as having affinity for authoritarian leadership. There are,however, some differences. The State Duma representatives are less authori-tarian than the other elites, while the leaders of the state ministries, stateenterprises and private businesses express most support for a strong leader-ship. More surprising are the authoritarian tendencies among the culturalelite, with 90 per cent supporting strong leadership in 2000. Since Putin cameto power the national elite has become more positive about strong leadershipwhile the regional elite has turned somewhat more sceptical.

The less authoritarian attitudes among the State Duma members in 1998can be explained by the struggle taking place at that time with PresidentYeltsin, which represented an attempt at demarcation vis-à-vis an over-dominant president. By the same token, the higher support for a strongleadership in the Federation Council at that time can be explained by the


Table 4.1 Elites who support equal influence, strong leadership and a multi-partycompetition (%)

Equal Strong Multi-partyinfluence leadership competition(a) (b) (c)

Total 1998 80 81 482000 81 81 43

State Duma 1998 79 63 572000 79 67 43

Fed. Council 1998 93 77 262000 93 83 21

Bureaucracy 1998 79 84 452000 83 88 47

State 1998 74 82 45enterprises 2000 78 98 46

Private 1998 86 86 33business 2000 70 84 37

Culture 1998 84 84 502000 76 90 40

Regional 1998 79 84 51government 2000 83 78 46

N(=100%) 1998 971 972 9542000 588 589 593

Statements: (a) ‘Support equal rights for all to influence government policy’; (b) ‘Important tohave some strong and able people who run everything’; (c) ‘Competition among many politicalparties will strengthen the political system’.

fact that the governors and the president were generally on the same side,with major controversies seldom arising between them. An additional expla-nation might be that more democratic orientations have taken root among alarger proportion of the central political elite because they have been shapedby the democratic process and want to demarcate themselves vis-à-visthe executive. State Duma members seem to have been socialised into ademocratic culture generated by positive experiences from mass elections in amulti-party setting.

How do the elite’s attitudes fit in with the four basic orientations todemocracy described earlier? The first category describes to some extent theState Duma, with positive attitudes to participation and more scepticalattitudes to authoritarian leadership. In the second category, with positiveattitudes to participation as well as authority, the best examples are theFederation Council, the leaders of the bureaucracy, directors of state enter-prises, the private business elite and the cultural leaders. What is encouragingfor the development of democracy in Russia is that very few of the elite holdthe opinion that would fit into category four – namely, restricted popularparticipation combined with a desire for strong leadership.

While the Russian elite generally concurs in their support for equalinfluence and powerful leaders, they are split down the middle regardingsupport for a multi-party system. What is more, support for party com-petition diminishes over time among most elite groups. The representatives inthe Federation Council and private business leaders have a particularly lowopinion of such a system. The State Duma members expressed more positiveattitudes than the other groups in 1998 but later their support for partycompetition also declined probably due to the rather chaotic party system.

The elite’s ambivalent attitudes to party competition do not conform to apluralist democracy of the Western type and can be seen as reflections ofnegative experiences with political parties very fragmented. It was exactly thissituation the law, proposed by President Putin in December 2000 and laterpassed by the State Duma in July 2001, wanted to cope with, requiring ahigher threshhold as to formalisation and size of a party before it is allowedto run for election. Thus, the President also in this field responded to wide-spread attitudes among the elites. The increasingly negative attitudes towardsparty competition point toward a system where political competition isbecoming more limited with support from a large part of the elite.

In summary, the Russian elites are quite unanimous in their support ofparticipation in political processes, and while they also substantially favourstrong leaders, they are clearly divided on the issue of how beneficialcompetition among several parties is. What does this tell us about Russiandemocracy? Obviously, the elite prefers a democracy in which popularparticipation is understood as mass elections and where strong leaders caninterfere and make the necessary decisions. At the same time, the elites aredeeply fragmented about how pluralistic this system should be. Theseorientations may lead one to conclude that the Schumpeterian ‘elite demo-


cracy model’ is quite close to the Russian elite’s conception of democracywhile Schumpeter would probably disagree about inhibiting party com-petition. Such support for strong leadership and limited competition raisesthe question: have the elites endorsed the President and the government withpowers that may jeopardise pluralist constitutional democracy? This isinvestigated in the next section.

The executive and democracy

The Constitution of the Russian Federation3 regulates the relations betweenthe President and the State Duma and clearly states that in case of con-troversies the elected assembly is the final authority (Article 107). Further, itgives the Constitutional Court a quite prominent position and the authorityto interpret if ‘federal laws and enactments of the president’ is in accordancewith the Constitution and to resolve disputes between federal state bodies(Article 125). While the President’s jurisdiction towards the State Duma andConstitutional Court is regulated in the Constitution, the government’sauthority towards citizens is more indirectly regulated in the general Article2 stating that ‘the protection of human and civil rights and freedoms is theobligation of the state’.

Although the rules are fairly clear one question for democratic gover-nance is how such formal power is made legitimate by political support. Itcan be argued that the elite’s positive orientations to strong leadership maysustain certain practices that may violate the ideas of the constitution. Table4.2 shows the elite’s understanding of the President’s power towards theState Duma and the Constitutional Court, and to the government’s powertowards individual rights.

An overwhelming proportion of the elite wants to protect the autonomyof the Constitutional Court and very few want to give the government theopportunity to suspend citizenship rights with the exception of bureaucraticleaders who tend to be somewhat less concerned about liberal ideas. Theissues, if the government should be given the opportunity, if necessary, toignore public opinions, is evaluated in a more positive way but it is still arather small minority in all groups.

This picture of respecting liberal conceptions of presidential and govern-ment powers changes substantially when it comes to the president’s relationswith the State Duma.4 As many as one third agrees that the president shall, ifnecessary, be able to overrule the State Duma while very few say the sameabout the Constitutional Court. As one may expect the members of the StateDuma are the most sceptical and in particular under Yeltsin. The change ofpresident and Putin’s more state oriented policies has influenced the attitudesof the Duma deputies but still they are rather sceptical about widening theauthority of the president. The opposite trend is found for the members ofthe Federation Council, probably because of Putin’s intervention with thepower base of the governors during late spring 2000. Why the leaders of


state enterprises are among the most negative to presidential power is noteasy to say. While the strong support among private business leaders underYeltsin can be explained by the many clashes and defeats with the StateDuma in liberalising the economy. The following decrease can be understoodnot as the elite’s concern for the status of the elected asssembly but that theylost their most important allies in the struggle for market economy. Whilethe leaders in the regions naturally are relatively sceptical about a very strongpresidential power, the leaders in ministries and, more surprisingly, also incultural institutions have become remarkably more positive about increasingthe power of the president.

Although the Russian national and regional elite want stronger leadershipit does not necessarily mean a wish for authoritarianism, jeopardising con-stitutional rule. The data demonstrate that the elite largely agrees with theConstitution that protection of civil rights ‘is the obligation of the state’


Table 4.2 Attitudes to Presidential and government powers (%)

President President Govmt. Govmt.shall be shall be should shouldable able ignore suspendoverrule overrule public citizen-the State the Const. opinion ship rightsDuma Court

Total 1998 30 3 17 82000 34 4 12 7

State Duma 1998 10 2 16 82000 21 2 15 9

Fed. Council 1998 37 0 3 72000 20 0 0 0

Fed. Admin. 1998 36 6 20 162000 51 3 15 13

State 1998 20 6 18 6Enterprises 2000 22 2 18 6

Private 1998 51 4 18 11business 2000 34 4 12 2

Culture 1998 26 4 30 62000 42 8 10 6

Regional 1998 30 3 15 8government 2000 33 6 11 5

N(=100%) 1998 963 973 970 9592000 602 600 602 581

Response rate 1998: 98–9%; 2000: 96–9%.

Statements: The President shall be able to overrule the State Duma’; ‘The President shall be ableto overrule the Constitutional Court’; ‘The government shall ignore public opinion if it disagreeswith it’; ‘It is permissible to suspend citizenship rights to combat slander against the government’.

(Article 2) and they also want an independent Constitutional Court. On theother hand the picture is less obvious about the President’s relations with theState Duma. It seems that for a considerable proportion of the elite theattitudes to Presidential power are more influenced by a propensity for strongleadership and scepticism towards the elected assembly, than by principalconsiderations of distinct power sharing.

The market-democracy connection

The change of economic regime and the resulting social misery following thedemise of state-planned economy has created a major dilemma for demo-cratic development: how to legitimise democracy and market reforms whenthe government’s economic record is relatively poor and there are few demo-cratic traditions on which to rely. Less attention has been paid to how ademocracy emerging from under the conditions of a parallel political andeconomic transformation, as is the case in post-communist states, affects theelite’s orientations. In this section I discuss some theoretical contributions oneconomic and democratic development and in the next I will look into therelationship between market affinity and democratic orientation among theRussian elite.

Elite theories of democracy take a neutral stance toward the market–democracy relationship, maintaining that elites primarily have a commoninterest in avoiding destructive ‘zero-sum games’, irrespective of marketaffiliation. They will support basic procedures for the political struggle,independent of the level of economic development or market opportunities.Two main theoretical approaches may be discerned about the role of themarket for democracy. Structural theories argue that the level of economicdevelopment is decisive for democratic development, while institutionaltheories focus on the market as a system of exchange in which the degree ofinstitutionalisation of ‘opportunity structures,’ like property rights, willdetermine democratic attitudes. This approach is essentially about politicalsocialisation and has two variants: ‘good’ or ‘bad’ learning.

The structuralist approach sees a viable democracy as a consequence ofcertain patterns of economic growth. Lipset (1960) is one of the mostinfluential proponents of explaining democracy in terms of economicmodernisation and growth. Diamond (1992), after reviewing the accumulatedresearch that Lipset spurred for over three decades, concludes that socio-economic development makes democracy and stable democratic governmentmore probable. This ‘modernisation’ approach has been challenged on sub-stantive grounds for not taking into account theories of ‘state capture.’ As isoften seen in elite-controlled bureaucratic–authoritarian regimes, elites havemore of an interest in creating an economic system that is favourable to themthan in generating general economic growth. The modernisation approach istherefore criticised for not including vital intervening variables like politicalculture and elite interests.


Institutional approaches regard democracy as a result of institutionalisedmarket practices. This approach has gained broad theoretical and empiricalattention in recent decades. One influential advocate of the idea of a closerelationship between the market as an institution and political democracy isHayek (1976), who argues that a system of private property rights is the bestguarantee of liberal political freedoms. The argument has been advanced,e.g. by Lindblom (1977, 1988), that ‘no democratic state has been developedexcept in a market-oriented economy’ (Lindblom 1988: 115). Diamond (1995)underscores the market as an institution and a model for learning democraticpractices and asserts the existence of a close interdependence between themarket and democracy, saying the freedom to engage in market activitiesprovides the foundation for political liberalism. Private ownership and markettransactions as such will create a middle class with inherent interests indemocratic institutions. Capitalism generates certain values of competitionand freedom of choice that are ‘generalised to encompass the realms ofgovernance’ (Diamond 1995: 113). The interesting question is how thesimultaneous economic and democratic transformations in post-communistcountries may sustain or erode market and democratic orientations.

The Russian economic reforms that began in 1992–4 were radical. Amassive ‘shock therapy’ strategy was imposed by the Kremlin leadershipwithout consultation with affected interests and pushed into effect mainly bya few Westernised Russian elites with close connections with liberal eco-nomists at Harvard University, the International Monetary Fund (IMF) andthe US government (Wedel 1999). Later attempts to mobilise support fromthe elite for what was essentially a ‘fait accompli’ aroused opposition, thusundermining the successful implementation of the reforms. As Przeworski(1991) argues, economic ‘shock therapy’ in democratic states creates adilemma for reformers, who will tend to vacillate between technical blue-print reforms from the policy leadership and compromises with broaderinterests that take the social costs into consideration thereby diminishing theeffects of the reforms.

Kullberg and Zimmerman (1999), arguing from an institutionalist pointof view, maintain that ‘the “cost of reform” argument obscures the characterof the relationship between market economy and democracy’ (p. 327). Themain object is not fair distribution of incomes but the extent to whichreforms enhance the prospects for stable competition and exchange that mayincrease future economic well-being. Support for democratic values is thus afunction of certain economic rights, first and foremost property rights. Theargument seems plausible if one regards the elite as economic self-interestedactors and is in tune with the classical tradition of regarding a democraticstate as rooted in certain liberal rights, in particular the right to own pro-perty. According to this line of thinking, the market is inherently ‘democratic’and the middle class and the elite will be infused with formal and informalnorms operating in the market place and thus take on democratic practicesas well.


A successful market economy has been found under authoritarian regimeswith widespread elite-rule, e.g. in South America and Southeast Asia. In theRussian case I argue that the most important intervening variable is not themarket or level of economic development but the political psychology of theelite. After 10 years of sharp economic decline, a catastrophic worsening ofthe socio-economic situation among the major part of the population andthe debunked ‘market economy’, democratic institutions are still in place.While still lacking a middle class, what else other than the elite’s values canbe considered to form the basis for democracy? In an economy whoseperformance remains below the critical threshold for generating democraticdevelopment and a predatory type of capitalism having enriched beyondimagination only some few, the national and regional elite’s interests incounterbalancing the Kremlin leaders with pluralist institutions become vitalfor democratic consolidation.

When a middle class whose economic status is independent of the powerholders is absent, as Diamond maintains referring to Mosca, the elite tend toform a ‘political class,’ where political power creates economic benefits andgenerates new social stratification by capturing the state. Under such condi-tions market liberalism may lead to ‘bad learning’ about democratic practicesas well as about how to run the economy. Using democratic breakdowns inAfrica and Asia as examples, Diamond argues that the main cause of suchdevelopments is the perverting effects of ‘rent seeking’ – i.e. a situation inwhich elites control the state for their own purposes and block economicdevelopment by sustaining a large state apparatus.

Obviously, this could also have been a description of the Russiansituation. The markets were designed by an elite who controlled the privatis-ation of state property but within the context of a collectively orientedpolitical culture. The paradox is that while the benefits of the market werethe main argument for dismantling the former inefficient state economy, theprivatisation process actually put some of the elite in a position tomonopolise the economy, thereby perverting the market. By giving the elitecontrol of the new profitable businesses that often have only formally beenseparated from the state, the new economy largely became a distortedmarket.5

The problem of ‘bad learning’ may be illustrated by Anders Aaslund(1995), who was an adviser to the Russian government during the earlyreform period and thus one of the main proponents of ideas and recom-mendations for putting a radical market plan into effect over a short time-period. Following the failure of this project he explains with hindsight that itturned out to be a disaster because of the conservatism of the old nomen-klatura and the strength of the ‘rent seekers’ who made money by distortingthe market (Aaslund 1999).

Others have argued that the main problem was not the ‘nomenklaturacapitalists’ from the former regime but the small team of non-officialeconomic advisers to the Russian government.6 Using presidential decrees to


by-pass the parliamentary process amounted to operating with the samedegree of secrecy and non-accountability as the former regime and thusdemonstrated a failure to shake off the old communist mentality. As shownby Wedel (1999), Yeltsin’s adviser and architect of economic change, AnatolyChubais, formed a ‘clan’ consisting of young Russian economists with closeconnections to liberal economists at Harvard University. According toWedel, the ‘Chubais clan’ played a ‘trans-identity game’ where responsibili-ties were unclear and accountability lacking, resulting in open access to topauthorities in Russia as well as in the United States, the IMF and the WorldBank. These people were able to operate as advisers while at the same timepursuing their own individual interests. Paradoxically, the only way ofinstigating radical reforms was for politicians to delegate authority to closed‘change clans,’ a situation that was mirrored in several other post-communiststates. President Yeltsin and his advisers backed this group of youngreformers and protected them from the pressure of groups inside and outsidegovernment who had to bear the costs of the changes. Because the firstphase of economic change was legitimated by a ‘negative consensus’ aboutthe miserable failure of state socialism, a quick surgeon-like operation wasdeemed to have a better chance of success than an incremental strategy. Theargument was that while elites may persist in their belief in the market, evenin the absence of economic results, the public soon forget the promises ofcapitalism and turn to idealising the past.

In other post-Soviet states, e.g. Latvia, Nissinen (1999) maintains thatafter the ‘shock therapy’ involving privatisation, price deregulation, theabolition of subsidies and the need to balance the state budget, the economymust be consolidated by generating popular support. While the initial periodwas a stage of extraordinary politics, a democratic government cannot in thelong run continue resorting to secrecy and delegation of policy to ‘dreamteams’ of experts. Therefore, it was clear that the second phase, involvingreform of the taxation system and social rights, required a broad consensus.In other words, while the government could get away with circumventing thenormal political process during the initial period of reform, in the subse-quent period broad elite and mass support became essential for success. Ageneral problem in most post-communist states was that structural publicsector reforms in the second phase were conceived and implemented usingthe same ‘closed methods’ as in the first period.

From another perspective, Bartlett (1997) paints a more optimistic picture.Comparing democracy and market changes in Hungary with other post-communist countries, he maintains that political institutions affect the courseof market reform. The broad regime types ‘democracy’ and ‘authoritarian-ism’, however, offer only limited explanations for economic transformationsand performance.7 Therefore, one has to determine how country-specificpolitical traditions determine market reform and performance. The mainpoint is not whether a state is ‘democratic’ or ‘authoritarian’ but how‘particular’ norms of lobbying the state are balanced against ‘universal’


standards that prevent special interests from distorting the implementation ofmarket reforms. Contrary to the conventional wisdom, Bartlett maintainsthat democratic institutional design, at least in the case of the post-communist states, strengthened the capacity to implement unpopulareconomic reforms and restricted the manoeuvring of ‘rent seeking’ elites.

While this may be an adequate description of the relatively successfulHungarian case, Russia’s institutional solutions had other consequences thatare more reminiscent of O’Donnell’s (1993) analysis of Latin America. Thesecountries are ‘electoral democracies’ with weak state capacities and lack the‘universal’ norms and ‘civic society’ dimension of liberal democracies,thereby empowering the elites to exploit the state by patronage and specialtreatment. Although it is important to insulate the elite from mass demands,it is even more essential to create institutions that protect governing elitesfrom ‘rent seekers’.

The dual transformation of the economy and the political regime makesthe relationship between the market and democracy complex and dynamic.The Hungarian case may exemplify how rather successful democraticinstitutionalisation allowed elite competition to prevent the domination ofspecial interests in the market. At the other extreme, the dismantling of thecentral economy and weakened Russian state did not result in a liberalmarket but in new forms of interlocked arenas of patronage and dependencebetween the state and the new managers in the so-called private sector.

The new state–business relationship goes to the very heart of the post-communist state. Rejecting the notion of a ‘mixed economy’ in post-communist states as imprecise, Stark (1997) adopts the term ‘recombinantproperty’ to describe a system of decentralised private property networksthat are interlocked with central government management of liabilities,resulting in an increasingly blurred distinction between state ownership andprivate property. In order to survive under such unpredictable conditions aspecific strategy is required. The ambiguity of decision-making environmentsis countered by ambiguous organisational strategies. As Stark remarks,actions may be interpreted as coherent from many perspectives at the sametime and are imbued with legitimacy by both the state and the market, sincepublic and private motives cannot be separated. While the economy may runrather smoothly, under such conditions one may expect ‘bad democraticlearning’ to take place.

The erosion of mass support for the market had by 1994 already reacheda dramatically low level, with only 13 per cent of the Russian populationreporting trust in private enterprise. For the political institutions the picturewas even more gloomy: with the percentage of those who trusted the StateDuma at 12 per cent, the government at 10 per cent and the political partiesat 6 per cent (White et al. 1997).8 Accordingly, some argue that, given thelack of stable intermediate institutions between the state and the masses,both democracy and the market in Russia have been in jeopardy for sometime.


The elites as market-democrats?

The results of population surveys in Russia exhibit a rather convincingcorrelation between democratic orientations and market support (Evans andWhitefield 1995; Miller et al. 1997), while the empirical results of previouselite studies are rather contradictory. Miller et al. (1997) investigated therelationship between support for democracy and market reform amongRussian and Ukrainian elites in 1992 and 1995. Somewhat surprisingly tothem, they found no clear correlation. The relationship was tenuous andmuch weaker than among the general public. In fact in 1992 strong supportamong the elite for democracy was significantly correlated with preferencesfor a state-regulated economy. One factor which had a major impact on therelationship between a democratic and a market orientation among citizens,was party affiliation. Those who were affiliated with a party were consis-tently more in favour of both democracy and the market economy.

In their study, with data from 1993 and 1995, Kullberg and Zimmerman(1999) compare Russian mass and elite attitudes to democracy and themarket and found a rather a different picture. They argue that an over-whelmingly high proportion of the elite embrace both democratic andmarket values (almost 80 per cent of the elite is labelled as ‘market-democrats’ in 1993 and 1995). According to the authors, such values expressa fundamental consensus about and support for reform among elites,resulting from a more favourable opportunity structure than is available tothe general public. The general population is shown to be considerably moresceptical toward the market and democracy. According to the authors, theeconomic situation facing various groups determines opportunity structuresand ideological orientations.

One intriguing question is why the picture of elite orientations towarddemocracy and the market presented by Kullberg and Zimmerman is sodifferent from the findings of Miller et al. who report hardly any correlation atall. The purpose here, however, is not to ponder the inconsistencies of previousresearch findings. There may be several reasons for the differences, rangingfrom differing selections of elite respondents to differently formulatedquestions and different points in time at which the surveys were conducted.

If, as Kullberg and Zimmerman argue, new economic opportunity struc-tures shape democratic dispositions, one may expect to find a correlationbetween support for the market and democratic thinking in my 1998 and 2000elite surveys. In the following, orientations toward economic system are oper-ationalised as ‘support for state or private ownership in business and industry’and ‘adherence to the value of individual competition’. Democracy isoperationalised as ‘inclusiveness of participation’, ‘type of leadership’ and‘competitive party system’. Table 4.3 shows the relationship between thevariables.

If a favourable opportunity structure is vital to the elite, the assumption isthat they would systematically support both the market and liberal demo-


cracy, resulting in positive and rather strong coefficients. Obviously, con-fidence in private ownership and competition do not correlate positively withsupport for one basic democratic propensity – influence of citizens ongovernment policy. On the contrary, there is a small tendency for marketsupporters to express scepticism about inclusive participation but this is notsignificant. Using type of leadership as an indicator of democracy yields aninverse, though weak relationship. Support for individualism is, however,fairly clearly related to support for ‘strong leadership’ thus indicating apsychological competitive-authoritarian disposition among the elite.

However, when one examines the correlation between support for struc-tural aspects of democracy, like a multi-party system, the ‘market-democrat’thesis becomes rather plausible. The values of ‘private ownership’ and inparticular market competition are clearly correlated with preferences forparty pluralism. Thus, the data indicate the existence of a group of reformistliberal elites only when market attitudes are connected to the proceduralaspects of democracy, such as how to organise the party system. And, mostinterestingly, the correlations are getting much stronger under Putin.Obviously, a more centralised policy style spurred more profiled ‘market-democrats’ among the elites.

The discrepancy with the Kullberg–Zimmermann study who found asubstantial group of ‘market-democrats’ may simply be a question of use ofindicators. It may be related to the definition of ‘democracy’ as soft leader-ship style or a certain procedure guaranteeing political competition. Onlydefining democracy as an institutional arrangement seems to generate agroup of ‘market democrats’. More likely, the difference between the studiesare due to selection of elites. The Kullberg–Zimmermann sample consistedof only 200 respondents ‘whose primary expertise and position involved theanalysis and/or conduct of foreign policy’ (p. 357). This group of elites


Table 4.3 Attitudes to economic system and democracy. Pearson’s correlations

Democracy

Influence Leadership Party Economy of citizens competition

Ownership 1998 �0.05 (N=948) 0.03 (N=958) 0.08* (N=940)2000 �0.02 (N=588) �0.02 (N=581) 0.16** (N=585)

Competition 1998 �0.01 (N=961) �0.12** (N=971) 0.16** (N=954)2000 �0.02 (N=594) �0.05 (N=588) 0.20** (N=591)

**Significant at the 0.01 level; *Significant at the .05 level.‘Ownership’: Support for private vs. state ownership in business and industry.‘Competition’: Support for individual competition.‘Influence’: Support that citizens shall have equal chance to influence government policy.‘Leadership’: Support that it is necessary to have some strong and able people who runeverything.‘Party competition’: Support that competition among many political parties will make thepolitical system stronger.

would almost by definition be the most liberally oriented, becauseprofessionally speaking they are close to Wedel’s (1999) internationallyindebted ‘change clans’, which were the very core of Yeltsin’s reform-mindedelite with close connections to American liberals.

On the other hand, Miller et al. (1997) found only a small positivecorrelation between liberal economic and political orientations among theelite in their sample of 112 legislators from the parliament and adminis-trators from the major central ministries. That sample, although also quitesmall, tallies more closely with the composition of respondents interviewedin my 1998 and 2000 elite surveys and may account for parallel findings.Thus, the criteria for selecting ‘the elite’ and operationalising the concept ofdemocracy may explain the varying results.

To summarise, data indicate that there is no major group of ‘market-liberals’ among the Russian elite when ‘democracy’ is defined in terms ofcitizens’ participation and leadership style. Individual competition is clearlyan important aspect of a market economy for the Russian elite and thedata illustrate that in Russian-type democracy competitive values relate toapproval for strong leaders. Institutionalists would argue that a marketeconomy is conducive to democratic learning and practices. Obviously, thisis not true for Russia if one restricts the definition of ‘democracy’ to valueslike participation and leadership-style. However, support for economicinstitutions, like private ownership and individual competition, corrobo-rates substantially with positive attitudes to a political system allowing aplurality of parties. The elite’s political psychology, in particular attractionto individual competition, seem to be playing an important and increasingrole in their perception of how democracy should be organised. In con-clusion, Putin’s re-centralisation style seems to have stimulated a clearercleavage between liberals and those who are critical of market and politicalpluralism.

Conclusion: top-down democracy and the ‘market-democrats’

A common experience of former communist states was the emergence of acentral leadership who quickly established quite stable democratic institu-tions and introduced not-so-successful economic reforms. However, theinternalisation of democratic attitudes is not an automatic consequence ofreplacing communism and a planned economy with a democracy and amarket economy. And developing a civic culture takes time. While a politicalregime may be toppled in the space of a few days and institutions substitutedwithin months, the political culture underpinning the new institutions islikely to alter only after decades or generations (Dahrendorf 1990). Doesthis culturalist approach fit in with the Russian case? Without relativisingwhat is ‘good governance’ one may argue that ‘democracy’ is a manifoldphenomenon and specific cases must be understood on their own conditions,not on idealised Western models.


In Western countries democratic governance has ensued from the incre-mental and long-term adoption and internalisation of certain values andorientations, making specific patterns of elite behaviour appropriate. Thus, astable democracy and a functioning market depend on the extent to whichcertain enduring norms are shared by the elites. The aim of this chapter hasbeen to find out to what extent the Russian elite has adopted democraticvalues under conditions very different from ‘normal’ democratisation pro-cesses. The survey reveals a quite complex picture, showing orientationsgoing in various directions, depending on whether the focus is on ‘indi-vidualistic’ or ‘procedural’ aspects of democracy. An overwhelming majorityamong the elite is committed to broad popular participation in politicalprocesses, while at the same time favouring strong leaders and is clearlyfragmented on the issue of party pluralism.

It can be argued that a high educational level is conducive to democraticattitudes, since the new class of Russian national and regional elites standsto benefit from a democratic society. Lane and Ross (1999) show that amajor change in the composition of elites took place after 1991, with theincoming elite comprised primarily of intellectuals with a much higher levelof education than the old nomenklatura elite. The implications of such afundamental generational change in the elite’s orientation for post-com-munist political culture have not been extensively researched. Democracy‘Russian style’ with liberal attitudes on representation and participation anda preference for strong leadership (strangely enough, a combination foundparticularly among the cultural elite) may not be as contradictory as theyseem. Strong leadership is not the same as unrestricted and totalitarianleadership of the kind that existed under Stalin, for example. The Stalin erawas above all a tragedy for the educated elite, who became the target of theStalinist purges because they lacked the correct class background.

If one takes into account the small number of ‘market-democrats’ amongthe bedrock of Russian elites in the 1998 survey, the political events towardsmore authoritarian rule that followed the breakdown of the Russianeconomy in August 1998 make good sense. The double rejection by the StateDuma of Viktor Chernomyrdin, the candidate proposed for the post ofprime minister by Yeltsin after Sergei Kirienko had been fired, opened theway for the more ‘collective-oriented’ leader, Yevgeny Primakov. He at oncedistanced himself from the previous liberal economic policy, trying tocombine the market with state involvement without returning to theadministrative command system of the past (Shevtsova 1999). The lack of asubstantial group of commited market-democrats is not a threat to thedemocratic institutions but is important for the type of democracy that istaking root. Russian democracy is not made legitimate by the market oppor-tunities of the elites but by how it may solve problems for the collective, atask that requires solid leadership.

The personnel changes among the top leaders in 1998 and the subsequentappearance of Putin as prime minister in 1999 and as President in 2000


confirm a trend away from liberalism that had started among the nationaland regional elites some years earlier. The December 1999 elections to theState Duma resulted in a temporary cooperation between the communistsand the new successful party of the Kremlin establishment called ‘Unity’.The widespread support for Putin as a ‘strong’ Prime minister and actingPresident and later his election as President shows that the former conflictsbetween the elites around the President and other elites, mainly in the StateDuma, had largely been mitigated. Support for ‘strong leadership’ may alsobe a case for concern when an increasing proportion, as data shows, ispositive about allowing the President to overrule the State Duma. Whiledemocracy may have suffered Putin’s regime has stabelised Russia. Therelaxation of market reforms consolidated and integrated the Russian elitearound a stronger Kremlin leadership.

As will be analysed in Chapter 5, economic reform is a complex processwhere the elites expect the state to take on social responsibilities and protectlarge industries while also supporting the privatisation of a considerablenumber of smaller industries, housing and retailing. This small-scale privatis-ation is exactly what Putin started to propose during the autumn of 2000and managed to implement in September 2001, albeit, under the protests ofthe communists in the State Duma. The new laws make possible privateownership of land with substantial consequences for buying land for smallindustries, housing and shops in the cities. Putin did not at this early stagepropose privatisation of collective farms, which was also a highly con-troversal issue under Yeltsin. As shown in the next chapter widespreadpositive attitudes to collective farming among the elite is quite consistentwith Putin’s strategy of partial privatisation of land, which was restricted tocities. Later, Putin’s incremental economic reforms have continued withproposals of privatisation of farm land as well.

Obviously, the disappointing market experiment has not underminedbasic democratic propensities. Why not? It seems reasonable that democracyoffers better career opportunities to the Russian elites than the previousauthoritarian system. Thus, by defending pluralist democratic institutionsthe elite is safeguarding their own positions and future. While in the previousstrictly hierarchical system opportunities were mainly contingent on ideo-logical orthodoxy and personal relations, in a democracy the elites can makeuse of features that are more under their individual control, and they canbenefit from their competitive assets, such as education and skill.

Although some would argue that ‘elitist democracy’ has weaknessescompared to ‘participatory democracy’, such a critique is not very relevantin the Russian case. A type of ‘soft democracy’ would easily destabilise theRussian political system and territory, as was clearly demonstrated duringBoris Yeltsin’s period. Consequently, as shown in Chapter 3, the elite’sconfidence in President Yeltsin was extremely meagre. The leadership offeredby Vladimir Putin within the confines of electoral democracy was exactlywhat the elites wanted at the end of the turbulent 1990s.


The main explanation of why stronger leadership is welcomed is that theRussian national and regional elites have a genuine interest in avoidingdestructive ‘zero-sum games’. Lacking necessary inter-elite trust and civicvalues, only a powerful leader can reduce the costs of destructive gamesamong the national and regional leaders, co-ordinate policies and enforcedecisions necessary for the collective and state integration. Thus, ‘self-imposed consenus’ among national and regional elites, as Gel’man (2003)describes elite integration after Putin, is the mirror of a stronger executiveallowing the elites to benefit from liberal opportunity structures in politicsand market. The elites can continue their manoeuvring and coalitionbuilding based on deep-rooted competitive instincts but under the auspicesof a ‘visible hand’ of a firm authority that keeps the state together.

As the elite’s orientations reveal, when state integration is paramount, thegroup of ‘soft market-democrats’ will be marginal. On the other hand, morecentralised rule seems to be conducive to rallying market-oriented elitesround the idea of ‘democratic competition’. The strengthened associationbetween market preferences and the procedural side of democracy may,ironically, be interpreted more as a reflection of democracy under pressurethan learning from the market. The beliefs of these ‘hard market-democrats’fit well in with the general picture of a rather authoritarian-oriented elitewho are constituting the political basis for ‘democracy Russian style’.Another interesting question is the elite’s orientations towards the neweconomic system. One expectation is that the propensities for strongleadership disclosed here bode well for a type of capitalism where the statehas a leading role. This is the topic for the next chapter.


5 Between the state and the market

We are stuck halfway between a planned command economy and a normalmarket economy. Now we have a disgusting model, a bastard of the twosystems.

Boris Yeltsin1

Introduction

The intention of the reform leadership in dismantling the central planningsystem and introducing a market economy via ‘shock therapy’ was to restruc-ture the whole economy and establish a new foundation for economic growth.The instruments for doing this were a comprehensive economic stabilisationprogramme, the swift privatisation of state property, extensive tax reforms, theabolition of state subsidies and a decrease in transfers from the federal budgetto the regions. Although living conditions deteriorated rapidly, the reformersbelieved that pushing on with a sweeping and rapid introduction of the marketsystem was the only way to revitalise the stagnating economy.

One explanation for why the market experiment did not live up to theexpectations is that the ambitious policy reforms were thrust upon anunprepared population who, after patiently waiting for recovery to arriveduring the early post-communist years, later became critical of the reforms.Although the social effects were obviously disastrous to large segments ofthe society, they are not sufficient to explain why economic liberalism waseroded in favour of more state regulation. More important I believe, are theorientations and strategic position of the national and regional elites. Inorder to put the reforms into practice, the Yeltsin government had to rely onthese leaders that were enjoying the new power base ensuing from post-communist democratisation and federal decentralisation. I argue that whilethe impetus for replacing one type of economy with another came from asmall Kremlin leadership, the practical outcome ultimately bore the imprintof the strategic national and regions elites.

Their orientations are here examined from three perspectives. The first isthe basic individual-collective values. The second is the more operationalissue of privatisation. Third, the problem of privatisation is investigated


from a more instrumental angle, asking how the elite view the state and themarket as instruments for solving problems in various policy areas, and howtheir attitudes to state and market correlate with reform policies in variousregions.

Asking why the economic reforms ‘failed’, if indeed they did, is not a veryuseful exercise, since ‘failure’ must be measured against some standard, inthis case the Western ideal of a market economy. More to the point is thatthe elite’s orientations may explain why the economic system has ultimatelybeen moulded more by traditional collective Russian values than by the ideasof the proponents of the free market. Actually, this was the programme ofVladimir Putin and one pertinent issue investigated in this chapter’s lastsection is to show how Putin’s centralising policies changed the elite’s wide-spread pessimism of the Yeltsin period into economic optimism.

Before investigating the elite’s reactions to the new economic system it isnecessary to give an overview of the actual impacts of the reforms oneconomy and society. These impacts affected people’s lives to a large extent,and most likely have been formative for the elite’s orientations.

Impacts on economy and society

The dramatic economic situation following the fall of communism and theintroduction of a market economy during the 1990s should be put intoperspective. Calculating economic development in the former Soviet Unionis not an easy task. There are large discrepancies between official Sovietfigures from the period 1922 to 1985, as alternative estimates recomputed ata later stage and Western estimates reveal. However, all the figures show apositive growth rate for the years 1951–85. In the period directly precedingthe reforms (1981–5), official Soviet figures showed 3.9 per cent growth,Western estimates 2.0 per cent and alternative estimates 0.6 per cent. Allestimates display a downward trend, but none of them, with the exception ofthe alternative estimates for the 1940s,2 show negative growth rates.

A dramatic collapse in production, incomes and living standards tookplace after 1989. By 1994 GDP had declined by 50 per cent, real wages hadbeen reduced by one-third and the real value of pensions had dropped byalmost half (Becker and Hemley 1996). Developments in the years following1994 were less dramatic. From about 1995 until the collapse of the roubleand the banking crisis of August 1998 there were some grounds foroptimism. The downward trend in GDP, real wages and industrial outputwas halted and there were even some signs of recovery. However, the positivedevelopment was built on sand and did not last. The devaluation of thenational currency and the economic ‘melt-down’ of 1998 proved that theWestern model of a market economy was not right for Russia. The figures inthe Appendix, Table A5.1 to a large extent speak for themselves.3

Most important was the central leadership’s open admission that thecountry was undergoing a severe crisis. In 1999 Prime Minister Putin (who


was elected President in March 2000) wrote in an article to mark the end ofthe millennium that ‘In the 1990s Russian GDP fell almost 50 per cent. Interms of GDP we lag behind the USA by a factor of 10 and behind Chinaby a factor of 5’ (Ellman 2000: 1420). Judging by the table above, theRussian leadership had a very realistic perception of economic developmentsduring the last decade of the twentieth century. The fall in GDP, realincomes and production simply could not continue.

The disastrous effects on people’s living conditions may be read not onlyfrom the decrease in real pensions and wages and in average life expectancybut also from various other indicators. Ellman (2000) shows that a majorelement of ordinary people’s lives was mass impoverishment resulting inmalnutrition, worsening public health and a consequent rise in epidemics.But poverty did not emerge with the market economy, it existed well beforethe market experiment. However, after 1992 the decline in real wages andpensions meant that larger segments of the population became poor.Braithwaite (1997) illustrates that poverty was expanding from about 10 percent of the population in the 1980s to almost 30 per cent in 1993, andbecame increasingly concentrated to families with children, unemployed andhandicapped people. According to Ellman (2000), the Gini-coefficient whichmeasures inequality, shows that Russia has one of the largest incomedifferences in the world. No wonder, then, that criminal activity skyrocketed.

In most sectors there was a negative trend in value added per employeeand in the number of employees. Taking 1990 as the base year (1990=100),Tikhomirov (2000) illustrates that industrial employment fell to 65 between1990 and 1997 and agricultural employment to 89, while in the stateapparatus it increased to the astonishing level of 161 with similar upwardtrends for the banking and finance sector and the oil and gas industry.

The failure of the Russian reform meant that the negative economic trendwas never reversed. This development looks even more dramatic if one takesinto consideration the situation on the labour market. The Russian economywas producing less and, apart from the export-oriented oil and gas industry,was unable to channel the labour force into productive sectors. In contrast,the state bureaucracy grew considerably during the 1990s. Although the‘knowledge industry’ was more crucial than ever in Russia, the country’s‘brains’ – i.e. those engaged in research – either went abroad or spent theirtime working in other jobs in order to survive. During the 1990s the Russianstate lost a large portion of its most qualified personnel. Employees inresearch and development decreased dramatically – by one half – during the1990s.

Most striking, however, is the substantial growth of employment in the‘triangle of interests’ – the oil and gas industry, the banking sector and thestate administration. The oil and gas sector is the largest export industry,creating enormous incomes in which the banking and finance sector natur-ally had a great interest. Although much of state control over the oil and gasindustry was lifted, making possible huge profits for the managers, these

Between the state and the market 69

activities also remained the main and most secure source of income for thestate. At least some of the growth in the state bureaucracy – the third cornerof the triangle – can be explained by the emerging ‘administrative market’,with interlocking relationships between elites, as described by Treisman(1995) and Stark and Bruszt (1998). In order to reduce uncertainty andbenefit from the new opportunities, state employees began to co-operateclosely with the banking sector and the managers of the lucrative exportindustries.

The mutual dependency between these actors and the strengthening ofthe ‘state-banking-industry triangle’ during the 1990s underscore thepeculiarities of the Russian economic reforms. Instead of creating prosperityfor all, the ‘shock therapy’, which was aimed at rapid economic develop-ment, produced widespread misery and opportunities only for some few whoprotected their wealth in clandestine networking with state managerscontrolling regulation and allowances, and bankers providing the necessarycredits.4

Central economic reforms and obstructive elites

The Western-inspired economic reforms of Yeltsin’s administration wereinitiated from above without much consultation with affected interests andclashed with a major part of the elites in a rather provocative way. This is nota new phenomenon. Russian history provides many examples of grandiose,top-down ‘blue-print’ reforms that ran into trouble because of non-co-operative elites (Yanov 1987). Thus, bureaucratised authoritarian regimesoften falter because of obstructive tactics by the lower level elites Olson(1982). Clearly, therefore, the additional power accorded to these elites bythe introduction of democracy and decentralised rule makes the new reformleadership even more dependent on this elite stratum than its predecessorswere.

The elite’s mind-set is informed by two sets of attitudes: those inheritedfrom the past and new ones created by the current opportunity structures.Both have proven to be major obstacles to sustainable economic reform. Inthe first instance, sympathy for the previous collective institutions isobviously at odds with the individualism on which the market is based. Inthe second instance, widespread opportunism perverts the market, sinceinstitutions for efficient exchange, e.g. laws for contract enforcement, do notwork. A main hindrance to market reforms may occur when traditionalthinking rooted in the political culture of the past coalesces with new liberalopportunities under the absence of sufficient institutions.

The former stable ideology of collectivism and state ownership was dis-carded overnight and replaced with the idea of individual responsibility andcompetition in a market environment, which turned traditional politicalorientations completely upside down. Consequently, the main challengeconfronting the reform government was to change the mind-set of the


national and regional elites and recruit leaders with the ‘right’ ideas in orderto form pro-reform coalitions. Concerned about the adverse effect on reformof the attitudes of the past, President Yeltsin’s pro-market regime tried con-tinuously to replace the ‘old guard’ with younger people. But while the lattertook on board the ideas behind the market model they were completelylacking in experience of how a modern economy actually functioned.

