Why is there bad governance in Russia?
In the first decades of the 21st century, Russia has demonstrated a trajectory of bad governance. After the Soviet collapse and turbulent political and socio-economic transformations of the 1990s, the country faced the challenge of building a new politico-economic order. However, the rulers of the new Russia, who managed to establish a monopoly on power, had little incentive to establish democracy and the rule of law – rather, they intentionally built up and maintained bad governance in the country, similar to poisoning.
Russia’s rulers turned key economic assets controlled by the state into sources of rent for their cronies and themselves and used the state’s coercive apparatus to further their dominance. No wonder that state-led companies and other pillars of the “power vertical” became fiefdoms of top managers and their political patrons while often showing dubious performance. At the same time, until very recently the Russian leadership pursued a strategy of authoritarian modernization aimed at economic growth and development. Some successes were achieved, but they were rather limited in scope. Even though several policy reforms that should have improved the quality of governance were launched in the early 2000s, they were short-lived and quickly scrapped for the sake of rent-seeking.
Still, despite the gloomy picture of governance in Russia, the situation is rather complex. Competent technocrats at several state agencies, such as the Central Bank, have performed the important function of fool-proofing and kept the Russian economy from major failures. Moreover, policy entrepreneurs of various sorts launch some policy initiatives that could turn into “success stories” in the conditions of political patronage. However, these “pockets of efficiency” remain isolated islands in a sea of rent-seeking and corruption amid the “power vertical.” First, they have limited multiplicative effects, as the best practices of good governance barely spread to other state institutions. Second, the “success stories” were short-lived, as political patronage – which provides a special regulatory environment and preferential access to state resources for these initiatives – proved unsustainable.
In the book, I trace the rise and fall of several “success stories” in Russia, including the Soviet space program and the contemporary Higher School of Economics: though they all made a difference, their transformative effect on the country’s technological and educational development was minimal.
To what extent can the trap of bad governance in Russia be overcome in the foreseeable future? The current low-level equilibrium of bad governance in Russia is also maintained by the high costs overcoming it. These costs may increase over time, especially in the wake of Russia’s aggression against Ukraine, as they tend to serve to preserve bad governance rather than transform it and improve the state. The high costs in the Russian case are related to both the complexities of possible changes in the political regime (if and when they occur) as well as the need for major elite turnover.
In fact, the short-term beneficiaries of bad governance in Russia are numerous: they aren’t limited to top state officials and oligarchs, but also include law enforcement officials and many public-sector employees, so it’s hard to imagine that resistance to revising the politico-economic order will be easily overcome.
Meanwhile, even small steps toward democratization are not on the agenda of Russia’s political leaders. At least until February 2022 they sought to find other recipes to maintain the status quo quality of governance.