Explaining Post-Soviet Patchworks

Presentation at U.S. Universities,

February and March, 2001

By Klaus Segbers

Free University of Berlin

Program

• Talking about Russia

• Design and results of „Explaining post-Soviet Patchworks“

• How does that fit into the current political debates on Russia?

The Western Russia Text

• Uniqueness: There is nothing like...• Irrationality: One cannot really comprehend...• Europe/ Asia: They aren’t European, are they?• Stateness: It‘s a big power, somehow• Consistency: “Russia” is now going to...• Directed Action: Why does/ doesn‘t “Putin” just...• Apocalypse forever • Split discourse: It‘s so dangerous; it‘s so messy• Involvement: We have to help/ let‘s get out

Typical Western statements

“The fiasco of reform in Russia has forced a belated reappraisal of this blind trust in markets... The transition economies needed appropriate property rights and an effective state to enforce those rights... liberalization without property rights turned out to be the path to gangsterism, not capitalism.“

(Bruce R. Scott, Foreign Affairs, 1/2-2001)

„Explaining Post-Soviet Patchworks“ (1)

Core ideas:

• No state-centered approaches

• Focus on actors: their preferences, interests and strategies

• Focus on rules: institutional change

„Explaining Post-Soviet Patchworks“ (2)

Basic question:

How are post-Soviet actors‘ interests, andhow are institutions shaped by

a) Soviet legacies? b) Global context?

Theoretical task

• Establishing adequate levels of analysis (challenge to unit/ state as dominant loa)

• Relating post-Soviet studies to IR and WP approaches

Theoretical orientations: pros & cons

Unitary actor and consistency claims

Realist approaches

Area specific modeling

Domestic structures & actors

(liberal/ pluralist assumptions)

Two-level games; 2nd image reversed

Multi-level & bargaining systems

Institutional framing

Explaining patchworks

Patchwork

Territories/ Regions

Sectors/ FIGs

Admin Groups/ Bureaucracies

Social Actors

Interactions

Why (these) actors?

• In an environment of weak (formal) institutions, and of a weak or even failing state, groups of actors are the real players.

• Among those groups, lobbies with few clients and many resources are more effective than those with many members/ clients which are more exposed to collective action problems.

Actors‘ list: State structures and actors

• President• Power ministries• Federal financial actors• Central bank• Ministries/ natural

monopolies

• Duma deputies• Federation Council

members• Donor regions• Mayors *• Law organs *• Armed organs/ personnel

Actors‘ list: Economic Actors (2)

Domestic

• Mass media

• Telecom

• Service/ retail, food,

textile, importers *

• Automobile *

• Defense *

• Agroindustry *

• Coal *

External

• Gazprom• Oil (Lukoil)• EES• Commercial Banks• Mineral/ mining• Aerospace/ hightech

Actors‘ list (3)

• Societal Actors

• Parties *• Trade unions *• Church hierarchies• Criminal groups• Oligarchs

• Foreign actors

• CIS state *

• Global state

• Global private

Methods

• Expert polls: 40-60 experts, 2 rounds (1999/ 2000)• Experts were from the RF (2/3; 1/2 from Moscow) and

abroad (1/3)• Experts had to assess preferences for 1990; 1994; 1999; and

2004• Expert polls reflect experts‘ assessments in a given moment• They are different from opinion polls; interviews; and case

studies• They do not necessarily reflect reality – whatever that is• The interpretations rest on these polls and on dozens of

detailed studies

Influence in 1999 (2nd)

4.4

4.2

4.0

3.8

3.6

3.4

3.2

3.0

2.8

2.6

2.4

2.2

2.0

1.81.6

Influence in 2004 (2nd)

Church hierarchies

Criminal groups

Regional elites

IMF etc.

Armed state forces

Duma deputies

Transnational comp.

Commercial banks

Oligarchs

Telecommunication

Raw material sector

Sectoral ministries

Mass media

Federation Council

Oil companies

Armaments export

Gazprom

Power ministries

Electricity comp.

Central Bank

Financial actors

President

4.4

4.2

4.0

3.8

3.6

3.4

3.2

3.0

2.8

2.6

2.4

2.2

2.0

1.81.6

Importance of Political Resources

Expert knowledge

Int creditworthiness

Workforce employed

Hard currency

Natural monopolies

Image in West

Men-at-arms

Party organisation

Mass media

Personal networks

Social mobilisation

Personal Charisma

4.4

4.2

4.0

3.8

3.6

3.4

3.2

3.0

2.8

2.6

2.4

2.2

2.0

1.81.6

1990

2004

Church hierarchies

Commercial banks

Armed state forces

Duma

Power ministries

Federation Council

Mass media

Central Bank

Sectoral ministries

Telecommunication

Regional elites

Financial actors

President

Criminal groups

Electricity companie

Armaments export

Oligarchs

Raw material sector

Oil companies

Gazprom

Transnational comp.

IMF etc.

4.2

4.0

3.8

3.6

3.4

3.2

3.0

2.8

2.6

2.4

2.2

2.0

1.81.6

Pursuit of global strategies 1999 (2nd)

Church hierarchies

Duma deputies

Federation Council

Armed state forces

Central bank

Power ministries

Comm

ercial banks

Mass m

edia

Sectoral ministries

Telecomm

unication

Criminal groups

Regional elites

President

Financial actors

Oligarchs

Armam

ents export

Electricity comp.