It would appear that the post-communist elites represents a ratheranomalous combination of traditional collective attitudes, rooted in thepast, and the individualism resulting from the new liberal institutions. Theeconomic reforms stimulated a latent ‘competitive instinct’ among the elitethat had been suppressed during the Soviet period by control mechanismsdesigned to preserve hierarchical thinking and promote egalitarianism.However, the ‘competitive instinct’ does not necessarily lead to entre-preneurial and creative market activity. In the environment of post-SovietRussia it is just as likely to find expression in resistance to the abolition ofstate functions, a scramble by the elite to safeguard their jobs or competitionfor control over state property motivated by the prospect of personalenrichment. It may also, as Stark and Bruszt (1998) argue, result in statebureaucrats and business managers establishing a new type of networkeconomy in the grey zone between the state and the market.5

Nevertheless, individual competition for job security and ‘rent-seeking’ donot rule out a concern for the collective interest. The paternalist politicalculture espoused by the elites embraces ‘strong leadership’ and state respon-sibility for the common interest. Faced with a dominant political culture ofthis kind, the ‘chaotic capitalism’ of the reformers could not last, but wasobstructed by elites seeking to safeguard their own positions and attainstability without wanting to return to authoritarian rule.

Perhaps as a reflection of the mixture of old-style collectivism and new-style individualism and competition espoused by the elites, the Russianeconomy is now following a middle road between the state and the market.David Lane (2000) sees a trend towards mixed ownership, with government-controlled financial institutions and companies run by managers who haveinherited their basic orientation from state socialism. A strong undercurrentof collectivity is clearly conducive to a kind of ‘state-led capitalism’ (Lane2000). This argument is consistent with Yanov’s (1987) observation that thefailure to bring about economic reform during the authoritarian Sovietperiod was also due to the top leadership’s inability to co-operate withinfluential groups among the lower-level elites.

Other authors, too, see the strong position of the managerial elites duringthe Soviet period and in post-communist Russia as highly detrimental toeconomic progress. Olson’s (1982) concept of ‘distributional coalitions’ isuseful for understanding economic malfunctioning after the collapse of thecommunist regime. According to him collusive behaviour accounts for howthe state was usurped by the managerial and bureaucratic elites, leading toeconomic stagnation and the decline of authoritarian empires. Collusive


behaviour did not end with the demise of the authoritarian state, however. Itis now probably more widespread than ever, with the rise of a new class ofeconomic managers who have an interest in only partial market reforms(Hellman 1998). This tendency to ‘insider ownership’ was particularlyobvious during the 1992 privatisation programme for large state enterprises(McFaul 1995). While the former Soviet management elite ‘free-rode’ thestate, the post-communist elites have an interest in exploiting both the stateand the market. The collapse of all-encompassing institutions and the lack ofproperty rights and contract enforcement is for Olson the main explanationfor why economic performance is even worse after the fall of communism(Olson 1992).

According to Olson (2000) some markets emerge spontaneously whileothers thrive only when certain institutional arrangements are in place, likeproperty rights. In his rational perspective, individual incentives, not aconsensus on basic values, are what determine the outcomes of economicreforms. Here, I argue that outcomes are also determined by basic orient-ations. Indeed, traditions and culture become particularly important wheneconomic institutions are weak and economic reforms are implementedabruptly from the top rather than growing gradually and acquiring legiti-macy through long-term common experiences of market exchange. Further,the lack of effective mechanisms for enforcement of market institutions, thedisruption of stable political paradigms following the change of regime andthe disastrous social results of the shock therapy created a fertile breedingground for resistance to effective market reforms.

Parallel to the introduction of the market and democracy, a widespreaddecentralisation of power to the regions took place, so that building coali-tions between autonomous elite groups became the key to successfulreforms. Thus, reform implementation was no longer the top-down processthat it had been under the hierarchical command structure of the previousregime. Democratic and decentralised federal structures meant thateconomic reforms initiated by the core-elite first had to obtain politicalsupport from the national elite and then be implemented by autonomousregional elites. At both stages traditional thinking led to resistance since thecosts of the reforms created many losers who found a common interest inobstructing their implementation.

Democracy and decentralised forms of governance soon became counter-productive to the economic reforms introduced by the Yeltsin government.‘Co-option’ was replaced by effective ‘veto-coalitions’ among elites who alsohad broad popular support. The democratic institutions and the transform-ation of the federal-regional relationship dramatically enhanced the obstruc-tive power of the conservative ‘distributional coalitions’ and the façade-liberal ‘winners’ of the privatisation of state property who wanted to sheltertheir fortunes from further market reforms. The resistance of the national,regional and business elites to Yeltsin’s ‘shock therapy’ became a crucialobstacle to putting market reforms into effect.


Nevertheless, the constraints varied between policy sectors. Shleifer andTreisman (2000) argue that the extent to which the reform leadershipmanaged to form coalitions with the elites determined the success of thereforms. According to them, rapid privatisation succeeded becausepoliticians were shrewd enough to co-opt critical elites for this project. For ifreforms are to be implemented properly and survive in the long run, politicalsupport for privatisation is also vital among the majority of elites who haveno direct personal economic stake in the reforms but are deeply engaged inand affected by how they work. That said, the co-option of managers andtop-decision makers, while necessary, are not sufficient for viable reforms.What is important is how reforms converge with the orientations of largesegments of the elite.

Individualism versus collectivism?

One main issue is whether the elite divides into opposing groups, or whetherthe elite embraces the apparently contradictory values of individualism andcollectivism. In the survey the respondents expressed their fundamentalattitudes on five separate but related statements as shown in Table 5.1.

Looking at the average of all statements as a manifestation of the maintendencies, the Russian elites are neither completely convinced of the puremarket alternative nor enthusiastic about the all-encompassing state but optfor something in between. Over time, the tendency is more towards themarket and less towards the state. In the following these main tendencies areanalysed in detail in order to find out what the elite’s response is to specificstatements and whether they are split on these issues.

The data show that the elite strongly supports ‘competition’ as a basicvalue. In 1998 31 per cent (scoring 1+2 on the scale, mean 3.3) were classifiedas very strong adherents, increasing to 49 per cent in 2000 (mean 3.1). Clearly,individual competition – the central idea of the market – is accepted by a largepart of the elite. Moreover, support for competition increases considerablyover time. By contrast, after Putin came to power the elite is considerably morereluctant about accepting the economic consequences of a market economy:only 13 per cent (1+2 on the scale, mean 4.4) are willing to accept majorincome differences between social groups. A third message concerns theinstitutional consequences of the market for the state as a provider of welfare,as an owner and as an income regulator. When it comes to the question ofwho should be responsible for welfare the elite do not come out in favour ofthe market. Rather, attitudes are spread evenly along a 10–point scale. Thesame trend is found for ownership. On the issue of whether the state shouldregulate incomes or leave it to the market the elite’s collective instincts againcome to the fore. In 1998 28 per cent (8+9+10 on the scale) thought the stateshould influence income distribution, decreasing to 20 per cent in 2000.

Now, let us examine these issues by elite group, asking how individualistand collectivist attitudes may vary according to institutional affiliation. One



Tab

le 5

.1In

divi

dual

ism

and

col

lect

ivis

m (

aver

age

mea

ns (

stan

dard

dev

iati

on in

bra

cket

s))*

Com

peti

tion

Inco

me

Wel

fare

Ow

ners

hip

Inco

me

Ave

rage

all

diff

eren

ces

resp

onsi

bilit

yre

gula

tion

stat

emen

ts

Tota

l elit

e19

983.

3(2

.1)

4.4

(1.7

)5.

0(2

.6)

5.2

(2.5

)5.

7(2

.5)

4.7

(2.3

)20

00

3.1

(2.1

)4.

4(1

.9)

4.7

(2.6

)4.

7(2

.5)

5.2

(2.5

)4.

4(2

.3)

Stat

e D

uma

1998

4.

3(2

.2)

5.2

(1.6

)5.

8(2

.5)

6.2

(2.4

)6.

1(2

.6)

5.5

(2.3

)20

003.

5(2

.1)

4.7

(2.2

)5.

1(2

.7)

5.1

(2.7

)5.

4(2

.8)

4.8

(2.5

)

Fed

eral

Cou

ncil

1998

4.

0(1

.6)

4.8

(1.3

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0(2

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5.8

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3(1

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4.8

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)

Fed

.adm

in.

1998

4.1

(2.4

)4.

8(1

.7)

5.5

(2.3

)5.

7(2

.2)

5.8

(2.3

)5.

2(2

.2)

2000

3.8

(2.3

)4.

8(2

.1)

4.8

(2.4

)4.

9(2

.4)

5.6

(2.2

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8(2

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e en

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s 19

983.

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4.7

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002.

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(1.5

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4(2

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2(2

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(1.9

)

Pri

vate

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ines

s 19

983.

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Res

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1998

:98–

9%,N

=98

0;20

00:9

8–10

0%,N

=60

5.*

Att

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le f

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1 t

o 10

,whe

re 1

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alis

tic

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and

10

indi

cate

s an

ext

rem

ely

colle

ctiv

ist

atti

tude

.T

he fo

llow

ing

five

pair

s of

stat

emen

ts w

ere

used

:‘C

ompe

titi

on is

goo

d’–

‘Com

peti

tion

is h

arm

ful’;

‘Inc

omes

sho

uld

be e

qual

’– ‘A

ccep

t in

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e di

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ence

s’;

‘Pri

vate

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– ‘S

tate

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usin

ess’

;‘In

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s sh

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zens

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’;‘T

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he s

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arke

t’.

would expect this dimension to be split along left–right cleavages among thepolitical elite, to arouse a more pro-collectivist response among theadministrative elite and a more individualist one among the business elite.For the managers of state enterprises and the cultural elite two oppositehypotheses are equally plausible. Since these leaders are very exposed to theuncertainty of capitalism they will seek protection in collectivist values. Onthe other hand, precisely because of the severe problems with financing theseactivities and the new opportunities provided by the market economy, thisgroup of people may be attracted by individualist values.

The members of the State Duma are the most collectivist-oriented amongall the elite groups but they also support individual competition to quite alarge extent. The generally high standard deviations illustrate a rather clearleft–right division among the deputies. A rather substantial shift has alsotaken place away from the collectivist orientation of the 1998 Duma to thenew 2000 Duma. The change illustrates two opposing tendencies: while thedeputies are generally becoming more market-oriented, leftist values havealso become more visible. On one value, however, a tendency towardsconcurrence is discernible: both sides of the political spectrum now tend tofavour the value of individual competition.

The picture of increasing individualism and a polarisation of collectivevalues in the State Duma is somewhat surprising. While under Yeltsin therewere fierce struggles over his policies of economic liberalisation, debates oneconomic reforms under Putin have become far less controversial. Oneexplanation of this anomaly is that although basic attitudes have remainedthe same or even become more polarised, the overall political game haschanged. After the disruptive conflicts between the President and the Dumaunder Yeltsin, a mood of national accord directed at lending support for thepolicies of a stronger Presidency paved the way for pragmatic co-operationbetween the Unity Party of Vladimir Putin and the Communist Party.Obviously, the ideas of the market reforms have become easier to swallowunder a more law-and-order-oriented President.

The Federation Council shows much of the same picture but with oneexception: the level of polarisation between individualist and collectivistideas is considerably lower than for other groups. The top bureaucrats in thefederal ministries show similar attitudinal patterns to the members of theFederation Council but they are more divided.

Elites that have been more directly exposed to the market and may makeuse of its opportunities – i.e. the leaders of state enterprises, culture andespecially business leaders – are as one may expect more positive aboutmarket solutions, particularly about acceptance of individual competitionand income differences. Obviously the marketisation process is perceivedmore as an opportunity than a threat. Not surprisingly, the leaders of stateenterprises and culture are more concerned about the state’s welfare respon-sibilities and income regulation than the business leaders, but their underlyingindividualistic attitude is indisputable. The combination of seemingly incom-


patible orientations is most visible among the cultural elite, who want tohave it both ways. While favouring a competitive society with large incomedifferences they also want the state to shoulder responsibility for incomedistribution. In all these groups there has been a major shift towards moreindividualist attitudes.

In regional government attitudes are, as expected, less individualistic thanamong business leaders but they are not as collectivist as those of the centralpolitical-administrative elite. After the fall of communism many of theformer nomenklatura moved to the regions and found a basis for their powerand traditional views. Hanson (1997a) argues that the new regional elite hadlittle interest in implementing decrees issued in Moscow and carrying outblueprint reforms for reducing the local state apparatus and abolishing pricecontrols. Accordingly, it has been argued that the regional elite will be moreconservative than the national elites.

But, the data do not support the thesis of particularly conservativeattitudes among the regional elite. Rather, the most traditional attitudes areto be found in the State Duma, the Federation Council and the Federaladministration. On the specific issue of ‘competitiveness’, the regional elite isconsiderably more individualist than the central elite. It seems that thedecentralisation of power is conducive to competitive attitudes. The basicattitudes of the regional leaders are somewhere between the collectivistorientation of the central political leadership and the market inclinations ofthe business elite. Their responsibility for the welfare of local constituenciescombined with their personal stake in ‘insider privatisation’, allowing controlover profitable industries, gives them an interest in both the state and themarket. For all the other groups one can observe a rather substantial shifttowards supporting more competitiveness over time while the attitudes ofthe regional elite are very stable.

In general, it seems fair to conclude that the differences among the elitegroups are smaller than one might have expected. Although central politiciansand bureaucrats adopt the most traditional attitudes, the new business elitedoes not have very different values. In other words, behind the façade ofmarket reforms and privatisation, a ‘collectivist propensity’ is prevalent acrosselite segments. But the tendency is in no way extreme and indicates an eliteculture that supports a ‘third alternative’. The peculiar thing is that this optionincludes both considerable state regulation and individualism.

In fact, these attitudes are not as inconsistent as they seem. The state maybe active in regulating incomes in order to safeguard the living standards oflow-income groups and at the same time accept that other sectors of societyearn a lot. A preference for public ownership in some sectors may very wellbe combined with advocacy of private ownership and individual competitionin others, as is shown below. Furthermore, the value of individual competi-tion may thrive in a state where the borders to the private sector are blurred.In such a state, as Olson (2000) remarks, what matters most is competing forsubsidies, not a sector’s status as ‘private’ or ‘state’.


The ownership issue: the basis of the elite compromise

One interesting question is how strong the basic idea of collectivism is whenit comes to more specific issues like type of ownership in various sectors.This issue is at the heart of Russian economic reforms and debates about therole of the state and the market. How has the privatisation programmeinfluenced the attitudes of the elite and how may the elite’s attitudes explainthe various outcomes of the privatisation programme in different sectors?

Although the privatisation programme went far and Russia is nowclaimed to have one of the most privatised economies in the world, privateownership varies considerably between sectors. Thus, while privatisation hasto a large extent been implemented in small businesses and housing, theprivatisation of farmland was still quite limited in 2000.

Ownership is not only a question of ‘state’ or ‘private’. A third type ofownership is ‘co-operative’, which has solid traditions in Russian society.Particularly in the agricultural sector workers and farm managers have beenorganised as independent co-operatives. In the survey, the respondents wereasked to choose between the three alternatives and asked which they thoughtwas most suitable for various sectors, such as heavy industry, light industry,agriculture, housing and the retail sector.

The elite’s attitudes are definitely influenced by which sector is involved.As shown in Table 5.2, first of all, the Russian elite is overwhelmingly infavour of state ownership in heavy industry. Even among private businessleaders more than 80 per cent support state-owned large industries and only6 per cent (!) favour private ownership. This tendency is very stable over time.While their general support for private ownership is stronger than amongother elite groups (Table 5.1), when it comes to more practical implicationsthe business leaders prefer the state as an owner of heavy industryenterprises. This finding may be a surprise but illustrates the importance ofthe ‘grey zone’ between state and private business. It should also be notedthat the privatisation programme of large state enterprises in early 1992sparked heated debates among the elites. First and foremost the RussianUnion of Industrialists and Entrepreneurs and its political affiliate, the CivicUnion, argued that mass privatisation would simply localise ownership inthe hands of the mafia and foreigners. The best solution was to leaveprivatisation to the directors who understood the local conditions (McFaul1995). Privatisation accelerated but the elites’ state propensities put theirimprint on the actual implementation. The state still controls majorindustries and mixed state–private ownership has been predominating.

For light industry the picture is completely different. State ownership hasmuch less support with only 15 per cent in favour, while co-operative owner-ship has widespread acceptance among almost half the respondents. A quiteunexpected finding is that also here many private business leaders expresssupport for a collectivist alternative. The greatest change in attitudes is foundamong the deputies in the State Duma, where support for the state owner-



Tab

le 5

.2A

ttit

udes

to

form

of

owne

rshi

p in

var

ious

sec

tors

(%

)

Hea

vy in

dust

ryL

ight

indu

stry

Agr

icul

ture

Hou

sing

Ret

ail

Sta

teC

o-op

.P

riva

teS

tate

Co-

op.

Pri

vate

Sta

teC

o-op

.P

riva

teS

tate

Co-

op.

Pri

vate

Sta

teC

o-op

.P

riva

te

Tota

l19

9885

96

1548

369

5535

1630

533

1582

2000

858

615

4441

1151

3817

2755

212

86

Stat

e19

9887

103

2252

2610

6822

1729

544

2076

Dum

a20

0084

97

1061

299

5932

1627

570

1783

Fed

.19

9887

130

1059

313

7323

723

700

793

Cou

nc.

2000

8710

310

6030

067

333

3363

020

80

Fed

.19

98

877

616

4935

1254

3420

3644

329

68ad

min

.20

0092

44

1836

4518

1841

2523

523

1582

Stat

e 19

9888

66

1250

388

5438

2136

432

1484

ente

rpr.

2000

9010

016

4836

1652

3214

4442

010

90

Pri

v.19

9884

106

1054

362

4058

1236

522

890

busi

nes

2000

8212

66

4450

450

4610

3060

22

96

Cul

ture

19

9879

1111

647

474

5738

449

470

1981

2000

7913

88

4844

234

6416

4638

08

92

Reg

.19

9885

96

1647

3810

5436

1727

563

1384

govt

.20

0084

79

1937

4413

5434

1919

623

1186

Res

pons

e ra

te 1

998:

95–8

%,N

=98

0;20

00:9

8–9%

,N=

605.

ship option fell from 22 per cent in 1998 to 10 per cent in 2000. Although amajority support co-operative ownership, a rather large proportion favourprivate ownership and this share increases over time.

In the agricultural sector, co-operative solutions have the most support,with few respondents favouring state ownership. However, the co-operativeidea seems to be losing support, while the privatisation alternative has gainedgreater acceptance over time. But co-operative ownership is still favoured foragriculture. Collective ownership of the land for several generations duringthe Soviet period combined with considerable social costs experienced bymost agricultural workers and managers following privatisation may serve toexplain the elite’s preference for this traditional alternative.

The housing issue impinges directly upon ordinary people’s lives. Whileabout half of the elite want private ownership of flats, as many as one-thirdprefer a co-operative solution, and a relatively high proportion want stateownership in this sector. Why collectivist attitudes in this sector are sowidespread, even among the business elite, may be explained by the poorsupply of housing in Russia.6 Obviously, privatisation did not help much toimprove the long tradition of scarcity of housing and flats inherited from theSoviet period. The varied approach of the elite to the issue of housing mayreflect both distrust in the market and also the fact that housing needs vary alot. For some segments of the population private housing is a good alterna-tive, while for others some form of co-operative or state organisation is best.

The sector where new private business activity is most visible is the retailsector. Here hardly any respondents favoured state ownership.7 A largemajority of all elite groups prefer private ownership of shops, while somedeputies in the State Duma and leaders of federal ministries and stateenterprises still prefer the co-operative form.

Specifying fields of ownership does not split the elite, however, with evenprivate business leaders following the general pattern. Thus the attitudes toownership in various sectors reveal major consensus among the Russianelite. While private ownership is rejected for heavy industry, it is a universallypopular alternative for the retail sector. Interestingly, the same patterns arefound for the mass public in a survey of 1996 where a majority of 64 percent opposed the private ownership of large plants and factories while amajority supported private property in small firms, stores, restaurants andsmall plots of land.8

Why should this be? One explanation is that these fields of economicactivities are very different. Shops and restaurants belong to what MancurOlson (2000) calls ‘self-enforcing’ or ‘spontaneous’ markets that do not needmuch state regulation in order to function. Heavy industry and to someextent light industry, by contrast, impinges upon collective concerns and co-ordination and need encompassing institutions in order to function. Theelite obviously think these industries will be better run by the state and co-operatives than if they are exposed to capitalism. Confronting such a majoropposition among both elites and the general population to privatisation of


large industries was in fact a considerable challenge to the Russiangovernment. The high speed of privatisation between 1992 and 1994 struckobservers (Shleifer and Treisman 2000) and with about 80 per cent privatisedenterprises, the size of the Russian non-state economic sector is impressive.However, the mixed ownership predominated in 1997, considering the numberof employees and total output (Lane 2000), meaning that the state has asubstantial share in the larger industries.

As will also be discussed later, the main explanation that ‘privatisation’has been regarded as successful is that privatisation of industries to directorsand workers were blurring the borders between state responsibility andprivate property. The institutionalisation of mixed ownership and informalstate–market relations, as Lane (2000) calls ‘state-led capitalism’, served tolevel out the antagonism between Kremlin reformers and critical elites andone may argue both sides had their way.

The state and the market as policy instruments

In this section the approach is to ask what the role of the state and themarket should be in meeting challenges related to policy-making, likestimulating economic growth, providing infrastructure and safeguardingwelfare. State involvement in these sectors varies a lot between countries, andmost commonly, one finds a sharing of functions between the state and themarket. There are three main models, ‘state control’, the ‘mixed economy’and the ‘liberalist’. In reality all countries have combined solutions but theborder between state and market varies considerably dependent on the typeof function in question and political traditions. This balance is still to besettled in Russia and in 2000 scholars were, referring to Putin’s state-orientedprogramme, discussing how far back the pendulum would oscillate fromYeltsin’s liberalist state. One substantial indication of the future equilibriumbetween state and market in Russia is the elite culture in which the economyhas to be embedded. At least their orientations constitute a major contextfor shaping the state–market balance. Table 5.3 shows the categories catchingvarious degrees of blended state–market solutions.

Apparently there is a lack of enthusiasm for pure or predominantly marketsolutions in all policy sectors and there is remarkable stability in attitudes.Advocates of the market as the only instrument for problem-solving arealmost completely absent for all sectors, except for a very few marketadherents in the field of food production and industrial production. In theother sectors the elite favour a certain balance between state and marketsolutions, and alternatively, substantial state domination.

Most surprising is the scepticism about the market in the fields of produc-tion and economic growth. Only about 15 per cent of the elite prefer themarket as the dominant instrument for solving industrial problems, and asfew as 8–10 per cent think the market should be the main instrument forstimulating economic development. The problems of industrial production


and economic growth are best solved, the elite believes, either by sharingresponsibility equally between the state and the market or by a dominantstate that is able to control major parts of the economy. These attitudescorrespond well with the positive attitudes to state ownership in largerindustries shown previously. Industrial production and growth problems arestill thought to be a task for considerable state involvement. The somewhatmore market-oriented attitudes to food production can probably beexplained by a long tradition of family-based agricultural production andco-operative farming outside the state sphere.

In most societies the state has considerable responsibility for providing theinfrastructure, e.g. in energy and transport. In Russia the elite is very positivelydisposed towards major state control in the energy sector. In transport arelatively high proportion (36–9 per cent) favour a mixed solution, althougha majority is pro-state. Evidently, the elite are very sceptical about lettingprivate interests dominate in such public domains.


Table 5.3 The state and the market as instruments for solving various problems:total elite (% and mean average)

State State 50/50 Market Market Meanonly mainly mainly only1 2 3 4 5

Growth problems:

Industrial 1998 13 26 44 15 1 2.6production 2000 11 25 48 12 3 2.7

Economic 1998 9 27 56 8 0 2.6development 2000 6 27 56 9 1 2.7

Food 1998 3 8 44 39 5 3.4production 2000 3 9 44 36 7 3.3

Infrastructure problems:

Energy 1998 48 38 12 1 0 1.72000 49 34 14 2 1 1.7

Transport 1998 22 36 36 6 0 2.32000 24 28 39 7 1 2.3

Welfare problems:

Pensions 1998 44 43 12 1 0 1.72000 44 44 12 0 0 1.7

Health care 1998 24 51 23 1 0 2.02000 25 50 24 0 0 2.0

Environment 1998 31 53 15 0 0 1.9protection 2000 22 54 23 0 0 2.0

Response rate: 1998: 98–100%, N=980; 2000: 99–100%, N=605. The question was about whatshould be the role of the state and the market in solving the problems in the various sectors.

In sectors providing welfare, like pensions, health care and environmentalprotection, the critical attitude to the market is clearly spelled out. Althoughpensions are very low and sometimes were not even paid at all during the1990s, the elite think this is a state responsibility, though one that can becombined with private initiative. In the health sector the tendency towardsthe market is more widespread but again only in tandem with substantialstate involvement. Much of the same profile is found for state responsibilityfor environmental protection.

The elites evidently do not believe in the market as an all-powerfulinstrument for solving problems. Whether these attitudes prevailed through-out the 1990s or whether they constitute a later reaction to chaotic capital-ism is difficult to say. In either case they reveal a political culture in which alarge majority entrusts the state with major social responsibility, such asproviding welfare services and an infrastructure but also for instigatingproduction and stimulating economic growth. These patterns may beinterpreted as a desire to bring the state back into the economy. However,they probably stem from pragmatic considerations and wishes for a mixedtype of economy, since there is far from a majority among the elite for atotal state solution.

One may conclude that, as in other countries, Russia is heading formixed state-market solutions, but the balances vary a lot between thesectors. In welfare the elite wants a solution that is not so different from the‘Scandinavian model’ with considerable state domination and is far from theliberalist solution. Establishing an infrastructure – i.e. providing energy andtransport – is considered to be primarily the responsibility of the state butwith use of the market where this seems practical, especially in transport.Such policy orientations are also widely held in Western Europe. Neither insectors related to economic growth does there exist substantial liberalism.Instead ‘state-led capitalism’ seems to be a viable solution for the elite. Aparallel to the Russian elite attitudes may be the French economic system offinancial integration between the state and large corporations propped up byelite consensus between state and business. According to Lane (2000) thistrend was fairly institutionalised in Russia at the end of the 1990s anddistinguished by considerable state influence on the financing of privateenterprises and the appointment of public officials to boards of private com-panies benefiting from government financial support. The elite’s attitudestowards opting for market solutions, not independent of the state but as anintegral part of it, enable a sort of capitalism that is ‘state-led’.

Elite orientations and regional performance

The eighty-nine federal units, spread over an extremely large and geo-graphically varied territory, have gained a substantial degree of autonomy,and some observers have therefore predicted an accelerated fragmentation ofthe Russian Federation. Direct election of the governors has certainly


sustained regional autonomy, but at the same time the Russian Federationhas become consolidated and most governors have entered into rather stablebargaining relationships with the political centre in Moscow (Solnick 1998).The predominant issue in the regions is now more how to instigate economicgrowth than how to obtain further autonomy from Moscow. One mainassumption among the central reformers is that when the basic orientationsof the regional decision-makers change, the economy will improve. Thequestion here is to what extent reforms in the regions may be related to theregional elite’s economic orientation. Do we find the economic liberalists inthe reform regions? First, however, this issue is discussed in a broadercontext, considering what other factors should be taken into consideration.

Although the regions have remained loyal to the federation, their varyingbargaining power has meant that some regions have been much moresuccessful with regard to distributional and jurisdictional issues than others.The regional authorities have also inherited very different legacies of naturalresources and industrial structures from the previous regime. At the sametime, decentralisation of power has given regional government unprece-dented possibilities for individualism and market solutions. Specific eliteinterests may be identified where policy networks and political clans arestrong. While central policy networks are often pragmatic and unstable, insome regions ‘clan-politics’, based on family ties, patronage and traditions,have become quite widespread (McAuley 1997). An important question ishow the regional authorities have made use of the newly won opportunitystructures.

Kirkow (1994) asks whether the Russian regions have the potential forautonomous development or whether economic change must necessarily be atop-down process controlled from Moscow. Much depends on the outcomeof struggles within the regional elites. The fate of national economic reformpolicies tends to be decided by whether regional leaders have an interest inexercising ownership rights through the market or in controlling enterprisesvia traditional state instruments. In a case study of the remote region AltaiKrai, Kirkow finds only limited potential for regional economic reforms andrecommends a more authoritarian, top-down approach, especially in privat-isation and land reform. The great variation among the Russian regionsshould lead one to expect differences in attitudes to reform among theregional leadership.

When they investigated the links between the economic structure inheritedfrom the past and adaptation to the new circumstances of seventy-sevenmain administrative regions using data from 1993, Sutherland and Hanson(1996) found only a moderate degree of linkage during the early years ofreform. More promising for understanding regional economic reforms is thedegree of urbanisation, the availability of technical expertise and the extentof openness to foreign markets and investment. In Samara Oblast, forexample, favourable economic development may be directly related to suchfactors (Hanson 1997c).


When a political and economic regime breaks down, the processes of de-institutionalisation and building new institutions go hand-in-hand, and thescope for elite manoeuvring increases enormously. In another article Hanson(1997b) asks to what extent the differences in economic development in theregions can be explained by the actions of the regional elites and to whatextent by more or less favourable structural conditions. The point is thatstructural conditions and demands from the population have to be mediatedby elites to have an effect. Socio-economic conditions influence policies,particularly when institutions are weak, as to the extent to which elites havean interest in changing the economic environment. McAuley’s (1997)argument that the fate of Russian national reform programmes dependsprimarily on the interests of the local and regional elites seems plausible.

Comparing the Russian regions, Hanson maintains, first, that there is nosignificant positive correlation between reform efforts and variousprivatisation measures (in housing, farming, and small- and large-scaleenterprises). He argues that the attitudes to reform of regional leaders donot correlate with the effectiveness of privatisation. In fact there may even bean opposite correlation. Regional elites may have a propensity to blockprivatisation in prosperous regions, especially in medium- and large-scaleenterprises, in order to ensure their control over such assets. Hanson (1997a)mentions as an example Moscow Mayor Aleksandr Luzhkov’s campaign toavoid the implementation of the federal privatisation plan. If the closednetwork economy is more dominant in Moscow and the more reform-oriented one more dominant in St Petersburg, one would expect the attitudesof the Moscow elites to be more conservative than those of their StPetersburg counterparts. They will also enjoy more legitimacy, since aconservative strategy will prevent large-scale unemployment and socialmisery and therefore increase popular support for the local leadership.

The Moscow situation appears to be a paradox: Mayor Luzhkov rejectedmuch of the privatisation programme that Yeltsin’s young reform teamproposed. One may thus be tempted to conclude that the Moscow leadershipis much the same as before the change of regime. However, Moscow’srejection of large-scale privatisation probably reflects not so much a con-tinuing traditional collectivist orientation among its leadership but rather theemergence of a new network economy where public and private leaders areinter-connected and have a common interest in controlling the city’seconomy. By warding off the harsh consequences for ordinary people oflarge-scale privatisation, the city’s leadership actually managed to maintainthe stable political situation that makes the city attractive for investment andbusiness activity.

Hanson discusses the reforms in terms of a struggle between a traditionaland a market-oriented leadership. All other factors being equal, regionalleaders with a reputation as reformers did only slightly better with regard toeconomic performance, according to Bradshaw and Hanson (1994), thantheir more conservative counterparts. One problem is that the researchers


had to depend on media coverage for assessing whether leaders were reformersor not. The argument easily becomes circular, since the media tend to labelleaders as reformers precisely because they have implemented successfulprivatisation programmes. Another problem is the crude categorisation intoonly two groups: ‘reformers’ and ‘traditionalists’. Further, measuring‘effects’ is not easy since which indicators are most relevant and in what timeperspective? As Hanson remarks: ‘Whether leaders make a difference is atricky question’ (undated: 5). His main conclusion is that both the perfor-mance of regional leaders and the impact of federal income equalisationpolicies between regions should be regarded with some caution. Theeconomic legacy of the past combined with a region’s location and degree ofurbanisation may, according to him, actually be more important than theattitudes and policy decisions of the elite.

Van Selm (1998) compares the economic situations of the Russian regionsand illustrates a complex link between reform policies and economicperformance. Using several indicators for variations in policies, structuralconditions and economic performance, he concludes that liberal, pro-reformregions hardly perform better, if at all, than conservative, anti-reformregions. Actually this is not surprising, since anti-reform policies aim topreserve existing employment structures and therefore stimulate traditionalproduction. According to mainstream economic theory, in a longer-termperspective reform regions will benefit from having endured the hardship ofeconomic ‘shock therapy’. However, van Selm’s main conclusion is thatstructural differences account for some of the variation in regionalperformance, while policy does not. Like Hanson, van Selm agrees thatbeneficial industrial structures seem to be more important than liberalreform leaders.

How does this research fit in with my query of how attitudes to the stateand market among the regional elite is related to economic performance? Isit the case that elites in stagnating peripheral and ethnic regions tend tofavour mainly collective and state solutions, while elites in prosperous centraland reform regions support individualism and market strategies? The fullresults are reported in the Appendix, Table A5.2.

As one may have expected, the mean scores of the five main region typesshow that a more individualist and market-oriented leadership is found inthe ‘reform regions’. These respondents score particularly high on competitivevalues. On the other side of the continuum elites in regions classified asstagnating are clearly more traditional in their orientations.

The variation among the leaders of the central regions is not large, butthere are some distinct tendencies. Since the Moscow City leadership did notgo far in implementing privatisation programmes and thereby retainedcontrol over economic activities, the Moscow elite is more traditional in itsideological orientation than the elites of the other central regions. Theaverage scores for the five statements confirm that the Moscow leaders aremore conservative than the leaders of St Petersburg, who turn out to be the


most liberal among the central regions. The Moscow City leadership’sstrategy of preserving economic control seems to be rooted not only in apragmatically-based power struggle with the Kremlin but in some realideological differences.

The leaders of the ethnic regions also tend to be rather traditional in theireconomic outlook, perhaps with the exception of the republic of Sakha. Onthe periphery Arkhangelsk Oblast is the most conservative, while the leadersin Primorye Krai are somewhat more oriented towards individualisticsolutions.9 As one might have expected, the elites tend to be the mostconservative in the stagnation regions. There is a correlation between a lackof reforms and anti-market attitudes among the elites in all these places, inparticular in the republic of Udmurtiya. The leadership of the so-calledreform regions shows the largest variation. The elite in Nizhniy NovgorodOblast tends to be the most conservative in this group, while the leaders inSaratov Oblast clearly have the most individualistic views.

One may conclude that since the national and regional elites hold much thesame values, together they constitute a formidable obstacle to extensive top-down liberal economic reforms. However, there are nuances in this generalpattern of sceptisicm. The stagnation regions with the most traditional andstate-oriented economic policies also have the most conservative leadership,while in reform regions we find the most market-oriented leaders. At leastthere is some consistency between elite orientations and policies. Anotherquestion is the actual outcomes and concrete results, but since they will bemanifest only after several years, they are extremely difficult to predict.However, the reform-propensities should not be exaggerated. Although theattitudes of the leaders of the reform regions together with those of privatebusiness leaders on the central level come closest to prop up a liberal reformprogramme, they are far from enthusiastic adherents of the market.

From pessimism to optimism

The economic ‘shock therapy’ had an earthquake-like impact on basicindustrial production and living conditions throughout the country. Never-theless, President Yeltsin and his supporters repeatedly underlined that afterthe initial years of economic hardship, the situation would improve and the‘valley of tears’ would be short-lived. The President and his team of free-marketers were committed to believing in positive economic development,despite most evidence to the contrary.

More interesting than the ideological pledges of the central leaders, how-ever, is whether the attitudes of the President’s team were paralleled amongthe elites and whether these attitudes changed over time. Comparisons canbe made between the elite’s attitudes in the summer of 1998, before thefinancial crash in the early autumn of that year, and two years later, whenthe new President started a programme to mitigate raw capitalism. If theleaders’ general mood will influence prospective policy moves then the


‘psychology of trust in the future’ may be read as an indicator of futurepossibilities for economic development. Because national and regional elitesare not only strategic actors in decision-making and implementation but alsoleave their mark on the political-economic climate, the elite’s orientationsmay be seen as a push factor that may influence economic development inpositive or negative ways.

Did the optimism of Yeltsin’s administration about the blessings of themarket have any support among the elites? And, how did the change ofPresident influence the elites beliefs in the future?

Apparently, only a smaller part of the elites thought the future wouldimprove under Yeltsin’s rule and about a half thought the economy wouldgrow worse. As the table shows, after Putin came into office the attitudeschanged dramatically in favour of optimism.

During the Yeltsin period, the most pessimistic group were the members ofthe State Duma, with 70 per cent. Symptomatically, in the private businesssector and among state enterprise leaders about half were pessimists. Onewould expect that institutions closer to the President, such as leaders in theministries and the Federation Council, would have more faith in economicimprovements than the others. The data show some tendency in this direc-tion but it is rather small. Yeltsin’s market reforms suffered from a severelack of credibility among all elite groups.


Table 5.4 Perceptions of future economic development (% and mean average)

Optimists No change Pessimists Mean

Total 1998 27 26 47 3.42000 59 27 14 2.9

State Duma 1998 19 10 70 3.82000 64 20 15 3.1

Fed. 1998 34 33 33 3.0Council 2000 62 14 24 2.9Fed. 1998 30 31 39 3.2admin. 2000 52 29 19 2.9State 1998 31 16 53 3.5enterpr. 2000 61 25 14 3.3Priv. 1998 27 27 46 3.5business 2000 67 29 4 2.6Culture 1998 22 22 55 3.6

2000 62 28 11 2.8Reg. 1998 27 29 45 3.4govm. 2000 57 29 13 2.9

Response rate 1998: 98%, N=980; 2000: 94%, N=605.The respondents were asked to say how, in their opinion, the economic situation would developin Russia over the next few years on a 1 to 5 scale: 1 (‘significantly improve’), 2 (‘improvesomewhat’), 3 (‘no change’), 4 (‘become worse’), 5 (‘become significantly worse’). In the tablethe categories 1 and 2 are merged as ‘optimists’ and 4 and 5 are represented as ‘pessimists’.

The change of President and gradual improvements of the economy hada direct and profound impact on the elite’s attitudes to the economicprospects. The pessimistic mood marking the end of the Yeltsin periodturned into considerable enthusiasm after 2000, with an increase in thepercentage of optimists from 27 per cent to 59 per cent for the total elite.Comparing the means for the elite groups reveals that among privatebusiness leaders the change in attitudes was quite sensational: having beenamong the most pessimistic in 1998 they became the most optimistic in 2000,when as many as 67 per cent expressed confidence that the economy wouldimprove. Interestingly, the Duma representatives come in second place withregard to faith in future economic growth, while the cultural elite is the thirdmost optimistic group. What is more, the regional elite increased their trustunder Putin, even though they lost some of their power just before theinterviews were conducted in the spring and summer of 2000. The verysubstantial increase in optimism among the various elite groups illustratethat Putin’s re-orientation of economic policy was supported by majorsegments of the elite. Putin did not push his programme on reluctantnational and regional leaders; on the contrary, Putin’s regime represented thenecessary political stability that met the expectations among a major part ofthe elite.

Conclusion: from economic chaos to state-led capitalism

The major architect of the economic reforms, Yegor Gaidar, who went frombeing a convinced communist to becoming the leader of the first radicaleconomic reforms in the early 1990s, thought the main issue was to change theRussian mentality, replacing one ideology with another. When Marxism failedto provide the answers, he says in an interview, he turned to Friedrich Hayekwho ‘gave a very clear and consistent picture of the world, as impressive asMarx in his way’ (quoted from Gustafson 1999: 20). For some time the youngreformers lived in the euphoric world of liberal economic models and had adecisive influence on the policies of the Russian government.

These neo-institutionalists envisaged a ‘promised land’ that would emergeif the government were strong enough to reduce the state apparatus andenforce laws regulating business and societal activities. However, in March1999 Yeltsin was forced to admit that the reforms had produced an unfortun-ate mixture of the worst aspects of both central planning and capitalism, a‘bastard of the two systems’ was crumbling Russia.10 What had happenedduring these years? The answer is that the policy leadership had simply triedto implement an unprecedented blueprint reform without taking the politicaland cultural context into due consideration. Once again in Russian historythe strategic lower level elites had obstructed central reforms. Institutions maychange overnight, mentalities may only change over decades or generations.

After the economic crash of 1998 public rhetoric became even more nega-tive towards the market and privatisation. Some of the previously radical


reformers quickly began to speak of the necessity for state regulation. Thefindings here show, however, that a return to the previous state-plannedeconomy is not likely. If political culture matters for economic reforms, thefascinating question is what type of economic system is likely to emerge fromthe elite’s seemingly inconsistent attitudinal patterns?

The main conclusion from this is that a decade after the reforms started,collectivist conventions are still very much alive and well represented amongthe Russian elite and only a few people have become enthusiastic adherentsof the market in traditional state sectors. Nevertheless, the elite whole-heartedly supports the individualistic value of ‘competition’ and also to agreat extent accepts economic stratification among social groups. The datadisclose a complex but also a rather clear picture of an elite who want aneconomic system that is not easy to place on the conventional state–marketaxis. Yeltsin’s energetic reforms and frequent firing of government leadersobviously did not alter the elite’s basic mentality in a fundamental way.

