However, the mode of interaction between political leaders and technocratic reformers is more vulnerable in terms of principal-agent relations: policymakers concentrate the power resources involved in their own hands, and those resources can be used (or rather, abused) for political purposes. Unlike top managers of companies who cannot overthrow the stakeholders who hired them, top-level technocrats may not only betray political leaders and join the ranks of the opposition, but also even transform from policymakers to politicians and take power for themselves. These risks increase alongside challenges to the political status quo (regardless of policy outcomes), thus raising tensions between political leaders and technocratic policy reformers. Successful and capable technocrats may be even more dangerous for political leaders than their unsuccessful and incapable colleagues, especially in authoritarian settings where power losses and regime changes usually result from intraelite conflicts and breakdowns of informal ruling coalitions.13 This is why political leaders are often tempted to prioritize the loyalty of technocratic policymakers over their competence. As Georgy Egorov and Konstantin Sonin convincingly demonstrate, the weakening of autocrats’ political positions often contributes to the replacement of efficient technocrats (“viziers”) with loyal yet inefficient ones, thus decreasing the quality of policy-making.14
Examples of betrayal of political leaders by their competent yet disloyal viziers may be considered an extreme version of aggravation of principal-agent problems. Although these practices are relatively uncommon, political leaders will still employ various techniques to prevent the disloyalty of technocratic policymakers without damaging their policy efficiency. In addition to oversight and monitoring of technocrats to reduce information costs, they also promote internal competition between state agencies and informal cliques within the state apparatus and at times constrain technocrats’ freedom of decision-making. Also, some policies face a formal and/or informal veto from political leaders (these two options are not mutually exclusive but rather complementary). The windows of opportunity for technocrats regarding policy changes are limited both in terms of the policy areas to which they are granted access and in terms of the scope of their influence on policy outcomes. The weakest link here is not the development of plans and programs of reforms but their implementation by the state apparatus, which is usually not controlled by the technocrats and has little or no incentive for policy reforms regardless of their content. If the quality of the state apparatus is poor, then the technocrats’ chances of successfully implementing their plans and programs (even when their hands are completely untied in conducting policy reforms) are slim. Therefore, technocrats limit themselves to partial solutions, diminishing the scope and domains of policy reforms to those specifically protected by political leaders who may grant their patronage to these changes for various reasons. These solutions are less risky in terms of disloyalty of technocratic reformers, but the benefits of the resulting policy advancements for political leaders and their countries are also far from obvious. This is why good intentions of improvements in certain policy areas may contribute to further worsening of the situation.
However, the most important challenge for technocratic policy reforms lies not along the lines of conflict between political leaders and policy reformers and is not even related to the resistance of the bureaucracy to policy changes (whether open or concealed) but arises from the policy influence of interest groups operating both within and outside the state apparatus. The gap between politics and policy-making opens a window of opportunity for “distributional coalitions”15 and numerous rent-seekers, whereas technocrats’ opportunities to build efficient informal (let alone formal) pro-reform coalitions are markedly limited. The struggle between technocratic policy reformers and rent-seekers over policy decisions was at the heart of the turbulent changes in Russia in the 1990s and the 2000s.16 However, the subordinated status of technocrats makes them vulnerable in terms of politics. Within the framework of the political model, politicians and/or parties may use the popular mandate to launch policy reforms in at least the early stages of political business cycles. Meanwhile, under the conditions of the technocratic model, these opportunities can disappear at any given moment if rent-seekers become more influential in behind-the-scenes lobbying and/or if opponents of the reforms successfully establish coalitions of potential losers from the policy changes.17 Although insulation of reformers from these influences may reduce the risk of policy changes being curtailed, it also reduces the political support available to technocrats and may provoke them into tacit alliances and compromises with rent-seekers.18 In essence, technocratic reformers can reach success only when their plans coincide with the priorities and preferences of political leaders. This is why the major political resource of technocrats is their ability to sell policy recipes to political leaders using bright covers and attractive labels whenever those leaders are willing to buy their proposals. Under the conditions of the politico-economic order of bad governance, this venture is questionable to say the least, and it comes as no surprise when the reforms become unsustainable, and are ultimately distorted, diminished, or revised—and not always because of the outcomes of the actual policy. Moreover, policy failures do not so much bury technocrats’ reform plans as such but diminish the chances of their implementation by the same teams of reformers.
The combination of negative features that shapes the technocratic model of policy-making are: (1) aggravation of principal-agent problems; (2) risks of disloyalty and attempts at their evasion; (3) limited resources and powers of technocrats against the background of; (4) resistance from interest groups; and (5) limited opportunities for pro-reform policy coalitions. These factors make technocratic reforms unreliable and unsustainable. Under these conditions, technocrats may fall into a trap where their overall role in policy-making diminishes over time, yet they have few opportunities to advance major changes while they still can. Policy areas and zones where positive changes are possible are reduced to a limited number of pockets of efficiency with unfavorable odds of extending them to other policy areas; while the technocrats’ discretion is limited to the development of policy programs in the form of advice and consultation without power over the adoption of key policy decisions or control over their implementation.
To put it succinctly, if viziers remain loyal to political leaders but lack major leverages of influence, they may become “eunuchs” of a sort. They often maintain a formally high status that serves as a reward for loyalty and camouflages their inability to exert meaningful influence on policy-making, let alone politics, in their states. In the end, the boundary between technocrats and rent-seekers may be blurred: even if the top echelons of the Russian state agencies are staffed by professionals responsible for problem-solving,19 their presence does not change the overall picture of bad governance. Rather, technocrats perform important functions of fool-proofing:20 they may protect autocrats from the most dangerous policy failures, which may result from incompetence and/or their subordinates’ excessively voracious rent-seeking appetites (similar to those of Yakunin, described in chapter 2). Yet under conditions of bad governance, policy reforms as such cannot become a magic bullet to diminish the negative effects of this politico-economic order. Technocrats themselves cannot improve the quality of governance, and may be not very interested in doing so, lacking strong positive performance incentives.