Deregulation as an instrument for improving the quality of governance in Russia is vigorously advocated by liberal economists, especially in the aftermath of the 2008–2009 global economic crisis.38 The problem, however, is twofold. First, despite the loud rhetoric of state officials who call for a “regulatory guillotine,”39 the outcomes of many revisions of numerous by-laws and governmental decrees are selective, partial, and insignificant as of yet: entrenched bureaucrats and special interest groups have little incentive to revise the existing status quo. In terms of policy reforms, the insulation of the Russian government from the influence of societal actors, cultivated since the early 2000s,40 has demonstrated its dark side. Major policy changes, though necessary, can be conducted in Russia only by those state actors who pursue their own self-interest and may deliver unintended policy outcomes.41 For example, it was hard to expect that deregulation in Russian academia would be conducted effectively by the same actors who previously contributed to its overregulation and imposed dubious practices of oversight and evaluation. 42 Moreover, as deregulation remains a matter of discretion on the part of the regulators themselves, these efforts may even result in perverse effects such as “regulatory capture.”43 Very telling in this respect is the experience of RZhD, which almost unilaterally imposed high commuter services tariffs onto the shoulders of regional budgets, while being endorsed by the Russian government (as described in chapter 2). In 2020, the Russian government proposed a bill that involved a sweeping elimination of all previous environmental regulations, except for those approved by the government. This proposal could bury state requirements for environmental accountability of businesses and norms of disclosure of negative environmental effects of economic activities, ruin any fair methodology for assessing ecological damages, and severely limit the regulatory functions and monitoring of state environmental watchdog agencies. Only after a series of alarming calls from environmental activists,44approval of this proposal has been postponed and later on stopped at least for a while. In fact, however, this happened not because of the ultimate importance of environmental issues for the government, but rather because the overall framework of the regulatory guillotine had not been sufficiently prepared, and the process of interagency negotiations within the state bureaucracy took more time than was initially expected by its initiators. That said, it is highly likely that the environmental concerns will not stop the regulatory guillotine or change its major directions. Even the most socially efficient deregulation can at best reduce some of the risks for policy entrepreneurship crated by the negative incentives within the power vertical. However, it cannot in itself provide positive incentives for improving the quality of governance, given prioritization of loyalty over efficiency and the lack of transparent meritocratic mechanisms for rewards and career advancements within the Russian state.
Digitalization became a new buzzword among Russian state officials and technocratic experts in the mid-2010s. The advancement of algorithmic governance (driven by artificial intelligence rather than by self-interested humans) is widely perceived as a mechanism for constraining the rent-seeking aspirations of special interest groups and for improving the effectiveness of government. Furthermore, techno-optimists, such as German Gref (currently, CEO of the largest Russian bank, Sberbank), consider online platforms to be an instrument of accountability that may serve as a viable alternative both to the power vertical and to representative democracy.45 The evidence, however, is far from these optimistic expectations. On the one hand, against the background of isolationist trends in Russian politics and the obsession of Russia’s leadership with threats to its sovereignty, digitalization faces numerous political constraints that have contributed to many attempts at the “nationalization of the Russian Internet.”46 Successes on this front have been modest, to say the least. In 2012, Rostelekom, the state communication monopoly, launched the major project of making a national Internet search engine, “Sputnik,” which was intended by the Kremlin to be a state-controlled alternative to Google. However, despite it investing more than two billion rubles from state funds into this project, Sputnik received less than 1 percent of all search inquiries in Russia, and the project was finally closed in September 2020.47 On the other hand, the government is faced with pressure from special interest groups that tend to adjust algorithmic governance to serve their own purposes. Andrei Isaev, an influential State Duma member from United Russia, summarized the essence of such an approach. He openly stated in front of journalists in August 2019: “If you, an official, come to an Internet company to resolve a concrete issue, and he (its representative) responds: ‘hey, there is an algorithm, so I can’t change anything,’ then you should ask him to change the algorithm.”48 As one can see, this approach is hardly compatible with the ideas of effectiveness and impartiality promoted by crusaders of digitalization.
The increasing use of digital technologies for purposes of surveillance and political control, most notably in China, has contributed to the development of major concerns regarding the rise of “digital totalitarianism”49 in many autocracies, including Russia. Ironically, bad governance has hindered technological developments in this direction in Russia, as many high-tech initiatives of this kind are used as smokescreens for rent-seeking and corruption, and in the end attempts by Russian authorities to impose various sophisticated mechanisms of control over citizens have had only partial effects at best.50 For example, the Kremlin failed to stop the use of popular messenger Telegram, launched by the Russian IT entrepreneur Pavel Durov, who fled the country after vicious attacks on his previous projects from state-affiliated companies, endorsed by state security services. State regulators ultimately prohibited the use of Telegram and tried to block it across the country but failed to do so despite a series of attempts (at least, as of yet).51 Rather, these attempts resulted in the Streisand effect, as Telegram became increasingly popular among Russian users and anonymous channels in this messenger were employed as a means of communication among Russian elites.52
Still, the effects of politically driven digitalization can be observed in Russia, albeit in different forms than in China. They were heavily criticized in the aftermath of the September 2019 Moscow City Duma elections, when in one of the single-mandate districts, electronic voting via a web portal contributed to a shift in the outcome. According to the offline mode of voting, the independent candidate Roman Yuneman won with a solid margin over his major opponent, university rector Margarita Rusetskaya, who was openly endorsed by city hall. Yet online voting brought quite the opposite results: Rusetskaya won a landslide majority when votes were counted via the web, and in the end, she gained a seat in the legislature. Meanwhile, the web portal was hacked, and faced many technical glitches, so the integrity of online voting has been questioned by election observers.53 Similar trends were discussed in the aftermath of 2021 State Duma elections, when electronic voting results not only totally contradicted the results of offline voting, but also contributed to dubious electoral victories of candidates of major pro-Kremlin party, United Russia, in eight single-member districts of the city of Moscow.54
In a similar vein, Carolina Schlaufer, Daria Gristenko, and Andrey Indukaev analyzed opportunities for and constraints of the “digital governance” model in Russia, using the evidence from the Moscow-based project Active Citizen, which was developed by the city government as an instrument of communication with Muscovites.55 Despite noticeable success in aggregating citizens’ requests, online platforms still constrain citizens’ empowerment, as advanced digital tools are used only in limited policy domains and certain types of participation because the agenda-setting of e-participation is tightly controlled by the Moscow City government.56 Even though in most instances the effects of digitalization on governance in Russia may have less salient political connotations, the fundamental problem remains the same: algorithms and online services can improve the quality of governance only if these mechanisms are complementary to impartial and effective offline good governance, but not if they aim to substitute for it.