However, irrespective of collective propensities among the elite, theprevious centrally planned economy will not return. In the following I shalldiscuss what type of economic system is emerging in Russia by posing threesub-themes. First, what type of system developed during the chaotic 1990s?Second, what are the contours of the emerging economic system after Putin’sre-centralisation of 2000? And third, what may explain these patterns?

The ‘bastard’ economy of the 1990s

Shevtsova (1998) maintains that Russia has become a ‘hybrid regime’ in botha political and economic sense. Accordingly ‘privatisation was often notabout purchasing an enterprise’s shares; it was about gaining access to anenterprise’s management’ (p. 73). She indicates that about 80 per cent ofprivatised firms are owned by insiders, mainly directors, and only 11 per centare majority-owned by outside investors. Financial and industrial groupsprimarily wanted to expand and control property and created a ‘peculiarmodel of a market system based on the use of state resources’ (ibid. p. 73).Treisman (1995) found in his study of subsidies and low-interest credits forRussian business enterprises that personal relations between business andpolitics seemed to be the main reason for preferential treatment. Connec-tions are significant even when ownership and the importance of productionare taken into account and have resulted in markets appearing to be ‘notreplacing but fusing with systems of personalised political redistribution’(Treisman 1995: 967). The extraordinarily swift privatisation of stateproperty resulted in a tremendous transfer of property rights to whatHanson (1997b) calls ‘sitting tenants’ – i.e. managers of large-scale andmedium-scale enterprises from the former regime who, often in co-operationwith the workers, attained control over a majority of the equities.

Some have portrayed this economic ‘bastard’ as the result of a few personsenriching themselves by exploiting collective property. The terms ‘rent-


seekers’ and ‘financial oligarchs’ have been used to describe the new powerfulactors who were the product of the economic reform process (Aaslund andDmitriev 1999; Andresen 1999). A limited group of directors of financialand industrial enterprises seems to have been very influential in politicalprocesses. Few major decisions could be taken without consulting thesepeople, since the well-organised economic elite had captured most channelsof influence that penetrated the Russian state (McFaul 1998). The newbusiness elites became more interested in controlling property andsafeguarding their own power bases and monopolistic economic intereststhan in stimulating further economic reforms. The web of personal ties andrelations to conservative state structures inhibited real market reforms andeconomic progress.

The consequence of ‘half-way reforms’ has been ownership forms in thegrey zone between the state and the market capable of flexible adaptation toextremely turbulent environments (Stark 1997). The concurrent transform-ation of property and politics in post-communist societies has createdalternatives to market and hierarchy (Stark and Bruszt 1998) that we areonly just beginning to comprehend and identify. The basic agents in this newform of co-ordination are active elites who bring collective orientations intonetworks and bargaining agreements with the state, thereby making chaoticenvironments less uncertain.

Towards state-led capitalism

It is tempting to conclude that the new elites are espousing a form ofconsensual ‘social market’ economy or a ‘Scandinavian model’. However, therather extreme individualism of the elite and acceptance of income differ-ences would suggest otherwise. Moreover, the specifically Russian economicand institutional context, with its lack of economic prosperity and poorrespect for law and order, makes social democracy an implausible outcome(Shlapentokh 1999). It is more likely that what we are now seeing is theoutline of a peculiar post-communist type of political-economic system –neither socialist, and nor capitalist nor social democratic – in which decision-making is determined by networks and inter-elite bargaining under theumbrella of legitimate strong leadership. One problem is how to concep-tualise and identify this new sort of economic system, which encompassescompetitive elites who believe in collective institutions and who are unifiedby beliefs in strong leadership.

Some have suggested that this constitutes a kind of communitarianism,combining liberal ideas with collective responsibility, as a solution to thecontradiction between individualism and collectivism in post-communistsocieties. But is the Russian population ready to accept communitarianism‘as a new state ideology’, as Labikovskaya concluded (1999)? Mass surveys inRussia and Eastern Europe have revealed widespread collective attitudes, butthese are generally combined with a wish for hierarchical subordination, not


liberal ideas (Koryshkin 1999). The liberal and communicative aspectsessential to the communitarian model are generally weak among post-communist populations.

The data draw a picture of an elite who pay considerable attention tocollective responsibility and support a rather strong central power while atthe same time competing for influence and the right to economic privileges.David Lane (2000) has termed such a system ‘state-led capitalism’, in whichself-interested and rough elite competition is combined with self-restrictionsstemming from loyalty to a strong President and shared concern forcollective control of strategic segments of the state. A combination of beingattracted to competition and support for comprehensive collective institu-tions points toward individualist elites united by a paternalistic mentality, inwhich the success of economic reforms hinges not on more effective stateintervention but on acceptance by the elites.

‘Muddling through’ the new economic system

There are two main explanations for why economic reforms did not live upto expectations, one institutional, the other cultural. The neo-institution-alists argue that implementation was not effective enough. Top-downimplementation of radical market reforms in an environment of inherited,non-profitable industrial enterprises, a weak state and social institutions anda lack of enforcement instruments might have been successful if the nationaland regional elites had been receptive and willing to co-operate in bringingabout radical economic change. The ‘will to action’ of the executive is notonly crucial for the success of a certain policy but also feeds back intoacceptance of institutions and enforcement mechanisms.

A main message from our data is that the attitudes of the Russian elite arequite conducive to changes away from central planning but not to the sort ofeconomy propagated by Gaidar, the head of Yeltsin’s reform team. Thebelief of Gaidar and his followers that new economic institutions wouldinstil attitudes in the elite beneficial to competitive markets and economicgrowth did not come true, simply because the required liberal values couldnot be internalised by command. The elites’ preference for flexible stateinterference and their criticism of the market, combined with a ratherexcessive individualism, seems to point partly to cultural ‘path dependent’mental models inherited from the collective past and partly to the uniquesituation after the change of regime which encouraged individualistic elitebehaviour. Obviously, the elite wants to make use of the opportunitiescreated by the market experiment but they also want an active state.

Western-type capitalism has clearly failed. If we now return to thequestion of what sort of capitalism is emerging in Russia, the literature givesfew reliable clues. However, if ‘path dependency’ is crucial for change, oneimplication is that ‘grand change’ models forwarded by the Yeltsin reform-team must be replaced by incremental methods in accord with the national


and regional elite’s practices determined by traditional norms, personalstrategies and compromises. Such incremental behaviour, the effects of whichwill still only be vaguely discernible, will always be less attractive forimpatient reformers and international partners than the economic miraclepromised by rational ‘blue-prints’. The puzzle of the emerging Russianeconomy is gradually falling into place as elites continue muddling throughin extremely difficult decision-making environments.

Hedlund (1999) attributes the Russian market failure to the ‘heavy burdenof history’. A specifically Russian ‘path dependency’, where basic norms aredifficult to change, which creates attitudes that stand in the way of legitimateformal rules and the efficient implementation of reforms and which sustainsa type of ‘predatory capitalism’. In the longer term the worrying perspectiveis, Hedlund (2001) maintains, that path-dependent behaviour may bereinforced by the ‘capture of the Russian state by roving bandits’ (p. 234).Given the widespread sense of collective responsibility among the Russianelite revealed in our elite survey, this scenario would appear to be overlypessimistic. Rather, the impetus of national and regional elites imply asPrzeworski (1991: 179) argues that reforms neither ‘succeed’ nor ‘fail’ but‘proceed in spurts: advancing, stumbling, retreating, and advancing again’.Przeworski makes the point that elites will learn from past mistakes to designbetter programmes but also from past failures that reforms will fall shortagain. The Kremlin leaders’ muddling along after 2000 may as Gustafson(1999) argues turn out to be Russia’s formula for progress. CapitalismRussian style may not win general support among ordinary Russians butseems to be the system best suited for the emerging ‘middle class’, and evenmore important, I argue, has a political basis since it fits in with the beliefs ofRussian elites.

Referring to studies of debates among elected representatives in theCongress of People’s Deputies in 1989, Fleron (1998) argues that the reflec-tion of traditional Russian culture found in the political elite’s discourse isjust a continuation of the idea of sobornost. It is a conception of a mythical,collectivist mutual responsibility found in the self-governed Russian villagecommune, the mir. Such attitudes, opinion polls demonstrate, are verywidespread on the mass level. While Russian elite culture is characterised byconsiderable collective norms, it also embraces patterns of extreme individual-istic behaviour and lack of trusting other elites.

Harry Eckstein and his associates, in their study of political culture inRussia (1998), maintain that political stability will follow when elite attitudesand political institutions are congruent with the prevailing authority patterns(be they democratic or authoritarian) in society. Accordingly, Putin’s morestate-oriented policies, supported by national and regional elites will stabilisethe situation since it is more in harmony with traditional values andauthority patterns of the mass public. At the very least, the myth ofsobornost has been vitalised.


The transition to ‘capitalism Russian-style’ is a pragmatic project in whichelite attitudes are being shaped not only by the legacy of the past but also bynew incentives and opportunity structures created by the failure of the newinstitutions, such as market monopolies. North (1990) writes that institu-tions providing disincentives for a market economy will create groups withan interest in the existing constraints, and participants will rationalise thisstructure and reinforce it. During the Soviet period the collective statecreated disincentives for co-ordination, and ‘distributional coalitions’ amongthe economic managers and political elites produced large-scale inefficiency(Olson 1982). After the demise of communism the conditions for establish-ing elite coalitions and collusive networks became very fruitful. Controllingvaluable state property became more important than investing in newactivities which created ‘winners who took all’ and halted further marketreforms as Hellman (1998) argues.

A more optimistic view is that elite coalitions did not necessarily haltreforms; they could also be used as a resource. Shleifer and Treisman (2000)argue that while ‘culture’ was a restraint, it did not make reforms impossible.The ability of the central leadership to co-opt or include the strategicnational and regional elites by giving them some influence over decision-making was crucial to the successful implementation of some reforms, e.g.macro-economic stabilisation. On the other hand, privatisation, most wouldagree, was only halfway successful in sustaining a viable market and hadmajor negative side-effects. Most agree that the tax reforms were also amajor failure. Shleifer and Treisman make a case that these reforms had thepotential to succeed but they failed owing to a lack of effective co-option ofthe elites by the Kremlin leaders.

The rhetorical solutions – ‘more market’ as recommended by Westernisersor ‘more hierarchy’ as proposed by traditionalists – ignore the unparalleled‘third way’ that seems to be emerging in Russia and is reflected in the elite’sorientations. Anatoly Chubais, a main proponent of the market experiment,is optimistic about this emerging ‘mixed economy’. Complaining aboutRussian businessmen during ‘raw capitalism’, he said, ‘they steal absolutelyeverything and it is impossible to stop them. But let them steal and take theirproperty. They will then become owners and decent administrators of thisproperty’.11 To what extent the new capitalists will become well-manneredproperty owners remains to be seen. As shown in Chapter 7, how privatis-ation works is a highly controversial issue among the elites. While Yeltsin’sprivatisation programme fuelled the traditional dichotomy between state-ownership and liberal values, Putin’s state-led capitalism provokes both left-wingers and the liberals. One telling example is the bill proposed to the StateDuma in October 2002 aimed to deregulate the electricity sector where ‘thebill would liberalize the energy industry while, at the same time, allowing thegovernment to retain control over the sector’.12 The bill was passed undersharp protests from the communists and the liberals. The law according to


the liberal party leader of Yabloko, Grigorii Yavlinski, would lead to ‘thecreation of electricity oligarchs in the regions’ and establish a ‘basis forpolitical-corporate authoritarianism’ in Russia.13

As robbery capitalism thrived on the remnants of state property, a newform of ‘network economy’ seemed to fuse with old structures, yielding newforms of elite-state dynamics. In this relationship individualism and ‘rawcapitalism’ go hand-in-hand with paternalistic ideas of state regulation andsocial responsibility. The ensuing restriction on raw capitalism is more likelyto come from paternalist intervention than from emerging civic values. Withthe broad support of the elites for Putin’s partial recentralisation of the statethe period of ‘roving bandits’ and ‘predatory capitalism’ appears to be onthe decline. Although criticised by liberals, it seems that state-led capitalismwill be stable because it is upheld by a compromise between the Kremlinleaders and a post-communist elite culture deeply entrenched in traditionalRussian values.


6 Integration in a decentralisedfederation

If we look at the situation two years ago, I think many will agree with methat centrifugal forces had gained such a momentum that they werethreatening the destruction of the state itself.

Vladimir Putin1

As experiences elsewhere show, for a federation as a particular organisationalform of democratic rule to work successfully, it not only requires appropriateinstitutional structures, procedures and conventions, but must also bematched by a set of socially held beliefs that value both unity and respect fordifference.

Graham Smith2

Introduction3

After the break-up of the Soviet Union many expected the process offragmentation to be unstoppable, ultimately resulting in the secession ofseveral other regions from the newly established Russian Federation. How-ever, although decentralisation went far during the Yeltsin period, thefederation did not fall apart. The intriguing question is why the weakeningof the state centre and the far-reaching decentralisation of power did notlead to more federal disintegration. I argue that the Kremlin leaders andnational and regional elites have a common interest in keeping the federationtogether as long as the federal institutions allow the regions a substantialdegree of autonomy. The purpose therefore is to analyse how decentralis-ationist and integrationist attitudes may constitute the basis of the Russianfederation.

The large amount of regional autonomy provided for in the liberalConstitution of 1993 clearly reflects a decentralised type of federation. Itwas in the interests of most regional elites to attain sufficient autonomy fromthe centre to gain more control over their own natural resources and internalmatters while continuing to benefit from collective goods and economictransfers, receive a satisfactory share of tax revenue and preserve the careeropportunities provided by the federation. Because of the disappointments of

Chapter Title 95

the market experiment and the rapidly deteriorating economy, the momentumof decentralised rule created both new local responsibilities for providingpublic services and dependency on central transfers. In regions where thetitular nationality formed a major part of the population ethnic autonomybecame more an instrument for negotiating better economic deals with thecentre than a serious splintering force.

The elite’s attitudes to these issues of regional autonomy, economic re-distribution and ethnic relations are germane to the more fundamentalquestion of what keeps the Russian Federation together. Centralised anddirect interference from Moscow disappeared with the demise of the totali-tarian system. Under Yeltsin’s period governing instruments were severelyweakened and federal cohesion was determined by the extent to whichexecutive power allowed national and regional elites sufficient autonomy totake responsibility for solving their own problems. Decentralisation of poweralso created numerous problems of policy co-ordination and federal frag-mentation of which Chechnya is the most serious example, which incitedVladimir Putin’s more control-oriented regime.

After first reviewing some main contributions from the discourse onfederalism in general this chapter analyses the elite’s attitudes to somefundamental challenges inherent to Russian federalism. The first topic ispower-sharing between levels of government; second, allocation of economicresponsibilities; and third, the use of agreements to organise central-regionalrelations. The elite’s attitudes on these issues, as Preston King (1973) argues,constitute the federal solution. Type of ‘federal solution’ should beunderstood not only as choice of formal institution but probably moreimportantly how federalism is working in terms of the elite’s politicalpriorities. Not only are the formal institutions the result of elite bargaining,but the actual content and priorites which is filling the institutions, varyingover time, is a process driven by elite interests and bargaining.

The federal bargain

There exist numerous definitions of ‘federalism’ and ‘federation’. ‘Federalism’refers to social and territorial pluralism that produces certain tensionsbetween diversity and co-ordination. A ‘federation’ is the institutional answerto such problems where the constitution guarantees a certain regionalautonomy (Burgess 1991). A federation may be regarded as a negotiatedinstitutional outcome whose basic purpose is to reconcile unity and plural-ism by establishing balances between centrifugal and centripetal forces.However, since such issues vary, federations find different institutionalsolutions. As Preston King (1973) argues, the type of federation is bestunderstood in terms of the problems to which it constitutes the answer. Inorder to grasp the political relevance of such problems, Burgess (1991)maintains that one has to acknowledge that federal solutions reflect valuesand commitments and are closely related to political beliefs among the elite.

96 Integration in a decentralised federation

Types of federations

One may distinguish between federalism as a political ideology and federal-ism as an institutional arrangement (Smith 1995). Advocates of federalismas an ideology hold that decentralisation within a framework of unity ismost conducive to liberal values, civic rights, democracy and the fairdistribution of resources. Federalism combines authority and freedom.Another justification for federalism is the desire to preserve stability andpeace inside and between territorial units. Federalism may be explicitlyconstrued as an instrument for pre-empting conflicts emerging from eth-nicity, language or religion.

As an institutional construction federalism may be seen as a politicalform in which diversity is the main principle. Even unitary states may bedecentralised. What distinguishes federalism from other state forms isdecentralisation based on a constitution guaranteeing autonomous territoriesbasic self-rule as well as electoral influence on the central level. More funda-mentally, the central government has no right to interfere in the jurisdictionof a local territory on certain defined issues. In this sense a federationconsists of regional states with a large amount of autonomy.

In a comparative and historical perspective federalism obviously varies alot with regard to its ideological underpinnings and institutional arrange-ments. Nevertheless, one principle common to all federal states is thatneither the central nor the regional government should be subordinate to theother legally or politically (Watts 1992). As Watts argues, the principle of‘separation of powers’ varies between federal states. Two main forms offederalism may be distinguished: the presidential federative system (as in theUSA), where the executive and the legislature are clearly separated; and‘parliamentary federations’ (like Canada), in which the cabinet is chosenfrom an elected assembly and plays a more prominent role. The Russianform of federation is somewhere between the two. It is characterised by astrong presidency that is to some extent dependent on the parliament andprobably comes closest to the US type.

The Russian Constitution adopted in 1993 describes the Russian state as afederation consisting of eighty-nine federal subjects.4 The Constitution pre-scribes clearly the allocation of jurisdiction between the levels of governmentbut also lists areas of joint competence amenable to negotiation5. The asym-metrical nature of the Russian Federation, in which ethno-territorial regionsenjoy a favourable status under the Constitution, has been identified as asource of potential instability by some observers. However, apart fromChechnya there have been no other serious attempts to break out of theFederation. An asymmetric federation may serve quite different functionsunder centralised and decentralised governance. During the previouscentralised command system the asymmetric structure was conducive toethnic protests and secessionist movements, starting with the three Balticrepublics in the late 1980s.

Integration in a decentralised federation 97

The present decentralised structure may be an incentive to stay inside thefederation because of the possibilities it offers for mutually favourable dealsand divisions of responsibilities between the central and regional elites.Stephen Hanson (1999) maintains that while the centralist Leninist ideologytriggered the break-up of the Soviet Union, the absence of a centralistideology keeps the present Russian Federation together. Ethnic and economicfactors must be seen in this broader context of a decentralised structure. Butthe context may change according to the prevailing ideology of the centre:decentralism may turn into centralism and will influence how the elite definethe ethnic and economic situation. Or, as formulated by Alexseev (1999: 5):‘The key question is how regional elites in post-Soviet Russia interpretregional ethnopolitical identity and economic incentives’ and make use ofthese factors either for separatist purposes or in bargaining strategies withMoscow.

Incentives: autonomy and redistribution

The formation of regional identity may be based on ethnic cleavages but alsoon tensions between the centre and the periphery stemming from economicredistribution issues. Dependency on transfers from the central governmentmay encourage integrative forces, since connections must be built with thecentre in order to compete with other regions for a share of resources. Thedistribution of subsidies and the advantages brought by collective goods andshared costs are the substance that binds a decentralised federation together.The stability of the federation largely depends on how the distribution ofresources in practice measures up to the expectations of all federal elites. TheKremlin leadership, national and regional elites do not necessarily haveopposing interests in this distributional haggling. In fact, this is an empiricalquestion the answer to which cannot be deduced from theoretical assump-tions about regional identity formation.

Going beyond a formal constitutional approach, Nathan (1993) arguesthat the distributional substance determines the federation’s approach toreconciling unity and diversity. Power relations and levels of trust betweencentral and regional levels of government, the fiscal role of the regions andthe central authorities in levying taxes, and the sharing of responsibility forpublic services form the flesh on the constitutional skeleton.

Not only the type of federation but also the policies of the centre influenceelite strategies on the regional level. Donald Horowitz (1992), writing duringthe break-up of the Soviet Union, argues that the federalism and regionalautonomy inherited from the Soviet period may provide the potential forrenegotiating a federal structure without severe conflicts. Instead of regionalattributes, like the economic situation and ethnic composition, it may be thepolicies of the central state that shape the preferences of the republican elites.

During the 1990s the regions obtained a high level of autonomy withoutbreaking their bonds with the federal government.6 Instead of speculating


about whether this structure will lead to regional secession one should askwhat keeps such a heterogeneous and decentralised federation together. Hereit is argued that collective services and redistribution in a decentralisedcontext are a pivotal centripetal force. They make the federation legitimateby generating acceptable divisions of responsibility for policy between thecentre and the regions, thereby also keeping regional dissatisfaction in check.The elite’s attitudes to the decentralisation of power, to the distribution ofeconomic responsibilities between the centre and the regions and to ethnicconflicts provide clues as to what holds the new federation together.

Boris Yeltsin’s various deals with the regional governors between 1994and 1998 confirm that decentralisation had gone far. The process of re-shaping the federation has always been and still is characterised byunexpected changes of direction. One example is President Vladimir Putin’sattempts to reduce the power of the governors.7 Hanson (1999) argues thatrecentralisation of the federation may lead to more regional autonomy andethnic rebellion against the centre. Accordingly, the legitimacy based ondecentralisation and on support from the governors will be replaced by moretension between the regions and the centre following Putin’s strengthening ofvertical rule and increasing control over the regions. Still, the pendulum willnot swing back to Soviet-style centralisation. A pluralist elite comprising ofboth the centre and the regions has simply become too strong a force. Thepresident needs its support, and the elite see too many advantages indecentralised rule. Sakwa (2002) argues that Putin seeks to reverse theerosion of constitutional principles, so-called ‘segmented regionalism’ thatflourished under Yeltsin but Putin is torn between ‘compacted’ and morepluralistic forms of statism.

Several observers have described the problems of the Russian Federation atthe outset of the new millennium as less a question of ethnic separatism than abargaining game between regional and national elites competing for politicaland distributional privileges.8 Furthermore, identity is not only about ethnicbonds like culture and language. Mobilisation against the centre may also bestimulated by a distinct regional identity experienced by a predominantlyRussian population or by a mixed population in a given geographic area.Regional assertiveness vis-à-vis the centre may stem from a variety of local,symbolic and material factors. Two possible causes of resentment that cutacross ethnic cleavages are ‘relative deprivation’,9 whereby the cost-benefitflows between the centre and the region are perceived by the regional elite asdisadvantageous, and lack of control over local natural resources.

The stability of the Russian Federation is usually studied from the perspec-tive of the regional elite. This chapter takes a somewhat different approach,focusing on both central and regional elites. In fact the distinction betweenthe two groups is a purely formal one, since most members of the centralelite, particularly the political elite, are to a large extent recruited from theregions. A crucial point is how strong integrationist tendencies are amongthe regional elite compared with the national elite.


One harmonising factor is career. As David Laitin (1998) argues, theregional elite has a strong incentive to be part of the national elite. Overlonger periods of time members of the regional elite are co-opted by thecentre and their motives become related to personal status. Career ambitionsbecome bound up with opportunities to influence decisions that have vitalconsequences for their home region. Philip Roeder (1991) helps to explainthe separatist wave before 1991 in terms of how successfully republican elitesmanaged to negotiate redistribution deals with the centre, thereby creating orinhibiting occupational mobility for the republican elites. Roeder’s modelmay also illuminate why the Russian Federation did not continue to dissolve.In the major part of the regions the elites have continued to see opportunitiesfor mobility and access to additional resources from Moscow in a decentral-ised federation. Consequently, the elite’s personal ambitions are intertwinedwith the issues of autonomy and distribution.

Images of power sharing

The elite’s comprehension of power relations between levels of governance isone fundamental ‘social construct’ constituting the psychological context forpolitical processes and distributional decisions and the legitimacy of thefederation. It is important because it will influence not only the scope ofgovernment action but also how the elites evaluate ethnic mobilisation andeconomic incentives as possible ways of obtaining better deals for theirhome region.

The ‘federal ideology’ adhered to by the various elites may be centralist ordecentralist. An important question is whether the regional elite is moredecentralist than the national elite. Do we find opposing camps or is there acommon ‘federal ideology’ across elite institutions? One way of ascertainingthe prevailing federal ideology is to ask how the elite perceive the actualpower of central, regional and local government (Table 6.1) and how itwould prefer power relations to be in the future (Table 6.2).


Table 6.1 Perceptions of power of various levels of government (%)

Very Verystrong weak

1 2 3 4 5 Mean

Central 1998 2 8 30 30 30 3.8govt. 2000 6 15 43 26 10 3.2

Regional 1998 5 18 43 22 12 3.2govt. 2000 5 27 38 23 7 3.0

Local 1998 5 19 33 23 21 3.4govt. 2000 4 16 28 31 21 3.5

Response rate: 1998: 98%, N=980; 2000: 98%, N=605.

In both years few respondents describe federal, regional and localgovernment as ‘very strong’. A large group thinks these governmental levelsare quite weak and the rest take a middle position. The figures reflect asituation of partial abdication of state power and rule of law, resulting inweak governing structures on all levels.

While the central government is seen to be generally weak, a distinction isdrawn between various levels of power. The table shows clearly that in theunstable year of 1998, in particular, both regional and local governmentswere seen as stronger than the central government. Of the respondents, 60per cent regarded the federal government as weak, a proportion considerablyhigher than that regarding regional and local government as weak – 43 and44 per cent, respectively.

After Putin came to power, the elite’s ‘psychological power-map’ changed.In 2000 the percentage seeing federal government as weak decreasedconsiderably from 60 per cent to 36 per cent, while those still regardingcentral authorities as ‘strong’ are quite modest. On the other hand, as shownin the next table, the elite want to entrust considerable power in the Kremlinleaders. Perceptions of regional power remain relatively stable, though thereis a slight tendency to see it as stronger. Local government, on the otherhand, was regarded as somewhat weaker than in 1998. The elite’s perceptionsin 1998 correspond well with the actual decentralisation of power that tookplace and the weakness of the central power under Yeltsin. By the summerof 2000 Putin’s re-centralisation policies had obviously found a positiveresonance among the elite and affected their images of power rathersubstantially. However, in the elite’s minds there has been no one-wayprocess: a double process of centralisation took place. Not only was federalpower vis-à-vis the regions strengthened but the regional level itself was alsoperceived as holding a stronger position. In the early Putin period the imageof regional subordination to the centre was not becoming more widespreadand as shown in the next table, the elite wants only minor changes in thedivision of power.

A comparison of the various elite groups reveals quite uniform opinionsabout the federal government being weak and about the relative strength ofregional government. However, while the central elite, in particular membersof the State Duma and the Federation Council, evaluate local government asbecoming weaker over time, the regional and local elite put local governmentin a stronger position in 2000. This is the only example of the cognitive‘power map’ being influenced by the elite’s institutional affiliation.

Although the tendency over time is for the elite to describe central govern-ment as more powerful – a consequence of Putin’s policy of ‘verticalisationof power’ – the general picture painted by the elite is of rather weakgovernment at all levels, with relatively stronger regional and local govern-ment. This picture indicates a fragile centre dependent on a decentralisedpower structure – an accurate reflection of the actual development of relationsbetween the centre and the regions during the 1990s. This decentralised


governing structure seems to be a dominant social construct among the elite,thereby constituting the elite’s image of power relations. Assuming that theRussian elite have a vested interest in a pluralist political system the re-introduction of a more hierarchical style of government must be seen moreas developing a minimum of state loyalty in which the regional elite willpreserve and safeguard its autonomy. The ‘loser’ in this process seems to belocal government, despite Putin’s signals of strengthening its influence.

These images of power relations provides a main ‘ideological’ contextwithin which the central and regional elites operate. Decentralisation createspolitical room for manoeuvre and opportunities for influencing decision-making that would not have been possible under centralised rule. Does thepicture of a rather weak federal government represent a wish for a morepowerful central government in the future, or does the elite want apermanently decentralised and constrained federal government? Table 6.2shows the elite’s preferences for how power should be distributed betweenthe centre and the periphery in the future.

In 1998 relatively few members of the elite wanted to strengthen centralgovernment (27 per cent) and as many as 37 per cent preferred to reduce thepower of the centre.10 The large proportion of respondents wanting tostrengthen regional and local government in 1998 is astonishing but is easilyexplained by the decentralisation policies of Yeltsin’s administration. Twoyears later a marked shift took place. The elite’s attitude to centralisationhad become considerably more positive, with 57 per cent saying they wantedto strengthen central power and only 18 per cent wanting less power for thecentre. For regional and local government there was a tendency towardspositive centralisation sentiments over time but the change was minor. Insummary, the table reveals two layers of preferences which are comple-mentary: the elite support the new president’s ‘verticalisation of power’ whileat the same time they want to defend a decentralised federation by preserv-ing the power of regional and local government.


Table 6.2 Perceptions of future power distribution (%)

More Lesspower power

1 2 3 4 5 Mean

Central 1998 13 14 36 26 11 3.1govt. 2000 22 35 26 14 4 2.4

Regional 1998 14 36 36 11 3 2.5govt. 2000 11 30 39 16 4 2.7

Local 1998 21 32 31 11 6 2.5govt. 2000 17 30 34 14 4 2.6

Response rate: 1998: 96%, N=980; 2000: 97%, N=605.

One crucial question is whether this represents a general tendency amongthe elite or whether there are differences between the central and regionalelites? In 1998 53 per cent of the deputies in the State Duma and 52 of theleaders in the central ministries had strong preferences for increasing thepower of the central authorities. Regional leaders, managers of stateenterprises and deputies in the Federation Council were much more infavour of reducing the power of central government, with less than 20 percent wanting more centralisation. The most visible cleavage, however, wasbetween different central political elite groups, in particular between pro-centralists in the State Duma and the de-centralists in the FederationCouncil.

How then did the change of President affect the views of the elite groups?The effect is greatest for the regional elite. In 1998 17 per cent supportedmore power for the centre, while in 2000 the share increased to 54 (!),compared with the more stable situation in the State Duma, where thefigures were 53 and 64 per cent, respectively. Do the regional elite also wishto strengthen their own decentralised position? The figures show quiteclearly that a large proportion of regional leaders still want more power, butthere is a reduction from 57 per cent in 1998 to 40 per cent in 2000, indicatingthat the decentralisation wave while still having considerable momentum, islevelling off.

Although the views of the ‘centralists’ are becoming more dominant thanbefore, it would be over-simplistic to say that top-down government is beingreintroduced. The change in the governing ideology from decentralisation tocentralisation seems to be more of a two-tier process resulting in a new layerof governance. The main task of the new leaders of the seven ‘federal districts(okrugs)’11 introduced in May 2000 and called ‘Presidential representatives’, isto co-ordinate the work of the central and regional levels, of which taxation isone of the main challenges. Actually, this new mid-level federal institution fitswell into the prevailing attitudes of the Russian national and regional elitesrevealed in this study. The Russian elite obviously supports Putin’s policy ofstrengthening the ‘vertical power’ but on condition that a major part of thedecentralised structure and regional power can be preserved.

While formal power structures matter, the real challenges however, areabout establishing elite consensus on how to share basic state functions, likeredistribution and taxation policies, and create a legal fundament for trans-actions between central and regional levels that the elites are supporting.These are the two next topics of this chapter.

Redistributing resources

One major incentive for regions to stay loyal to the federation is the prospectof benefiting from resources provided by the federal centre. Federalredistribution institutions create the necessary structures for regional accessto resources controlled by the central government. Accordingly, federal


subsidies and collective infrastructures have substantial integrative functions.Poorer regions, in particular, benefit by receiving more than they pay to thefederal budget and thus being net receivers. There are about a dozen netcontributors among Russia’s regions and so far these have not coincidedwith areas of serious ethnic mobilisation.

A redistributional system creates incentives for members of the regionalelite to take into consideration personal benefits, such as material pay-offsand career opportunities. According to Laitin (1998), they combine their ownmobility in the federation and other republics with bargaining for federalresources and cost sharing. It has been argued that regional autonomy willnot develop into separatism as long as the elites are part of an attractivesystem of promotions and benefits directly from distributional outcomes.Accordingly, the splintering effect of ethnicity and regionalism may easily beexaggerated. As Treisman (1995) maintains, during the ‘sovereignty wave’ atthe beginning of the 1990s the regions in question were fighting more for ashare of resources than for ethnic sovereignty as such.

Despite a general economic decline, many regions have emerged as‘winners’, benefiting from central transfers and control over regional taxrevenues, a price President Yeltsin had to pay for keeping the federationtogether. The President negotiated separate deals with several of the regionalleaders, which reflected variations in the cost-benefit equation stemmingfrom factors like administrative status inherited from the Soviet period,ethnic mobilisation, regional control over advanced industries, the presenceof natural resources and the negotiation skills of the regional elite. Thepreferential treatment accorded to some regions enhanced their loyalty tothe centre but was also problematic, since such policies were at odds with thestrongly rooted principle of equal treatment.

By way of background for understanding the elites’s attitudes, an outlineof the central-regional transfer policy of the 1990s is pesented first. Second,the focus is on how the elite evaluate the new system of sharing benefits andresponsibilities. The questions are about the elite’s perceptions of the effectsof inter-regional equity, which federal level it thinks should have respon-sibility for providing public goods, which administrative level should be incharge of collecting taxes and whether fiscal relations between the centre andthe regions should be regulated by special agreements or general law.

The transfer system: fixed criteria or ad hoc?12

The new system of economic relations between central and regional govern-ment has been founded since 1992 on the principle of independent budgetsat all levels of government, adopted in the budget law of October 1991. Thelaw abolished the traditional system of automatically refunding financialdeficits incurred by programmes at lower levels of government from thecentral budget. The result was a swiftly emerging gap between prosperousand poor regions. Economic ‘shock therapy’ produced a deterioration in


economic and social conditions in many regions and the system of federaltransfers was resumed in three ways: transfers for specific purposes; sectoralfunding; and a general fund for making regions more equal again.

From the beginning specific transfers constituted the largest and anincreasing proportion of federal support to the regions. The grants wereused mainly to cover expenses resulting from presidential and governmentalad hoc decisions to meet demands for wage increases, to compensate enter-prises and to finance development programmes in certain regions. Specifictransfers were made to finance essential services like hospitals, to subsidisecertain closed cities with military and nuclear assignments, to compensatefor extra transportation costs in remote areas, and to Moscow to takeaccount of the additional expenditure incurred through its status as thecapital. The criteria for such transfers were not clearly stated in the budgetdocument and the decision-making process was non-transparent and negoti-ated on an individual basis, often with a particular ministry. Other types offunding were connected to specific sectors. In order to provide a fairlyuniform infrastructure in all regions, sectoral funds were established in thefields of federal roads, employment, ecology and medical insurance. Theseconstitute a second type of resource transfer, but the rules governing themare so ‘fuzzy’ that their redistributive effects are unclear. These special directtransfers generally resulted from decisions taken on an ad hoc basis andfrom non-transparent allocation criteria.

The fixed criteria fund seems to have been the most ‘rule-based’ transfermechanism. The Federal Fund for Financial Support to regional govern-ments was established in 1994 and introduced a new mechanism for trans-ferring resources. It was founded on a ‘formula’, providing for moretransparency in the allocation process. The idea was to compensate regionssuffering particular financial hardship. In 1995 the fund accounted for abouthalf of the federal budget transfers to the regions. The fund was financed byfixed incomes amounting to 27 per cent (1995) of VAT revenues. Aboutthree-quarters of the fund’s resources are allocated to regions with per-capitabudget revenues below a certain percentage (95) of the federation average.The remaining quarter is allocated to regions with economic problems of amore temporary nature.

The equalising effects of these three types of transfers may be questioned.Le Houerou and Rutkowski argue, however, that during the period 1991–4there were some positive effects for the seventy-five regions they investigated.After 1995 the effect was negligible, and the overall non-transparency of thedecision-making process led to some already strong regions attaining bene-ficial agreements regardless of the fixed criteria.

The most institutionalised mechanism for transferring resources is the onebased on specified requirements. Here certain formal criteria for revenuecollection and allocation are used. Even if some transparency was intro-duced into the funding criteria in 1994, in reality ‘the politically powerfulregions claim transfers under the category ‘mutual settlements’ regardless of


any written rules’ (Le Houerou and Rutkowski 1996: 41). Often the verynature of specific allocations makes them susceptible to ad hoc treatment,not governed by formal rules. Atomised and ‘distributional politics’ arecharacteristics of certain political arenas in which patron-client relationshipsdominate. Accordingly, since 1992 ad hoc transfers have accounted for thelargest share of central transfers to the regions, and the proportion hasincreased over time (Le Houerou and Rutkowski 1996). Political bargainingand clientele relationships seem to distort the equalisation impact of thefund, although the principle of objective criteria for allocation and trans-parency at least represents a gesture towards formal bureaucratic decision-making and institutionalisation.

Transfers and equity

Economic inequality is not new in Russia. During the Soviet period thereexisted significant and quite entrenched economic differences between theregions. The change of regime intensified and accelerated many of theexisting inequalities and new regions were added to the list of the backward.However, irrespective of the inadequacy of the transfer system before andafter the change of regime, the main justification for its existence was and isthe effects of redistribution on social and economic conditions in theregions. An active state that cares about people’s living conditions is a deeplyingrained part of Russia’s egalitarian culture and of the elite’s cognition ofstate responsibility.13 Redistribution presupposes centralisation and a mech-anism for negotiating who shall get what and for co-ordinating the adminis-tration of a complex inter-governmental system. Redistribution is also atwo-way process: subsidies are transferred from the centre to the regions andtaxes are collected in the regions to finance the transfers, presupposinglegitimate procedures in order to function well.

The main idea of the transfer system is to bring about more equalitybetween the regions. This goal is not just political rhetoric. Empirical analysishas shown that the Russian government is seriously concerned aboutredistributing resources to poorer areas.14 The extent to which the membersof the elite support a centralised redistribution system is directly related to


Table 6.3 How economic transfers and taxation influence equality between regions*(%)

Much equality Some equality Some inequality Much inequality

1998 1 11 33 562000 2 15 38 45

Response rate: 1998 95%, N=980; 2000 97%, N=605.*The elite was asked to assess the consequences for equality between rich and poor regions ofthe present system of taxes and transfers between the federal and regional level.

how they evaluate its equalisation effects. The legitimacy of the transfersystem is therefore one of the strongest roots of loyalty to the Russian centre.

With only 12 to 17 per cent believing in the equalising effects of thetransfer system as shown in Table 6.3, it is obvious that the Russian elitehave very little confidence in the accomplishments of the subsidies andtaxation system. A substantial majority, more than 80 per cent, holds theopinion that the transfer system leads to inequality. The consensus is over-whelming and stable, with no differences between elite groups or types ofregion. If the transfer system is holding the federation together, as theinstrumentalist perspective would imply, it is not because of its redistri-butional effects. For the very idea of the egalitarian transfer system is in adeep crisis.

Why this sweeping scepticism? One reason may be that the transfers haveactually had the very opposite effects of what was intended. Despite egali-tarian declarations and objective criteria for distribution, the real flow of taxesto, and subsidies from the centre is severely distorted. This does not contradictthe finding that the redistribution of the Russian government is motivated byequity considerations (McAuley 1997). While subsidies may end up in poorregions in line with central directives, a corrupt regional administration hasmany opportunities for enriching itself rather than using the transfers toalleviate poverty and a depressed economic situation. In both cases the dismalevaluation of the equity effects of the redistribution system by the elite reflectstheir concern about the poor functioning of the system in reality.

Another explanation is that the elite’s perceptions differ from the actualsituation for strategic reasons. Showing concern about inequality is onebargaining chip in the regional elite’s efforts to extract more resources fromthe federal authorities. By dramatising the situation the regional elite may beable to persuade the central government to give it more money. If thisexplanation is valid one would expect the elite from economically depressedregions to be particularly negative about the effects of redistribution. Thedata do not show any differences in attitudes between the elite from pros-perous or stagnating regions, or between the political, administrative andbusiness elites at the centre. This means that the negative perceptions cutacross institutional and territorial affiliations and cannot be regarded as astrategic instrument used by certain elites in the bargaining process.

The data draw a picture of a realistic elite who sees few substantial effectsfrom the redistributional system. Such an interpretation tallies with findingsdescribed in Chapter 5 showing a rather widespread egalitarian cultureamong the elite. These egalitarian ideas reflect a concern for the miserableeffects of the central transfers. Putin’s ambitions of a more active state tocounteract the injustices of the market mechanism have so far had onlyminor effects on the elite’s perceptions of the effectiveness of equalisingprogrammes. As will be shown in the next chapter the growing economicdifferences and unfair distribution of resources seem to stimulate a left–rightideological mobilisation among the elites.


Sharing responsibilities

According to Thane Gustafson (1999), a new way of sharing responsibilitiesbetween the centre and the regions evolved during the 1990s. Regionalgovernment became responsible for health, welfare, basic education, housing,transportation and public utilities, and shares of revenues were assignedaccordingly. In theory the regional government receives a correspondingshare of tax revenue to cover the expenses. The problem, as Gustafsonremarks, is that the responsibilities are continuously subject to renegotiation,whereby ‘the centre tries to recapture revenues’ (p. 207) and reassign expendi-ture to the regional level. And a report from the World Bank concludes: ‘Thesystem is not a system, but a collection of ad hoc, negotiated, non-transparent agreements whose effects are not well understood’ (Bahl andWallich 1995: 337). The debate on privatisation of state responsibilities haseven brought in a new source of financing: the single citizen. Although thesharing of responsibilities is confusing we know even less about the elite’sattitudes regarding which level of government should bear the burden forfinancing which public services.

