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Can Russia Modernise? The author’s perspective

By Blog Admin, on 19 March 2014

Can Russia Modernise ThumbnailIn her 2013 book Can Russia Modernise? Alena Ledeneva picked out key types of networks that make up Sistema:  Russia’s complex, ambiguous and sometimes surprisingly effective system of informal governance. In the final part of a three-part ‘mini-symposium’ the author reflects on and responds to critical assessments of the book.

The criticisms made by Katharina Bluhm and by Geoffrey Hosking are both valid and valuable. In my response I will attempt to clarify my arguments, where I can, and call for further research, where I cannot.

 How do we define sistema? Sistema stands for the network-based informal governance system backing up the formal facades of power. I agree with my critics’ point that sistema is a runaway target. My method was to rely on respondents’ perceptions of it. But they often varied a lot, as in the fable about the elephant and the seven blind men.  There are a range of definitions in the glossary of the book. I pieced together a detailed ethnography of sistema, but conceptualising sistema proved elusive.

 The Soviet writer Fazil Iskander has described the pressure of sistema as follows

 Imagine that you had to share a room with an aggressive madman all your life. Moreover, you also had to play chess with him. One the one hand, you had to play so that you would not win and anger him with your victory; on the other, you had to play so subtly that he would not suspect that you allowed him to beat you.

 When the ‘madman’ disappears this precious skill and the life-long experience of survival with a madman turns out to be redundant. Sistema reveals its features mostly to those who feel pressurised or victimised by it, rather than to its beneficiaries (President Putin is one of latter at the moment, but his memoirs will be an invaluable source on sistema one day, just as President Gorbachev’s ones are now).

 So I interviewed people who in some sense had exited sistema, distanced themselves or had time for reflection (I describe this ‘slow cooking’ methodology in a recent SSEES working paper. Distance from sistema enhanced their ability to articulate – as happened with understanding of the Soviet system after its collapse – and provided a useful point of comparison (especially if people had a chance to live elsewhere).

 De-personalising sistema: the possibilities of comparison

 The main point of conceptualising sistema, even if in this elusive way – as governance within governance – is that it has comparative potential. One could indeed compare the inner workings of Chirac’s, Berlusconi’s and Putin’s power networks, whose continuities and changes are determined by short-term, long-term and universal factors of informal power (as well as personalities). Yet it is also possible to compare anonymous and historically rooted governance models that seem to be reproducing and ‘framing’ the workings of power networks and their trickle-down effect, regardless of who is in power.

 I argue for the de-personalisation of sistema. Personalities are important in a short term, but in the long-term every leader is a hostage of sistema and sistema will dispose of him when he stops being the right person for its reproduction. Putin has been successful in reinventing himself, but looking to future analysis – if undertaken by researchers of sistemas in other societies – it would make sense to ‘look the other way’ and explore non-sistema forces. And not just non-sistema opposition or protest movements – which are fairly well-researched –  but their also their spectrum and potential.

 The diffuse nature of sistema vs non-sistema forces

 On the basis of various election results about 62% of Putin’s supporters are likely to have a vested interest and benefit from sistema. What are the remaining 38% up to and how far do the diffuse and trickle-downs effect of sistema go? Does sistema filter out unsuccessful, non-career oriented people who don’t mind having a low profile and businesses which are not big enough to catch an eye of a raider? Do the non-sistema forces  grow from the ‘blue buckets’ motorists’ movement and gay rights supporters? Or sections of the internet and blogosphere, who do not necessarily qualify as civic activists, but seem nevertheless to be targeted by sistema? Sistema is sensitive to any threat to its reproduction, so the recent measures aimed at the foreign assets and bank accounts of state officials can be interpreted as necessary to rein in officials who develop financial independence and a certain ambivalence, if not sense of inner protest, towards sistema.

 Threats to sistema

Sistema survival depends on control of non-sistema forces. Yet the most important threat to it is economic. It is expressed in Russia’s petro-paradox: only such a rich country can afford to have a system of governance as inefficient as sistema. There are also threats like weakness vis-à-vis globalisation, especially in the legal sphere, where Russia is losing its sovereignty and control over its assets.

 Unwritten rules of sistema

I have to admit that research into sistema undermined my earlier belief that unwritten rules can be identified. They can be conceptualised, in theory, as the so-called meta-rules, or rules of breaking the rules.  Yet empirically, I have to admit they would be possible to pin down as a coherent set of rules. For example, it is impossible to determine whether the law was used in good faith or manipulated according to an unwritten rule whereby the letter of law is followed only to violate its spirit. So, we have to think about the functional ambivalence. I do stand by my conclusion that to overcome the grip of unwritten rules it is ‘simply not enough to transform the formal rules and the way they are enforced’.  This view informs my take on modernisation.

 Modernising what?

According to modernisation agenda of then President Medvedev Russia’s modernisation priorities were: institutions, infrastructure, innovation, investment and intellect. My addition to this list would be informality. The main point is simple: to modernise what works (informal networks), as well as what doesn’t (formal institutions). So far issues associated with informal governance have not been on Russia’s modernisation agenda or part of administrative reforms. In my view, modernisation of the use of social networks might be central to the overcoming of the so-called ‘modernisation trap of informality,’ currently known as ‘manual control’ or micromanagement.