Raw material sector

Oil com

panies

Gazprom

Transnational comp.

IMF etc.

4.4

4.2

4.0

3.8

3.6

3.4

3.2

3.0

2.8

2.6

2.4

2.2

2.0

1.81.6

Pursuit of global strategies 2004

Protection from global competition 1999 (2nd)

IMF etc.

Criminal groups

Transnational comp.

Mass media

Electricity comp.

Financial actors

President

Telecommunication

Central Bank

Armed state forces

Regional elites

Federation Council

Power ministries

Gazprom

Duma depuites

Oil companies

Church hierarchies

Armaments exports

Sectoral ministries

Raw material sector

Oligarchs

Commercial banks

4.0

3.8

3.6

3.4

3.2

3.0

2.8

2.6

2.4

2.2

2.0

1.8

1.6

Rules of the game

Three sets of institutions have been analyzed:

• Economic (budget policy, property rights)

• Administrative (regional)

• Common places

20041999

3.2

3.0

2.8

2.6

2.4

2.2

2.0

1.8

Soft budget

constraints

Hard budget

constraints

2.7

2.4

2.9

3.1

Interest in budget constraints, 1999/2004

Interest in soft budget constraints

2004199919941990

3.6

3.4

3.2

3.0

2.8

2.6

3.0

3.2

3.4

3.2

The meaning of property rights (1)

• The continuous implementation and enforcement of PRs is always difficult

• They should be impartial, inclusive, transparent and enforceable

• Significant changes of PRs – initiated by evolving preferences of actors – always take time

The meaning of property rights (2)

• Furthermore, PRs reflect power relations (and not „ideal sets of governance rules“). Accordingly, their evolution goes hand in hand with instability:

„When there is radical change in the formal rules that make them inconsistent with the existing informal constraints, there is an unresolved tension between them that will lead to long-run political instability.“

(Douglass North, 1990)

Protect. prop.rightsAcquiring property

3.6

3.4

3.2

3.0

2.8

2.6

2.4

2.2

2.0

1.8

1999

2004

3.4

3.1

2.9

3.3

Interest in property rights, 1999/ 2004

Interest in property rights, 1990-2004

2004199919941990

3.2

3.0

2.8

2.6

2.4

2.2

2.0

3.1

2.8

2.5

2.1

Importance of public goods

2004199919941990

3.2

3.0

2.8

2.6

2.4

2.2

2.0

1.8

Enforcement of

budget constraints

Protection of

property rights

Securing effective

functioning of state

2.9

2.6

2.52.5

3.1

2.8

2.5

2.1

2.5

2.4

2.2

2.1

Which sort of bandits?

• Roving vs. stationary bandits (Mancur Olson)

• Strong positive correlation between short time horizons and roving bandits‘ behavior

• Prospects for conversion

• Prospects for stability and cooperation

Time horizons, 1990 - 2004

2004199919941990

3.4

3.2

3.0

2.8

2.6

2.4

2.2

2.0

1 year

4 years

Long-term

2.8

2.3

2.1

2.4

3.1

2.82.72.7

2.8

3.23.3

2.9

Time horizons, 1999/ 2004

20041999

3.6

3.4

3.2

3.0

2.8

2.6

2.4

2.2

2.0

1 year

4 years

Long-term

3.0

2.3

3.4

3.0

2.6

3.2

The „Putin“ phenomenon

• „Putin“ can be deciphered as the expression of a new equilibrium

• „Putin“ expresses a certain saturation of important elite players

• „Putin“ also represents the interests of diverse social strata

• „Putin“ is the metaphor of an uneasy compromise between the sovki and the new middle classes

• This makes „Putin“ rather a moderator and preserver, than a „mover“

The „Putin“ ambivalence

• „Putin“ is a compositum of elements from the past and the global

• He symbolizes the past, but he also stands for opening up toward the global environment

• „Putin“ represents some consensual progress (tax code, budget policy, IR)

• „Putin“ represents impasse (land code, banking system)• Consequently, “Putin” can not provide a common

Russian space (law, rules) and certainly not engineer an authoritarian state

Institutional change between past and global

Will ineffective institutions (legacies) be modified by global impacts and interactions, or will they be extended and „transnationalized“?

Will the economic “window of opportunity” be used for some movement, or will it be consumed and “lost”?

Test cases: AM; rent seeking; housing portfolio

A lost cause?

• What are our criteria?• What are our reference points?• How do we compare with other historical situations and

other/ similar contexts?• How to account for inconsistent policies, undirected

interventions, unintended side effects and ad-hocistic maneuvering?

• How about comparing with Brazil, India, Turkey, South Africa?

A Western contact strategy

Writing a new Russia text:

• Let‘s relax – it is normalization• Let‘s develop pragmatic attitudes• Let‘s accept the patchwork• Focus on establishing and on broadening rules• Let‘s not prescribe a special role for Germany – but for

Europe• Let‘s develop flexible and functional concepts of and for

Europe

Strategic Partners

„new“ middle classes

service sector

financial organizations

educational organizations

it - related sectors

young people

regional administrations

young politicians