The administrative level responsible for public service varies a lot betweenunitary and federal states, and also among federal states. Responsibility forpublic services may be organised in various ways depending on the type ofservice in question. The ‘theory of collective goods’ says that the availabilityof services and the degree of collective consumption determine the ‘publiccharacter’ of the good and how service provision should be organised.Economists use this idea to separate state tasks from tasks the market cansolve. In a federative state the ‘public character’ of a service is, however, also aquestion of which governmental level is responsible for providing the service.One assumption is that the level of government that is regarded as mostuseful depends not only on ‘collective consumption’: large-scale benefits andequity considerations will also be influenced by the elite’s attitudes.

Some services like universities have large-scale advantages and naturallywill be more centralised than ordinary schools. Pensions are more directlyrelated to equity than hospitals and child-care. Main roads and energy aremore of a collective good than local public transport, since they bind thefederation together and it is difficult to exclude people from consumption. Ifthe sharing of financial responsibility follows a ‘collective logic’ of this kind,one would expect the elite to perceive a relationship between the type ofpublic service and administrative responsibility. Table 6.4 shows how the eliteallocates responsibility for education, welfare and the infrastructure betweengovernmental levels and the private sector.

The elite expresses one core idea of the federal state: responsibilities arerelated to a specific division of functions between administrative levels. Inkeeping with the Russian perception of functional specialisation, the eliteassigns services that need a certain level of concentration (universities), haveconsequences for equality among major population groups (pensions) or need


large investments and bind the state together in a very concrete sense (mainroads and energy) to the federal level. It delegates other functions morerelevant to local community requirements to lower levels of government.

In summary, the elite first has a very positive attitude to public respon-sibility for basic national services, thereby renouncing the private sector. Thispicture corresponds with their positive attitudes to state ownership in largeindustries, as shown in Table 5.2. The elite simply does not trust the marketto provide these services. Second, the elite quite systematically allocatesresponsibilities to different governmental levels according to the type ofpublic service, for example, hospitals and child- care are seen as tasks thatshould be assigned to regional and local governments. The widespread eliteconsensus about divison of functions should be a good basis for stableresource exchange between governmental levels. However, it remains to beseen if the confusing renegotiation of responsibilities, as Gustafson (1999)observed during the 1990s, may be ended.

Controlling taxation

A major challenge for the Russian government was to design a new systemof fiscal federalism. Taxation posed two problems: to define what should betaxed and which level of authority should be responsible for collecting taxes.Here the focus is on the latter. As early as in the last months of 1991,Michael Gorbachev introduced laws that recognised independent budgetarylevels and a variety of special taxes, creating unclear responsibilities. A ques-tion persistently nagging the Russian Federation was how fiscal responsibili-ties should be shared between levels of government. The new way of sharingresponsibilities in a decentralised federation soon had dramatic consequences


Table 6.4 Responsibility for providing public services (%)

Federal govt. Reg. govt. Local govt. Private sector

1998 2000 1998 2000 1998 2000 1998 2000

EducationUniversities 86 86 11 13 2 0 1 1Schools 36 36 31 31 32 33 1 0

WelfarePensions 82 88 14 10 3 2 2 0Hospitals 32 34 48 54 20 12 0 0Child care 10 8 21 26 67 64 3 3

InfrastructureMain roads 68 64 27 31 4 4 0 1Energy 64 67 30 28 4 2 2 3Public transport 9 8 37 48 49 39 4 5

Respons rates 1998: 98–99%, N=980; 2000: 97–100%, N=605.

for providing revenues after privatisation of many state industries. Regionalexpenditure as a share of total general government expenditures increasedfrom 36 per cent in 1992 to about 50 per cent in 1995. The regions’ share ofthe total social sector budget rose from 66 to 80 per cent during the sameperiod. Regional spending on subsidies to industry sharply increased, from47 per cent in 1992 to 71 in 1994 (Le Houerou and Rutkowski 1996).

The new system represents a continuation of the decentralised adminis-trative practices of the former Soviet Union in which tax revenues werepassed upwards from raions to oblasts and then to the federal budget. Thissystem of federal financing may have contributed to the dissolution of theSoviet Union, for republics used the withholding of tax revenues to thefederal centre as political leverage. During the mid 1990s the RussianFederation was still vulnerable in this respect (Bahl and Wallich 1995).

The Yeltsin government saw the need to mandate a clearer and moreefficient tax system. The former system was replaced with value-added tax(VAT) and excises on certain products, thereby coming to resemble Westerntaxation practices. In addition to profit tax, personal income tax and exportand import duties constituted the main sources of revenue (Shleifer andTreisman 2000). The idea was that revenues from different categories of taxobjects should be wholly assigned to specific administrative levels. Thus,VAT revenues were assigned to the federal level, while corporate profit taxwas reserved for regional government. As Shleifer and Treisman write, theimplementation of this assumed accountable and less complicated systemsoon turned into chaos. Bargaining between the reformers and theiropponents in the regional and central parliaments led to ‘a chaotic and fluidtax-system’ (op. cit.). Instead of assigning main types of tax to differentlevels of government, these taxes were shared between federal and regionalgovernments on an ad hoc basis, thereby creating ‘incentive problems’15 andultimately eroding the state’s financial capabilities.

In Russia during the 1990s there was no fixed assignment of expenditureresponsibilities to particular levels of government. According to Kirkow(1998), referring to Wallich (1992), available tax revenues prescribe whichadministrative level has responsibility for expenditure. The rather ad hocand non-formalised way of imposing responsibilities for controlling taxincomes opens the way for extensive bargaining among the central andregional elite. As of 1998, 53 per cent of the tax revenues was kept in theregions and 47 per cent was transferred to the federal level. A large portionof federal tax revenue was used for things like defence, energy, or therailway system and the rest was redistributed back to the regions. At the endof the 1990s one main issue under discussion was changing the share oftaxation obtained by the centre and the regions. The federal governmentwanted to increase its tax revenues, and by 2000 its share had increased to 57per cent and by 2002 to 63 per cent.

A major priority was to make tax-collection more effective. Shortly afterPutin came to power a new law on taxation, simplifying and standardising


the complicated system of varying tax rates, was adopted in the spring of2000. However, the idea of reorganising the tax-collecting system was notsomething entirely new. During his second presidential period Yeltsincontinuously advanced plans for changing taxation but these were nevercarried out because of his loosening grip on power. How tax incomes areshared go to the heart of a federation’s capability of establishing a balancebetween centripetal and centrifugal forces. Who shall be controlling taxes isalways an issue of bargaining among central and regional government butfederal stability depends largely on a minimum elite consensus. Here thequestion is what type of balance between central and regional governmentdo the elites support.

The majority of the elite (more than 70 cent) obviously want a mixedsystem, with shared control over taxation between the federal and regionallevel, see the Appendix, Table A6.1. The purely centralist alternative has verylittle support, even among the central elite, while the absolute decentralistoption is only marginally more popular. While a major part of the eliteagrees on a shared solution, how to strike the balance between central andregional influence is less clear.

Over time there is a quite obvious trend towards accepting more federalcontrol over tax resources. These changes in elite attitudes coincide withPresident Putin’s tax laws to strengthen the redistributional component ofthe federal budget. The laws were adopted in the Federation Council withthe support of governors from the poorer regions but met with protests fromthe ‘donor’ regions (Blakkisrud 2001). There are only minor differencesbetween the elite groups. The largest discrepancy is found between leaders instate ministries and regional leaders. As expected, the regional elite is mosteager to have regional control, while bureaucratic leaders in Moscow wantmore federal influence.

Comparing types of regions one would expect poor regions to benefitfrom a central tax system, while a decentralised taxation system would bemore advantageous to rich regions. Regional adversary between rich andpoor federal subjects is not found among the regional elites, however.16

Members of the elite from central and reform regions have exactly the sameattitudes to the tax system as those from peripheral and ethnic regions. Theconflicts about the new tax law between the governors in the FederationCouncil seem not to have been nourished by political mobilisation ofopposing interests in the regions. Probably the protests against Putin’s newtax regime among the governors from prosperous regions were more anexpression of concern for their own positions of power.

As data shows the issue is not a blunt either central or regional rule but todo with a different weighting of federal and regional control. The questionof striking a proper federal balance, obviously both unite and split the elites,illustrating that antagonism over taxation is an integral part of elitebargaining in a federal system. Thus, a main challenge for Russia was how toinstitutionalise the complex exchanges of taxes and subsidies between centre


and regions. There are two main options, bilateral agreements or federal law,and in the next section I ask which alternative does the elite support.

Bilateral or universal deals?

The relationship between the central and regional level may be organised intwo fundamentally different ways: the centre may either deal with the sub-national actors as a collective or individually (Solnick 1998). According toSolnick, universal deals do not exclude bargaining but are likely to affordgreater transparency in the bargaining process, ensure that jurisdictional anddistributional issues are fixed and make legitimate central sanctions forviolations of the rules. Although the application of the rules in practice mayvary depending on the strength of the regions, the sub-national actors cannotattain formalised special treatment through ad-hoc bilateral negotiations. Theessence of bilateral agreements is to institutionalise special treatment ofcertain regions. The questions here are, how do the elites assess the twosystems of governing relations between the centre and the regions, and do thenational and regional elites have various platforms for these two alternatives?

During the Yeltsin period a large number of special treaties were estab-lished between the centre and the regions. The provisions of these agreementsstipulated who should benefit from subsidies and who should control taxrevenues. The agreements formalised special treatment of regions with afavourable bargaining position – e.g. ethnic dominance of non-Russians orvaluable natural resources – and were a main instrument for the President toform beneficial alliances with these governors and attain political supportfrom the regions.

Although criticised for its preferential treatment, the special agreementsystem obviously also had an integrative effect. By co-opting the regionalleadership, the centre managed to establish bonds of loyalty between thecentre and the periphery. Such arrangements are conducive to establishing andmaintaining patron-client relationships favourable to both the centre and theregions. Otherwise these regions might have found the secessionist solutionmore attractive. As Hanson (1999) argues, if material incentives for staying inthe federation are insufficient and ethnic distinctive is strong, the push forindependence will be considerable. Bilateral agreements became particularlyimportant for the centre to prevent discontent among ethnic regions.

Solnick (1998) argues along the same lines, maintaining that when thefederal authorities fear that they might not be able to impose universal rules,they prefer bilateral agreements as an alternative means of preserving aconsensus. As a reward for regional honouring of specific agreements regard-ing jurisdiction and distribution, central government will offer additionalside-payments to these regions. The foundation for the subsequent separateagreements was laid with the signing of a ‘Federation Treaty’ in 1992 givingthe republics various attributes of statehood that were not shared by theokrugs and oblasts (Treisman 1999).


A total of forty-six bilateral and also some trilateral agreements weresigned, starting with Tatarstan in 1994 and St Petersburg in 1996. Theprovisions of the agreements differ considerably between the various republicsand regions. The agreements with Tatarstan and later Bashkortostan werecomprehensive and included a large amount of autonomy.17 In VladimirOblast the agreement was quite limited and formal, while in other regions, likeYakutia the agreements mostly financed federal programmes for the use ofnatural resources. The agreement between Moscow City and the federalgovernment was quite special because of Moscow’s capital status. It gave thecity government a certain degree of autonomy in the economic sphere18 and aPresidential decree from Yeltsin gave leeway in how to privatise city property.The last agreement between the centre and the regions was signed in June1998. The actual effects of these treaties are not easy to assess. While somemaintained they would tear the country apart others argued they were moretemporary political compromises than legal acts. Still, as Treisman (1999)remarks the treaties were opportunities for several regions to extract additionalbenefits. However, the bilateral treaties that gave considerable autonomyincluded only some few regions, of which Tatarstan, Bashkortostan, Sakha,Sverdlovsk and Moscow are the most prominent cases.

A more uniform way of regulating relations between the centre and theregions is by federal laws. The most important of these are the Constitutionand constitutional laws, like those governing the Supreme Court and theConstitutional Court. There are also various federal laws regulating taxation,education, labour, health, the police and spheres like public relations and themass media.

The selective, and from an integrationist point of view, effective negotiat-ing strategy employed during the Yeltsin era has changed quite radically.Soon after Putin was inaugurated as President, steps were taken towards amore centralised federal system. Decrees were issued ordering regional lawsto be brought into line with the Constitution and federal law, and a specialfederal law was adopted requiring that all special agreements should bemade to comply with the Constitution within three years.

One important question for the future of the federation is how the eliteregard special agreements and universal rules as instruments for regulatingdistributional issues. There are two standard hypotheses: first, inherenttensions between federal levels imply that the central elite will supportuniversal rules, while the regional elite are likely to respond positively tospecial agreements; and second, when the centre takes measures to re-centralise the federation, the regional elite will resist, because they want topreserve their autonomy. The survey of the elite dates from 1998 and 2000,so the respondents should have had enough time to assess how the system ofspecial agreements is functioning for the regions compared to universal laws.The figures are shown in the Appendix, Table A6.2.

In 1998 the total percentage of the Russian elite supporting universal rules(scoring 4 and 5 on the scale) was 58 per cent, increasing to 79 per cent in


2000. Evidently, federal law has strong support among all elite groups. Eventhe regional elite shifted from a relatively low level of support for federal law in1998 to a very positive attitude in 2000. It is easy to understand that theincreasing number of special deals concluded between the centre and specificregions became a cause of concern for the adherents of a centralised feder-ation. Special agreements not only conferred preferential treatment and pavedthe way for clandestine decision-making but they also raised fears that theycould be a first step towards separatism. Generally speaking, this argumenthas been exaggerated. As shown in Table A6.2, the regional elite do notdeviate from the central elite’s support for federal law as a regulatingmechanism. Moreover, after Putin came to power the leaders of regionalgovernments overwhelmingly support federal law’s taking precedence overspecial agreements.

Following the ‘ethnicity argument’, special agreements will take on moreimportance in so-called ethnic regions than in regions with a large Russianpopulation. But how much of a role does ethnicity play in the desire forseparate agreements? Table 6.5 shows to what extent the elite from ethnicregions prefers special agreements more than other regional elites.

The leaders of ethnic regions support special agreements somewhat morethan leaders of other regions. The leaders of stagnating regions on the otherhand, are the most positive towards federal law. The difference is significantenough to assert that ethnic elites have a greater interest in special agreementsthan other regional leaders. But ethnicity is first of all a ‘marker’ and notnecessarily a splintering force, as Solnick (1998) maintains. Special agreementshave become more a means of attaining a higher status inside the federationthan a force for separatism. Dual bargaining and preferential treatmentbacked up by a special ethnic status only changed these regions’ position onthe ‘autonomy continuum’ without affecting their status as federal subjects.

However, not only ethnic republics but also the leaders of other regionssee advantages in special agreements. Obviously, elites in stagnant regions


Table 6.5 The opinions of various regional elites on special agreements and federallaw, 1998 (%)

Special Federalagreements law

1 2 3 4 5 Mean

Total 12 15 22 17 35 3.5Central 11 13 19 21 36 3.6Ethnic 15 21 30 10 24 3.1Stagnant 11 9 17 14 49 3.8Periphery 5 17 20 20 24 3.5Reform 13 15 22 20 21 3.4

Response rate: 98.3%, N=980.

fear that such a type of central-regional relationship is conducive to inequaltreatment. The overall message is that in all types of region elite preferencesare mixed, with a major tendency to favour federal law. The pattern can alsobe interpreted as elites opting for the most pragmatic solution, whereby someissues are best regulated through bilateral bargaining while others should besubject to federal law.

Conclusion: the new elite bargain as a force for cohesion

In September 2001 President Putin introduced a rewritten version of thenational anthem by the same author who made the anthem from the Sovietperiod. While the lyrics were changed the melody was preserved the same asbefore. In the Soviet version the first verse opens with the words ‘Unbreak-able union of free republics’. In the new version, reference to the unioncomes in the refrain which means that three times the line ‘Eternal union offraternal peoples’ is repeated. The idea of an unchangeable multi-ethnicunion lives on while the inspiration secessionists in the regions may have seenin the words ‘free republics’ have been deliberately removed.

A large majority of the State Duma voted for the proposal. They alsoagreed that Peter the Great’s tricolour flag, which was re-introduced in 1991,should be the national flag. The Romanov family’s two-headed eagle frombefore the 1917 revolution should be the state emblem, while the armedforces should use the red communist flag as its common banner. Thesemeasures not only reconcile the past with the present, they also signal a morevigorous assertion of central power intent on uniting the federation bymeans of common symbols. However, symbols do not necessarily indicate arecentralisation of power. While the Russian elite surely want more stablecentral power, including traditional national symbols, it also wants a decen-tralised federal structure that both safeguards regional self-rule and reapsthe benefits of a redistribution of central resources.

One purpose of this chapter was to analyse images of the Russian Feder-ation among the elite. The asymmetric federative structure inherited fromthe Soviet period created instability during Yeltsin’s period that inducedthe central government to take both concrete and symbolic measures tostrengthen its power. Here I have argued that the actual integration of thefederation must be seen from the perspective of the orientations of thosewho are directly affected: the national and regional elites.

These questions have been asked: What kind of ‘federal ideology’ prevails?How does the elite perceive the division of responsibilities for providinggoods and control tax revenues between levels of government? How do theywant to organise central–regional relations? Stephen Hanson’s argument thatthe absence of a centralist ideology is what keeps the Russian Federationtogether seems to be quite illuminating of the nature of distributional andethnic problems to which the Russian type of federation has appeared as asolution.


Putin’s policies of centralisation were carried forward by broad elitesupport for more ‘rule of law’ and economic stabilisation. Nevertheless, thedata show that the decentralised structure of the Russian Federation adoptedunder Yeltsin is now deeply rooted among the elite. This paradox means thatthe political scope for centralisation is more limited than many people think.Only if central power accommodates itself to regional autonomy will theregional elite support the measures taken by the centre. Decentralisationmakes the federation legitimate, because it allows room for regional varia-tions and elite autonomy. At the same time an autonomous elite benefitsfrom redistribution from the centre, from the provision of collective goodsand from a federal structure that gives career opportunities to individualmembers of the elite.

Following the argument of Michael Burgess (1991), the ‘federal solution’is a part of political beliefs and practices, and a type of federalism that isdynamic and will change over time. While the description of Russia as adecentralised federation with considerable regional autonomy was most aptunder Yeltsin, Putin’s intention to reassert central power may raise thequestion of where to place the regions on the ‘autonomy continuum’.

A programme for more central rule is one thing; the degree of centralisa-tion the elites will allow to be implemented is quite another. The elite’ssupport for both stronger central government and regional and local self-governance reveals a rather hybrid approach to the federation under Putin.One possible implication of Stephen Hanson’s thesis is that the emergingrecentralisation after 2000 will lead to reactions and more secessionist politicsin the regions. The data do not support this view. It seems more accurate tosay that members of the elite support a certain degree of centralisation andfirm leadership without fearing a loss in status of the decentralised federalsubjects. The Russian elite has internalised a profound sense of autonomybased on tradition and one decade’s experiences with self-governancesustained by their traditional scepticism to rule from Moscow.

Economic responsibilities, negotiation between the centre and the regionsand the ethnic factor must be seen in relation to the federal structure. TheRussian national and regional elites agree that the present system of trans-fers and taxation leads to inequality. The tendency towards centralisation,whereby more federal control of taxation and use of federal law is seen aspreferable to special agreements with the regions, may be regarded as anegalitarian response to the inequalities created by excessive decentralisationand harsh capitalism. Despite its centralisation tendencies, Putin’s regimedoes not represent a retreat to unitary Soviet-type governance. The elite’staste for autonomy has become too deeply rooted and bound up with alegitimate divison of state functions and personal career interests.

The dilemma that confronted Yeltsin of how to find a viable balancebetween the centre and the regions remains. Graham Smith (1995) argues thatthe choice is between ‘refederating along more decentralist lines or movingtowards a highly centralised system of federation,’ and either way the risk offragmentation is great (p. 167). And the most notable obstacle to pluralist


federal integration in Russia is ‘the lack of a federal culture of associativedemocracy to generate a sense of coexistence and well-being’ (op. cit. p. 157).

The Russian Federation has neither fragmented nor returned to a Soviet-type centralist command system. It seems that the integrative potential ofthe Russian elites’ basic orientations has been severely underestimated and itwould be a mistake to think that integration comes only from centralisationinitiated by the Kremlin leaders. A more viable force for federal cohesion isdecentralisation made possible by responsible national and regional eliteswith interests in both central redistributional institutions and delegatedauthority.

Compared with the Soviet period there has been a fundamental change inhow resources are actually distributed and the shift coincides well with theelite’s attitudes. Even after Putin came to power, almost half of the elitesupported putting a major portion of taxation under regional control andbasic services and parts of the infrastructure were considered to be theresponsibility of regional and local government. And beneath theseoperational attitudes one finds a solid bedrock of decentralisation ideology.The elites’ orientations exposed here seem without much doubt to constitutea viable basis for what Graham Smith calls ‘refederation along moredecentralist lines’ while ingrained values of ‘associative democracy’ may takegenerations to develop.

Decentralisation is not synonymous with ‘democracy’. To what extentdelegation of authority leads to more democratic rule in the regions is anopen question. For example Cameron Ross (2000) argues that the Russiantype of asymmetrical federation was created at a time when the centre wasweak during the early 1990s. Consequently democratic practices were notsufficiently institutionalised in the regions and political processes are oftendominated by authoritarian leaders and political and business elites whohave joined forces in closed power networks.

In conclusion, the elites favour a functional division of responsibilitiesbetween governmental levels stemming from an ideology of decentralisedfederal structure. Decentralisation gives the regional elite substantial influenceon regional and local decision-making and a basis for bargaining with thecentre which they do not want to lose. The best guarantee of a stable feder-ation is not one-sided centralisation, which may provoke not only regionalseparatism based on ethnic or regional identities, but also resistance amongthe national elite.

The strengthening of the regions and the turbulence between the centre andthe periphery during the 1990s were misconceived as fragmentation of theRussian Federation. In retrospect these processes were more about negotiatinga new balance of responsibilities between the federal executive and theregional elites within a decentralised federation. The main ‘glue’ holding theRussian Federation together is an elite culture supporting a decentralisedfederation, in which the Kremlin leadership permits a mutually beneficialdivision of responsibilities between the centre and the regions and is allowedby the elites to keep closer eye on federal fragmentation and free-riding.


7 What matters for the elite’s orientations?1

[T]he importance of specific learning of orientations to politics and ofexperience with the political system has been seriously underemphasized.

Almond and Verba2

Introduction

The previous three chapters described the elites’ orientations to democracy,economic system and federal structure. Taken separately these reforms haveresulted in tumultuous changes of the Russian state and society. Additionally,this triple reform was carried out almost simultaneously and became inter-twined in such a way that the accomplishment of each of them depends onthe success or failure of the others.

A large literature has been dealing with the question of why these reformsdid not live up to initial expectations. Following the argument that reformshave to be seen in connection with the actual political culture in which theyshall be implemented, the purpose of this chapter is to ask what factorsinfluence the crucial intermediate variable: the elite’s political culture. Inparticular after such a dramatic tripple-change elites have to adapt to com-pletely new circumstances and will adopt orientations to fit actual contin-gencies. This is in line with Almond and Verba’s (1965) argument that in anypolity political culture will seek congruence with its political structure andperformance where also political memories may play a role. However, theseauthors did not take into consideration orientations following the unprece-dented way of changing regime in previous communist states. Thus, one mayquestion if weak political institutions have any substantial effects on theelite’s orientations. Further, I argue that post-communist experiences aremore important for explaining the elite’s orientations than socialisationduring the communist regime.

The ‘institutionalist’ argument is that loyalty to the Kremlin leadershipand the state’s capacity to rule are crucial to norms and therefore necessaryfor successful reforms. In contrast, the ‘traditional’ argument maintains thatpast legacies restrain reforms because they preserve conventional thinking.However, and in particular in transitional societies, culture is continuously


being reshaped. Thus, less attention has been paid to the importance of whathere is termed post-communist ‘learning’. Change of regime and the ensuingtriple reforms created an unparalleled context for the elites. Democratic andeconomic opportunities spurred political re-socialisation and new ‘ideological’cleavages. According to this view, the elite’s attitudes to how to organisedemocracy, economy and federation are shaped by recent experiences whereparty activism and revitalisation of the left–right axis are crucial.

The purpose here is to connect these explanations to what type of statemodel the Russian elites prefer under Yeltsin and Putin. The tendencies aretowards sympathising with ‘elitist democracy’, ‘state-led capitalism’ and a‘decentralised integrated federation’ identified in the previous chapters. Howmay these inclinations be explained? These dimension simply do notcorrelate in the usual models of a ‘liberal state’ and an ‘authoritarian state’.Thus, do the elite’s perceptions about the Kremlin policy making leadershipand the state’s capacity, the length and form of involvement under thecommunist regime and post-communist actual behaviour and ideologicalorientation, have effects on the sides of the triple-transition triangle? Theseapproaches may be illustrated in Figure 7.1.

Loyalty to the leadership

In particular, scholars who adopt a neo-institutionalist approach regardpolitical outcomes and economic policies as the products of formal rules andinternalised norms that leave relatively little room for choices. In this view,the behaviours and orientations of the Russian elites reflect bonds of loyaltyto organisations and institutions erected by the policy leadership.

Although the norms that make up a political culture change only slowly,institutions may change much more rapidly. Referring to North’s (1990)treatment of institutional change, Hedlund (1999) argues that in Russia aclash between new economic institutions and old norms helps to explainmuch of the country’s turbulence during the past decade. This is particularly

What matters for the elite’s orientations? 119

Kremlin leadership

State capacity

Legacy of the past

Post-communist ‘learning’

Figure 7.1 Shaping of elite orientations.

The elite’sorientationstowardsdemocracy,economy andfederation

salient when the top elite, as a result of liberalising and eroding state struc-tures, is lacking effective mechanisms for enforcing the policies. Shleifer andTreisman (2000) argue that although reforms were enacted it makes littledifference if they are not implemented because of little loyalty to the centralleaders. They see the struggle with the Kremlin leaders over implementationand coalitions of anti-reform stakeholders as the main hindrances for viablereforms.

Thus, the first hypothesis (a) is that the more loyal the elites are to thePresident and his administration (measured as confidence), the more theywill accept the policies of the incumbent President.

State capacity

Any state’s capacity to rule depends on hierarchy, sufficient resources andefficient instruments that is operated by loyal elites. Under the centralisedSoviet regime the official communist ideology served to unite elites, at leastoutwardly in their public expressions, while semi-autonomous spheres wereregarded as threatening effective governance. But democratisation, decen-tralisation and economic competition requires role-differentiation in thepolitical, bureaucratic, and economic spheres (Aberbach et al. 1981). Thechallenge for post-communist states is how to govern when hierarchical ruleand a unified elite are substituted by new roles following unclear legal normsand elite pluralism.

Logically, it is not so easy to deduct the direction of the hypothesis sinceboth a positive and negative perception of the state’s ruling capacity may goin either direction: a wish for a stronger or preserving the ‘soft’ state. Onemay, however, hypothesise (b) that the more the elites perceive the state’sruling capacity as strong and regional government as weak, the more theywill identify with elitist democracy, state-led capitalism and a centralisedfederation.

Legacy of the past

In a study of ‘civic culture’ Putnam (1993) asks why economic growth is sodifferent in North and South Italy. Building on Almond and Verba’s (1965)political culture approach, he argues that differences in economic develop-ment occur because the social norms of the two Italian regions have alwaysdiffered so much. Referring to Putnam’s study, Hedlund and Sundström(1996) have been asking ‘Does Palermo represent the future for Moscow?’They argue that because cognitive models are transmitted across generationsamong people who are closely linked in families and small groups, theculture that gives rise to such models has great longevity. A main ingredientof the cognitive models that predominate in ‘Palermo and Moscow’ is lackof confidence in the state. Where norms that they call ‘commitment mech-anisms’ are lacking in the public arena co-operation to solve common

120 What matters for the elite’s orientations?

problems is difficult, if not impossible. Thus, some argue that the legacy ofthe Leninist and totalitarian past is severely influencing the cognitive modelsof the elites and therefore impairing both political and economic reforms(Jowitt 1992; Crawford and Lijphart 1995).

The hypothesis (c) is that those elites who were involved with the previousregime (being older and having been elected to office in the Communistparty) are more prone to supporting an authoritarian model of democracy, astate controlled economy and a centralised federation.

Post-communist learning

The change of regime created fundamentally new political and economicorders and completely unprecedented challenges to which the elite had toadapt. One may argue that elites, after a change of regime, quite easily adapttheir orientations to new circumstances and career possibilities. First, post-communist democratic learning is resulting from the elite’s politicalactivities. The argument is that those who are party members take part in anorganisation of ‘democratic learning’ and will be more democratically-minded than those outside party-politics. Second, the dismantling of stateplanning and the introduction of a market economy opened up the way foruncertainties and pragmatism (McAuley 1997), but we must also ask howuncertainties created problems and challenges that may have vitalised newsocio-economic cleavages and political identities. Some elites were eagerlytaking advantage of economic opportunities while others defended tra-ditional egalitarian values against capitalism. Thus, the replacement of theprevious monolithic state with pluralist structures may shape new divisionsamong the elite, and, as Kullberg and Zimmerman (1999) indicate, ideo-logical variation in Russia largely results from different opportunities createdby the market. However, not only the market caused new opportunities, butalso democratisation and decentralisation produced unprecedented arenasfor elite games and coalitions. As Almond and Verba (1965) argue, apolitical culture is mainly determined from experiences with actual politicalperformance in a broad sense. On the mass public level Mishler and Rose(2002) found that economic and particularly political performance of post-communist regimes explains the most variance in regime support, while thelegacy of the past accounts for considerably less. They argue that politicalsupport must be ‘re-learned’ after a change of regime and over time thiseffect will increase. Probably such a ‘re-learning’ of political loyalties will beeven more notable for the elites who have a clearer stake to accommodatewith the new regime.

Accordingly, a dramatic breaking with the past gives recent impressions agreat impact. If activity in a political party is a ‘school in democracy’, astheories of ‘democratic socsialisation argue’, one would expect that (hypo-thesis d1) party membership will induce positive preferences for liberaldemocracy, market economy and power to the regions. Second, I hypothesise


(d2) that ideological position on the left–right scale is expected to haveeffects on type of economy but not necessarily impinge on attitudes todemocracy and federation.

The results

While the policy leadership factor intends to explain what may make policiessuccessful, ‘the legacy factor’ is concerned not only with what disruptsreforms but also with how the past may be conducive to unprecedentedforms of co-operation, representing a flexible adaptation to an insecureenvironment. In fact Russian reality is not so much about success or failure3

but, as I will argue, more about an intricate mixture of change and con-tinuity determined by competing elite’s preferences. Thus, the elite’sorientations are fundamental to vertical and horizontal coalition-building,where the main issue is to strike a sound balance between stability anddifferentiation, between predictability and uncertainty.

If political stability follows from particular authority patterns among theelite, only a certain degree of harmony between the Kremlin elite and thenational and regional elites can produce less turmoil. I argue that VladimirPutin’s more authoritarian state is above all a response to a widespread wishamong the elite for order and stronger rule. Nevertheless, the elites are alsoan autonomous force whose positions are institutionalised in distinct groupsand underpinned by a democratic Constitution. In other words, despite thisself-imposed stronger leadership, the national and regional elites have a vitalinterest in preserving their bargaining position vis-à-vis the President and hisadministration.

The model (Figure 7.1) suggests various explanations of the elite’sattitudes to democracy, economic system and type of federation. Moregenerally, I ask, do beliefs in institutions like the Kremlin leaders and statecapacity matter, or is the pre- or post-communist culture more important.Below, the hypotheses are tested out using regression analysis.

Obviously, the total effects of the model (measured by R2) are unimport-ant (Table 7.1). But some partial effects stand out and the lack of effects ofsome variables which have been presumed as essential, e.g. legacies of thepast, are quite astonishing. In the following I comment on the effects of theindependent variables on each main group of the dependent variables.

Democracy

The independent variables do not influence in any significant way attitudestowards equality of influence. The national and regional elite’s trust in theexecutive affects one democracy indicator: after Putin came to power trust inthe President’s administration leads to preferences for stronger leadership,while trust in the President as such has no effects on democratic attitudes.The only example of how the perceptions of state capacity influence


democratic attitudes is that those who regard regional government as strongalso support party pluralism.

It is a widely assumed that the legacy of the past is important sinceindividuals are socialised into certain values at an early stage. However, agedoes not affect democratic attitudes in any significant way. Some may thinkthis is quite strange, but the same is found in population surveys in post-communist countries showing low effects between age and support fordemocratic regime (Rose et al. 1998: 205) and in a study of post-communistelites in the Baltic states (Steen 1997). Obviously, the issue of ‘democracy’ isnot splitting those who had their formative years under communism and theyounger generations. ‘Democracy’ has become an internalised value acrossgenerations.


Table 7.1 New institutions, old legacies and post-communist experiences influencingthe elite’s orientations.4 Regression coefficients (R2) in 1998 and 2000

Democracy Economy Federation

Equal Strong Party Income Owner- Power Powerinfluence leader- compe- differ- ship of of

ship tition ences central regionalgovmt. govmt.

The Kremlin leadersThe President 1998 0.02 0.02 0.05 0.06 0.15** 0.06 0.02

2000 �0.01 �0.01 �0.02 0.08 0.05 0.09 0.02

President’s 1998 �0.09 0.06 0.01 �0.05 0.04 �0.03 0.01admin. 2000 �0.02 0.13** �0.02 �0.03 0.03 0.09 0.12**

State capacityFed. govmt. 1998 �0.02 �0.05 0.06 0.02 0.05 0.03 0.02

2000 �0.05 �0.07 0.03 0.08 0.02 �0.07 0.05

Reg. govmt. 1998 �0.01 �0.01 �0.03 0.00 0.03 �0.04 0.10**2000 �0.07 0.02 0.09** �0.09 0.00 0.05 �0.11**

Legacy of the pastAge 1998 �0.03 �0.02 0.02 0.05 0.06 0.02 �0.05

2000 0.01 �0.07 0.03 0.05 0.05 �0.05 �0.11**Elected to 1998 �0.05 �0.02 0.06 �0.03 0.04 �0.03 0.02

office 2000 0.07 �0.11** �0.09* �0.07 �0.09 0.05 �0.05

Post-communist ‘learning’Democratic 1998 0.04 �0.10** 0.06 �0.09* �0.07 0.11** �0.08*

experience 2000 0.05 �0.10** 0.06 �0.01 �0.03 �0.03 0.05

Ideology 1998 0.06 0.01 �0.05 �0.20** �0.22** 0.19** �0.062000 0.04 0.00 �0.18** �0.23** �0.41** 0.07 0.06

R2 1998 0.02 0.02 0.02 0.08 0.14 0.03 0.032000 0.02 0.04 0.06 0.10 0.22 0.04 0.04

Coefficients significant on the 0.01 level are marked with ** and on the 0.05 level with*. Alsoother coefficients may indicate effects but should be interpreted with care.

One should also expect that having been elected to a representative bodyduring the previous regime leads to more scepticism towards democraticinstitutions. This variable has a rather clear effect on attitudes to leadershipbut is the opposite of what is expected: under Putin those who had such aposition in the Soviet period tend to disagree about the blessings of strongleadership (�0.11*). While a previous position does not matter, as shown inChapter 4, the main response is that more than 80 per cent of the elites aresupporting strong leadership. Also quite unexpectedly, during Yeltsins’period those who held a power position in a Soviet elected body tend to bethe most positive about party pluralism. Although the effect is not signific-ant it may indicate that the previous confrontations between Yeltsin and thecommunist opposition made them see party pluralism as a way of protectingthe Communist Party. Under Putin’s regime the elite tend to change theiropinions and are becoming clearly more negative about the value of partycompetition, probably because of the confusion created by the many smallparties.

Post-communist ‘learning’ has a positive effect on democratic orienta-tions. Those who are a member of a political party both during Yeltsin’s andPutin’s periods are more positive about participation and party competitionand significantly more critical of strong leadership than those who are notactive in politics (�0.10**/�0.10**). Taking part in political organisationsseems to socialise leaders into democratic thinking. Since Russian politicalparties tend to serve as ‘schools of democracy’ this is a considerableachievement for democratic development. An interesting observation is thatunder Putin the right-wingers are much more positive about partycompetition than those on the left side of the political spectrum (�0.18**).In Yeltsin’s period the left–right divide was less important for attitudes aboutparty pluralism, indicating that Putin’s re-centralisation policies are appeal-ing to the more authoritarian left’s propensities to streamline the politicalprocess while liberals tend to mark their pluralist instincts.

The economy

During Yeltsin’s period trust in the President significantly influenced supportof private ownership (0.15**), but under Putin, the President does not seemto give rise to any cleavages among the elites. State capacity as measured bythe elite’s perception of regional strength, indicate that strong regions lead toa wish for a levelling-out of income differences.

The legacy of the past does not influence attitudes to the economicsystem except that those who had an elected position before tend to supportstate ownership. The must substantial effects on economic system come frompost-communist learning. The left–right preferences among the national andregional elites, both under Yeltsin and Putin, strongly affect their attitudes toincome-differences and ownership (�0.20**/�0.23** and �0.22**/�0.41**).Over time, the effects are getting considerably stronger, showing that among


the elite, new ideological cleavages emerging from post-communist experiences,are much more important to the future economic system than loyalty to thecore leadership’s policies, the state’s governing capacity and legacies from theprevious regime. Under Yeltsin party membership affected attitudes toeconomic reforms, which probably reflects the heated debates on the ‘shocktherapy’ with the communist opposition. While the effects of party member-ship disappear under Putin, the ideological position increases in importance.

The federation

Trust in the leadership under Yeltsin and Putin does influence the issue offuture centralisation of the federation, but not significantly. On the otherhand those who are positive about the President’s administration supportmore power to the regions, so the picture is mixed. Regarding state capacityan interesting shift has taken place: perceiving the regions as strong underYeltsin’s government resulted in preferences for even more autonomy (0.10**),while the relationship reversed under Putin (�0.11**). After 2000 the eliteswho regard the regions as politically strong want less federal decentralisation.This illustrates the pragmatic shifts of elite attitudes that have taken placefollowing Putin’s regime.

Looking at legacies of the past, one finds the opposite of what wasexpected, the younger elite want less power devolved to regional government,a tendency that is growing over time and underscores that Putin’s policy ofrecentralisation has a particular support base among the younger generationof leaders. Post-communist learning significantly affects federal attitudesduring Yeltsin’s period of rule where party-membership and left orientationsinstigated preferences for more centralised governance and less power to theregions (0.11** and 0.19**). After Putin came to power, party membershipand ideology are far less important for the elite’s preferences for type offederation.

In summary

As the regression analysis illustrates, it is not an easy task to explain theelite’s attitudes to the triple transformations in the political, economic andfederal systems. Obviously, the indicators measuring the trust in the ‘execu-tive’ and ‘state capacity’ are targets for criticism since they are based on theelite’s subjective perceptions and not on objective circumstances. But, whenclearcut objective indicators of ‘past legacies’ like age and communistactivities do not affect attitudes in any convincing way one may doubt thatalternative institutional indicators will do better.

The institutional factor, like loyalty to top leaders explains little. However,it is important to note that the ownership issue was rather closely connectedto trust in President Yeltsin, while this relationship disappeared under Putin.Obviously, the politicisation of the Russian Presidency was connected to the


turbulent economic ‘shock therapy’. The (a) hypothesis that trust in thePresident induces sympathy for their policies was valid just during a certainperiod of the Russian economic transition. Certainly, a disassociation betweentrust in the President and controversial policies is crucial for the President’sauthority.

While the federal government’s capacity to rule has no effects at all,perceiving that regional government is strong has some consequences forliberal political orientations, but these elites also want more income equalis-ation and less delegation of power to the regions. It seems that the state’scapacity is less important than expected in the (b) hypothesis.

The cultural factors relating the elites to the past explain much less thanexpected, and the hypothesis (c) arguing that age and previous connectionswith the regime influence orientations, have little support.

In the hypothesis (d1) I argued that the variables emanating from theelite’s recent post-communist experiences and thus connected with theirmore immediate interests are important. The ‘school in democracy’ thesisgets considerable support. Experience with membership in a political partyencourages preferences for liberal democracy, market economy anddecentralisation of federal power.

In the (d2) hypothesis I argued that ideological position on the left–rightscale will have effects on preferences for type of economy but not necessarilyimpinge on attitudes to democracy and federation. The main finding here isthat ‘ideology’ accounts for the two major political controversies in Russiaboth under Yeltsin and Putin: how to redistribute wealth and ownership.These socio-economic ideological disputes are obviously getting strongerover time among the elite. While the issues of type of democracy and federalstructure also split the elite, as shown in the previous chapters, only theeconomic issues follow a clear left–right divide. The lack of ‘ideologisation’of the fundamental procedures of the state indicates a rather smallpossibility for politisation of the ‘rules of the political games’. On the otherhand, the highly ideological controversial distributional issues related toequality and property rights is a manifestation of prospective elite clashes.

The elite’s orientations to democracy, economy and federation analysed inthe previous chapters have revealed basic patterns of uniform beliefs acrosselite groups, while this chapter illuminated the potential for socio-economiccleavages among the elites. However, attitudinal patterns are moulded inspecific decision contexts that in post-communist countries are characterisedby weak formal institutions, clientelism and personal relations. The purposeof the remaining two empirical chapters is to analyse decision-makingculture and network behaviour in Russia.


8 Decision-making cultures

But, we might hypothesize, at a time when political structures are demolishedand new rules introduced, the informal conventions governing behaviour willprovide the only element of stability in an uncertain world.

Mary McAuley1

Introduction

A major purpose of the post-communist reform programme was to institutea more law-abiding civic culture furthering public transparency, the values ofa civic society and a functioning market. One formidable challenge was topass laws and establish institutions regulating relations between the state,society and the new business community but even more important is theinternalisation of these civic values into the elite’s thinking and behaviour.This legal approach to how to organise decision-making is often associatedwith political modernisation and modern bureaucracy and is contrasted withmore traditional forms based on informal mechanisms like ‘clientelism’ andunwritten codes. Here it is not the ‘impersonal’ law but individualconnections and the self-interest of holders of public office that prevail.