 A weapon of the strong

I have argued that blat under communism had a more equalising effect on society that power networks have today. It was not egalitarian, but it gave an additional channel – sociability – for outsiders to access resources, formally allocated to nomenklatura. The trickle-down effect of the present-day ‘economy of kickbacks’ seems to be the reverse: it undermines competition, excludes outsiders and rewards insiders through network-based allocation and mobilisation. I contrast the implications of the functionality of grassroots and power networks, even if they share similar features and ambivalence. If blat networks tended to operate on the basis of informal obligation seen as ‘help’ or ‘mutual aid,’ power networks tend to operate on the basis of a formal, hierarchical, patron–client logic associated with practices of ‘feeding’ (kormlenie) aimed at enhancing the power of the patron or his/her network.

 The difference also stems from the political and economic frameworks in which these networks operate. As the Soviet system was not economically viable due to its centralisation, rigid ideological constraints, shortages and the limited role of money, blat networks had some equalising ‘weapon of the weak’ role in the oppressive conditions.  To some extent they also served the economic needs of the central distribution system. In Putin’s Russia, power networks operate without those constraints and extract multiple benefits from the post-Soviet reforms, while undermining the key principles of market competition (equality of economic subjects and security of property rights) and the key principle of the rule of law (equality before the law). They are, in effect, a ‘weapon of the strong.’

 Russian vs Chinese networks

Patron-client networks are known everywhere for their parasitism on state resources and abuse of administrative power. Yet in Russia they are perceived as more stifling for business than in China, which has been a taboo in contemporary anti-corruption studies. Chinese networks are better monitored – there is a system of checks and balances, hotlines and letters that are taken seriously by the Communist party – and can be managed internally with more awareness of guanxi.

 Chinese also regions enjoy much more independence that Russian regions, which also has implies local growth, rather than centralisation of resources. Cultural differences are also important: a sense of measure is a key Confucian value that can be contrasted to Russia’s spiritual aversion to moderation.

 The impact of networks

 Whether networks are more important under communism or post-communism is difficult to analyse due to the immeasurability of such a complex phenomenon.  Three caveats are essential for tackling this question.

 Firstly, one has to assess just how dependent people are on their networks for everyday consumption and which of their needs are satisfied through the use of contacts. The more basic those needs are the more people are dependent on social networks. The more advanced needs are the less dependent people will be on social networks, but their use is likely to be much more divisive (it produces more inequality).

 Secondly, the advantages received via networks in societies with private property are likely to be more significant in volume than in those where state property predominates. The blurred boundaries between the public and the private seem to enhance the use of networks for crossing them).

 Thirdly, it is important to note the functional ambivalence of networks: they can both support and subvert formal institutions and informal norms, making it still more difficult to assess their impact. Generally, the use of social networks mirrors the nature of formal and informal constraints of political and economic regimes, but the idea of harnessing the potential of social networks to change institutions is difficult to implement due to the ambivalence of networks and ethical controversies, similar to those surrounding ‘nudge’ policies in the UK and elsewhere.

 The modernisation trap

What it lacks in democratic virtues, the sistema appears to compensate for with the effectiveness of its informal incentives, control and capital flows operated by power networks and their impressive mobilisation capacity. Reliance on networks enables leaders to mobilise and to control, but also lock politicians, bureaucrats and businessmen into informal deals, mediated interests and personalised loyalties. This is the ‘modernisation trap of informality’: you cannot use the potential of informal networks without triggering their negative long-term consequences for institutional development.

 Scepticism, dialectics and wishful thinking

Am I more sceptical about Russia’s prospects that I was in 2006? I would say that my position has not changed. Then and now, I believe in Russia’s paradox, ambivalence and unpredictability.

 On a personal level, I adhere to Gramsci’s formula: pessimism of intellect, but optimism of will. I note very promising changes that have taken place in large cities, but I also want to speed things up in remote areas. I believe that reflective leadership can make a difference – including difference in leadership style. Putin has reinvented himself (but not his networks) many times.

 Back in 2005 he was not ready to engage in an anti-corruption campaign. Instead he pointed out many times that Russian democracy was only 20 years old and it should be given time for economic growth and development. His attitude to corruption has changed by 2006. Then he envisaged that the next president would tackle it – and Medvedev did indeed has initiate very important anti-corruption legislation. Putin 3.0 has taken the anti-corruption campaign to a new level, announcing measures against foreign assets and offshore businesses. It might be wishful thinking, but there is a clear ‘behavioural’ turn in public policy thinking towards the disaggregation of formal, normative agendas and a focus on informal, ‘what-works’ governance tools.

 Alena Ledeneva is Professor of Russian Politics and Society at UCL-SSEES.

The cover image is reproduced by kind permission of Cambridge University Press.

Note: This article gives the views of the author(s), and not the position of the SSEES Research blog, nor of the School of Slavonic and East European Studies, nor of UCL