of
Policy Reforms
HOW DOES POLITICS AFFECT policy and vice versa? Why are these two dimensions of political development so often at odds and how this does this relationship affect the quality of governance? Very often, power struggles, the essence of politics, inhibit efficient policies, and this is why numerous projects of policy reforms are implemented only partially and/or in a distorted way or result in unanticipated and undesired outcomes. There are many reasons for contradictions between politics and policy—including political business cycles that put policy changes between elections into question, ideational polarization of political actors whose policy priorities differ widely, and the inability to reach major policy agreements that may block any changes or even lead to policy decisions that make the situation worse than the previous status quo. Examples of the juxtaposition of politics and policy are numerous across countries and time periods. Thus, it is no wonder that many politicians, policymakers, and experts around the globe can endorse the bold statement of Russian economist and former minister of economic development Alexey Ulyukaev: “The main question of every evolution is constraining political power: how to provide competent decision-making which will depend upon knowledge and experience and not upon voting results, and how to achieve a ‘regime of non-interference’ of politics in other spheres of public life.”1
In fact, a “regime of non-interference,” if and when it has been achieved in those political and institutional contexts where policy decision-making does not depend upon voting results, has seldom brought positive effects from the perspective of quality of adoption and implementing policy decisions. To a large degree, this disjunction is acute for authoritarian regimes, where voting results do not directly affect possession of political power.2 Yet major advancements from policy reforms in authoritarian regimes are relatively rare.3 Moreover, authoritarian leaders sometimes have a vested interest in the inefficiency of their own policies, since it may be used as a mechanism for maximizing political power—the “bad policy as good politics” paradox.4 As I stated in the preceding chapters, these leaders and the members of their winning coalitions are beneficiaries of the politico-economic order of bad governance and have little interest in having it undermined from within. That said, many autocrats are proponents of efficient policies aimed at rapid and sustainable economic growth and socioeconomic development of their respective states. In democracies, politicians may also attempt to insulate policy from politics,5 but the results of reforms in various policy areas are not always in line with the expectations of supporters of the regime of non-interference.
The unavoidable and irreconcilable contradiction between politics and policy, widely discussed in the literature,6 has often stimulated searches for mechanisms to improve the quality of policy intended to limit its dependence on the directions being taken by politics. Following William Easterly, I will label these mechanisms “technocratic”—as opposed to political mechanisms, which imply that decision-making in both politics and policy arenas is conducted by the same legitimate actors. The goal of this chapter is to analyze the opportunities and constraints inherent to technocratic mechanisms of governance in terms of policy-making and the effects of policy reforms on the quality of governance in post-Soviet Russia. In the 1990s competitive and polarized politics were at odds with market reform policy and were widely perceived as a hindrance to economic transformation.7 Conversely, in the 2000s, some policy advancements in Russia were achieved at the expense of degradation of politics.8 The insulation of policy changes from politics has not always led to success,9 and certain policy outcomes paved the way for the rise of authoritarian tendencies10 but brought mixed results at best during the entire post-Soviet period—illustrating the inherent weaknesses of the political mechanisms for governing the state.
Explaining why following technocratic recipes has brought policy successes in some cases and not others requires an in-depth analysis of technocratic mechanisms for governing states, one that will reveal the opportunities and constraints inherent to technocratic policy reforms (described in chapter 4). The argument of this chapter is that, given the key role of rent-seeking in governing post-Soviet Russia, attempts at significant policy reform and improving the quality of governance using technocratic mechanisms meet major resistance from interest groups and parts of the bureaucracy (who often unite their efforts in informal coalitions). At the same time, the regime of non-interference has left little room for the emergence of broad and sustainable pro-reform coalitions. This is why the personal priorities of political leadership have become the main, if not the only, source of policy reforms. Yet they are often insufficient for successful achievement of the goals of policy changes and can even turn into an obstacle to these reforms. The experience of policy changes in the 1990s–2010s in Russia has demonstrated the range of vicissitudes faced by the technocratic model of policy reforms in unfavorable political and institutional environments.
The structure of the chapter is as follows. After theoretical considerations regarding mechanisms of interaction between politicians, bureaucrats, and technocratic policy reformers in nondemocracies, I present an overview of some policy reforms in Russia and their implementation during the 1990s–2010s within the framework of analysis of the regime of noninterference of politics in policy. Possibilities and opportunities for realist alternatives to the technocratic model of policy-making are discussed in the conclusion.
The Technocratic Trap: Dictators, Viziers, and Eunuchs
Technocratic policy reforms are deeply embedded in global history. Most policy changes in the past, both successful and unsuccessful, were conducted in various states and nations within the framework of a technocratic model of policy-making. Political leaders exerted a firm control over politics, and due to domestic and international challenges opted for policy reforms intended to reduce costs and increase benefits, both for their countries and for themselves. But since policy reforms require professional skills and expertise, while their results are unpredictable by definition, it is no wonder that the role of reformers has been delegated to those officials and/or professionals who have certain specialized competences and may be blamed for policy failures in case of undesirable outcomes. In fact, policy reformers in various areas are similar to company managers hired by the owners (in this case, political leaders) to accomplish strictly defined tasks. With that said, policy reformers enjoy a degree of autonomy in their respective areas and are accountable only to their bosses. Political leaders, in turn, benefit from a monopoly on decision-making and policy evaluation, and therefore, can insulate the substance of the reforms from public opinion and, to some extent, from interest groups. Many historical reformers fit this description, ranging from Colbert and Turgot in absolutist France to Witte and Stolypin in Tsarist Russia, and from the “Chicago Boys” in Chile under Pinochet to the Opus Dei technocrats during the last decades of Francoist Spain.
At first sight, this institutional design facilitates the autonomy of technocratic policy-making from politics in both democracies and nondemocracies (even though the nature of politics in these regimes is different). However, it leads to an aggravation of principal-agent problems, and their scope increases with the scale of policy changes. Political leaders are unable to judge the credibility of policy proposals and the quality of their implementation. At best, feedback on policy outcomes reaches the top of the power hierarchy too late (or, conversely, too early in the case of reforms that may bring fruits only in the long term). At worst, especially in authoritarian regimes, this feedback may be heavily distorted and contribute to poor political decisions.11 Asymmetric relationships between political leaders and technocratic reformers are similar to those between company stakeholders and managers: their interests and incentives differ hugely by definition. The alternative to the technocratic model of policy-making is the political model, which implies that legitimate political leaders and/or parties themselves develop and approve major policy decisions (though these decisions are often based on external expertise) and bear political responsibility for policy outcomes, thus being unable to shift the blame onto technocratic reformers.12