This chapter examines the Russian elite’s beliefs about these two culturesof decision-making in the post-communist era: is an anti-modern or arational bureaucratic culture dominating? One challenging puzzle is wherethe attitudes of the national and regional elites may be placed on a continuumbetween ‘clientelism’ and ‘legalism’, asking if, as McAuley hypothesises, post-communist Russia is characterised by a mix of the two cultures. Another iswhether the elites’ attitudes have changed from the rather ‘clientelistic andbargaining regime’ under Boris Yeltsin’s chaotic reform period to a more‘law and order’ oriented regime under Vladimir Putin’s centralising policies.

The problem of reforming Russia may be understood from the inertia ofdecision-making culture. This administrative legacy implied both a certainelasticity and stiffnes. As described by Ledeneva (1998) in the Soviet regime‘the availability of unwritten codes alongside the written ones, and the usualpractice for authorities to switch to the written code only ‘where necessary’created certain freedom and flexibility. On the other hand, such leniency

Chapter Title 127

could be restricted at every moment’ (p. 77). The idealistic reform teamsurrounding Yeltsin took it more and less for granted that laws and directiveswould be implemented through political and administrative structures. Theydid not take sufficient account of the fact that a decision-making culturebased on law and loyalty had taken root only to a limited extent amongpolitical and administrative organs. Beneath the façade of an apparentlyloyal civil service governed by regulations, patron–client relationships werealive and well.

Decision-making cultures may vary from ‘traditional’ to ‘rational bureau-cratic’ organisation. And ‘clientelism’ is more a continuum than a constant.Its meaning may vary from traditional personal relations and preferentialtreatment accorded between patrons and clients to criminal activity, wherebydecision-makers are held to ransom via bonds of dependency like bribes orthreats. Here I will analyse the following questions, all vital to the develop-ment of a democratic culture and viable markets: First, how open or closedis the decision-making process? Second, how important is bargaining asopposed to formal procedures? And third, to what extent has organisedcrime infiltrated decision-making?

Since clientelism is by definition a covert process these issues areinherently difficult to investigate. But it is possible to take a less directapproach. The elite, as participants in decision-making, can be regarded asa mirror that reflects at least parts of the hidden decision-making culture.Thus, the informed elite’s evaluations provide a crucial indicator if a‘traditional’ or ‘modern’ type of administrative culture is prevailing inpost-communist Russia.

Legal-rational and traditional decision-cultures

Max Weber contrasts legal and traditional authority by different ways ofsubmission. In traditional societies submission rests upon the belief incharismatic persons or respect for an ordered tradition, while submissionunder legal authority ‘is based upon an impersonal bond to the generallydefined and functional ‘duty of office’ . . . and the right to exercise authorityis fixed by rationally established norms, by enactments, decrees, andregulations . . .’ (Weber, in Gerth and Mills 1977: 299).

In some Mediterranean countries, in Latin America and in Asia,clientelist relations have become more than a deviation from ‘ordinary’institutions. Vertical clientelist connections between decision-makers andsocietal groups are, according to Eisenstadt and Roniger (1980), a per-manent institutionalised pattern in these countries. In the Soviet Union thestate bureaucracy and clientelism became especially intertwined during theBrezhnev period. As Eisenstadt and Roniger argue, such conventionsshould be regarded as institutionalised behaviour arising out of specificpolitical cultures upheld by informal norms among members of the elite inthe state and society.


Periods of de-bureaucratisation – i.e. reducing the state apparatus – areparticularly conducive to the growth of special dependencies between thestate and client groups (Eisenstadt 1959). In some cases like in Italy, Putnam(1993) argues that the Mafia adjusted quickly from previous feudal relationsto new representative political state institutions. The post-Soviet period canbe seen as an enormous experiment in dismantling old governing structuresand introducing new institutions and codes of conduct imported from theWest. In Russia, and to a large extent in the former Soviet Union, thecombination of clientelism and bureaucracy resulted in a hybrid in whichhierarchy, professional specialisation and rules were just a formal frameworkin which decision-makers regarded public positions largely as a kind ofpersonal ‘property’. Personal networks based on ‘generalised exchange’became widespread, while the collective aspect of decision-making and socialresponsibility was accorded a secondary role. Accordingly, networks andclientelism were a hindrance to the ‘specific exchange’ that is a characteristicof both market relations (McAuley 1997) and rule-based decision-making ina state administration. Since the clientelistic model is characterised by non-transparency and personal connections it is more open for influence by non-legitimate groups like organised crime.

Patron–client relations express culture-specific conventions of interdepen-dent personal relations deviating considerably from formal structures. Tounderstand political and economic changes, it is necessary, as McAuley(1997) underscores, to understand which ‘cultural conventions’ impingeupon attitudes and behaviour. During a period in which old institutions arebreaking down and new ones being introduced, members of the elite orientthemselves towards the most predictable circumstances. Informal conven-tions for problem-solving will constitute the context for behaviour in thiscase and are, paradoxically, one main stabilising element in an environmentof change and unpredictability.

Clientelism can been described as an alternative relationship betweenstate and society found especially in regions with weak state structures (LaPalombara 1964). Here state officials are permanently involved in exchangerelations with special interests – e.g. family clans or a dominant politicalparty – and others are excluded. The source of authority comes from personalcontrol over resources and the individual attributes of the decision-makerrather than from a depersonalised position or role. Obviously, in such anadministrative culture clandestine networks will prosper and decision-making will be deviating from the Weberian legal-rational model of bureau-cratic administrative behaviour.

Transparency

According to the clientelistic model, decision-making involves interpersonaland covert relations. The legal-rational model assumes more transparentprocesses where decisions stand up to scrutiny by outsiders. Members of the

Decision-making cultures 129

Russian elite were asked how they would assess ‘openness’ in business,politics and public administration. One may assume that transparency variesa lot among these three sectors. In the economic field, for instance, theoriesof ‘distributional coalitions’ (Olson 1992), ‘winners take all’ (Hellman 1998)and ‘recombinant property networks’ (Grabher and Stark 1997) predict thatclandestine relations will be dominating.

About 90 per cent of the elite say decision-making in business andbureaucracy is closed. In politics and central government the percentage islower, while in regional government only just over half the respondentsconsider decision-making to be closed. As expected, business and bureaucracyare perceived as being conducted under especially clandestine conditions,while political processes on the central, and especially on the regional level,are deemed to be more visible to the public. Attitudes remain quite stableover time, indicating that the degree of openness in decision-making is astructural propensity of these sectors. The more closed nature of decision-making in business and bureaucracy fits in with the idea of closed eliterelations within and between business and bureaucracy suggested by Olson,Hellman and Grabher and Stark. Lack of transparency is more of a problemamong these elites than in the political process, where competitionguarantees a minimum level of openness.

There are no major differences between the elite groups, with oneimportant exception. The members of the Federation Council and regionalleaders are conspicuous in perceiving regional processes as more open.Regional government looks more closed from the central perspective than itdoes to the regional elite themselves. It is a long way from Moscow to theregions.

Easter (2000) describes the informal network system on the periphery asbeing rather autonomous and independent of the central authorities, notonly after the change of regime but even during the communist period. Thedata indicate that those most closely involved in regional government tend toagree about the existence of quite porous regional decision-makingstructures. But members of the central elite do not say the same about theirown decision-making. Regional networks obviously are widespread andimportant for the cohesion of the regional elite, but according to the elitethey are also different from the more closed central networks.


Table 8.1 Elites saying decision-making is ‘closed’ in various sectors (%)

Business Bureaucracy Politics Central govt. Reg. govt.

1998 91 90 79 77 552000 87 91 76 73 59

Response rate 1998: 97–9%; 2000: 97–9%. The attitudes were measured on a four-point scale,where 1 is very closed, 2 is rather closed, 3 is rather open and 4 is very open.1 and 2 are mergedin the table.

Formal and informal contacts

As La Palombara (1964) argues clientelism is an alternative state–societyrelationship, deviating from Max Weber’s non-personal bureaucratic gover-nance. In the clientelist model special interests and persons have establishedpermanent exchange relations with the state. The Soviet system was apeculiar mixture of patrimonialism, or even ‘sultanism’,2 and rigid bureau-cratisation and flexible clientelism. The main element of Soviet-type ‘clientel-istic bureaucracy’ was professional specialisation, where authority wasderived not from a person’s position as such but from control over specificresources upon which others were dependent. Hierarchical control eroded asthis group of specialists grew throughout the union and personal networksdeveloped between the central and regional elites.3 These people regardedtheir positions as a kind of ‘private property’ where personal and publicinterests could not easily be separated.

In the post-communist era the patrimonial aspect has been severelyweakened; legitimacy is no longer derived from the personality of the nationalleader, as it was in the Stalin era, for instance. The bureaucracy has not beenreduced, but democratic institutions and the deregulation of the economyhave created new power bases for the elites. The argument is that this processof fragmentation among the elites in the post-communist era probably hasincreased the propensity for clientelism and weakened the law-based elementin decision-making. Moreover, the business elites, who one would expect tobe especially oriented towards personalised contacts, have become moreimportant.

The relative weight accorded to the two ways of decision-making is, ofcourse, difficult to demonstrate. One approach is to ask the elite howappropriate they think these alternatives are as ways of problem-solving forordinary people. If the bureaucratic model is a widespread one, one wouldexpect a high degree of rule-orientation; if clientelism dominates, directcontacts will be regarded as important.

For all respondents taken together, the clientelist and the law model wereregarded as equally important in 1998 (see Table 8.2). Two-thirds of the elitethought that it was best for ordinary people to use both the law and personalconnections when solving problems. Two years later the law has gained moresupport, indicating that the clientelistic style of decision-making underYeltsin is prominent but is gradually giving some way to Putin’s rule of lawpolicies. The beliefs of the respondents indicate that the two quite contrastingdecision-making cultures are intertwined and exist side by side in Russia.

A comparison of elite groups shows that members of the FederationCouncil have the most trust in the law model and relatively few of them optfor the clientellist solution. The State Duma members are moving in thesame direction. The bureaucratic leaders prefer the law, but 50 per cent ofthe political elite also mention personal contacts. Regional governmentleaders put more emphasis on the law.


Those members of the elite who are not so directly connected with statedecision-making deviate from this pattern. During the period of economicreforms at the end of the 1990s the leaders of state enterprises were mostsceptical about law-based decisions and heavily favoured the clientelisticdescription of state–society relations. It seems that after the hectic privatis-ation period their views changed. Private business leaders score high onclientelism both before and after Putin. The cultural elite is also movingtowards describing decision-making in terms of personal relations.

One may conclude that the elite’s image of state–citizen relations combinestwo opposing decision-making cultures. A reliance on rights enshrined in lawis combined with direct contacts with leaders in charge. Ledeneva’s (1998)description of the Soviet practice of ‘switching’ between personal relationsand written codes also remains after the change of regime. But, clientelismremains stronger in non-state sectors. The tendency over time for politicaland administrative elite groups to underscore ‘the law’ while business leadersthink personal contacts are more important in dealing with the state showsthat the advent of the new market economy opened a new arena for patron–client relations.

Having ascertained which type of decision-making the elite thinks isdominant in problem-solving among ordinary people, one also needs to askwhich model the elites regard as most efficient for decision-making in differ-


Table 8.2 The importance of ‘the law’ and ‘personal contacts’ (%)

The law Personal contacts Difference

Total 1998 63 63 02000 71 57 14

State Duma 1998 72 73 �12000 80 52 28

Fed. Council 1998 80 50 302000 93 55 38

Federal admin. 1998 61 49 122000 68 56 12

State enterprises 1998 54 78 �242000 62 59 3

Private business 1998 64 76 �122000 54 63 �9

Culture 1998 66 57 92000 58 70 �12

Regional govt. 1998 62 63 �12000 74 55 19

Response rate 1998: 98–9% N=980; 2000: 98–100% N=605.The respondents were asked to rank on a five-point scale first the importance of law and thenthe importance of personal contacts for ordinary people in dealing with the state. In the tablevalues 1 and 2 on the scale are merged.

ent fields. Here ‘law’ is contrasted to ‘bargaining’ as models of decision-making. Bargaining involves personal relations but not necessarily ‘clientelism’.It implies that decisions are subject to negotiation but doesn’t necessarilyresult in personal favours. However, in general one may argue that due to thedirect contact in the bargaining process the threshold for playing on patron–client dynamics is rather low.

As shown in Table 8.3, the Russian elite obviously regard the law as amore significant vehicle for reaching decisions than bargaining throughpersonal contacts. For the total elite the differences are rather substantial inpolitics and administration while smaller in the business sector. During theperiod examined the law option has a consistently high degree of support. Itis clear that bargaining is falling out of favour with the elite as a whole.

From 1998 to 2000 the political elite in the State Duma and FederationCouncil preserves a substantial and somewhat increasing support for federallaw and shows a particular loss of trust in bargaining in the fields of politics,administration and to some extent in business. The same tendency is alsofound among leaders of state enterprises, private business and culture. Theleaders of regional government changed their opinions only slightly over time.


Table 8.3 The importance of the ‘law’ and ‘bargaining’ (barg.) in various sectors asperceived by the elite (%)

Politics Administration Business

Law Barg. Law Barg. Law Barg.

Total 1998 85 54 89 50 79 682000 87 41 92 40 79 59

State 1998 88 59 91 51 86 68Duma 2000 94 35 98 34 88 56

Fed. 1998 90 50 97 50 83 60Council 2000 90 24 100 37 86 56

Fed. 1998 84 41 92 36 80 50adm. 2000 66 37 82 34 58 46

State 1998 88 50 86 50 80 60enterprises 2000 90 34 94 32 92 46

Private 1998 94 51 96 44 92 72Business 2000 92 33 94 30 84 54

Culture 1998 85 53 82 60 74 612000 92 32 90 32 86 62

Regional 1998 83 56 88 53 77 71govt. 2000 89 54 91 52 79 69

Response rate 1998 98–9% N= 980; 2000 98–9% N=605.The question was about assessing the importance of two alternative approaches for reachingeffective decisions: ‘abide by the federal law’ and ‘bargain with influential persons’. Percentagescoring 1(very important) and 2 (quite important) were merged on a scale from 1 to 5.

One anomaly is the decreasing confidence in the law in all three fieldsamong administrative leaders. Focusing on the business sector, it should benoted that its leaders express considerably less confidence in bargaining in2000 than two years earlier; and although the percentage of people sayingthey rely on the law is slightly reduced in 2000, it remains very high.Contrary to mainstream beliefs the support for rules regulating conduct inpolitics and administration is in fact very strong among business leaders andthe bargaing option is losing popularity!

The main picture is that both federal law and bargaining are regarded as anefficient way of decision-making among a large majority of the elite. However,‘law’ and ‘bargaining’ are not mutually exclusive as some theories of adminis-trative modernisation invites us to believe, but rather complementary (LaPalombara 1964; Weber, in Gerth and Mills 1977). As Eisenstadt and Roniger(1980) indicate clientelism may thrive in bureaucratic organisations. Theycoexist in a symbiotic relationship, whereby law-abiding activities arenourished by an interest in a rather stable framework for bargaining activities.

The balance between the two over time is not static. It is influenced by theexperiences of the reform processes. Where the centre saw fragmentation andchaos, the regions experienced autonomy. The centripetal forces of thepower centre want more regulation while centrifugal interests in the regionsare desiring self-rule by opting for the bargaining alternative. The dataindicate that the central political elite obviously see ‘bargaining’ as a way ofreaching decisions as much less attractive after Putin came to power. On theregional level the balance is stable: the ‘bargaining alternative’ enjoys thesame support as before and the ‘federal law’ option is still attractive. Theregional leaders want to preserve autonomy and the bargaining style fromthe Yeltsin period while the national political elite has become more criticalof decision-making by bargaining with influential persons. Thus, changes ofdecision making style reflect the basic shifts in centre–periphery relationsthat followed in the Putin era.

Data shows that there is huge potential support among the elite for a statebased on the rule of law. Putin did not create the new centralist mood, hesimply responded to the general orientations of the Russian elite. However,the ‘rule-orientations’ does not exclude clientelism. The concept of ‘abidingby the law’, which the Russian elite evidently support, and the type ofdecision-making expressed by Max Weber’s ‘legal rational’ authority may bevery different things. While the ‘personal’ and the ‘official’ roles are clearlyseparated in Weber’s model they are often blurred in other bureaucraticsystems lacking ‘legal rational’ traditions. Clientelism and bargaining mayvery well thrive under a Russian form of law-regulated system.

Mafia and decision-making

The ‘mafia’ is not a very precise concept and covers a wide range of activitiesfrom clandestine networks, through various forms of corruption to black-


mail and the use of violence to silence opponents. One common characteristicof mafia activities is that they are not only illegal but that they haveorganised links to the state and may therefore represent an institutionalisedalternative pattern of decision-making. The purpose here is to detect theseextreme habits of ‘clientelism’ on the ‘legal-clientelist’ continuum whichaccording to several observers has been deeply ingrained into Russiandecision making. Organised crime is distinguished from other forms ofillegal behaviour by a hierarchical and specialised organisational structure. Ithas certain rules of conduct, a strict discipline controlling the organisation,and an exclusive membership that makes use of threats and, if necessary,bribes and violence to attain its goals.

Williams (1997), an international expert on organised crime has repro-duced a report issued by the US authorities on Russian émigré crime. Itdistinguishes between three major types of criminal organisations: (1) thevory v zakone (thieves in law), whose roots go back to the Gulag prisons ofthe 1930s and have much in common with the Italian Mafia and Camorra,particularly their use of strict codes of conduct; (2) the young entrepreneursin their 20s and 30s who emerged after the collapse of the Soviet regime andoperate in small groups; (3) the avtoritety or ‘thieves in authority’, some ofwhom had important positions in the Communist Party and/or state bureau-cracy. They are well educated and sophisticated and have internationalnetworks that enable them to operate in the grey zone between crime, themarket and government.

While some criminal formations have their roots in the Soviet system, theopportunity structures created by dismantling the state, by the new marketeconomy and by pluralism spurred new criminal activities. Citing officialfigures Williams (1997) reports that organised crime skyrocketed in Russiaduring the 1990s and the number of criminal organisations grew from 3,000in 1992 to 8,000 in 1996. Despite the ambiguity and uncertainty of thefigures they clearly illustrate the saliency of the problem. But they saynothing about the relationships between the groups and how they areconnected to the public sphere.

Some observers argue that in particular Southern Italy and post-com-munist Russia have similarities: legal institutions and a political culturecharacterised by informal relations and mafia influence. Robert Putnam(1993) in his study of political culture and economic performance in Northernand Southern Italy tentatively predicts that ‘Palermo may represent thefuture of Moscow’ (p. 183). It is not really possible to assess the extent ofmafia influence on the state, since mafia activities are covert and not open forresearch or public scrutiny. However, some research has been done on mafiaactivities in Southern Europe.

One important observation is that the wealth motive is supplemented bythe paramount aim of increasing power by infiltrating politics and the publicadministration (Siebert 1996). According to Allum (2000), during the ‘take-over’ of local politics by criminal groups in Italy during the 1980s, some


main phases of power expansion may be identified. These stages may also beused to characterise the expansion of organised crime more generally onnational and regional levels. During the first phase, which is labelled‘clientelistic exchange’, politicians are provided with resources like money forcampaigning or networks for collecting votes in return for protection. Thenext stage is the infiltration of political parties, representative organs and theadministrative apparatus by members of the Mafia, or ‘buying-off’ people ininfluential positions. In the third stage the Mafia uses its ‘representatives’ toset the political agenda and control the policy-making process in order toincrease their own economic returns. In the final phase organised crimebecomes fused with the political, administrative and economic sectors.

Organised crime is not a new phenomena in Russia. Old patterns of illegalbehaviour from the Soviet period have, according to Rawlinson (1997),merely been adapted to fit new circumstances. Williams (1997) remarks thatthe Soviet regime intentionally used illegal activities, like the black market,as a way of compensating for the deficiencies of the command economy.Under communism there existed a symbiotic relationship between parts ofthe nomenklatura and the black economy. In post-Soviet Russia the problemis corruption applied by mafia elements to ‘protect criminal organisationsfrom law enforcement’ (p. 21). He asserts that a new type of symbioticrelationship has been established, whereby the post-communist elite havebeen forced to accommodate organised crime because it is now the dominantforce controlling resources that the business, political and administrativeelites depend on. The combination of the old personal relationships and themafia’s power to use positive and negative sanctions make the elite vulner-able to pressure. How then does this rather gloomy description of organisedcrime correspond with the Russian elite’s evaluation of the situation?

Table 8.4 reveals that a majority of the elite sees mafia and organisedcrime as important actors in all fields, 65 per cent in 1998 and decreasing to58 per cent in 2000. All elite groups regard the mafia as less influential afterPutin came into office and this trend is considerably stronger among thecentral political elites, especially among the Federation Councilrepresentatives. The rather short period Putin had been in power when thelast survey took place in the summer of 2000 obviously could not havereduced the influence of the mafia in any substantial way. The effects mustmainly be understood as the elite’s positive psychological reactions to Putin’slaw-and-order programme anticipating less mafia influence.

The private business sector is the one deepest entrenched in organisedcrime, a view asserted by all elite groups. Mafia influence is seen as somewhatweaker in politics, central administration and government of rich regionsand as notably weaker in poor regions and local government. This patterncorresponds with the Italian model of how mafia influence expands,presented above. In the first phase organised crime gains control over thebusiness sector. In the Russian context this meant that the resourcesgenerated during the privatisation process – i.e. the ‘stealing’ of profitable


state property – was the stepping stone for the next stage: influencing thepolitical process and government. This rather pessimistic picture is mitigatedby the small but overall tendency towards reduced perceptions of mafiainfluence over time. The period of privatisation and economic liberalisationunder Yeltsin was highly conducive to mafia-type activities; although theseactivities are still going on, it seems they are at a somewhat lower level.

The need to finance election campaigns, the blackmailing opportunitiesgenerated by the leaking of sensitive information, and personal relationsmake politicians a rather easy target. This explains why politicians seeorganised crime as playing a role in politics. In 1998 60 per cent of thepoliticians in the State Duma thought this was the case and as many as 79per cent of Federation Council representatives did. Over time the membersof the Federation Council became much less negative in their attitudes andthey describe in particular the federal administration and regional and localgovernment as quite independent of the mafia.

The leaders of state and private economic enterprises are also relativelyconcerned about the influence of organised crime in politics and they thinkthe federal administration, in particular, has been infiltrated by organisedcrime. More than 70 per cent of the economic elite were of this opinion in1998, but their attitudes had changed quite a lot by 2000. Those whorepresented individualism and market interests during the turbulent period


Table 8.4 Strong mafia influence in various sectors (%)

Business Politics Fed. Govt. Govt. Local Averageadmin. of rich of poor govern- all

regions regions ment sectors

Total 1998 90 66 62 66 53 45 642000 82 57 57 62 49 43 58

State 1998 92 60 57 72 59 42 64Duma 2000 76 51 50 53 38 25 49

Fed. 1998 87 79 59 57 40 28 58Council 2000 80 56 27 26 3 7 33

Fed. 1998 93 63 57 74 55 71 69admin. 2000 85 60 42 70 55 55 61

State 1998 91 72 78 83 63 75 77enterprises 2000 85 62 47 77 65 55 65

Private 1998 92 74 71 75 64 67 74business 2000 77 64 52 73 65 63 66

Culture 1998 94 68 64 78 68 64 732000 86 62 48 80 44 69 65

Regional 1998 89 67 61 61 49 36 61govt. 2000 81 56 49 58 51 38 56

Response rates 1998: 93–7% N=980; 2000: 96–9% N=605.1 and 2 are merged on a scale from 1 (very strong influence) to 5 (very weak influence).

under Yeltsin perceived not only business but also the state as very prone tocriminal influence. Putin’s anti-corruption campaigns and ‘law and orderpolicies’ has to some extent changed this image.

It has been maintained that mafia is a problem in particular for regionalleaders. McAuley (1997) argues that elites, e.g. in Krasnodar, depend on themafia for staying in power. The elite’s perceptions about the mafia varyaccording to type of region. While rich regions have a major mafia problem,poor regions and in particular local government is in a relatively bettersituation. It is also interesting to observe that views differ on this pointbetween elite groups: the regional elite and members of the FederationCouncil say this is a smaller problem than the elite in other institutions.Whether the differences come from a better knowledge of the actual situa-tion or from distortion of the truth is not easy to judge.

In summary, reports from international experts, evaluations by Russiananalysts and the images of the Russian elite all confirm the same picture: theinfluence of organised crime in the Russian economy and government issubstantial. What is new from this study is the apparent variation of mafiaimpact between the business sector and central and local government, howvarious elite groups rather unanimously assess such activities, and thetendencies to perceive less mafia influence over time.

What are the explanations for this persisting influence of the variousactivities lumped together here as ‘mafia influence’? One main condition isthat the Russian state’s lack of resources to finance a decent level of wagesfor its employees makes government officials and politicians extremelyvulnerable to bribes. However, it is quite a big step from bribery to organisedcrime influencing decision-making. As mentioned above, Williams (1997)argues that in the post-communist period connections from the past regimehave been important for establishing links between poor government andorganised crime in which corruption is systematically used as a means ofexerting influence and protecting the mafia from the legal system. A majorpart of the Russian elite evidently supports this view.

From a cultural perspective mafia influence and organised crime haveoften been related to the existence of a certain sub-culture marked by a lackof civic responsibility where the population may have something to gainfrom supporting illegal activities (Putnam 1993). From an institutionalperspective organised crime arises out of the new ‘opportunity structures’following establishing of liberal market and state institutions, as describedby North (1990). Organised crime may compensate for a weak state unableto provide protection and services.

During the turbulent Yeltsin period the combined effect of a suddenbreakdown of the old institutions, the existence of organised crime duringthe Soviet period, the absence of civic society norms, the new opportunitiescreated by the carving up of state property and conditions of ‘raw capital-ism’ produced extremely fertile ground for illegal activities in general andorganised crime in particular. The elite’s images of organised crime in the


state and society reflect a problem that is not only widespread but alsoresilient to being tackled by legal means. For such behaviour is deeply boundup with rooted cultural norms that after the downfall of communism arebeing nourished by a fragmented state. The tendencies towards reduction ofmafia activities after Putin came to power illustrate that such forces may becounteracted by stronger state structures, but will they disappear? AsRutland and Kogan (1998) indicate, corruption and organised crime areserious for Russia but they are not necessarily disabling problems and it isnot clear that either liberal institutions nor a strong leader will bring themunder control.

Conclusion: a mixed decision-making culture

Yeltsin’s reform team was keen to introduce a market economy but did notpay much attention to the institutional and cultural context in whichmarkets function. One main precondition for the success of a marketeconomy and liberal democracy is that norms underpinning legal-rationalrule are accepted as legitimate by the actors. Yeltsin’s administration hopednew attitudes would quickly take hold once the political and economicinstitutions were in place. This chapter has presented an outline of the elite’simages of post-communist decision-making culture. The point of departurewas that decision-making may be placed on a continuum from the legal-rational and accountable bureaucratic type to personalised forms of rulewhere bargaining, clientelism and organised crime decide outcomes.

It is impossible to measure exactly where Russian decision-making is onthis continuum but it is not really necessary. Since the elites are the bestinformed and their orientations are extremely important for behaviour anddecisions, it can be assumed that their responses will give some basic insightsinto the Russian decision-making system. Here I have concentrated on threeaspects of decision-making: ‘transparency’, ‘rule-orientation’ and ‘illegalinfluence’. The elite’s images draw a broad canvas of a decision-makingculture where processes are closed, where the law is important but personalrelations and bargaining are also very significant, and where decision-making is infiltrated by organised crime. It may come as a surprise to somethat the elite substantially support law-based decisions and a purely clientel-istic culture is not reflected in the elite interviews. This attitude may beexplained by a tradition of bureaucratic thinking among the Russian elitethat lives side-by-side with a clintelistic decision-making culture.

In fact, as a consequence of the new decentralised federation, bureau-cracy in terms of the numbers of state positions and organisations hasgrown since the fall of communism. Eisenstadt (1959) remarks on thisparadox that bureaucratisation and clientelism may develop side-by-side.The growth of bureaucratic activities ‘may be accompanied by deviationfrom its rules’ (p. 313). A bureaucratic structure implies rules and regulationsbut also provides resources that can be exploited for personal purposes and


make clientelism work. This argument may be applied to the political sectoras well. Politicians are entering democratic institutions with new forms ofexchange and are becoming directly dependent on the support and resourcesof clients, be they voters, ordinary pressure groups, financial oligarchs ororganised crime.

However, in contrast to Southern Europe, where external actors graduallyinfiltrated politics and public administration and to some extent were con-fronted with an existing legal-rational culture, in Russia the business leaderswere recruited from the previous state structures. The problem was that amixture of the communist-era nomenklatura, the former Soviet managerialelite and the new young, and often well-educated, careerists became rent-seekers more interested in exploiting the state than restructuring theeconomy. The break-down of the formerly all-encompassing state and theresulting blurred boundary between the state and the private sector issustaining a specific Russian decision-making culture where informal relationsand formal institutions go hand-in-hand. Whether the elite’s cognitionsreflect real processes cannot be decided here. At least, that is how the elitesinterpret their decision-making environments, with important consequencesfor their orientations and how they are acting. If a clientelistic culture isinherent to how decisions are made, ‘networking’ can be expected to be aningredient part of the elite’s behaviour, which is the topic of the next chapter.


9 The network state

The most common method of bringing proximate policy makers intoagreement with each other is their informal efforts toward mutualadjustment.

Charles E. Lindblom1

Introduction2

Following the dissolution of the monolithic state structure and the abolitionof the hegemony of the Communist Party, almost overnight the elite losttheir two main pillars of orientation: a stable hierarchical order and acommon belief system. It therefore became imperative for them to findalternative ways of co-ordinating decisions. One main strategy for doing thiswas the formation of networks. As a medium of social exchange a network isless formal than an organisation but also less fluid than market relations.The hallmark of networking is communication through personal contactswith some regularity. Networks were not a new phenomenon after 1991, butsince the old power institutions broke down and the elite had to reorganise,the importance of informal contacts increased. Elite-networks are particu-larly crucial structures for co-ordination in periods of swift political andinstitutional change. The purpose here is to identify such networks, thepolitical background of the elites and to what extent legacies of the pastshape the patterns of contact.

After the privatisation of state property, networks between the state andbusiness flourished (Stark and Bruszt 1998). Others claim that because ofthe Russian clientelistic tradition, elite networks are generic to central andregional governance (McAuley 1997; Easter 2000). One may argue thatpolitical pluralism, a weakened state and poorly functioning market institu-tions paved the way for new opportunity structures that intensified informalcontacts among the elite. However, elite contacts are not formed incidentally.They are derived from a person’s professional affiliation and position in thehierarchy and steered by institutional constraints, and they are nourished byhis or her experience under the previous regime. As post-communist pluralistinstitutions and values take shape, it is fascinating to investigate how bothpast and present institutional affiliations may influence elite contacts.

Chapter Title 141

The first part of this chapter analyses patterns of contacts not only betweengovernment and business elites but also among the other elite groupsincluded in this study. Do we find an evenly knit network of elite contactsacross all state and business institutions, or do certain state elites – politic-ians, bureaucrats or leaders of state enterprises – have closer connectionswith business than others?

In the second part the focus is on the elite’s various types of ‘capital’, inPierre Bourdieu’s (1985) term, and how such resources may influence contactpatterns. I investigate how the elite is connected by existing family bonds andby its previous positions (membership and rank in the Communist Party)during the Soviet period. It may be argued that contacts will be intensified ifthe elite brings its ‘political capital’ into the network. Consequently, I askwhether those who held higher positions during the Soviet period areespecially active in post-communist networks.

It has often been hypothesised that this kind of ‘political capital’ isconvertible into personal advantage under a new regime, so that the samepeople who held positions of influence in the Soviet Union now form thepolitical and business elite in contemporary Russia and maintain specific,selective patterns of contact. If elites do indeed succeed in transferring theirinfluence from one regime to another, then the next question is whether suchbackgrounds produce certain patterns of contact among the present elite.Do certain groups have more intensive contacts with each other than others?According to the widespread ‘nomenklatura capitalist’ thesis, previouspolitical influence is easily converted into closed business networks. Thisissue also raises the question of whether connections with the previous regimeare conducive to certain conservative attitudes. As shown in the previouschapter having been elected to office during the Soviet period has very littleeffect on basic attitudes. But does it mean that communist background isalso insignificant for the elite’s behaviour?

Networks are flexible arenas for solving conflicts and finding pragmaticsolutions, but they also tend to be clandestine and therefore not amenable todemocratic control. Lack of accountability is a particularly pertinent issueafter the departure of a totalitarian regime when major parts of the old elitemay re-emerge in new positions of power. At the same time, the flexibility ofnetworking between new and re-emerging elites may be a major asset incoping with the extreme uncertainty that arises in the wake of institutionalearthquakes. Networks may also be seen as a pragmatic mechanism fornegotiation between old and incoming elites. While hierarchy and market asorganising principles easily create winners and losers, direct personalcontacts may create trust and smooth over controversies. Direct personalrelations make possible the achieement of a consensus on unprecedentedproblems under turbulent decision-making circumstances.

The aim here is not to disclose actual networks between specific personsbut to provide more substantive knowledge about general patterns of co-operation between the leaders of various institutions. By asking which elites

142 The network state

interact, how frequent their contact is and what influences their behaviour itis possible to construct a better empirical foundation for understanding the‘Russian network state’.

Self-interest and culture

Elite networks have gathered momentum and are flourishing. And they arean extension of a Russian governing tradition that became widespreadduring the Brezhnev period, when a rigid bureaucracy became an integralpart of personalised patron–client relations and stable elite connections.Networks provided an informal structure for social relations, trust-buildingand collaboration that was fundamental to early Soviet state-building andinfluenced the construction of Soviet political institutions. These relationsacquired even greater importance after democracy, market reforms anddecentralisation weakened central power.

Networks may be analysed from the perspective of self-interested elitesseeking personal benefits or from the perspective of a political culture inwhich networks dominate as accepted norms for relations among elites. Bothperspectives assume that networks will be carried over from one regime toanother and that the weakening of central power increases the potential forinteraction based on self-interest and informal norms to continue. Bothapproaches imply that networks may be highly undemocratic. I start bydiscussing the view that deviations from the ordinary, vertical chain ofcommand represent a strategy devised by national and regional elites toobtain advantages through co-operation. I then go on to outline the culturalperspective, and conclude by examining the thesis that when elites are carriedover from one regime to another networks raise special democratic chal-lenges in transitional societies.

A basic precondition for the existence of elite networks is the authorities’control over attractive resources. Such resources, according to Mancur Olson(1982, 1990), are objects of collusive self-interested elite behaviour. Olsonmaintains that economic decline during the Soviet period and later in theRussian Federation may be attributed to the existence of networks, or whathe calls ‘distributional coalitions’, organised around sectors and specialinterests among medium- and upper-level elites from the mid-1960s onwards.Particularly during the Brezhnev period, these elites escaped collectivesanctions by the central state and formed a new independent ‘class’ ofadministrators and planners out of the control of the party leadership.These personal networks were able to frustrate or hinder reforms in thesegment of the economy they administrated and provide stable positions andsupplies of resources for the people involved. The aggregated negative effectof such self-interested behaviour became formidable during the 1980s.

While the communist elite thwarted reform of the socialist economy bybuilding network coalitions, under the new regime the same elite stratumcaused major problems for market reforms. As Olson (1992) emphasises,

The network state 143

especially among ‘meso-elites’ and ‘sub-elites’ one will find a considerabledegree of conservatism. Resistance towards market reform and sympathy forcentral governance will be more widespread among these elites than amongthe Kremlin leaders. The network alliances among the conservative elites notonly undermined the collective rationality of the Soviet system but alsoperverted the new Russian market economy.

After the fall of communism Hellman (1998) observed that the formermanagerial elite initially supported liberal reforms, such as privatisation anda competitive market, but as soon as a few elites had gained control over andmonopolised the most attractive state assets, they took steps to preventfurther reforms that might threaten their monopoly interests. These ‘winners’thereby effectively weakened the rationality of a free market economy. Suchnetworks are small, closed and extremely difficult to study, and their leaderswere therefore not included in this survey, but it is reasonable to assume thatthe respondents from business reflect some of the same attitudes. Whileoften at loggerheads, the conservative elites and the oligarchs also seem tohave a perverse common interest in restricting market reforms andpreserving the state.

Networks may also be understood as an integral part of a political culture.As Eisenstadt and Roniger (1980) maintain, patron–client relations exist inall forms of political systems. Typical of ‘pure’ clientelist systems are ‘general-ised exchange relations’, which are stable and based on informal agreements,but they also include important elements of competition and negotiationabout the terms of the exchange. Particularly in times of profound economicand social change, when resources are free-floating, competition among elitesto join favourable networks will be especially fierce. Patron–client relationsbecame an integral part of the Soviet system and were moulded by hierarchyand certain norms of competence and loyalty. After the change of regime amore open society, fragmented elites, a plurality of power bases and a weakpolitical centre changed traditional patron–client relations (Willerton 1998).As in the Soviet period, the elite’s main aim was to gain control over stateresources.

A well-known Russian term denoting clout or influence is blat, wherebypersonal interests are advanced by circumventing formal procedures andregulations (Ledeneva 1998). A person’s access to public resources is deter-mined by how much blat he or she has. Blat is regarded an important part ofinformal norms and regarded as legitimate, since it is deeply rooted inRussian political culture. Elite competition for material benefits becamewidespread during the Soviet time and some would maintain elements of‘pluralism’ existed under the official façade. The appropriate networkconnections could be used to obtain positions and material benefits (like flatsand consumer goods). During the privatisation period, from 1993 to 1995/6,networks were of vital importance for the redistribution of state property tothe new capitalists, and cash became an important new element in theequation, largely replacing material goods.


It has been argued that regional elite networks were the main social mech-anism for the consolidation of the early Soviet state as well as an informalsource of power interacting with the central command lines to produce thestalemate and inefficiency of the late Soviet period (Easter 2000). After 1991,when the formal governing hierarchy had broken down, the new institutionswere still weak and a ‘civic culture’ had yet to take hold, informal contactsand networks between elites probably became an even more importantsource of power than they were before. Also McAuley (1997) believes thatsuch informal conventions have been carried over from the Soviet past andthat these norms are now the only stable element in an extremely uncertainworld. Particularly under the Yeltsin government, weak central power andrapidly changing coalitions spawned informal contacts among the elite(Shevtsova 1999). Under such unstable conditions networks became importantintegrating mechanisms for national and regional elites.

Networks are covert, often changing, cut across formal organisationalstructures and therefore raise problems of democratic governance. They areoften blamed for non-accountability and for encouraging non-democraticprocesses. People who held senior positions under the former regime tend toutilise previous networks to bolster their own positions and give preferentialtreatment to partners, friends and family members, thus establishing asystem of clientelism and patronage in closed circles. The use of networks toconvert former political capital into economic advantage in the new marketeconomy is also known as ‘nomenklatura capitalism’.

Since the economic situation of the elite may change rapidly in an unstablemarket economy, and regular elections have introduced an element ofunpredictability, patron–client relations will tend to be even less stable thanbefore. One feature of the post-communist era is that elite alliances tend tobe short lived. In particular the grey zone between the state and the marketprovides fertile ground for the emergence of networks between politicalactors and the new private entrepreneurs. According to Kryshtanovskayaand White (1998), such coalitions are especially important in decision-making processes. The problems of economic development in post-com-munist countries have been attributed to the fact that they moved not fromplan to market but from ‘plan’ to ‘clan’. This idea was initially propoundedwith respect to post-communist Hungary (Stark 1990), but it probablyapplies in even greater measure to Russia. And because of widespread‘patronage politics’ in the Russian regions, ‘political clans’ are probably evenmore important than in the centre.

Although clans and family relations always had a considerable role toplay during the Soviet period, democratic institutions like elections and afree press have actually extended the scope of ethnically- and family-basedclan politics in several regions (McAuley 1997).3 Under turbulent circum-stances the most predictable factors are family-based networks. One assump-tion therefore is that family ties will be more widespread among the regionalelite than among other elite groups. The central administrative and political


leaders are more committed to formal procedures and more vulnerable tocriticism of clan politics. However, in the business sector one may assumethat family ties thrive since they compensate for weak market institutions.

The web of contacts

A network may be seen as a continuum along which elite interaction may beorganised in various ways. Van Warden (1992) systematises several networkdimensions, of which the most important are: number of participants, identityof the participants, the function of the network (exchange of information ordecision-making) and degree of formalisation. At one end of the networkcontinuum one finds limited participation, important participants, frequentinteraction, stability and decision-making as functions and a high degree offormalisation. This kind of network may be said to represent the corporatistarrangements that organise relations between the state and society. At theother end of the continuum are issue networks, which are characterised byextensive but informal participation that varies from issue to issue and whosemain activities are the exchange of information and views.

The main purpose is first to find out who contacts whom, how often, andis more close to the idea of open and flexible issue networks than ‘irontriangles’. ‘Contact’ implies several forms of interaction: face-to-face, bytelephone or in writing. How intensive the contacts are indicates howimportant elite relations are. Variations in interaction between institutionsmay, however, indicate that some elite networks are more closely knit thanothers.

