The case of RZhD is not the only example of bad governance in Russia’s public sector: quite the opposite, this example is a rather typical episode of exploitation of a state-owned company for the private benefit of its top management. Over the last decades, investigative journalists and anticorruption activists have uncovered many examples of abuses of public resources by top managers of state-owned companies, as well as by top Russian state officials.16 Yet despite the great public attention, in most instances official reaction to these revelations has been conspicuously absent, and Yakunin remains one of the few visible persons in Russia who lost his post because of a scandal related to bad governance.
In a broader perspective, the transformation of RZhD into “Russia’s greatest rent machine” exemplified the failure of one of the sectoral reforms that formed a large-scale program of socioeconomic changes in Russia under Putin.17 But why did the good intentions of policy reforms aimed at accelerating economic growth and improving the quality of governance pave a road to the hell of crony capitalism and bad governance in post-Soviet Russia? I argue that the causes of these mutations of post-Soviet modernization are related to the emergence and maintenance of intentionally built political and economic institutions of bad governance. These institutions should not be perceived merely as inherited from the Soviet (or pre-Soviet) past; rather, they were purposefully developed after the Soviet collapse to serve the interests of ruling groups in Russia and other post-Soviet states and consolidate their political and economic dominance.18 Thus, policy reforms brought partial results at best, and very often contributed to a vicious circle of socially inefficient changes that served privileged private interests. I also argue that this vicious circle cannot be broken by attempting to “borrow” socially efficient institutions or “cultivate” them step-by-step within the given political constraints. Further embedding of post-Soviet bad governance may increase the risk of its reinforcement and self-reproduction regardless of possible political regime changes. I believe that the incentives for rejection of bad governance in Russia and some other countries may (though not necessarily should) be strengthened by a combination of domestic pressure and external influence, with certain restrictions of those countries’ sovereignty and possible compulsion from major international actors.
The structure of this chapter is as follows. First, after an overview of discussions on the sources and mechanisms of post-Soviet bad governance, I present my own approach to analysis of its effects on post-Soviet policy-making, and its political foundations and constraints. I then explore mechanisms of governance within the framework of post-Soviet political institutions (the “power vertical”) and focus on policy reforms that have brought few returns and/or have resulted in unexpected and undesired consequences (the models of “borrowing” and “cultivating” institutions). In the conclusion, I discuss some implications and considerations regarding the possible role of international influence in breaking the vicious circle of post-Soviet bad governance.
The Sources of Post-Soviet Bad Governance: The Long Arm of the Past?
As stated in chapter 1, the following are the foundational principles of post-Soviet bad governance as a politico-economic order: (1) rent extraction is the main goal and substantive purpose of governing the state at all levels of authority; (2) the mechanism of governing the state gravitates toward a hierarchy (the “power vertical”) with only one major center of decision-making, which claims a monopoly on political power (the “single power pyramid”); (3) the autonomy of domestic political and economic actors vis-à-vis this center is conditional; it can be reduced and/or abolished at any given moment; (4) the formal institutions that define the framework of power and governance are arranged as by-products of the distribution of resources within the power verticaclass="underline" they matter as rules of the game only to the degree to which they contribute to rent-seeking (or at least do not prevent it); and (5) the power apparatus within the power vertical is divided into several organized groups and/or informal cliques that compete with one another for access to rents.
These principles are the essence of an informal institutional core, or de facto constitution, of the politico-economic order of bad governance. The ruling groups build the shell of formal institutions (such as official constitutions, laws, and regulations) around this “core.” However, this shell is not just a camouflage aiming to hide the ugly face of bad governance; it also serves as a functional mechanism for authoritarian power-sharing and rent-sharing that aims to maintain a balance of power among the insiders of the regime’s “winning coalition.”19 Although authoritarianism in both its “electoral”20 and “classical” (“hegemonic”)21 formats to some extent is a mechanism of maintenance of bad governance in the political arena, it may be vulnerable because of the risks of intraelite conflicts and regime subversion. These risks emerge when the political monopolies of ruling groups are undermined and autonomy of political and economic actors becomes limited in certain ways, so regime changes or threats thereof are not so rare. But if the regime can avert these risks, then bad governance may become invincible (if one puts aside risks stemming from exogenous shocks).
Many explanations of bad governance in post-Soviet Russia are focused on the negative role of the repressive and ineffective autocratic state machinery, which is deeply embedded in centuries of Russian history. It is no wonder that its most widespread explanations relate to the effects of various legacies of the past.22 While in the case of Third World countries (which are largely perceived as hotbeds of various forms of bad governance) the whole frame of reference revolves around colonial legacies,23 but in post-Soviet countries, scholars look for sources of bad governance in virtually all stages of Russian and Soviet history. They assign responsibility for its embeddedness to the inescapable legacy of pre-Petrine Russia with its lack of private property and arbitrary rule of autocratic leaders,24 or to the legacy of Communist regime, which in its late developmental stage demonstrated decay and “degeneration” into neo-traditionalism,25 or to an overlapping of socioeconomic backwardness with imposed Soviet dominance in certain Eastern European countries.26 Some scholars who use similar arguments in their analyses of post-Soviet politico-economic order refer to terms such as “patronal politics”27 or “sistema,”28 and also focus on their effects on politics and governance through the lenses of various legacies of the past. In any case, the “legacy” argument is structural in nature: explicitly or implicitly, bad governance is assumed to be like an inherited chronic disease of the sociopolitical organism that cannot be cured at least in the foreseeable future. By its very nature, this eternal and unavoidable “matrix,”29 or “track” (koleya),30 is put in place once and forever: it cannot be changed because of irreversible path dependency. The reasoning of this analysis, however, is vulnerable to criticism because of its lack of heuristic value and its frequent reliance on the principle of fitting theory and evidence into prearranged answers. The policy relevance of the approach looks even more dubious: if in any given country or region bad governance is the product of a “wrong” history that cannot be altered, one might say that this country is best eliminated (similarly to the fate of the Soviet Union) or conquered by other states that are more capable and efficient in terms of the quality of governance. Nevertheless, in the twentieth century some countries with even more problematic matrixes or tracks of history (ranging from Japan to Turkey) took the route of radical systemic changes necessary for altering their legacies and moving onto the right path; judging from this perspective, a similar path is not precluded for Russia, at least in theory.