The mapping of contacts by interviewing elites has been used in severalstudies of Western elite integration. In America and Australia Heinz et al.(1990) and Higley et al. (1991) interviewed elites to reveal general contactpatterns and more specialised inner circles and elite cliques. In these studiesit was possible to talk to members of the elite in person and thereby identifypersonal networks. Here I use a more indirect method where the aim was notto investigate contacts between specific persons but among group-specificleaders. The Norwegian (Maktutredningen 1983) and Swedish (Petterson1989) power studies used this type of interview to analyse contact patternsamong elite groups. A similar approach was employed in Estonia, Latviaand Lithuania to analyse how the new national elites interact and how ethnicissues create certain patterns of elite interaction (Steen 1997). The advantageof this indirect approach is that higher level leaders are more willing answerquestions about contacts if information about actual personal networks isnot disclosed.

Legal-rational rule in a Weberian sense is characterised by clearly definedroles for politics and the administration, a generally recognised demarcationbetween the state sphere and the market sphere, and centre–peripheryrelations founded on well-defined and legitimate interest-mediation. Such adifferentiation of roles generates tensions in modern states that are processed


and moderated through consensus-producing bargaining institutions, oftennamed as corporatism.

In the Russian case, such institutionalised forms of bargaining are largelyabsent. One may, therefore, expect informal networks to be particularlyimportant as a decision-making mechanism. Interesting questions are whethercontacts are arbitrary or do institutions channel elite contacts into morespecific patterns? And have contacts taken other directions following themore hierarchical rule by Putin’s government? Table 9.1 shows with whichleaders of various institutions the respondents have been in contact.

The frequency of contact for the total elite remains fairly stable over time.The main contacts are with leaders of state enterprises, regional governmentand leaders of the mass media. The members of the federal Cabinet, StateDuma, federal ministries and political parties have the least contact overallwith the respondents. This pattern is in some ways surprising and indicatesthe increasing importance of certain institutions outside central governanceand politics. Contacts with leaders of state enterprises, regional leaders andmass media bosses were particularly intensive under Yeltsin, while contacts


Table 9.1 The elite’s contacts with leaders of other institutions. Percentage ofcontacts occurring monthly or more often

Contact with

Elites in Federal State Federal State Regional Political Private MassCabinet Duma ministries enter- govt. parties business media

prises

Total 1998 29 35 40 80 76 38 56 702000 32 43 47 73 69 32 62 62

State 1998 70 99 76 78 84 90 35 8Duma 2000 66 94 81 72 90 86 49 79

Federation 1998 67 60 80 96 94 50 60 97Council 2000 93 70 77 100 100 77 83 97

Fed. 1998 55 37 73 57 52 9 25 32admin. 2000 45 59 94 62 63 16 39 39

State 1998 18 2 42 68 46 2 73 22enterprises 2000 2 4 44 86 34 0 74 16

Private 1998 8 8 26 74 41 6 90 24business 2000 2 2 30 70 36 2 88 30

Culture 1998 20 18 45 66 44 22 54 682000 14 18 32 54 30 24 58 68

Reg. govt. 1998 19 29 29 86 86 39 60 812000 21 33 16 78 81 49 66 76

Response rate 1998 97–9% N=980; 2000 99–100% N=605. The respondents were asked howoften (every week or more often, every month, sometimes during the year, or never) they hadbeen in contact with leaders of various institutions, by letter, telephone, meeting etc., duringthe last 12 months.

with the central political-administrative institutions were relatively infrequent.While one should be cautious in drawing firm conclusions, the data wouldappear to show that Vladimir Putin’s programme of ‘verticalisation ofpower’ has reintensified elite interaction at the centre. The elite’s contactswith leaders of the central authorities (Federal Cabinet, Federal Ministriesand State Duma) have increased. This is also the case for contacts withbusiness leaders. Elite relations may be described in terms of whether theyare intra- or inter-institutional and whether they are mutual or one-sided. Inthe table the interactions between state and private economy are shaded.

The State Duma deputies are in close contact with leaders of their owninstitution and also with the leaders of the federal Cabinet, ministries, stateenterprises, regional government, political parties and the mass media. In1998 70–84 per cent and in 2000 66–86 per cent of the deputies said they hadmonthly or more frequent contact with these leaders. Only the businessleaders have less contact, although this has increased considerably over time.

The members of the Federation Council exhibit roughly the same pattern,with numerous contacts to other elites which have intensified over time. Aparticular increase can be observed in their communication with the federalCabinet and with leaders of political parties and business leaders. Thisindicates that the Federation Council became ever more politicised duringthe late 1990s until its power was curtailed in the summer of 2000. TheFederation Council is the institution that maintains the most frequentcontacts with the leaders of the mass media. The generally very high level ofcontacts with other leaders reflects not only the importance of this institu-tion but also provides a clue as to why President Putin adopted measures inthe summer of 2000 that may reduce the power of the Federation Councilrepresentatives.

The leaders of the federal ministries score low on contacts with leadersoutside the state, such as party, business or mass-media leaders. They havemoderate contacts with the Cabinet, politicians in the State Duma andleaders of state enterprises and regional government, but the contacts tendto be initiated by the politicians. The more selective and limited networks ofadministrative leaders reflect more specialised bureaucratic roles.

Even more selective are the networks of state enterprise leaders. First,there is an interesting reduction in contacts with the cabinet which mayreflect the state enterprises’ growing independence. Contacts with StateDuma representatives and party leaders are also either minimal or non-existent and state enterprise leaders seem to have little interest in cultivatingthe mass media. On the other hand, contacts with bureaucratic leadersremain consistently quite high (more than 40 per cent in 1998 and 2000). Asimilar tendency is found for regional leaders. Obviously the political spherehas minor relevance for state enterprise leaders, while bureaucratic regula-tions remain important. They also need to keep up contacts with the regions,since the latter provide both the natural resources and markets for theirproducts. Together with other state enterprise leaders the new private


business leaders constitute the most important network for state enterpriseleaders. The data show very clearly that networks among state enterpriseleaders and business leaders are intensive, mutual and flourishing (indicatedby shading in Table 9.1).

Business leaders exhibit much the same contact patterns as their col-leagues in state enterprises. Business and state enterprise leaders share solidmutual contacts over time, indicating that particularly specialised and viablemarket–state links are at work. Like state enterprise leaders, the businesselite have a certain amount of contact with bureaucratic leaders, regionalleaders and mass media leaders, while business contacts with politicians arealmost non-existant. Mutually strong contacts are found only betweenprivate business and state enterprises, supporting the thesis of Stark andBruszt (1998) that networks in the blurred area between the state and privatesectors are a major force in the development of a distinctive type of post-communist capitalism.

The cultural elite has close contacts with leaders of the mass media(almost 70 per cent report such contacts) and also with private business.Contacts with politicians (the federal cabinet, State Duma and politicalparties) are restricted. Quite surprisingly, cultural leaders have fairly frequentcontact with the leaders of state enterprises. The relatively broad contactswith private business illustrate how cultural institutions also tend to movetowards the market in order to generate new resources.

As shown above, the central politicians in the State Duma and FederationCouncil have extensive contacts with leaders on the regional level. Quitenaturally, the Federation Council has more contacts than the members of theState Duma, who, in turn, have considerably more contacts with party leaders.This difference reflects the strong regional basis of the Federation Council,while the composition of the State Duma reflects both party lists and geogra-phy. The contact pattern of the regions with the centre are quite different. Theregional elite initiate far less contact with political and administrative leaderson the central level and are primarily oriented towards their regionalcolleagues and leaders of state enterprises, the mass media and privatebusiness, in other words actors outside the central political-administrativearena. The low intensity of upwards contacts in the political and administra-tive fields may reflect the relatively autonomous status of the regions. On theother hand the high intensity of downwards political contacts do not reflecthierarchical rule but rather the representative functions of the FederationCouncil and the State Duma. The regional representatives in these bodies feelresponsible for looking after what is going on in their constituencies.

In summary

While the data do not say anything about the formalisation of elite relations,the subject of the contacts or whether connections are consensual or conflict-ing, they testify to the variation in intensity of contacts between elite groups


and reveal who initiates contacts with whom. Some main patterns can bediscerned:

• Active and mutual relations between the central political and adminis-trative organs – i.e. between the State Duma, Federation Council, thefederal Cabinet and the federal ministries – and also within theinstitutions;

• Frequent, top-down communication between the centre and the regions,whereby the State Duma and Federation Council very often initiatecontacts with regional and local government;

• Energetic, mutual contacts among the leaders of state enterprises andprivate business companies;

• Close, but apparently unilateral contacts between central and regionalpolitical-administrative elites and mass media leaders.

One may therefore conclude that the central political-administrative elitesare well integrated in terms of close contacts within and between the elitegroups. Inter- and intra-elite integration is most consistently visible formembers of the Federation Council and leaders of the federal ministries.The central authorities very often initiate contact with lower levels ofgovernment, while contact is seldom initiated in the opposite direction. AfterPutin was elected President, the top-down flow of contacts increased. Thesetrends may be interpreted as a result of efforts to strengthen central rule,while networks among regional leaders remain strong.

Two of the most far-reaching post-communist reforms involved theprivatisation of state property and the emergence of new mass media institu-tions. The data illuminate contact patterns in these two sectors that impingeon two of the main problems facing Russia: how to create a real marketeconomy separated from the state and how to guarantee the independence ofthe media from the authorities. Separating private business and media fromthe state is clearly not a straightforward task, and in certain respects thecontinuing existence of networks obstructs progress towards the formationof a civic society. During the transition period these networks functioned aspragmatic mechanisms for solving problems under extremely uncertaindecision-making conditions. But long-term close links between the state andprivate business and the mass media blur the demarcation line between thestate and society, one of the main hallmarks of pluralist democracy.

Family ties

Family bonds between elites are prominent in clientelistic political cultures,in particular on regional and local levels. In such cultures trust is normallylimited to personal networks in which the family is the core element(Eisenstadt and Roniger 1980; Putnam 1993). Amid political change,unstable elite coalitions and insecure economic and social environments,


personal relations and kinship bonds provide some stability. One would,therefore, expect family ties to be an important part of the Russian decision-making culture, especially among the regional elite.

During Yeltsin’s term as President many of the top positions wereoccupied by his relatives, friends and cronies often known as ‘the family’.Obviously, this was a way of securing political control and safeguardingmaterial interests. Interestingly, some of these top leaders remained in import-ant positions even after Putin came to power. The question here is whetherthe national and regional elites also exhibits the same nepotistic tendencies.Survey respondents were, accordingly, asked whether any of their family orrelatives had a leading position in the federal government, the State Duma,the federal ministries, local government, regional government, state enter-prises, political parties, trade unions, private companies or the media. It wasnot possible, however, to ascertain whether relatives had actually beenappointed to these positions by the respondent. The results showed that infact very few respondents have relatives in important positions, except forthose dealing with the private business sector and state enterprises, so theTable 9.2 is limited to these economic elites.

The number of family members in business and state enterprises is rela-tively high, but the national and regional elite had very few relatives in leadingpositions in other institutions in 1998 and 2000. The figures for the total elitein 1998/2000 respectively were: the federal Cabinet (1/0 per cent), the State


Table 9.2 Members of the elite with family and relatives in leading positions inprivate firms and state enterprises (%)

Private business State enterprises

Total 1998 18 202000 23 20

State Duma 1998 16 102000 25 18

Federal Council 1998 10 102000 7 13

Fed. admin. 1998 13 182000 18 22

State enterprises 1998 24 362000 38 34

Private business 1998 56 242000 50 16

Culture 1998 10 62000 28 18

Reg. govt. 1998 17 222000 15 18

Response rate 1998: 99–100% N=908; 2000: 99–100% N=605.

Duma (1/0 per cent), the federal ministeries (2/2 per cent), regionalgovernment (4/1 per cent), the political parties (1/2 per cent) and the massmedia (5/5 per cent). Among the cultural elite, as many as 18 and 16 per cent,respectively, said they had relatives in top positions in the mass media. Thedata clearly show that the regional elite has few relatives in regional govern-ment, with only 5 per cent in 1998 and 3 per cent in 2000 reporting suchconnections. Evidently, if the close ties among regional political elites, asdescribed by McAuley (1997) during the Soviet period, have continued in thepost-communist era, such connections are not based on family bonds. Thenumerous contacts among regional elites shown in Table 9.1 must therefore beexplained by patron–client relations also outside the family sphere.

In contrast to other sectors, in private business and state enterprises familyties are more common. In both sectors about 20 per cent of the total elitereported having close relatives in leading positions. More than 50 per cent ofthe business elite said they had such ties with private business, and 24 vs 38 percent of leaders of state enterprises said this was the case. Even 25 per cent ofthe State Duma deputies had family connections with private companies in2000. Family affiliations among the leaders of state enterprises are also wide-spread. More than one third of the leaders of state enterprises said othermembers of their families were also high up in this sector. Family connectionsbetween private business leaders and those in state enterprises were not quiteas common (24 vs 16 per cent), about the same level as regional leaders. Arather unexpected finding was that a rather high proportion (about 20 percent) of the leaders of federal ministries had family members among theleaders of state enterprises and a similar tendency emerged for State Dumadeputies.

Evidently, the elite does not have family connections everywhere. Rather,these ties are strongest in the sector that underwent the most dramatictransition: the economy. The close family connections within the privatebusiness sector are less surprising. In uncertain environments it is naturalthat private companies should be established on the basis of family bonds.The internal cohesion of the business community will make it strong but notnecessarily isolate it from the state, for the data show that a relatively largeproportion of the political elite, the administration and the cultural elitehave family ties with business leaders. These relations, and even more so thestate enterprise leaders’ close connections with the private business sector,illustrate an important social condition for the emerging ‘grey zone’ economybetween the state and the market, which Stark (1997) describes as ‘recombin-ant property’ distinguishing post-communist capitalism and also referred toas ‘state-led capitalism’ in Lane (2000).

The elite’s ‘political capital’

Some observers maintain that many members of the old nomenklatura havecontinued to hold leading positions under the new regime, often in the


business field (Kryshtanovskaya and White 1998). Other studies show sub-stantial changes in the composition of the elite. In particular, younger peoplewith higher education saw new career opportunities in democracy and amarket economy that the former hierarchical system could not provide(Lane and Ross 1999). According to Lane and Ross, the old central politicalelite was largely replaced by a younger and materially ambitious generationwho came to dominate the private business sector in particular. At the sametime, some members of the former political elite found a new power basis intheir home regions. While previous research has focused on the top leaders inMoscow the question here is how widespread are members of the oldcommunist party and state elite among the present middle-level elite?

In Russia, as in other post-communist countries, ‘political capital’, in thesense of political connections and networks that may be converted to powerin other sectors, became a major stepping stone for ambitious members ofthe older generation elite to obtain leading positions after the change ofregime. A variety of career paths became open to the elite but access was notstraightforward in all sectors. And in some post-Soviet countries, like theBaltic states, ethnic nationalism made political careers difficult for previoussupporters of the Soviet regime. In Estonia, for example, a large proportionof the former members of the republican Central Committee of theCommunist Party had, by the mid-1990s, attained higher positions in privatecompanies, while very few of them continued to hold positions in theinstitutions of the new state, the parliament and the public administration(Steen and Ruus 2002).

The idea of converting political capital into new forms of capital is fromBourdieu (1985) but assessing ‘political capital’ is not a straightforwardmatter. Rivera (2000) argues that a differentiated approach is useful forstudying elite continuity in Russia and proposes a continuum of affiliationwith the Soviet regime, ranging from ‘regime-challenging’ to various levels of‘regime-supporting’ activities. While dissident activities are rare there is agreat variety in types of regime-supporting activities among the present elite.Here I draw the distinctions between whether a person was a member of theCommunist Party of the Soviet Union (CPSU), the ‘strength’ of that member-ship in terms of length and function, and the level of the position held insome Soviet representative body.

Party membership and tenure under the former regime

Finding out about the elite’s background is not easy. In 1998 72 per cent andin 2000 68 per cent of the elite reported previous membership in the CPSUand 97 per cent and 87 per cent, respectively, reported membership of theKomsomol. Less than 1 per cent reported membership in another party ormovement. In other words, the elite has a very strong communist back-ground. Among the elite groups there is not much variation in the rate ofCommunist Party membership, with the exception of business leaders, who


had the lowest membership rate (approx. 50 per cent), and the members ofthe Federation Council, who had the highest rate (approx. 80 per cent).

In the Soviet Union access to membership in the CPSU was restricted,but it was imperative for making a career and constituted the first step inmoving up the state hierarchy. Because of the CPSU’s exclusiveness, only asmall percentage of the Soviet population were party members, so those whowere constituted an elite. Harasymiw (1984) reports that among the totalpopulation only 7.5 per cent in Russia and 6.8 per cent in the USSR as awhole were Communist Party members in 1981.

According to theories of socialisation, the impact of CPSU membershipon the orientation and behaviour is related to how many years they weremembers of the party. The longer the membership, the broader the previousand present networks. Table A9.1 in the Apppendix shows the length ofmembership for the elite groups, while Table 9.4 investigates the effects ofmembership on contacts.

The mean period of membership was 16 years in 1998, with only smalldifferences between the institutions. Over time the tendency remains quitestable, with a reduction to a mean of 15 years in 2000. The central politicalelite in the State Duma and Federation Council had the longest tenure asCPSU members, with many of them having been party members for 20 to 25years. Among other elite groups, like state enterprises and private business,many respondents also reported having been members of the CPSU formore than 15 years. Over time, the mean length of former communistmembership declines in all groups except business and culture, where peoplewith a long tenure in the CPSU seem to have become more dominant.Among the political elite in the State Duma and the Federation Council, thedecline is particularly marked. Thus, even several years after the fall ofcommunism, the elite was still dominated by people who had been partymembers for a long period and long membership of the CPSU seems to bean important precondition for gaining elite status under the new regime.

Probably even more important for later access to the ranks of the elite isthe type of position held in the CPSU. There is quite a difference in the laterfortunes of those who were rank-and-file members and those who were topparty officials. One hypothesis is that the higher the former position, themore political capital can be converted into subsequent elite status andnetwork access. If political capital is convertible from one regime to anotherand between sectors, one would expect post-communist elites to have heldhigh party office under the previous regime. Table A9.2 in the Appendixshows the position in the CPSU hierarchy of those who were members.

About half of the former party members were leaders, and of those about20 per cent held top positions. These proportions remain stable over time.However, there are large variations among the elite groups. Particularlyamong the political elite many respondents previously held top partypositions. As many as 50 per cent of the Federation Council members said in1998 that they had been leading officials in the Communist Party, while only


29 per cent were ordinary members. In the State Duma and among regionalgovernment officials, too, several respondents had reached the top ranks ofthe CPSU. In the other groups, a lower-level background is more common.The business elite and leaders in the federal ministries and state enterprisesare mainly recruited from the party rank-and-file or the middle level elite.

Much the same pattern is found for the Komsomol. As many as 97 percent of the respondents had been members of the Komsomol, among whom43 per cent had held some type of leading position. Here, too, the deputies inthe Federation Council and the State Duma report the highest proportion ofprevious leading positions.

Former party membership is very widespread, and a large majority of thepresent national and regional elite were CPSU members for many years.Moreover, a considerable proportion of the present elites held top partyoffices. The data from Tables 9.3 and 9.4 support the contention that politicalcapital is important for a later career. It seems that also the type of politicalcapital has an influence on later career paths. Previous experience as high-level party functionaries obviously channels members of the elite into thecentral and regional top political positions. On the other hand, in privatebusiness and the federal ministries, political capital in the form of previoustop party positions is less important.

Previous positions in Soviet legislative bodies

The respondents were asked whether they had been deputies in Soviet legis-lative bodies – i.e. the USSR Supreme Soviet, the RSFSR Supreme Soviet,the regional Soviets (republican or oblast) or local Soviets (city, district orrural). Table A9.3 in the Appendix shows the proportion of respondentswho have held such elected positions.

In 1998 36 per cent and in 2000 34 per cent of the respondents said theywere elected to a legislative body during the Soviet era.4 Such a backgroundis found among a large majority of the members of the Federation Council(83 per cent in 1998 and 2000) and of the State Duma (66 per cent in 1998and 52 per cent in 2000). Also quite a few of today’s regional officials werepreviously members of the Soviets. In private business and in the federaladministration only 10 to 12 per cent were previously deputies. This tallieswell with the proportions of the various elites who held leading positions inthe CPSU, as shown in the Appendix, Table A9.2.

The State Duma and Federation Council deputies in this respect representconsiderable continuity from the previous regime. Many people who hadtheir first experience as elected representatives in Soviet institutions on lowerand intermediate levels seem to have used this political capital to advanceinto the new political elite after the change of regime. This kind of continu-ity is, however, different from the re-emergence of the Soviet nomenklatura.The new national and regional political elites have actively used theirpolitical capital from the previous regime to make post-communist political


careers but only exceptionally does one find a member of the present elitewith a top nomenklatura background.

The new political elite has combined political capital with other resources.Intellectual capital, arising from higher education and leading positions inthe state bureaucracy,5 is linked with political experience in the Sovietperiod. Thus, the power of the new political elite is generally based not on asingle resource but on a ‘package of capitals’. According to James Coleman(1990), one may identify various forms of capital, such as physical, humanand social capital. The strength of the capital depends on its accumulationand whether one type of capital may be substituted for another.

More than 90 per cent of the respondents in the State Duma and 100 percent in the Federation Council have completed post-graduate studies, and alarge proportion has a scientific degree. Intellectual capital is thus merged withconsiderable political experience at lower and intermediate levels. Most of thenew political elite are academics who have made use of democratic institutionsas career ladders in politics. But, education is a type of ‘human capital’ thatmay be converted into both political and business opportunities. The politicalelite in the State Duma and Federation Council are not ‘bright youngsters’6

without political experience. The younger generation with little politicalluggage of the past seems to have been attracted more by business oppor-tunities than political positions. To conclude, the data presented here does notindicate as argued by Kryshtanovskaya and White (1998), continuity of oldnomenklatura members encroaching on leading positions after the change ofregime. Neither, can a wave of non-experienced younger people be observedamong the new political elites, as indicated by Lane and Ross (1999).

The picture is quite complex but two basic patterns emerge: (1) Thenational and regional political elites (State Duma, Federation Council andregional government) tend to be recruited from the middle and higherleadership in the CPSU and elected to deputies in the Soviet legislativebodies; (2) The elites outside electoral politics, i.e. in business, bureaucracyand culture, to a much lesser degree had leading positions in the CPSU andvery few had been elected deputies in some Soviet body. Thus, if the focus ison the political elites the ‘continuity of the nomenklatura’ thesis gainssupport, while when emphasise is on non-political elites the ‘young careerist’thesis seems more plausible.

The elite’s images of political capital

Political capital is not only an objective phenomenon, its importance is verymuch related to how it is subjectively perceived. Before investigating theconnections between the elite’s present positions and their past activities, it isnecessary to find out whether the present elite perceives such relations asimportant or not for present decision-making.

The idea of ‘old boys’ networks’ working in a clandestine manner inRussia has gained considerable currency and is regarded almost as axiomatic


by some observers. Conspiracy theories nurture such images when fewsystematic studies exist. Others have argued that such networks are notnecessarily an integral part of the present system and that the question oftheir existence must be investigated empirically. One example is Kroh (1992)who reports that the post-German Democratic Republic elites just after theGDR collapse established ‘power cliques’ in profitable privatised enterprisesand media. In the political and administrative spheres, however, the eliteswere stripped of their power. Therefore, even if such connections exist, theyare not necessarily significant for decision-making.

Since it is extremely difficult to assess the actual effects of networksinherited from the past, one indirect method is to ask the elite themselves. Ifthe present elite perceives connections from the past as important, then onemay assume that these networks actually have an impact on present decisionmaking processes.

The main picture is that even several years after the end of the SovietUnion, the elite thinks Soviet connections still have a major impact ondecision-making. In 1998 57 per cent of the total elite said such connectionswere very or quite important and only 6 per cent thought they were un-important. In 2000 the figures were, respectively, 47 and 48 per cent. Asexpected, and as the mean values of 2.6 and 2.9 illustrate, the significance ofsuch connections has slowly decreased, but even almost a decade after the


Table 9.3 Importance of Soviet connections in present decision-making (%)

Very Notimportant important

1 2 3 4 5 Mean

Total 1998 26 31 24 13 6 2.62000 21 27 26 17 8 2.9

State 1998 22 28 34 13 3 2.8Duma 2000 6 31 28 28 7 3.2

Federation 1998 20 23 23 20 13 2.8Council 2000 3 23 27 30 17 3.3

Federal 1998 19 26 24 28 3 3.0admin. 2000 21 34 23 15 6 2.6

State 1998 40 23 13 15 9 2.7enterprises 2000 33 19 19 27 2 2.7

Private 1998 14 39 27 8 12 2.8business 2000 34 18 26 10 12 2.5

Culture 1998 25 33 25 6 10 2.72000 27 27 24 12 10 2.7

Regional 1998 28 32 23 11 6 2.5govt. 2000 23 28 29 12 8 2.9

Response rate 1998: 98%, N=980; 2000: 96%, N=605.

fall of communism about half the Russian elite still evaluate such connec-tions as essential.

There have been interesting changes over time among certain elite groups.In 1998 a majority of all groups said such connections were very or quiteimportant, and there were only minor differences between the groups, thoughwith some exceptions: leaders of state enterprises and regional governmentassigned particular significance to past networks. Two years later the pictureis somewhat changed and the differences between the elite groups are morevisible. Why do the political elite in the State Duma, the Federation Counciland regional government now attach less weight to past connections, whilethe leaders of ministries, private business and state enterprises think suchconnections have the same as or even larger importance than before? Thispattern is the opposite of what one should expect from the data about thepolitical elite’s rather broad experience from the former regime. It seems thatthe closer elites are to actual political processes the less important theyconsider Soviet connections to be for present decisions. Among politicians,Putin’s regime seems to be less associated with the Soviet time than amongother elite groups.

Why leaders in federal administration stress the importance of Sovietconnections more in 2000 than in 1998 is not easy to explain. However, onemight attribute the change among leaders of federal ministries to theirexperience with Putin first as Prime Minister and later as President. Hisadministration obviously made the Soviet regime more acceptable again, notonly on the level of state symbolism but also by bringing persons intoimportant positions with sympathies for the Soviet system. Since the leadersof ministries are more directly a part of the central state apparatus thanother groups are, a nostalgia for the past may explain why they see Sovietconnections as increasingly important.

The business leaders, on the other hand, probably stress the connectionswith the Soviet past for the opposite reason. Since they are the group that isthe most sceptical about Putin’s more state-oriented economic policies, hispositive attitude towards the former regime and his use of personal connec-tions as a recruitment criterion, they probably perceive the communist pastas continuing to exert a major influence, albeit a negative one.

Political capital and networking

As Pierre Bourdieu (1985) argues, individual capital constitutes a part ofpersonal history and may be converted and made use of as new institutionalopportunities present themselves. Education is human capital that is easilytransferable from one regime to another, for expertise is to a large extentregime-independent and new regimes, in particular, need skilled personnel.The post-communist transition thus opened up many career opportunities tothe highly educated, careers that previously were restricted to loyal partyactivists. As the previous section shows, the elite regard connections during


the Soviet period as quite important several years after the fall ofcommunism. However, a new political regime also creates a specific contextfor the conversion of political capital. So, what about the effects of thepolitical capital of the post-communist elite? Does past political activityhave any relevance for networks between the post-communist elites?

There are two possible scenarios. Under the first, the elites first of allestablish access to economic institutions in order to enrich themselves. Byutilising their former positions they seek to build business connections withthe new economy. One would therefore expect their contacts to be mainlywith new business leaders. Under the second scenario the elites seek to utilisetheir political capital in arenas as similar as possible to Soviet institutions.Consequently, they will try to maintain contacts mainly with the leaders ofthe new political institutions. Political capital does not have to be transferredto other fields, for democracy also permits continuity in post-communistpolitical institutions.

Table 9.4 discloses how various forms of political capital from the formerregime (deputy in a Soviet body, CPSU membership, position in the CPSUand length of membership in the CPSU) correspond with the level ofcontact with leaders of various institutions in 1998 and 2000.

The findings show a clear correlation between previous political office andcontacts with the leaders of new political institutions. This applies both toformer Communist Party members and, to an even greater extent, to formerdeputies of Soviet legislative bodies, who now have quite close contacts withleaders of the Cabinet, the State Duma, political parties and regional andlocal government. Having a background as a Soviet deputy also seems to beespecially important for contacts with leaders of trade unions. A similarcorrelation emerges for contacts with mass media institutions.

In the economic sector political capital is considerably less important,while in the private business sector the correlation is even reversed. Thehigher the position a person held under the Soviet regime, the fewer contactshe or she has with business leaders. Past experiences have much less effect oncontact with state enterprise leaders than many would expect. And there isno support for the thesis that political capital is converted into contacts withbusiness leaders. Previous regime affiliation is more of a burden than anasset for business relations, and the longer the period of CPSU membershipthe less contact with business leaders.

The only contacts that seem to be rather independent of a person’s formerpolitical career are those with the leaders of the federal ministries. Whileformer party membership does have an effect, seniority does not. This suggeststhat the bureaucracy is rather immune to contacts motivated by the ‘strength’of the elite’s political capital. One interpretation is that the ministries haveadopted a certain element of political neutrality by not giving preferentialaccess to those with more developed political resources. Another is thatministerial leaders are not particularly relevant as partners for former Sovietfunctionaries, who seek first and foremost to form networks with newpolitical allies.


Obviously, the effects of political socialisation are weaker than expected.The longevity of CPSU membership, which averaged 16 years amongrespondents in 1998 and 15 years in 2000,8 is evidently not important forcontact with any leaders other than those in the State Duma. Those whoserved for many years in the CPSU are eager to keep up contacts with theircommunist colleagues in the Duma while they reject contact with the newbusiness elite. For its part, the business sector has intense but selectivecontacts with other elites, where previous regime connections are not anasset. This pattern seems to follow age cohorts. While age seems to be amoderate asset for contact with political and administrative elites, it has anegative effect on contacts with business leaders (1998: �20**; 2000: �16**).9

The evidence is clear enough to conclude that the younger generation elite isevidently more attracted by the new business leaders than by the politicaland bureaucratic elite.


Table 9.4 Political capital and elite contacts7

Contact with leaders of: Deputy Membership Position Years ofin a in the in membershipSoviet body CPSU CPSU in CPSU

Federal cabinet 1998 0.09** 0.12** 0.02 0.042000 0.16** 0.12** 0.12** 0.03

State Duma 1998 0.22** 0.14** 0.10** 0.09**2000 0.18** 0.15** 0.17** 0.05

Federal admin. 1998 0.04 0.10** �0.04 0.052000 0.02 0.15** 0.05 0.06

Regional govt. 1998 0.19** 0.11** 0.13** 0.022000 0.20** 0.12** 0.11** 0.01

Local govt. 1998 0.17** 0.04 0.16** �0.052000 0.23** 0.10** 0.08* �0.07

Political parties 1998 0.20** 0.10** 0.09** 0.022000 0.24** 0.10** 0.17** �0.05

Trade unions 1998 0.10** 0.12** 0.00 0.012000 0.17** 0.15** 0.07 0.00

Private business 1998 �0.06* �0.10** �0.08* �0.15**2000 �0.05 �0.10** 0.02 �0.09*

Mass media 1998 0.16** 0.08* 0.08** �0.052000 0.14** �0.03 0.16** �0.03

State enterprises 1998 0.05 �0.01 0.02 -0.042000 0.08* 0.07 0.09* 0.02

Average N= 1998 976 978 705 7052000 602 604 410 411

**Significant at 0.01 level; *significant at 0.05 level.

The findings in Table 9.4 would appear to disprove the conversion theory,whereby Soviet political capital is transformed into economic capital in theera of the market. While this thesis undoubtedly held more truth for theearly years after the demise of the Soviet Union when state property wasdismantled almost overnight and the communist nomenklatura scrambled toexploit the first privatisation wave for their own material profit (Rona-Tas1998), its validity seems to have declined with time. As Gustafson (1999: 169)argues, over time patron–client relations inherited from the Soviet period willdecline in importance, therefore in the business sector younger people willnot have old Soviet networks to support them.

Now that the period of economic ‘shock therapy’ and hasty privatisationis over, elites seem to be paying far more attention to acquiring new politicalcapital. As the data show, contacts with political leaders are much strongerthan those with business leaders. Political networks among the Russiannational and regional elites a decade after the fall of communism are stillmarked by the legacy of the past, a tendency that seems to be increasing asthe core leadership under Putin returns to more centralised rule.

Thus, former political capital is now being used to create networkssuitable for building new political capital. This conclusion confirms Laneand Ross’s (1999) assertion that political assets from the former regime werenot, in fact, exchanged for economic capital during the Yeltsin period, aswidely thought, but that new positions in the economy were occupied by theformer managerial class, who converted not political but intellectual capitalinto economic assets. Although clearly some managers who were politicallyactive during the Soviet period also went into politics. What the data show isthat the previous level of political position has a role to play in generatingpolitical networks and in gathering electoral support in the new politicalenvironment. But, as shown in Chapter 7 the legacy of previous regimeconnections have no clear effects on the elite’s democratic and economicorientations. A path can be traced from the previous communist politicalelite to post-communist democratic political behaviour but not to politicalorientations.

Conclusion: networks, elite integration and the state

Following the institutional earthquakes after the demise of the Soviet system,elite relations became a main mechanism for solving disputes and makingdecisions. Therefore, contacts between politicians and the administration,the centre and the periphery and the state and the private sector are crucialfor governance, democratic development and economic reforms.

The data presented here to some extent speak for themselves, but amidthe ‘messy’ reality of contemporary Russia it is still difficult to ascertain howwidespread networks are and when a network actually does exist. Whilecontacts are a necessary pre-condition for a network, they do not in them-selves constitute one. As van Warden (1992) suggests, a network can be


defined in terms of various dimensions, such as form of contact, its functionand level of formalisation and the motivation of the actors engaging in thatcontact. The purpose of this study was to get a better idea of how tightlywoven the contacts are between various elite groups and whether pastexperience has any bearing on contacts in the post-communist era.

The findings show that elite connections vary considerably betweensectors, patterns of initiating contact are different and the role played by pastexperience varies according to the object of the contacts. In this concludingsection I will first summarise to what extent elite groups are integrated interms of contacts and background, and second discuss some implications ofthe network configurations exposed in the preceding empirical part.

One may distinguish between three distinct types of elite relations:political–administrative, centre–periphery and state-market. In the political–administrative sector interaction between politicians and leaders of federaladministrative bodies is close. Politicians also actively cultivate relations withleaders of other institutions, like state enterprises, the mass media andregional government. Compared with the other elite groups, a very largeproportion of the political elite was politically active in the Soviet Union.Such political capital seems to be important for gaining access to politicalpositions under the new regime and for establishing an extensive network ofcontacts.

The creation of more autonomous regions gave a new and importantimpetus to centre–periphery relations. The central political elite maintainsfrequent contact with the regional and local elite, while the regional elite,who are in close contact with each other, perhaps surprisingly, seldom initiatecontact with the federal level. The exception are the leaders of the centralregions, who tend to be more in contact with the Russian leadership than theleaders of other regions. Geographical proximity naturally has some role toplay in determining the intensity of contact, but contact is also significantlyinfluenced by political capital, so that regional leaders who were Sovietdeputies or CPSU members have more contact than those who were not,with seniority also playing a role.

Intense, mutually-initiated contacts are maintained among leaders ofprivate business and state enterprises. The networks that exist within andbetween these sectors do not have their roots in the former Soviet Union.One may, therefore, classify this as a new elite segment. The emergence ofthis active state–business segment supports Olson’s (1982) contention thatthe ‘distributional coalitions’ that undermined the economy during theSoviet period later formed ‘winner takes all’ coalitions with the new businessleaders, thereby crippling the new market economy.10 Treisman (1995) callssuch relations an ‘administrative market’. The new market system has notreplaced the former system but has become intertwined with the ‘systems ofpersonalised redistribution [where] established interpersonal networksapparently continue to determine financial allocation in practice’ (p. 967).Aaslund (1997), too, attributes the inadequacy of reforms and economic


stagnation to dysfunctional elite behaviour. ‘The dominant problem of thetransition in Russia was rent-seeking, implying that certain people used thestate to their benefits, either reaping monopoly rents thanks to stateintervention, or receiving subsidies from the government’ (p. 184). Thiscontrasts with an earlier, more optimistic statement from Aaslund (1995)remarking that since private business leaders seek profit in the market, theywill have a weak incentive for contacting the state administration.

The leaders of state enterprises had a greater incentive to exploit thestate and block reforms than to restructure their enterprises. The data showthat the main target of lobbying is not the politicians but the leaders ofministries, producing quite intense mutual contact between these two elitegroups. While Treisman and Aaslund underscore the existence of contactbetween leaders of state enterprises and the government, which is confirmedby this study, our data also reveal extremely close elite connections in thegrey zone between state enterprises and the private sector. State enterpriseleaders are especially active as intermediaries between the state and themarket. From a functional viewpoint, such a ‘culture of rent-seeking’(Aaslund 1999: 86) founded on tripartite informal contacts is a vitalprecondition not only for exchanging benefits but also for building trust.Many other scholars are more pessimistic and argue that personal relations‘have been impermeable to the penetration of abstract processes such ascompetition, generalised trust, or law’ (McDaniel 1996: 166). From thisperspective networks are collusive and devastating for economic reformsand provide the most obvious explanation of why things went from bad toworse.

All of the authors cited tend to see the process of reform in Russian as atop-down mechanism, whereby the political leadership decides to adoptWestern-inspired reforms and then tries to implement them. Experienceshows, however, that ideals are seldom realised, particularly in Russia. Thevery Russian idea of reforms being applied as ‘surgery’ by the ‘right people’was, according to McDaniel, propagated by Yeltsin in keeping with a Russiantradition going back centuries. The idea of a brave and skilful ‘enlightenedruler’ engaging in technocratic social engineering pre-supposes a top-downstate that necessarily is at odds with adverse elite networks.

There are other perspectives, however. Hedlund (1999) explains the failureof the Russian reform programme in terms of Russian cultural peculiaritiesrooted in ‘the heavy burden of history’, or so-called ‘path-dependencies’.Such conditions created insurmountable obstacles to implementing Westerneconomic ideas in a setting alien to the norms of a market economy. North’s(1990) theory of economic change introduces a more explicit institutionalperspective. He maintains that while formal rules, e.g. economic plans orprogrammes, may easily be changed by the top leadership, the outcome willalways be determined by informal elite norms, which change only gradually.Accordingly, widespread elite networks are apt to distort centrally initiatedreforms in a situation where the state hierarchy and common norms are


weak. This view has important implications for the feasibility of change, forpolitical stability and the ability of ‘post-communist learning’.

But are widespread networks described in this study inherently bad?Informal norms and lack of enforcement instruments are the context inwhich actual processes take place. Seen from this angle, networks and the‘culture of rent-seeking’ are not dysfunctional per se but serve certain basicpolitical and social functions. The informal network structures can be seennot as obstacles to rational behaviour but as forms of ‘specific exchange’between elites. These make consensus workable, offer some predictabilityand enable pressing problems to be solved as well as possible, thus benefitingnot only the elite but employees in the administration and in state andprivate enterprises, and hopefully, in the long run the general population.With weak central authorities and widespread social apathy, networksformed by elites are a way of ‘organising’ elite interaction that might other-wise dissolve into anarchy or produce totalitarianism. Elite continuity andnetworks in the political–administrative field have made possible the survivalof basic Russian clientelistic values and thereby ‘lubricated’ the transitionprocess. Networks are crucial arenas for finding politically and culturallypragmatic solutions, rather than following some master plan.

Russian state–market relations are paradoxical and have at least twofaces. While the Russian business elite has, to a larger degree than otherelites, discarded the influence of the past, they have also established closeconnections with leaders of state enterprises. Such informal contacts consti-tute a stabilising element in an extremely uncertain environment. Theremarkably close connections between business and state enterprise leadersare consistent with the idea that a new type of economy, with close state–market relations, is emerging in Russia and providing opportunities for ‘rentseeking’. Those who occupied favourable positions under the former regime,it has been argued, obtained special benefits in the process of rent-seeking bycapitalising on their personal links (Harter 1997).

The data here do not, however, bear out the theories of political capitalconversion but instead show that the Soviet past is considerably less repre-sented among business leaders than among other elite groups, with pastprivilege seeming to have little bearing on present contacts with business. Onthe contrary, the weaker the legacy of the past among the elite the moreintense their contacts are with business leaders. It seems that ‘path depend-ency’ plays less of a role among business leaders than is often assumed.What emerges is a strange combination of private entrepreneurship andexploitation of state resources that does not necessarily produce poor manage-ment and stagnation. While political capital is of minor importance, socialcapital is rather prominent in business–state relations. Business leaders arerather often connected through close family bonds. Several other elite groupsalso have close social connections with business, in particular the leaders ofstate enterprises, who have both professionally- and family-based mutual tieswith the private sector.


The existence of these tightly knit business–state networks supports DavidLane’s (2000) prediction that a kind of negotiated, state-led capitalism willemerge in Russia where the state and the market co-ordinate economic activi-ties and the state is especially active on the financial side, providing resourcesfor private entrepreneurs. However, one should not regard this ‘co-ordination’as an institutionalised activity. The lack of permanent co-ordinating bodiesand the volatility of elite connections make the term ‘network economy’ amore apt description. Networks of this kind are forming at the interfacebetween the reorganised state and the raw capitalist economy and may gradu-ally formalise into more stable arrangements, especially in vital economicsectors like energy and the banking system.

At this stage of Russian political-economic development, the elite hasrelinquished old political capital as an asset in forming links with businessleaders, and the dense business networks that now exist are mainly con-cerned with establishing contacts with the leaders of state enterprises. AsAaslund (1995) correctly assumes, the new business elite have more incentivesto contact business partners inside and outside the state, than get in touchwith bureaucrats. These types of ‘path independent’ networks are a neces-sary stage in the development of more vital and institutionalised forms ofco-operation between the state and the market. It remains to be seen whetheran institutionalised ‘state-led capitalism’, as David Lane (2000) suggests, willcome to prevail in Russia.

The nomenklatura capitalism thesis cannot be rejected since there arenumerous examples of top communist leaders who succeeded because ofsuccessful business networks. However, the data shows that the new businessrelations are less influenced by communist connections than is often takenfor granted. On the other hand, a decade after the demise of the SovietUnion, ‘the legacy of the past’ still has a considerable impact on politicalnetworking.

Whether networks are bad or beneficial to political and economic develop-ment is another discussion. I will argue that those who dismiss elite-networksper se because some elite segments interact closely and include activists fromthe communist period have missed the point. By itself, a network is aresource but, as Stark and Bruszt (1998) argue, they are not unproblematic.They carry the potential to be agencies of development brought out of theshadows or clandestine rent-seeking cliques inhibiting economic growth (p.129). A positive interpretation of the Russian case is that differentiation ofnetworks and frequent elite contacts is an asset for efficient problem-solving.However, qualified decision-making and satisfactory implementation maytake place only when economic entrepreneurship is founded on politicalstability. The impetus of the past on Russian political networks as demon-strated in this study, is conducive to compromises between traditionalistsand reformers and safeguards political stability. While, on the other hand,the economic networks’ tendency to discard previous old guard communistsmay stimulate innovative economic behaviour. The elite’s network activities


may turn out to be a crucial force for Russia. At least the network approachprovides a necessary supplement to other conceptions of co-ordination likehierarchical control and the market mechanism.


10 The elites and the emerging Russian state

Introduction

Russia is still not meeting the basic standards of a viable democracy; theeconomy is characterised more by immature capitalism that benefits a fewthan by fair market principles and legal thinking; during the last decade far-reaching decentralisation has brought the Russian Federation to the brink ofdisintegration; and governance is infused by clientelism and personalnetworks more than by a belief in rational bureaucracy. Why is it so difficultto establish a well-functioning state in Russia? The literature offers a varietyof answers: Russian society is not prepared for Western-style democracy;economic reforms have taken the form of ‘shocks’ without ‘therapy’; thecountry’s leaders are unskilled and in the grip of big business; the legacy ofthe past continues to influence thinking and behaviour; or else, there is adeliberate international conspiracy to destroy Russia.

In all these explanations the main focus is on the policies of the Presidentand his advisers – initially the liberal reform project under Yeltsin and laterthe recentralisation policies initiated by Putin. The numerous elites occupy-ing positions in legislative bodies, in the state administration and in privatebusiness on the national and regional levels are generally seen as obstacles totop-down reforms rather than as a self-reliant force shaping the direction ofpolitical and economic development in the new Russia. Following thisargument I regard these elites as an important strategic political power basewhose interests and orientations represent alternative solutions to both theliberal and the centralised state models proposed by various Kremlin leaders.I argue that the Russian elites constitute both a serious political obstacle anda potential resource for the Kremlin leadership and that these national andregional leaders will ultimately determine the emerging ‘Russian form’ ofdemocracy, economy and system of governance. Therefore, to understandthe unique transformation of the Russian state, one needs to investigatethese important but often neglected elites’ beliefs and behaviour, the degreeof their integration and their relationship with the central leadership. Thisconcluding chapter summarises the basic patterns of elite orientations andthen outlines some implications of the post-communist elites’ politicalculture for the new Russian state.

Chapter Title 167

The many faces of the Russian elite

The collapse of the Soviet state and the ensuing weakness of the new institu-tions redefined the symbolic and behavioural parameters of the elites. Thestate became the subject of restructuring and continuous elite networking,inducing apparent anomalies in the elites’ orientations. In the precedingchapters these were analysed along the following dimensions: (1) democracy–authoritarianism; (2) state–market; (3) centralised–decentralised federalism;(4) legal–clientelistic norms; and (5) network behaviour.

Defining democracy is not an easy task.1 A specific set of criteria, whichobservers are socialised to believe are human and useful norms, haveproduced ethnocentric inspired recommendations based on Western experi-ence. I find it more useful to ask which conditions are conducive to whichtype of democracy. One condition for democratic rule is a certain level of‘elite trust’. The data show that confidence in political and governinginstitutions as such, irrespective of poor performance, is quite high. On theother hand, the elites are very sceptical about fundamental societal institu-tions, such as private business, the media and political parties. They express awidespread preference for popular participation in politics but also wantstrong leaders, even though they do not trust their fellow leaders and areseverely split on the issue of a competitive party system. These attitudesexhibit a specifically post-communist conception of democracy founded on adesire for a resolute ruler in the Kremlin who, if necessary, can disciplineunruly subordinates but whose authority is made legitimate by deeply rootedvalues among the elites.

Elite attitudes to economic reforms seem to be linked to the elite’s accep-tance of executive power. Yeltsin undermined the power of the Presidencythrough radical economic reforms, confrontations with the national elite andthe diffusion of power to the regions. Putin’s more authoritarian style seemsto coincide with a desire for co-ordinated governance and more stateresponsibility for welfare felt particularly by the national elites but also bytheir regional counterparts. The elites’ attitudes to economic reforms reflect adeep contradiction between a unanimous embracing of the idea of indi-vidual competition on the one hand and a concern for egalitarian values anda desire for state regulation to safeguard wages and social benefits on theother. The elites are apparently quite inconsistent on distributional issues butseem to reconcile these contradictions by supporting centralised leadership.A similar anomaly is found for ownership. The elites almost unanimouslysupport state ownership of heavy industry and about half see mixedownership as the best organisational form for light industry. For housing andin particular for the retail sector, on the other hand, a large majority favourprivate ownership.

The third anomaly concerns the type of federalism favoured by the elites.The study shows that a considerable proportion of the Russian elites support‘localism’ and the delegation of authority to the regions, while at the same


time wishing for more centralisation and rule of federal law, an attitude thathas become reinforced since Putin was installed in the Kremlin. The mainpicture, however, is of a consensus among the elites in favour of an emerging‘federal ideology’ of power-sharing between governing levels. Under Yeltsin,a majority of the elites wanted substantial regional control over tax incomes;under Putin, however the elites are split down the middle on this issue.Nevertheless, despite a lack of consensus on who should be responsible fortaxation, their orientations reflect a more normal distribution of policypositions within the framework of a re-centralised federation than real zero-sum confrontation. These attitudes to democracy, economy and the feder-ation are embedded in a decision-making culture that combines fairly strongclientelistic propensities with bureaucratic thinking and widespread networkbehaviour.

Since the state’s capacity to rule was dramatically weakened followingthe change of regime, economic reforms, democratic practice and theorganisation of the federation depend to a greater extent on the elites’political psychology, how consensual their attitudes are and what kind ofcompromises are arrived at between the Kremlin leaders and the middlelevel elites. The data illustrate how the national and regional elitesconstituted the political basis for Putin’s take-over as President andsubsequently for his programme of state consolidation. For some this maybe a cause for concern. However, many others would argue that after thechaotic 1990s, stronger central leadership was highly necessary from thepoint of view of state integration. Yeltsin’s ambitious blueprint for eco-nomic reforms could not be continued, primarily because it faced sub-stantial resistance from the elites. Putin’s achievement has been to gainactive support from this segment of leaders by appealing to their collectivevalues, thus paving the way not for a reintroduction of state planningbut rather for a continuing restructuring of the economy by incrementalmeans.

Legacy of the past, new institutions and post-communist learning

As discussed in previous chapters the elite’s orientations may be understoodboth from a ‘culturalist’ and from an ‘institutional’ perspective. According tocultural theory, belief systems are conservative and stable and therefore donot change very much from one regime to another. Neo-institutional theoristsargue that orientations shift because elites are loyal to new institutionsresulting from reform and that consequently a change of regime affectsattitudes and behaviour. In this study I suggest a third way, which bridgesthe rather pessimistic path-dependent and overly optimistic neo-institutionalapproaches. I argue that the Russian elite orientations have been determinedneither by early socialisation and traditions nor by loyalty to the policyleadership but by ‘post-communist learning’ based on a decade’s politicaland economic experiences of how Western models work.

The elites and the emerging Russian state 169

The analysis in Chapter 7 suggests that institutional factors, like loyaltyto the Kremlin leaders and perceptions of state capacity, and the historicallegacy of the past have only negligible or minor effects on the elites’orientations. Much more crucial for shaping political preferences are theissues of economic distribution and ownership. In addition, membership ofpolitical parties stimulates democratic thinking. In other words, the elites’approaches to democracy, economy and federation are moulded not bypast experiences and the new institutions but rather by the post-communistcontext itself. Experience of economic performance and political practiceis producing a unique political culture with new elite cleavages. Recentexperience of raw capitalism, for instance, seems to have formative influ-ence on left–right cleavages that to a large extent determine conflicts onredistribution issues. And party activism after the change of regime hasnurtured pro-democratic attitudes, tendencies that are highly compatiblewith pluralist democracy.

The anomalous but generally homogenous attitudes revealed in this studymust be understood against the background of autonomous actors buildingpower bases to solve unprecedented problems in an environment that hasgiven rise to both new opportunities and extreme uncertainty. The demise ofauthoritarian rule restructured the political basis of the regime and createdpluralist elites who hold the key to future development. As Sakwa (1999)argues referring to Bryant and Mokrzycki (1994), the transformation ofpost-communist states is an open-ended process where only the point ofdeparture is known. The findings presented in my study indicate that thelegacy of the Soviet past no longer has any substantial impact on theattitudes of the elite, suggesting that the departure from old institutions hasbecome irrevocable.

On the whole there is a tendency among observers to over-estimate theimpact of past experience and the new institutions on the elite’s orientations.The chapter on elite networks does, however, show a link between thepositions held by the elite during the Soviet era and current behaviour. Themore closely the post-communist elites were involved with the previousregime the more intense their present contacts are with leaders of allinstitutions. The exception is private business leaders – where the oppositeapplies. In other words, ‘political capital’ counts for political networks butnot for business connections.

While the past obviously has a role to play in the contacts that the eliteestablishes, the link between their current orientations and their experienceduring the communist period is much more tenuous. The fact that ‘old boys’networks’ continue to exist does not necessarily imply continuity of pastattitudes. The elites seem more to re-orientate themselves by adapting andlearning from democratic and market opportunities. Authoritarian andstate-oriented attitudes are prevailing more because strong leadership andstate involvement are better suited for solving post-communist problems andnot a wish to replicate methods of the past.


The horizontal basis for vertical elite consensus

Theories of why the economy is not prospering, why the federation hastended towards fragmentation and of how stable democracy is in Russiaoften underscore the lack of integration among the elites. The contributionsof Alexandr Yanov, Mancur Olson and John Higley referred to in previouschapters reflect a variety of perspectives, but all of them highlight theimportance of elite cohesiveness for economic reforms and political stability.They argue that the degree of elite integration affected political andeconomic reforms during the Soviet period and political stability, not just inpost-communist Russia, but also during the Soviet period as well. But whatis elite cohesiveness?

There is a substantial difference between disagreement among elites aboutdecision-making procedures and conflicts about policy priorities. While thefirst concerns the fundamental choice of political system, the second is aconflict about distributional issues that is a normal part of the politicalstruggle. Furthermore, in a visibly patrimonial state like Russia one shouldboth differentiate between horizontal and vertical elite relations and howthey are connected. The main purpose here has been to study how cohesiveelite orientations are on the horizontal level when exposed to variousvertically-initiated institutional and policy reforms.

Yanov (1987) argues that during the communist period coalitions betweenconservative top- and lower-level elites were a crucial element in the stale-mate and bureaucratic sclerosis of the Soviet system and that the potentialfor reforms generated towards the end of the Soviet period was the result ofshifts in these coalitions. The power of the central leadership during theperiod of stagnation under Brezhnev was based on a coalition between topleaders, party professionals, the central economic bureaucracy, the military–industrial complex and nationalist intellectuals. The coalition was upheldless by ideology than by material incentives and the nomenklatura system.

During the Soviet period leaders were ideologically unified, not onlyabout procedures but also about basic values. The foundation for elite unitywas hierarchical subordination, which was very distinct from elite integra-tion in Western democracies based on diversity. Furthermore, as Higleyargues, the Soviet elite was quite homogenous with regard to recruitmentand their positions depended on the top leadership. An ‘ideocratic elite’ ofthis kind is peculiar to one-party states and totalitarian regimes.

Yanov forecast the fate of Gorbachev’s liberal policies by recognising thatreforms were dependent on the ability of the Kremlin elite to build analliance with the new managerial ‘middle class’, which had an interest ineconomic reforms. With the help of the professional classes, the liberal intel-ligentsia and metropolitan elites, political and economic reforms wouldreceive the necessary support and loyal implementation. However, Gorbachev’scoalition was not strong enough and his experiment came under attack fromboth conservatives and liberals. The traditionalists tried to stop the reforms


and almost overthrew the whole experiment in the putsch by CommunistParty hard-liners of August 1991. If Boris Yeltsin had not entered the arenaand grasped the political reins supported by the emerging elites in business,culture and the regions who wanted to defend their newly won opportunities,the pendulum would most likely have swung back to authoritarianism andan ideocratic type of elite.

The values and orientations of the national and regional elites reportedhere not only reflect the priorities of decision-makers and post-communistRussian political culture, they are also the basis for viable ruling alliances inRussian politics. As history shows, the core leadership during the Sovietperiod was often less successful when reform policies conflicted with theinterests of the economic and regional elites, who co-ordinated their effortsin ‘distributional coalitions’ (Olson 1982). In a more recent analysis of theconditions for economic growth in post-communist countries, Mancur Olson(2000) shows that this relationship continues to exist. The problem is thecontradiction between self-interested elites who do not want voluntarily tocontribute to the collective and the central leadership’s all-embracing con-cern for the common good. His theory of why post-communist economiesare not prospering points to the structural tension between centrally initiatedeconomic reforms and lower level elite networks that soon bring changes to ahalt. The idea of covert ‘distributional coalitions’ among enterprise managersand bureaucrats is consistent with the argument advanced by other authors,treated in previous chapters, that clandistine networks among elites areprohibitive to real economic reforms. In particular some managerial elitesare better off with only partial reforms or no reforms at all. Whether the re-centralisation of power and co-operation between the state, business andregions under Putin really precludes elite ‘free riding’ and ‘rent-seeking’remains to be seen.

Yeltsin’s power rested primarily on the support of a limited group ofleaders: the new business leaders and the governors of the regions. Thesegroups had vested interests in a capitalist society, a liberal constitution andthe decentralisation of power. Shleifer and Treisman (2000) found that byco-opting strategic partners among some elite segments Yeltsin’s centralreform team was able to negotiate and persuade ‘stakeholders’ in the legis-lative bodies, bureaucracy and state enterprises not to obstruct some reforms.Aaslund (1999), however, sees these co-option strategies as underminingreforms, writing that the political leadership’s close connections withbusiness and its inability to cope with ‘rent-seekers’ were the main reasonsfor the perversion of economic reforms. The coalitions obviously had majorpolitical costs, challenging traditional Russian ideals of a strong state andegalitarianism, and were resisted by other elite groups whose economicstatus and national pride had become dramatically reduced during Yeltsin’seconomic ‘shock therapy’.

During the early years of reform, it was not only those outside the innersanctum of power who constituted an opposing force. Support for Yeltsin


also eroded among his inner circle of supporters. By early 1992, as Shevtsova(1995) writes, key allies of Yeltsin during the August 1991 attempted coupd’état had become his most vocal critics and powerful rivals. Furthermore,during the 1990s the elites became widely differentiated with regard torecruitment (Lane and Ross 1999), had a low level of mutual trust, sharedonly a few common norms and, according to Higley et al. (2003), were bestcharacterised as ‘fragmented elites’ leading to an ‘unconsolidated democracy’under Yeltsin.

The patterns revealed in this study raise the question of how applicablethis characterisation of Russian elites is. Looking at the elites’ orientations Iargue that the widely accepted picture of ‘fragmented elites’ must bemodified. According to the data, there is considerable horizontal integrationin the orientations of the national and regional elites. This, in turn explainsboth the vertical elite fragmentation and instability under Yeltsin and thenon-conflictual vertical integration and stable rule under Putin.

Coalition-building under Putin

Putin’s coalition with the military–industrial complex, nationalists, com-munists, corporate business and also the Orthodox Church is just the latestexample of how Kremlin leaders have redefined support from the elites. Itdiffers substantially from Yeltsin’s confrontational style, in particular hisquarrels with the Communist Party in the State Duma during his earlyperiod in office. Putin’s ideology of a strong state and collective institutionsleading to an alliance with business may be more surprising, but it is aninteresting example of how the political basis of the emerging Russian stateis continually being reshaped through policy compromises between strategiclower level elites and Kremlin leaders.

In summer 2001, after the disordered years of raw capitalism and theselling off of state property under Yeltsin, business leaders in co-operationwith Boris Nemtsov, the leader of the liberal Union of Right Forces partyrepresented in the State Duma, proposed a partnership with the state,declaring that ‘business and power should not attack or blackmail one other,they should be partners working towards the economic recovery of Russia’.2

This proposal for finding the middle ground was formulated by a group ofbusinessmen, who called on the Kremlin to declare a moratorium on anyinvestigation into the legitimacy of privatisation over the past decade and torefrain from redistributing former state property. In exchange the businesscommunity pledged to play by the rules, pay taxes and obey the law.Obviously, Putin could not force business to co-operate. Rather, the financialoligarchs themselves discovered that the time had come to subordinatethemselves to the state in their own interests. Some years earlier, according toNemtsov, when ‘the oligarchs were fighting like mad dogs for a piece ofproperty’, this would have been impossible, but now ‘they have stuffedthemselves and they themselves need the rules’.3 The compromise with big


business interests, which shows up very clearly in the interviews with thebusiness leaders, and the generally consensual relations between thePresident and the other national and regional elites illustrate Putin’s politicalsuccess in stabilising Russia by means of vertical consensus-making.

The comparatively rare open vertical elite conflicts and a political stylethat espouses conciliation are conspicuous features of the Putin regime. Onemay ask whether these trends indicate the emergence of a ‘consensual elite’similar to Western pluralist democracies or a return to an ‘ideocratic elite’with a single belief system and monolithic political structure. The data fromthe elite surveys of 1998 and 2000 presented here do not indicate anywidespread scepticism about democratic procedures. On the contrary, theelites generally espouse common basic values about a pluralist politicalstructure. At the same time, however, they would also like to see a strongerleadership concerned with the collective interest and state unity. The elitecontroversies during the Yeltsin period resulted above all from clashes overeconomic policy rather than from dissatisfaction with the new politicalinstitutions as such. These, as the elite interviews show (Chapter 3), in factenjoy quite a high degree of confidence.

This apparently anomalous combination of democratic and authoritarianthinking suggests not a fragmented elite but, on the contrary, widespreadsupport for a special type of post-communist regime. The low level of inter-personal trust among the elites and lack of a consensual political culture inRussia make it necessary to integrate the elites by certain accepted pro-cedures, of which strong leadership is an integral part. But Putin did notimpose obedience. Putin’s policy style is congruent with the expectationsgenerated by deeply rooted elite values, and this peculiar type of eliteconsensus may, as Gel’man (2003) notes, be characterised as ‘self-imposedconsensus’. In a context of plural political institutions, as the Yeltsin eraillustrates, it is not otherwise possible to make decisions that are bothconducive to political stability and seen as legitimate by the elite. The datafrom the elite surveys show a considerable degree of horizontal integrationamong Russian national and regional elites concerning their attitudestowards ruling procedures under both Yeltsin and Putin. The mainachievement of Putin has been to meet the expectations of the elites andestablish a vertical consensus between the executive and the various leadersof political and economic institutions.

A similar degree of homogeneity can be observed among the elites withregard to the type of federation Russia should have. The main trend is one ofgeneral support for an active role for the centre with considerable autonomyfor regional governments. Over time attitudes among all elite groupsinvestigated veer more in the direction of giving additional power to thecentral government. One general conclusion, therefore, is that there existswidespread consensus among the elite about procedures for federal power-sharing. It is a shift in favour of greater centralisation but far from returningto the strict hierarchy of the past.


While the procedural issues of democracy and federation are ‘win-win-situations’, the role of the state and the market relate more directly todistribution, economic interests and ‘zero-sum-situations’. One would there-fore expect the elites to be more divided over these issues. In fact, whiledivisions exist, they are not dramatic. There exists substantial agreementabout the need for active state ownership of larger industries, although thereis some disagreement about whether co-operatives or private companiesconstitute the best solution in other sectors, such as small industry andagriculture. A majority would like the state to play an active role in stimul-ating economic growth and in tackling issues related to infrastructure andwelfare. More surprising is the widespread support among elites for‘individual competition’ as a social value parallel to their support for anactive role for the state. As with the rather anomalous combination ofsupport for both democracy and strong leadership, one explanation heremight be that in the economic sphere Russian elites have established a modusvivendi, whereby capitalist values are united with a concern for collectiveobligations.

How do these rather homogenous attitudes towards governing proceduresand far-reaching consensus about distributional arrangements fit in with thenumerous observations of elite conflicts in post-communist Russia? First, theconflicts during the Yeltsin era mainly took the form of vertical confront-ations between the radical reform programme of the executive on the onehand and the values of the national and regional elites on the other. In sucha situation controversies about redistribution and the malfunctioning of themarket economy served as justifications for widespread elite support forstronger leadership and federal integration. When Putin came to power hisleadership style corresponded with the elites’ desire for a firm hand capableof holding the state together, taming the financial oligarchs and moderatingthe excesses of raw capitalism. Second, horizontal conflicts among thenational and regional leaders did not disappear as a result of a basicconsensus over values. Competition for resources, positions and prestigeamong the elite continues to be harsh and often relentless. However, thisform of elite rivalry is a product of the opportunities offered by pluraliststructures. As Chapter 7 indicates, distributional conflicts have led to theformation of opposing elite camps, and in the spheres of income distributionand ownership a political left–right cleavage is highly visible. In any case,such confrontations should be welcomed as a normal expression of socio-economic interest in the political process.

The problem of ‘elite integration’ is basically about social control. Asnoted by scholars who have studied political development in Third Worldcountries, the mobilisation of political support for state leaders’ policiesdepends on three levels of government: the central executive leadership, theleaders of bureaucracies and regional state officials. Paradoxically, the needto build alliances between the various levels of government in order to effectstate policies may in fact jeopardise efficacy, since powerful sub-organis-


ations may become centrifugal forces and threaten state stability (Migdal1988). Furthermore, as Linz and Valenzuela (1994) argue, mixed Presidential–parliamentary systems, like the one in Russia, create a problem of ‘dualdemocratic legitimacy’. When the President and the parliament are electedby the people and when the prerogatives of the President are only broadlyspecified, the potential for conflict between the President and the parliamentmajority is obvious. When controversial policies are on the agenda one mayalways ask what is the source of legitimacy. This was what happened duringthe 1990s because Yeltsin did not organise a sufficiently strong party base inthe State Duma. After Putin came to office, however, much effort wasinvested in organising a robust and loyal party organisation that could co-operate with other parties and safeguard a pragmatic majority. This wasmuch easier for Putin with his broad appeal to national and regional elitesdeeply traumatised by the turbulent Yeltsin years.

The triple transformation and the erosion of the state

The three simultaneous reform projects – democratisation, the market economyand decentralisation – put forward in the ‘500 days programme’ in 1990,which later formed the basis for Yeltsin’s liberalist crusade, were in principlevery different and yet at the same time closely related because they under-mined, as Offe (1991) argues, each other’s accomplishments. Unsuccessfuleconomic liberalism and privatisation leading to monopolies endangeredpolitical liberalism, while decentralisation and the weakening of the federalstructure allowed authoritarian rule and anti-democratic practices to prosperin many regions and republics (Ross 2002a). The combination of regionalis-ation and privatisation of state property created a new class of localmanagers who took control over profitable state enterprises and were oftenlinked through networks with a political clan for whom democratic thinkingwas rather alien (McAuley 1997). The Constitution, which provided for aseparation of the executive and legislative powers and the introduction ofcompetitive elections, instigated a powerful elite in the State Duma with theability to block economic reforms. A main problem for Yeltsin was the mutu-ally destructive effects of the various reforms that seriously incapacitated thestate.

The efficiency of the Russian political and economic system now hingeslargely on the President’s ability to reach compromises on economic reformswith the new political and business elites (Shleifer and Treisman 2000). Lane(2000) argues that a kind of state-led capitalism has evolved, based onconsensus between the President, the dominant groups in the State Dumaand leaders in industry and the federal ministries. The elite orientationsrevealed here seem to be highly conducive not only to state-led capitalismbut also to a redistributive state and broadly defined regional autonomy.

Pluralism and the delegation of power to the regions necessarily decreasedthe Kremlin elite’s control over the implementation of economic reforms, thus


putting elites in the State Duma, the federal bureaucracy and the regions in aposition to form effective veto coalitions if they chose to. Economic ‘shocktherapy’ turned out to be more a trauma than a remedy, and the catastrophicreduction in the population’s standard of living clearly destroyed illusionsabout Western-style democracy and the market; it did not, however, seriouslyundermine the Russian Constitution or basic democratic procedures.

The negative effects of the transformation were felt directly not only bythe population but also by the elites. Many believed that long-term negativeexperience of state performance (e.g. a reduction in state services) and themarket (e.g. high consumer prices and social injustice) would erode thelegitimacy of the whole transition project and pave the way for the return ofa totalitarian state and a command economy. Yet this did not happen. Why?

One answer lies in how the triple transformation was received by thenational and regional elites and their acceptance of a kind of ‘second-bestdemocracy’. As Linz and Stepan (1996) argue, democracy in post-com-munist Russia survived despite poor economic performance because thepolitical alternative was not attractive to the elites. Referring to WinstonChurchill’s thesis that imperfect democracy may continue indefinitely as longas it is a lesser evil than an authoritarian regime, Rose et al. (1998) argue thatpost-communist limited democracies are quite stable. Only elites can providebetter government and the choices offered to the people are restricted bylimitations among the elites. Thus, ‘the chief obstacles to democratisation inpost-Communist countries are on the supply side’ (p. 217). The purpose ofmy study has been to investigate some of these ‘supply side obstacles’.

Paradoxically, although ‘the triple transition’ created many problems italso limited the dramatic swings of the pendulum between anarchy andtotalitarianism that have characterised Russian history. Yeltsin’s firmcommitment to defending democratic institutions and strong regionsundermined his market project and shook the federation, but it also laid thefoundation for a pluralist structure with vested elite interests in democracyand decentralisation, even if many of them rejected Yeltsin’s liberaleconomic policies. Therefore, even if Putin had wanted to, he would not havebeen able to reintroduce authoritarian rule. As Leon Aron (2001) put it inhis biography of Boris Yeltsin, Yeltsin finally succeeded in bringing the‘cursed pendulum’ of Russian history to a standstill.

While Aron refers to constitutional rights as such, what is probably evenmore important is that the Constitution and economic reforms created eliteswho had a direct interest in defending these rights against the Kremlinleaders. Ironically, these elites undermined Yeltsin’s decentralised reformproject by playing ruthless self-interested games, in particular those inbusiness and the regions. Another irony is that after Putin came to power, asthe elite interviews and actual reforms reveal, the partnership between thePresident and the traditionalists seems to have kindled more support formarket reforms and privatisation among the very elite groups who underYeltsin ferociously rejected marketisation, e.g. in agriculture.


After the fall of communism, the disappointed expectations engenderedby the failure of reforms had crucial consequences for public opinion aboutthe emerging state. Comparing attitudes to democracy among the generalpopulation in a large number of countries, Inglehart (2000) reports thatrespondents in Russia score considerably lower than those in other countrieson support for democracy, and widespread dissatisfaction with the govern-ment correlates with negative democratic orientations. Although, suchpopular sentiments did not have substantial effects on the composition ofthe State Duma or Presidential elections during the 1990s, the elites were notunaffected by public opinion. Przeworski’s thesis (1991) that post-communistgovernments are likely to oscillate between technical blue-print economicreforms, which give rise to popular protest, and later compensate withparticipatory-style reforms to maintain consensus is less applicable to Russiathan to pure parliamentarian democracies. With a strong Presidency and apolitical culture dominated by the idea that politics should be the domain ofthe elites, ordinary people’s influence is at best indirect. In Russia the govern-ment’s shift from Yeltsin’s grand laissez faire plan to Putin’s more state-oriented approach was a reaction to the opinion of the elite rather than thatof the people.

The triple transition has resulted in an unprecedented type of statedefined by certain elite configurations and orientations and cannot easily becategorised in terms of mainstream concepts like ‘corporatist state’, ‘welfarestate’ or ‘liberalist state’. The foundation of the new Russian state is thepost-communist elite, whose power base derives from the dramatic reductionin state capacity that has ensued from the disappearance of the centralisedSoviet state and from their institutionalised bargaining position vis-à-vis theKremlin leaders guaranteed by the Constitution. Although Russia is oftendescribed as a ‘hybrid’ of democratic and undemocratic characteristics, amixture of state and market solutions and a federation with both centralisingand decentralising features, this does not bring us much nearer to a morespecific description of political trajectories. The ‘hybrid’ approach impliesthat the future is open and underplays the stabilising factor of widely-sharedelite orientations.

Post-communist Russia under Yeltsin and Putin can more aptly bedescribed as a quite constant, albeit differentiated elite culture in whichtraditionalists and reformers strive to achieve a balance. Moving away fromWestern normative definitions of ‘democracy’ and a ‘market economy’ andtaking a more ‘anthropological approach’ to studying the Russian statenecessarily leads us to focus on Russian conceptions of the state. After adecade of disappointment with political and economic developments, the timehas come to stop viewing Russia through the prism of Western models andrecognise the importance of country-specific elites and their political culture.

Some observers have moved in this direction. Solnick (1999), for example,describes Russia not as a democracy but as a system dominated by thesharing of power among rather stable elites. Referring to the data in theprevious chapters, I would not go so far as to exclude the term ‘democracy’


but would argue instead that Russia is a special type of democracy in whichelites have an imperative role to play. What determines a ‘democracy’encompasses a variety of structural, cultural and external factors but, asGitelman (2001) argues, in periods of change – and Russia is still a society inthe process transformation – the most important factor is elite choices.

The elite and state stability

As discussed in Chapter 1, Nettl (1968) maintains that states are not aconstant but will vary, first, according to ‘constitutional structures’ in whichformal and normative mechanisms are used to deal with policy problems,and second, along with the impact of informal ‘elite cultures’ on thesestructures. In the former USSR informal elite relations were conductedunder the auspices of the Communist Party, which had an integrativefunction for the Soviet state, just as the Boyars did under the Tsarist regime.In this study I have argued that post-communist elite culture will shape thepolicies of the Russian state. Formal political structures become lessimportant than horizontal and vertical value-congruence among elites. Asasserted by Nettl, elite interaction in such societies takes precedence overinstitutional structures and ‘the area of normlessness’ is filled by contendingnorms. The object of my study has been to describe how the demise of thecommunist state created a structural vacuum, that was filled by new elitenorms that claimed to be legitimate for society as a whole. However, evenbetter than the ‘vacuum’ metaphor, is the idea of amorphous institutionswhere clientelism and elite networks have precedence over ‘rational bureau-cracy’. These elite norms shape the very political basis of the new Russianstate, in the form of integration between the national and regional elites andthe Kremlin leaders. One crucial implication of this ‘soft state–strong elites’approach is that studying elite orientations may indicate in which directionthe Russian state is developing.

Various culturally-oriented political scientists claim that there is a correl-ation between political culture and type of state. As mentioned in theintroductory chapter, Almond and Verba’s (1965) argument that politicalinstability stems from incongruence between political culture and statestructure applies strongly to the Russian situation, which was what happenedwhen liberalism and de-regulation dominated during the Yeltsin period.Generally, the classification of cultures proposed by Douglas and Wildawsky(1982) catches some useful insights about how political cultures relate tostate structure and political stability. In the beginning of the 1990s politicaland economic liberalisation soon brought about an imbalance between‘individualism’, ‘egalitarianism’, and ‘hierarchy’ with serious consequencesfor social integration in general and elite integration in particular. Theambitious marketisation and decentralisation programme underminedegalitarian institutions and fragmented the federation. While some elitesbenefited from this situation, the majority were extremely worried by it andexpressed a desire for egalitarian policies, stronger leadership and hierarchical


rule. However, the fatalism and loyalty to the state, deeply rooted in Russianthinking, prevented these wishes from coming to the fore until an impassehad been reached. This eventually happened because Yeltsin’s supportdiminished and during the end of his era was limited to the regional elitesand the financial oligarchs which was not a broad enough political basis. Theclashes with other elites over distributional and federal issues could notcontinue indefinitely, and re-hierarchicisation fulfilled the expectations of thenational and regional elites.

Putin’s assumption of the Presidency was followed by a change in thebalance between the cultures, and the new equilibrium became more con-gruent with Russian traditions of a stronger state, hierarchical rule andredistribution. I argue, these preferences were not mainly transferred fromthe past, they developed first of all from experience with poorly workingliberal institutions in the post-communist era. As the data show, liberalvalues, like individual competition, are still widespread among the elites, butwhen it comes to the more concrete issue of private ownership they supportit only in the form of small business. In the view of the elites, large industriesand collective tasks are so crucial for egalitarian concerns that they shouldnot be subjected to market forces. Putin’s policies may be seen as a responseto the elites’ desire for a better balance between individualism, egalitarianismand hierarchy.

Conclusion

A decade after the triple transformation was launched analysts are stillasking what type of democracy, economy and federation is emerging inRussia. My point is that these reforms must be analysed in tandem, wherebythe orientations of the elites are a filter through which the reforms impingeupon each other and are reshaped. In this array of policy initiatives and elitegames, some basic patterns seem to stand out over time. Thus, one main keyfor understanding the new Russian state and the potential for stable develop-ment is that, as this study shows, elite orientations are either monolithic orthey are incompatible while largely co-existing.

When Putin launched his programme before the presidential election ofMarch 2000 and proclaimed that ‘the stronger the state, the freer theindividual’ and that the essence of more state regulation ‘is not to stifle themarket and extend bureaucratic control into new branches – but quite theopposite’,4 he was not being inconsistent. Rather, he had the clear politicalintention of bridging the values of the elites with necessary reforms. Theapparently contradictory policies espoused by the Putin regime of building astronger state and also supporting democratic principles and a marketeconomy are basically a strategy for establishing a consensus between con-comitant reluctant and modernising political cultures. As Yanov (1987),McDaniel (1996) and others argue, reforms are not possible unless thecentral leadership has a strategy for accommodating policies with nationaland regional elite cultures.


The patterns of attitudes presented in this book indicate that the politicalculture of the Russian elites is not a threat to democratic stability but isconducive to a specific type of democracy different from the Western model.In Western democracies a civic culture has evolved over generations and hasinternalised basic political norms rooted in mutual elite trust, where masspreferences impinge much more directly on the elites’ attitudes. One mainconclusion is that while Russia is not embracing a Western model, neither isit returning to its authoritarian or totalitarian past. Rather it finds itself inthe midst of a long process of institutionalising a unique model of its own, aprocess that entails searching for a viable compromise that may bridge thetension between revived collective sentiments stemming from harsh experi-ences with the turbulent Yeltsin period and new pluralist structures andeconomic modernisation.

If elite attitudes matter for policy formulation and implementation, theorientations investigated in this study provide some indications of thedirection future developments might take. Russia is neither on the road tofragmentation nor to totalitarianism but has embarked on a lengthy processof strengthening the state by establishing a more capable central leadership,more state intervention in the economy and less far-reaching decentralis-ation, while at the same time continuing with market reforms. Exactly whattype of state will emerge from the national and regional elites’ strategicposition in the bargaining process is more difficult to say. However, politicaland territorial stability and the economic agenda are currently safeguardedby widespread congruence between the Kremlin leaders’ policies and theorientations of the national and regional elites. Given the lack of a pluralisttradition, the main challenge for Russian democratic development is tocombine the widely shared procedural and policy orientations, that have anobvious potential for uniformity, into accountibility in governance, viablepolitical competition and the establishment of a critical opposition. Whilethe political base for the Russian state is solid, the same cannot be said aboutvalues nourishing a civic society.

The unprecedented triple transformations in politics, economy and federalstructure made the Russian transformation primarily a ‘political project’, butone, as Offe (1991) argues, that lacked fixed parameters. As a result of thereform, leaders were forced to cling to the ‘new’ doctrines of the neo-classical market economy and nationalist rhetoric for political mobilisation.After the fall of communism, according to Offe ‘everything became possible’because of the primacy of politics, weak formal institutions, covert elitenetworks and clientelism. I argue that if one takes post-communist eliteculture into consideration ‘everything is not possible’ in Russia. Politicalprocesses and policy outcomes have been substantially moulded by the elites’outlook. The main insight ensuing from this study is that combining reformwith stability in Russia depends on a certain mix of collective and indi-vidualistic cultures among the national and regional elites that correspondswith the Kremlin rulers’ policy ambitions.


Appendix

Additional tables


Table A3.1 The elite’s image of the masses’ trust in leaders of institutions* (%)

Image of mass trust of leaders in

State Fed. Fed. Reg. State Armed Church Priv. Pol.Duma Council min. gov. enter- forces business party

prises

Total 1998 37 49 21 52 40 56 77 11 172000 38 51 41 54 72 68 81 14 16

State 1998 49 45 17 46 46 62 74 6 29Duma 2000 63 59 49 56 73 80 81 17 24

Fed. 1998 47 61 34 67 47 97 97 10 17Council 2000 41 89 78 93 97 93 86 15 22

Fed. 1998 31 46 32 42 39 51 75 8 19admin. 2000 44 52 51 58 63 64 71 18 15

State 1998 19 43 21 49 26 64 77 12 4enterpr. 2000 23 43 32 50 72 73 72 15 13

Priv. 1998 28 48 25 56 31 60 76 38 21business 2000 34 52 50 71 69 78 81 17 14

Culture 1998 33 48 19 48 37 45 84 19 162000 31 49 50 55 79 69 93 17 17

Reg. 1998 37 50 19 55 41 53 77 10 15govt. 2000 29 43 26 43 72 57 83 9 12

* The respondents were asked what their personal impression was of the extent to whichordinary people trusted the leaders of the institution in question. The categories ‘total trust’and ‘some trust’ are merged. The table also includes attitudes towards party-, military- andChurch leaders, even though these elite groups were not among the respondents.Furthermore, the cultural elite does not match directly with a corresponding institution. Forall the other groups of respondents there are corresponding institutions.

Appendix – additional tables 183

Table A3.2 Mass public and the elite with no or little confidence in institutions (%)

Mass Mass Elite Elite19941 19972 19983 20004

Political parties 82 81 79 75

Private business 76 77 71 61

Cabinet 74 74 58 35

President 70 – 67 25

State Duma 70 77 43 44

Civil servants 71 51 64 68

Police 71 69 64 69

Judiciary 65 61 56 68

Mass media* 60 60 74 75

Armed forces 39 31 37 25

Church 33 34 43 34

N = 3.535 2.040 980 605

White et al. (1) made use of a seven-point scale while the World Value Survey (2) employedfour categories, as in my study. Therefore comparisons should be made with some care. InTable 4 the scale is simplified and only the value ‘no confidence’ is included.

1 Adapted from White et al. (1997) who used data from New Russian Barometer 1994. Theattitudes are measured on a scale from 1 to 7, where 1 is no trust at all and 7 is full trust. Inthe table the scale was simplified to 1, 2, 3�no confidence; 7, 6, 5, 4�confidence.

2 Data from the World Value Survey (1995–7), provided by the Norwegian Social Science DataService. The scale is from 1 to 4 and the question-formulation corresponds with the scale andquestion used for measuring the elites’ confidence (see Table 1).

3 The Russian Elite Study 1998.4 The Russian Elite Study 2000.

* In (2), (3) and (4) the question was specified to ‘TV and radio’. It was also asked aboutconfidence in ‘newspapers’ which had almost the exact same percentages of replies.

184 Appendix – additional tables

Table A5.1 Selected economic and social indicators for the Russian Federation,1990–19981

1990 1991 1992 1993 1994 1995 1996 1997 1998

Economy

GDPPer capita* 100 95 81 74 65 62 60 61 58Real income per capita* 100 116 61 71 80 68 68 70 57GDP2 �3 �5 �15 �9 �13 �4 �4 �1 �5Ind. output2 – �8 �18 �14 �21 �3 �4 �2 �5Agr. output2 �4 �5 �9 �4 �12 �8 �5 �1 �12Inflation3 – – 2509 840 215 131 22 11 84Real wages4 – – – 40 0 – 8 �28 �13 �5 �10Social sector:Pensions4 – – – 28 �3 �19 9 �5 �5Life-expectancy (years)5 64 64 62 59 58 58 60 61 –

Employment*

Industry 100 98 94 91 81 75 72 65 –Agriculture 100 100 104 104 106 100 95 89 – Oil 100 111 125 133 139 156 180 193 – R and D 100 99 82 80 65 60 54 51 –Banking/finance 100 109 123 146 185 204 199 194 –State apparatus 100 96 85 94 96 118 166 161 –

1 Here some figures were collected directly from IMF publications and some are fromsecondary sources based on Goskomstat. Some of these economic indicators and socialsector data are the result of a joint project between Goskomstat (the Russian StatisticalCentral Bureau State Committee for Statistics), the World Bank and the IMF (TheInternational Monetary Fond), which used alternative data and introduced estimates ofunreported and under-reported activity (Becker and Hemley 1996:4). One special problem isthe size of the shadow economy. Goskomstat reported that by the end of 1996 such activitiesaccounted for about 30% of the total economy, while the Russian Ministry of the Interiorhas suggested that the percentage amounted to 35% in 1996 (p.6). Others suggest that theshadow economy may account for as much as 60% of GDP (Hagen 1999).

2 Annual percentage change. Source: Goskomstat and IMF Staff Country Report No. 99/100,September 1999, table 1.

3 Inflation on consumer products: percentage changes from December to December. Source:ibid. table 15.

4 Annual percentage change. Nominal numbers deflated by the consumer price index. Source:ibid. table 17.

5 Source: ibid. p.36

* 1990�100. Source: Tikhomirov (2000).


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Table A6.1 Elite attitudes to controlling tax incomes (%)

Total Mainly Mainly Total Meancentral central regional regional control control control control1 2 3 4

Total 1998 5 29 42 24 2.82000 10 42 34 14 2.5

State Duma 1998 18 46 27 8 2.32000 9 49 36 5 2.4

Fed. Council 1998 3 40 43 13 2.72000 3 30 57 10 2.7

Fed. admin. 1998 9 57 29 5 2.32000 18 52 26 4 2.2

State enterpr. 1998 2 38 42 18 2.82000 16 50 28 6 2.2

Priv. business 1998 8 51 27 14 2.52000 12 57 18 12 2.3

Culture 1998 4 41 37 18 2.72000 8 45 33 14 2.5

Reg. govt. 1998 2 18 49 31 3.12000 6 31 38 25 2.8

Response rate 1998: 98%, N=954; 2000: 97%, N=584.

Question: ‘How to distribute tax revenues between central and regional levels has been muchdiscussed. What, in your opinion, is the best way to divide tax revenues between central andregional levels? Choose one of the following four options that comes closest to your opinion’.

1 ‘All tax revenues should be controlled by the federal government, and the federal governmentshould decide how to distribute them between the centre and the regions, and among theregions.’

2 ‘A major portion of the tax revenues should be controlled by the federal government and therest should be distributed directly by the regional governments.’

3 ‘A small portion of the tax revenues should go to the federal government, and the regionsshould themselves be responsible for allocating the major portion of revenues.’

4 ‘All tax revenues, with the exception of certain basic expenditures on national infrastructureand defence, should be controlled by the regional authorities.’


Table A6.2 Elite support for special agreements and federal law (%)

Fully Fully Meansupport supportspecial federalagreements law

1 2 3 4 5

Total 1998 8 13 22 17 41 3.72000 4 6 11 18 61 4.3

State Duma 1998 3 7 15 12 63 4.22000 2 6 8 21 63 4.4

Fed. Council 1998 3 10 37 17 33 3.72000 3 23 3 13 57 4.0

Fed. admin. 1998 2 5 25 22 45 4.02000 3 4 18 14 61 4.3

State enterpr. 1998 4 12 14 14 55 4.02000 2 4 10 18 65 4.4

Priv. business 1998 4 12 16 16 52 4.02000 2 0 8 22 67 4.5

Culture 1998 2 13 33 19 33 3.72000 0 17 8 23 52 4.1

Reg. govt. 1998 12 15 22 17 35 3.52000 7 4 12 17 60 4.2

Response rate 1998: 99%, N�980; 2000: 98%, N�605.

Question: ‘Many special bilateral agreements on taxation and subsidies have been negotiatedbetween the federal government and regional authorities. Some people have argued this is theright and most appropriate approach, which takes into account the diversity of problemsamong the Russian regions. Others feel this creates advantages for some regions, resulting inunacceptable inequality among the regions, and that therefore federal law should takeprecedence over such agreements between the regions and the centre. What is your view? Pleaseindicate your opinion on the scale from 1 to 5, where 1 means you fully support the idea thatspecial agreements are beneficial to the regions and 5 means you believe that federal law shouldtake priority.’


Table A9.1 Length of membership in the CPSU (%)

1–5 6–10 11–15 16–20 21–25 26–30 31+ Meanyears years years years years years years years

Total 1998 11 20 21 21 14 9 3 162000 12 23 22 22 11 7 3 15

State 1998 8 13 15 28 15 15 6 18Duma 2000 12 19 22 23 15 7 1 15

Fed. 1998 0 4 32 29 21 11 4 19Council 2000 7 10 31 28 21 3 0 16

Federal 1998 9 24 20 17 16 7 7 16ministries 2000 8 25 32 13 14 6 3 15

State 1998 6 22 19 28 14 8 3 16enterprises 2000 14 19 22 19 11 11 3 15

Private 1998 9 9 30 26 13 9 4 16business 2000 16 11 16 21 5 26 5 18

Culture 1998 7 30 17 13 23 7 3 162000 10 17 10 40 3 13 7 18

Reg. 1998 14 22 22 20 13 8 2 15govt. 2000 13 31 18 22 9 5 3 14

Response rate 1998: N�707 (100%); 2000: N�411 (100%)

Table A9.2 Former status in the CPSU (%)

Ordinary Mid-level Top-level member leader leader

Total 1998 48 31 212000 51 32 17

State Duma 1998 42 32 272000 30 37 33

Fed. 1998 29 21 50Council 2000 34 28 38

Fed. 1998 61 37 1ministries 2000 68 29 3

State 1998 56 33 11enterprises 2000 50 47 3

Private 1998 57 43 0business 2000 37 53 11

Culture 1998 57 30 132000 43 43 13

Reg. 1998 47 30 24govt. 2000 59 24 17

1998: N�707 (100%); 2000: N�411 (100%).


Table A9.3 Elected as a deputy of a Soviet legislative body (%)

Yes No

Total 1998 36 642000 34 66

State Duma 1998 66 342000 52 48

Fed. 1998 83 17Council 2000 83 17

Fed. 1998 10 90ministries 2000 8 92

State 1998 20 80enterprises 2000 14 86

Private 1998 10 90business 2000 12 88

Culture 1998 18 822000 10 90

Reg. 1998 38 62govt. 2000 45 55

Response rate 1998: 100% N�980; 2000: 100% N�605

Notes


1 This study of Russian elites, like my previous research on Baltic elites (Steen1997), has benefited from Putnam’s (1973) approach to interviewing British andItalian political elites.

2 Even in the Soviet period the concept of an all-encompassing state did not alwaysfit in with realities. In economic policy the central planners often had to enterinto compromises with influential industrial sectors, a system Nove (1987) calls‘centralised pluralism’. See also Lane (1992: 3), who argues ‘the traditional systemwas characterised by an evolving autonomy of elites which was not subject toautocratic Party control’.

3 For an overview of Russian approaches to elite studies in Russia, see Gel’man andTarusina (2003).


1 All federal units in the following were included in the 1998 survey, while onlythose marked with an asterisk were compiled by the 2000 survey.


1 Dahl 1963: 19.2 Popper 1999: 130.3 This chapter is a revised and extended version of papers published in Europe–

Asia Studies, vol. 53, no. 5, 2001 and in Steen, A. and Gel’man, V. (eds) (2003). Iam grateful for comments to the earlier versions from Vladimir Gel’man and OlaListhaug.

4 Political support among the public has been the focus of several populationsurveys. In Western countries the tendency over time has been an erosion ofpublic support (Pharr and Putnam 2000). Listhaug and Wiberg (1995) paint aless pessimistic picture, claiming that there was no general decline in publicsupport for governing institutions during the 1980s.

5 Later, just after the second round of elite interviews in summer 2000, Putin putan end to the governors’ automatic right to a seat in the Federation Council.


6 Those respondents included in the group of ‘regional leaders’ were deputygovernors, deputy chairmen of regional parliaments and other political andadministrative leaders in the regions. Governors and regional Duma chairmenwere included among the respondents selected from the Federation Council. Theselection of respondents is examined in more detail in chapter 2.

7 Distrust between elites is not only a Russian phenomenon. The elites in the threeBaltic states also have a low level of trust in each other (Steen 1997).

8 In 1997 in the Baltic states the proportions for elite/mass confidence was asfollows (unpublished data from the Baltic Elite Project, conducted by Steen, A.).Estonia: parliament 74%/23% ; cabinet 75%/30%; political parties 41%/13%; priv.bus. 75%/49%. Latvia: parliament 54%/24%; cabinet 69%/32%; political parties27%/15%; priv. bus. 60%/47%. Lithuania: parliament 61%/29%; cabinet 64%/32%;political parties 34%/17%; private business 68%/36%.

9 It should be noted that the most sceptical members of the elite are the StateDuma representatives, who constitute a fairly large proportion of the total elitesurveyed (see Table 3.2). Among the other elite groups attitudes are less negative.

10 The fairly large sample of Duma representatives influenced the result (with only16 per cent of the deputies expressing distrust). But even among other elitegroups, e.g. the Federation Council (31 per cent) and the regional elite (40 percent), levels of distrust were much less than among the mass public.

11 Source: The Elite Study in Russia 1998 and 2000.12 I argue that ‘democracy’ may be understood as a continuum where authoritarian

elements may be an ingredient part of certain types of democracy. Chapter 4deals with various conceptions of democracy and the Russian elite’s attitudes tothis manifold phenomenon.


1 Lukin 2000: 211.2 For a discussion of post-communist authoritarian and democratic attitudes

among Baltic leaders, see Steen (1997), Chapter 5: ‘Elite personality and thedemocratic mind’.

3 All references to the Russian Constitution is from the English translation pre-sented in Sakwa (1996).

4 According to the Constitution’s article 107 the President may reject a federal lawadopted by the national assembly, the State Duma and the Federation Council.But if the law, after repeated examination is approved by a two-third majority inthe two chambers the President has to sign it. Thus, the full meaning of theparagraph is that the President has the right of suspending but not overrulinglaws passed by the national assembly. The formulation of the question shouldtherefore be clear enough.

5 For an account of historical and cultural reasons why the Russian market reformturned out to benefit only a few, see Hedlund (1999). While Stefan Hedlund in hismany writings, sees few hopes for the Russian economy, his fellow-countryman,Anders Aaslund, as early as 1994, wrote about ‘Russia’s success story’.

6 Aaslund was himself closely associated with the ‘Chubais clan’ and an activeparticipant in the team advising the Russian government during the early Yeltsinperiod (Wedel 1999).

Notes 191

7 Looking at the empirical lessons yielded by the experience of Third Worlddemocracies and authoritarian regimes in the 1980s, Bartlett maintains thatregime type offers only tenuous causal links to economic changes (Bartlett 1997).

8 Positive answers were defined as those scoring 5, 6 and 7 on a scale from 1 to 7,where 1 was ‘no trust’ and 7 was ‘great trust’.

9 In another article from 1995, based on the same data as 1992, Miller et al. con-clude that there is ‘overwhelming support for democratic capitalism among theRussian elite’ (Miller et al. 1995: 32).


1 Boris Yeltsin in Presidential State of the Union speech. Quoted and translatedfrom the Norwegian daily Aftenposten 31 March 1999.

2 The figures are from Lavigne (1995), who also discusses technical aspects ofcalculating Soviet performance figures.

3 The statistics should be used with some care. As Birman (1996) remarks, statisticalinformation in Russia may still suffer from the old Soviet habit of distortingreality by under,- or over-reporting economic activities and results.

4 The gas company, ‘Gazprom,’ is an example of an attractive export companyoperating under the ‘the new Russian corporatism’. It is characterised by itssocial and economic importance and the unclear dividing line between the stateand private sectors (Kryukov and Moe 1996).

5 See also the economist approach of Gaddy and Ickes (2002) who argue that theRussian experiment ended up as a ‘mutant system’ of old industrial enterprisesand informal institutions which they call the ‘virtual economy’, and Reddaway andGlinski (2001) historical approach, where they use the term ‘market bolshevism’about the economic reforms.

6 During the Soviet period the housing sector was extremely regulated and animportant part of central state planning. In connection with a local governmentreform the privatisation of housing started as early as 1991 and by 1995 morethan 53% of the housing stock had been taken over by private owners. Theprocess then slowed down (Kosareva et al. 1996).

7 For ownership of restaurants the pattern is very similar to that for shops. Figuresare not shown here.

8 ‘VTsIOM, Monitoring obshcestvennogo mneniya, 1996’, reported in Shleifer andTreisman (2000: 22); VTsIOM is one of the major polling companies in Russia.

9 The elite survey also included a question about which regions have the best andworst economic and social conditions and the best and worst leadership. It isinteresting that the elites overwhelmingly singled out Primorye Krai as the worstregion with the worst leadership, although the leaders of the region are relativelyreform-oriented.

10 Boris Yeltsin in Presidential State of the Union speech. Quoted and translatedfrom the Norwegian daily Aftenposten 31 March 1999.

11 Financial Times, 27 May 2000.12 Deputy Development and Trade Minister Andrei Sharonov in Kommorsant

Daily, 10 October 2002. Referred to in RFE/RL (Radio Free Europe/RadioLibrary), 10 October 2002.

13 Kommorsant Daily, 10 October 2002. Referred to in RFE/RL (Radio FreeEurope/Radio Library), 10 October 2002.

192 Notes


1 Television interview with President Vladimir Putin, 7 October 2002. Reported inRFE/RL (Radio Free Europe Radio Library) Newsline, 8 October 2002.

2 Smith 1995: 117.3 Some parts of this chapter build on Steen and Timofeev (2003).4 Of the 89 federal subjects, 32 are defined as ethnic units with some autonomy (21

republics, 1 autonomous oblast, 10 autonomous krais) and 57 are defined byterritory (6 okrugs, 49 oblasts, and the two cities Moscow and St Petersburg(Article 5 of The Constitution of the Russian Federation).

5 Articles 71 and 72 of The Constitution of the Russian Federation.6 A large volume of literature is devoted to identifying differences in regional

autonomy and explaining how and why these came about. Ethnic mobilisationand the elite’s use of ethnicity for its own purposes are the two main paradigms.Often these are case studies of single regions or comparisons of a small numberof regions. One example of a large-scale study of nearly all 89 federal subjects ismade by Kathleen M. Dowley (1998).

7 In May 2000 President Putin introduced a new administrative level between thecentral authorities and the federal subjects, consisting of seven federal districts(okrugs). A set of leaders controlling federal agencies in the regions were appointedby the President, thereby limiting some of the powers of the regional leaders.Putin also abolished the governors’ automatic right to a seat on the FederationCouncil and interfered directly in gubernatorial election campaigns by support-ing candidates loyal to Kreml.

8 See, for example, Steven Solnick (1998), who regards ethnicity as a ‘marker’uniting a block of republics capable of establishing favourable collective deals withthe centre; and Stephen E. Hanson (1999), who argues that ethnic distinctivenessand economic incentives for secession are a rare combination. Ethnic regionstend to have many economic reasons for staying inside the federation.

9 Dowley (1998) distinguishes four possible motivating factors for the regionalelite: ‘essentialism’, ‘instrumentalism’, ‘relative deprivation’ and ‘resource mobilis-ation’ and puts all 89 regions on an autonomy continuum based on the actualbehaviour of the regional elite. She concludes that although these factors areimportant they are not a good predictor of ‘federalists’ and ‘anti-federalists’ andopts for a ‘combined model’ that gives substantial insights into the elite’sbehaviour.

10 1 and 2 are merged on the five-point scale.11 Each ‘federal district’ consists of 10 to 15 federal subjects.12 This section is based mainly on Le Hoerou and Rutkowski (1996).13 See Chapter 5 on the widespread collective mentality of the Russian elite.14 Alastair McAuley (1997) shows with a large data-set from 1995 that ‘the Russian

government is now substantially motivated by equity considerations in its policiesof regional redistribution’. Europe–Asia Studies, vol. 49, no. 3, pp. 431–44.

15 Shleifer and Treisman (2000) maintain that the confusing tax system is one reasonwhy the federal government is so unsuccessful in collecting taxes, with severeconsequences for financing basic services. The incentive problems created by a fluidtax system include overlapping tax bases between federal levels, collusive dealsbetween enterprise managers and regional authorities to conceal taxes from thefederal level, competition over tax sharing between administrative levels, divided

Notes 193

loyalties among the tax collectors to the federal, regional and local governmentsand negative relationships between increases in tax collection and increases intransfers. After August 2000 a new and simpler tax system was adopted.

16 The figures are not shown here.17 The agreements with Tatarstan and Bashkortostan recognised the autonomy of

these republics to decide on its own budgets, laws, the judiciary, foreign trade andestablishing diplomatic relations with other countries (Myklatun 2000). However,to what extent agreements were implemented is a more open question and manyhave later been renegotiated. While all other members of the federation paid 10per cent of the income taxes into the federal budget, as a result of the specialtreaty Tatarstan paid only 1 percent. Tatarstan and Bashkortostan kept all excisetaxes on alcohol, petroleum, petroleum products and gas, but the rest of thefederal subjects had to pay 50% to 100% of excise taxes to the central govern-ment (Mitrokhin 1996, referred to in Ross 2000).

18 Moscow city and some other regions (St. Petersburg, Samara Oblast and others)were given the right to form economic agreements with foreign countries andissue special stocks to be exchanged with foreign business and investors.


1 This chapter builds partly on the article: Steen, A. (2002): ‘The post-communisttransformation: elite orientations and the emerging Russian state’, published inPerspectives on European Politics and Society, vol. 3, no. 1, pp. 93–126.

2 Almond and Verba (1965: 33).3 Such a view of developments in Russia easily leads to normative debates based

on Western success criteria.4 The operationalisation of the independent variables are as follows: ‘The executive’:

The elite’s trust in the President and the President’s administration.‘Statecapacity’: The elite’s perceptions of the strength of central and regional govern-ment. ‘Legacy of the past’: Age of respondent; and having been elected to arepresentative body during the Soviet period (The Supreme Council of the USSR,The Supreme Council of the Russian Soviet Federative Socialist Republic, deputyof regional councils, deputy of local authorities). ‘Post-communist learning’:‘Democratic experience’ is operationalised as present membership in a politicalparty; ‘ideology’ is operationalised as self-placement on the left–right scale.


1 McAuley (1997: 17).2 Chehabi and Linz (1998) argue that the patrimonial Soviet system had some

similarities with ‘sultanism,’ especially in some of the regions where loyalty toone leader was founded on a system of rewards and sanctions.

3 Easter (2000) analyses how regional elite networks during the Soviet periodinfluenced state-building and paradoxically also the demise of the Union.

9 The network state

1 Lindblom (1968: 93).2 An earlier version of this chapter was presented at the 28 Annual European

194 Notes

Consortium for Politial Research (ECPR) Joint Session of Workshops 14–19April 2000, Copenhagen.

3 According to McAuley (1997), the elite had few other choices. The only thingregional elites could rely on were existing networks. This was particularly evidentin some republics, like Tatarstan and Sakha, where the only means of politicalconsolidation was ethnic-based clan politics.

4 ‘Soviet-era deputy’ is, however, not a clear-cut category. The 1989–90 electionswere to some extent competitive but without a multi-party system. Those electedduring these years thus followed other recruitments paths than the traditionalnomenklatura way of entering Soviet legislative bodies. I am obliged to VladimirGel’man for this note. However, as Linz and Stepan (1996: 379–81) noteparliamentary-like parties emerged only after the 1989–90 elections. Until thenthe discarding of article 6 of the Soviet Constitution in March 1990 was guaran-teeing the monopoly of the Communist Party of the Soviet Union.

5 More than 80% of the respondents in the State Duma and Federation Councilhave a background as director or leader in the state bureaucracy.

6 Average age of the State Duma respondents is 50 years, with only 6% under 34years. In the Federation Council the average is 53 years with none under 34 years.

7 The correlations are measured using Kendall’s tau-b. Causal directions werechecked using percentage tables showing the effect of independent variables oncontact. Tau-b as a measure is useful, since it combines the range of variable-values without excluding some units. ‘Contact frequency’ was operationalised tocontacts by meetings, telephone, letter during the last twelve months: ‘at leastonce a week’, ‘once a month’, ‘sometimes during the year’, ‘never’. CPSU-membership: no/yes. Position in the CPSU: member, lower-level leader, topleader. Deputy of some Soviet legislative body (Supreme Soviet of the USSR;Supreme Soviet of the RSFSR; a republic or oblast Soviet; a city, district or ruralSoviet): no/yes.

8 See Table A9.1.9 These figures are from separate calculations.

10 As illustrated in Chapter 8, the leaders of state enterprises are a special group.They emphasise widspread ‘clientelism’ and hold the opinion that considerablemafia influence exists in most areas.


1 One of the most oft-cited set of criteria for democracy is Robert Dahl’s (1971)catalogue of freedoms, rights and institutions. The list includes freedom oforganisation and speech, the right to vote and be elected for public office, theright to compete for votes and support, the establishment of institutionsguaranteeing alternative information, free and fair elections and governmentpolicies rooted in the people’s preferences.

2 Financial Times, 24 July 2000.3 Boris Nemtsov was one of the young reformers who started his career under

Yeltsin and was appointed governor in Nizhny Novgorod in 1991. Later, in 1997,he advanced into the inner circles of the Kremlin leadership, when he becamedeputy Prime Minister. Quoted from the Financial Times, 24 July 2000.

4 Financial Times, 27 February 2000.

Notes 195

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206 References

Index

Note: page numbers in italics denote tables.

References 207

Aaslund, Anders 58, 162–3, 165, 172agriculture 65, 69, 81Alexseev, M.A. 98Allum, F. 135–6Almond, G.A. 13, 37, 118, 120, 121, 179Altai Krai 83anti-corruption 138Arkhangelsk 21, 86army 31, 42Aron, L. 4, 177authoritarianism 170; democracy 49,

59–60; economic growth 47;legitimacy 45; market economy 58;Putin 6, 122, 168

autonomy 95, 96, 116, 176

Baltic states ix, 42, 97, 123banking sector 69–70bargaining process 112, 133, 134Barry, B. 27Bartlett, S. 59, 60Baylis, T.A. 3black market 136; see also grey zoneblat 144Bourdieu, Pierre 142, 153, 158Bradshaw, M.J. 84Braithwaite, J.D. 69Brezhnev regime 7–8, 128, 143Bruszt, L. 11, 70, 71, 149, 165Bryant, C.G.A. 170bureaucracy 19–20, 129, 131, 134, 139–40Burgess, M. 96, 116Burton, M.G. 10, 26

capital 142; see also political capitalcapitalism: competition 57; democracy 4;

nomenklatura 58–9, 142, 145, 165;predatory 92, 94; raw 31, 47, 93, 138,173; Russian-style 92, 93; state-oriented 48, 90–1, 93, 119, 152, 165,176

careerists 100, 140, 153, 156centre–periphery relations 108, 111–12,

115, 162Chechnya 31, 96Chernomyrdin, Viktor 22, 64China 45Chubais, Anatoly 59, 93Church 31–2, 40, 42, 173Churchill, Winston 177civic cultures 13, 40, 47–8, 120, 127, 138,

145civil society 47–8, 55–6, 181clan politics 63, 83, 145clientelism: Brezhnev 128; bureaucracy

129, 134, 139; decision-making 135,140; elites 7, 127, 128, 141; family ties150–2; patrimonialism 131; resources106; state enterprises 132; see alsopatron–client relationships

coalition building 122, 173–4Coleman, J. 156collectivism: agriculture 65; and

communitarianism 90–1, 92;individualism 67–8, 73–6, 185;ownership 65, 70–1, 77, 79

communism, fall of ix, 1, 18, 25, 68, 178Communist Party of the Soviet Union

(CPSU) 153–5, 159, 160, 188communitarianism 90–1, 92competition 57, 62, 71, 73, 76, 175confidence: see trustCongress of People’s Deputies 92Constitution 46, 54–6, 95, 97, 113, 176,

177contacts 145, 146–50, 161–2; see also

networksco-operatives 81corporatism 147crime 69, 135–9cultural elite 18, 76, 149, 169–70culture 122, 129, 179

208 Index

Dahl, R.A. 10, 18, 25, 50Dahrendorf, R. 63decentralisation: autonomy 96, 116;

decision-making 102; democracy 1,72, 176; elites 72, 99; federalism 97;property rights 60; recentralisation 3;regional elite 9, 14, 103;responsibilities 117; RussianFederation 3, 167; taxation 110;verticalisation of power 101–2

decision-making: clientelism 135, 140;decentralisation 102; elites 5, 130,132–3, 156–7; law 127; loyalty 128;political stability 165–6

democracy 4, 14–15, 176;authoritarianism 49, 59–60; capitalism4; decentralisation 1, 72, 176;economic growth 45, 49, 177;electorate 51; elites 10, 14–15, 25, 44,49–50, 122–4; Estonia 43; federation95, 175; freedom 25, 48; institutions26, 57, 123–4; legitimacy 28; marketeconomy 6, 56; political culture 13;property rights 57; stability 48; trust39

democracy, types 168; associative 117;consolidated 28; elite/participatory49, 50–1, 53–4, 61, 65, 119; hybrid178; multi-party 49, 53; pluralist 1;Russian style 64, 179, 180; top-down63; unconsolidated 13; Western 64

Diamond, L. 56, 58distributional coalitions 71–2, 105–6, 143,

162, 172distrust 38, 42, 46–7; see also trustDouglas, M. 13, 179

Easter, G.M. 130Easton, D. 27, 48Eckstein, Harry 13, 92economic growth: authoritarianism 47;

democracy 45, 49, 177; distrust 46–7;industry 80–1; post-communism 172;regions 83

economic policies 41, 88, 89–90, 106–7,159

economic recession 27–8, 88–9economic reform 4, 93, 163–4, 168–9,

176–7economic shock therapy 57; elites 161;

hardship 70, 85, 177; industry 86;Latvia 59; reform leadership 67;regional differences 104–5; resistanceto 72; Yeltsin 25, 43, 70, 86, 125,172–3

education 31, 64, 108–9, 153, 158

egalitarianism 13, 179–80Eisenstadt, S.N. 128, 134, 139, 144elections 51, 137elite studies 17, 19, 20, 22–4elites 2, 3, 17, 64, 153; autonomy 116;

careers 100, 140, 153, 156; clientelism7, 127, 128, 141; Constitution 54–6;contacts 145, 146–50; continuity 8,12, 18; decentralisation 72, 99;decision-making 5, 130, 132–3, 156–7;democracy 10, 14–15, 25, 44, 49–50,122–4; economic shock therapy 161;Federation Council 20–1, 38;fragmentation 5, 6–7, 13, 131, 173;horizontal/vertical relations 171;institutions 3, 8–9, 17, 20, 25, 30, 43;interviews 146; leaders 71; legalism127; loyalty 170; market-democrats61–3, 64–6; market economy 49, 56;networks 143; nomenklatura 12, 32;ownership 77–80; pluralists 10, 18,32, 53–4, 99, 124; political capital 142,152–8, 160; post-communism 26, 71,141, 170, 181; Putin x, 1, 14, 180;State Duma 2, 20–1, 38; trust 28–9,30, 37, 39–41, 44–5, 168, 173, 174;Yeltsin x, 1, 6, 172

elites, types: central 76, 101; consensual6, 10, 13, 19, 32, 174; core 17–18, 47;idiocratic 174; see also national elites;regional elites

Ellman, M. 69Elster, J. 4employment 21, 69energy sector 81, 93–4Estonia 20, 42, 43, 146, 153ethnic regions 22, 85, 111, 114ethnicity 97–9, 104, 112, 114ethnopolitics 98

family ties 142, 145–6, 150–2Federal Fund, Financial Support 105federal law 113, 114, 187federalism 96, 97, 100, 109, 115, 168–9federation 95, 96, 97–8; administration

19–20, 103; decentralised integrated119; democracy 95, 175;fragmentation 116–17; re-centralisation 125, 169

Federation Council: background ofmembers 154–6; contacts 148, 149;elite studies 19–20; elites 20–1, 38;individualism/collectivism 75; leaders40, 52–3; legal-rational model 131;legitimacy 36; mafia 136;participatory democracy 51; Putin 36;

Index 209

State Duma 36; taxation 111;transparency 130; trust 29, 33, 41

Federation Treaty 112financial oligarchs 9, 90500 days programme 4, 176flag 115Fleron, F.J., Jr 92fragmentation: elites 5, 6–7, 13, 131, 173;

federation 116–17; Russian Federation9, 82–3, 95

freedom 25, 48free-riding 72, 117, 172French economic system 82

Gabriel, O. W. 27Gaidar, Yegor 88, 91GDP 68–9Gel’man, V. 6–7, 66, 174German Democratic Republic 157Gitelman, Z. 179Gorbachev, Michael 4, 7, 109, 171Grabher, G. 39grey zone 71, 77, 90, 135, 145, 152Gustafson, T. 92, 108, 109

Hanson, P. 76, 83, 84–5, 89Hanson, S. 98, 99, 112, 115, 116Harasymiw, B. 154Harter, S. 164Hayek, F.A. 57, 88heavy industry 77, 168Hedlund, S. 11, 92, 119, 120, 163Heinz, J.P. 146Hellman, J.S. 93, 144hierarchy 13, 179–80Higley, J. 6, 10, 13, 26, 32, 37, 146, 171,

173Horowitz, D. 98housing 79, 168Hungary 59–60, 145Huntington, Samuel P. 11, 45

ideology 121, 126, 169income distribution 68–9, 73, 85individualism 13, 179–80; collectivism

67–8, 73–6, 185; leadership 62; marketeconomy 137–8; state regulation 76

industry 77, 80–1, 86, 168infrastructure 81–2, 105Inglehart, R. 45, 178institutionalists 63, 118–19, 169–70institutions 1–2, 45; culture 122;

democracy 26, 57, 123–4; economicchange 163–4; elites 3, 8–9, 17, 20, 25,30, 43; government/non-government29, 31, 32; leaders 19–20; legitimacy

27, 36; mass public 183; norms119–20, 179; opportunity structures56; pluralists 27; post-communism 45;trust 27–8, 29–32, 34, 46, 182

integrationism 99, 117Italy 120, 129, 135–6Izvestia 7

Kabardino-Balkaryia 22Kaliningrad 21King, Preston 96Kirienko, Sergei 22, 64Kirkow, P. 83, 110knowledge industry 69Kogan, N. 139Komi 22Komsomol 153, 155Krasnodar 22Kroh, F. 157Kryshtanovskaya, O. 145, 156Kullberg, J.S. 57, 61, 62, 121

La Palombara, J. 130Labikovskaya, E. 90Laitin, David 100, 104land ownership 65, 79Lane, David 6, 37, 64, 71, 82, 91, 152,

153, 156, 161, 165, 176Latin America 60Latvia 20, 42, 59, 146law 127, 133, 134; see also federal lawLe Houerou, P. 105–6leaders 49; charisma 28, 46, 51–2; elites

71; Federation Council 40, 52–3;individualism 62; institutions 19–20;legacy factor 122; loyalty 119–26;participation 51; political 19–20, 40;private business 19–20, 55; Russiandemocracy 66; trust 28, 37–8, 40,44–5, 125

Ledeneva, A. V. 127, 131–2, 144legacy factors 122; see also nomenklatura;

traditionalistslegal-rational model 129–30, 131–2, 134,

146–7legitimacy 25, 26, 27, 28, 36, 45, 173Lengyel, G. 6, 10, 13Leningrad Oblast 21liberalism 176light industry 77, 168Lindblom, C. 57, 141Linz, J.J. 2, 4, 176, 177Lipset, S.M. 56Listhaug, O. 29Lithuania 20, 42, 146living conditions 67, 68–9, 70, 177

210 Index

local government 101localism 168–9loyalty 112, 119–26, 128, 170; see also trustLukin, A. 45, 49Luzhkov, Aleksandr 84

McAuley, M. 84, 127, 129, 138, 145, 152McDaniel, T. 9, 163, 180Mafia 129, 134–9management 71–2, 89market-democrats 61–3, 64–6market economy 1, 176; authoritarianism

58; core elite 47; crime 137–8;democracy 6, 56; elites 49, 56;individualism 137–8; institutionalists63; mass support 60; patron–clientrelationship 132; policy-making 80–2;reforms 14, 91; Yeltsin 49, 87

Marx, Karl 11, 88mass public 40–1, 42–4, 51, 60, 183military leaders 20, 40Miller, A.H. 39, 61, 63Mills, C.W. 18mir 92Mishler, W. 28, 42, 45, 121Mokrzycki, E. 170Molenaers, N. 13Moscow City 84, 85–6, 113Moscow Oblast 21multi-party system 49, 53Murmansk 21

Nathan, R.P. 98national anthem 115national elites 12, 18; democracy 2–3;

federation 95; institutions 8; Putin6–7, 93, 169; trust in executive 122–4

natural resources 112Nemtsov, Boris 173neo-institutionalism 88, 91, 169–70Nettl, J.P. 1–2, 3, 179network economy 94, 165networks: clandestine 156–7; contacts

161–2; elites 143; family ties 142;informal 130, 145; path dependency165; personal 7, 129, 131, 141, 142;political capital 158–61, 170; politicalculture 144; privatisation 144;regional elite 145

Newsweek 7Nissinen, M. 59Nizhniy Novgorod 22, 86nomenklatura: capitalism 58–9, 142, 145,

165; elites 12, 32; political capital152–3; privatisation 161; re-emergence155–6; regions 76; Westernised 37

non-accountability 142, 145norms 2, 119–21, 164, 179North, D.C. 93, 119, 138, 163

October Revolution 8O’Donnell, G. 60Offe, C. 4, 27, 44, 45, 176, 181oil and gas industry 69–70Olson, M. 70, 71, 72, 76, 79–80, 143–4,

162, 171, 172opportunism 39opportunity structures 56, 135, 153ownership: city property 113; collective 65,

70–1, 77, 79; elites 77–80; forms 78;insider 72; land 65, 79; mixed 71, 80

Pakulski, J. 10participation 49, 50, 51, 53, 61particularism 59–60, 113–14path dependency 91–2, 163, 164, 165, 169patrimonialism 131, 171patron–client relationships 106, 128, 129,

132, 144–5pensions 68–9, 108–9personal gain 139–40pluralists: Constitution 46; economic

reform 176–7; elites 10, 18, 32, 53–4,99, 124; institutions 27; obstacles to116–17; post-communism 141

police 31policy-making 17, 80–2, 141political capital: economic sector 159;

elites 142, 152–8, 160; networks158–61, 170; nomenklatura 152–3

political culture 2, 13, 92, 121, 144, 170political elite 131, 156, 158political stability: see stability of statePopper, Karl 25, 48population surveys 123post-communism 5; crime 136; economic

growth 172; elites 26, 71, 141, 170,181; institutions 45; patrimonialism131; pluralists 141; population surveys123; reform 2–3; state–businessrelationship 60

post-communist learning 119, 121–2, 164,169–70

poverty 69power relations 10, 97, 100, 101, 102, 146predatory capitalism 92, 94Presidential administration 35, 55, 103Primakov, Yevgeny 22, 64Primorye 21, 86private business 87, 159; employees 21;

family ties 151–2; leaders 19–20, 55;mafia 136; networks 170; state

Index 211

enterprise directors 148–9; trust 31,35

private ownership 62, 65, 79, 124–6, 168privatisation 1, 67–8; legitimacy 173;

liberalism 176; mafia 136–7;management 89; networks 144;nomenklatura 161; property 58, 113;sectoral differences 77; stateenterprises 161; state responsibilities108; Yeltsin 93

property 56, 57, 58, 60, 113, 152Przeworski, A. 2–3, 57, 92, 178public services 108–9Putin, Vladimir 23, 52, 64–5, 68–9, 95;

anti-corruption 138; authoritarianism6, 122, 168; coalition-building 173–4;economic policies 41, 88; elites x, 1,14, 180; Federation Council 36;national anthem 115;national/regional elites 6–7, 32, 93,101, 169; recentralisation 7, 25, 26, 33,48, 63, 116, 124; reforms 3; regionalgovernment 99; Soviet system 158;State Duma 29, 176; state intervention107; taxation 111; trust in 39; UnityParty 65, 75; verticalisation of power101–2, 103, 148; Yeltsin 9

Putnam, R.D. 3, 37, 39, 50, 120, 129, 135

Rawlinson, P. 136recentralisation 3, 103, 125, 169; Putin 7,

25, 26, 33, 48, 63, 116, 124redistribution 106–7, 126, 176reform 1, 8–9; failure 163; leadership 67;

market economy 14, 91; post-communism 2–3; Putin 3; top-down9, 167; traditionalists 171–2; Yeltsin9, 25–6, 59, 139

reform regions 22, 85regional elites 12, 18, 21; competitiveness

76; contacts 149; decentralisation 9,14, 103; democracy 2–3; ethnicity114; ethnopolitics 98; federation 95;government 111; institutions 8;networks 145; Putin 6–7, 32, 93, 101,169; special agreements 113–14, 187;transparency 130; trust in executive122–4

regional government 35, 40, 76, 99regions: autonomy 95, 176; economic

growth 83; economic shock 104–5;economic transfers 106–7; ethnicity98, 104, 112; expenditure 110; incomedistribution 85; inequalities 104–5,106; infrastructure 105; mafia 138;mutual settlement 105–6; natural

resources 112; networks 130;nomenklatura 76; redistribution106–7; Russian Federation 104;segmented 99; taxation 106–7

religious leaders 20rent seeking 58, 71, 89–90, 140, 164, 172republics 112–13resource distribution 103–4, 106, 144responsibilities 108–9, 117retail sector 79, 168Rivera, S.W. 153Roeder, P. 100ROMIR 22–3Roniger, L. 128, 134, 144Rose, R. 28, 42, 45, 121, 177Ross, C. 37, 64, 117, 153, 156, 161rouble 68Russian émigré crime 135Russian Federation 2, 21–2, 31;

Constitution 54; decentralisation 3,167; economic and social indicators184; ethnic separatism 99;fragmentation 9, 82–3, 95; ideology115; regions 104; symbols 115;taxation 109–10

Russian Union of Industrialists andEntrepreneurs 77

Rutkowski, M. 105–6Rutland, P. 139

St Petersburg 21, 84, 85–6, 113Sakha/Yakutia 22, 86, 113Sakwa, R. 9, 99, 170Samara 22, 83Saratov 22, 86Scandinavian model welfare state 82, 90Schumpeter, J. 50, 53–4secession 97self-confidence 41self-interest 127, 143separation of powers principle 97separatism 99, 100Shevtsova, L. 89, 173Shleifer, A. 73, 93, 110, 120, 172Smith, A. 27Smith, G. 95, 116, 117sobornost 92social control 11, 163, 175–6social relations 44–8, 143, 160Solnick, S. 112, 114, 178–9Soviet bureaucracy 131, 158Soviet legislative service 189special agreements 113–14, 187stability of state 26, 48, 127, 165–6, 176,

179–80stagnant regions 22, 85, 86, 114–15

212 Index

Stalinism 64Stark, D. 11, 39, 60, 70, 71, 149, 152,

165state: administration 69–70, 128, 167;

capacity to rule 120, 122–3, 125–6,170; citizens 131–2; employment 138;infrastructure 81–2; intervention 91,107; regulation 76; trust 44–8; seealso bureaucracy

state–business relationship 60, 141,148–9, 150, 165, 173–4

State Duma 155–6; authoritarianism 52;contacts 148, 149; elite studies 19–20;elites 2, 20–1, 38; Federation Council36; individualism 75; legal-rationalmodel 131; participation 53; politicalleaders 40; Putin 29, 176; stateownership 77, 79; trust 41; trust in29, 33; Yeltsin 87, 176

state enterprises: clientelism 132; familyties 151–2; leaders 19–20, 21, 40–1,131–2, 148–9, 163; privatisation 161

state ownership 58, 70–1, 77, 79, 94, 168,175

statehood 112–13Stavropol 22Steen, A. 20, 29, 42, 123, 146Stepan, A. 2, 4, 177Stolypin, Petr 7subsidies 104, 107, 111–12Sundström, N. 120Sutherland, D. 83Sverdlovsk 22, 113

Tatarstan 22, 113taxation 106–7, 109–12, 186Third World studies 175Thompson, M. 13Tikhomirov, V. 69totalitarianism 121, 164trade unions 31–2traditionalists 171–2, 177transformation 1, 2, 4–6transparency 112, 127, 129–30, 139transport sector 81Treisman, D. 70, 73, 89, 93, 104, 110, 113,

120, 162, 163, 172tricolour flag 115trust 31, 35, 39; elites 28–9, 30, 37,

39–41, 44–5, 122–4, 168, 173, 174;Federation Council 29, 33, 41;

government 98; institutions 27–8,29–32, 34, 46, 182; inter-personal 37,47–8; leaders 28, 37–8, 40, 44–5, 125;national elite 122–4; networks 143;private business 31; private ownership124–6; regional elite 122–4; StateDuma 41; state enterprise directors40–1; state/society 44–8

Udmurtiya 22, 86Ukraine 39, 61Unity Party 65, 75universalism 59–60, 113–14

Valenzuela, A. 176Van Selm, B. 85Van Warden, F. 146, 161–2Verba, S. 13, 37, 118, 120, 121, 179verticalisation of power 101–2, 103, 148Vladimir Oblast 113Voronezh 22

wage levels 138Wallich, C.I. 110Watts, R.L. 97wealth distribution 126Weber, Max 28, 128, 134, 146–7Wedel, J.R. 59, 63welfare sector 82, 90White, S. 42, 60, 145, 156Wiberg, M. 29Wildavsky, A. 13, 179Williams, P. 135, 136, 138World Bank 108World Value Survey 42Wyman, M. 40, 42

Yakutia 22, 86, 113Yanov, A. 7, 8, 71, 171, 180Yavlinski, Grigorii 94Yeltsin, Boris 12, 67; economic reforms

169; economic shock therapy 25, 43,70, 86, 125, 172–3; elites x, 1, 6, 172;the family 151; 500 days programme4; liberalism 176; market economy 49,87; privatisation 93; Putin 9; reform9, 25–6, 59, 139; regional government99; social engineering 163; StateDuma 176; taxation 110–11

Zimmerman, W. 57, 61, 62, 121

political elites in the new russia (basees curzon series on russian & east european studies)

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