The Politics of Bad Governance in Contemporary Russia

Chapter

3

Authoritarian Modernization

Illusions and Temptations

THE AUTHORITARIAN MODERNIZATION PROJECT sounds tempting in various political and social settings. This project is perceived in the narrow sense as a set of technical policy measures aiming to achieve a high level of socioeconomic development through rapid economic growth, while the broad aspects of political modernization (that is, political freedoms) either remain beyond the current modernization agenda or are postponed to a distant future. The attractiveness of authoritarian modernization, advocated by numerous scholars and experts during the Cold War,1 greatly increased in the twenty-first century fueled by recent economic advancements in China and once again endorsed by numerous experts, policymakers, and citizens across the globe.2 There is a strong temptation to implement successful socioeconomic policies with a free hand, without the constraints and defects inherent to democracies, as authoritarianism allows the government to be insulated from the impact of political parties and policy preferences of the mass public.

Post-Communist Russia may be regarded as an instance of this phenomenon: not only are ideas and policies of authoritarian modernization deeply rooted in Russia’s Soviet and imperial past, but its current agenda also fits certain interests and expectations of both Russia’s elites and society at large.3 To a certain degree, authoritarian modernization became Russia’s response to the numerous challenges of the complex process of post-Communist transformation of Russia, which included simultaneous political regime changes, economic reforms, and state-and nation-building (known in the jargon of the 1990s as the “dilemma of simultaneity” amid the “triple transition”).4 During this process Russia’s elites and citizens alike sacrificed democracy for the sake of a market economy and a strong state,5 and this choice affected various dimensions of Russia’s further development including the quality of governance.6 I argue that the pursuit of authoritarian modernization in post-Communist Russia became one of the main origins of the politico-economic order of bad governance in the country. This is why it is necessary to explain how authoritarian modernization emerged as a mainstream of Russia’s political and socioeconomic trajectories and how this project has contributed to bad governance.

The main problem of authoritarian modernization is that “success stories” of its policies are relatively rare, with the major notable exception of China. In the second part of the twentieth century, autocracies demonstrated a much higher diversity of economic growth rates and developmental trajectories than democracies. In fact, this diversity led to Dani Rodrik’s comment (cited in chapter 1) about the uniqueness of success stories like Singapore amid many stories of failure like the Congo: a few examples of building effective states and prosperous economies in autocracies coincide with numerous cases where dictators drive their countries into decay and deterioration. From this perspective, the political and economic trajectories of post-Communist Russia resembled pendulum-like swings. In terms of the political regime, after the great liberalization under Gorbachev, during the 1990s and especially in the 2000s, the country quickly deteriorated into a personalist electoral autocracy.7 In terms of socioeconomic development, after the deep and protracted transformation recession of the 1990s, Russia demonstrated impressive growth in the 2000s, which resulted not only from the steep rise of global oil prices but also from policy changes launched by the government.8 In terms of state-building, Russia avoided the threat of disintegration in the 1990s and greatly strengthened its coercive and distributive capacity in the 2000s,9 yet remained an inefficient state with a poor quality of governance.10 Some authors have argued that these tendencies are natural for a country with the highly problematic legacies of Communism11 and weak linkages with the West,12 but have expressed hopes that they may be overcome over time through decades of growth and development with preservation of the political status quo.13 However, other observers (including the author of this book) have expressed major skepticism of such hopes and prospects.14

Since 2014, after Russia annexed Crimea and dragged itself into a major conflict with the West against the background of its geopolitical ambitions, rising economic problems, and questioning if not complete denial of policy goals of growth, development, and international integration, the agenda of authoritarian modernization in Russia has been dramatically challenged. No one believes that the experience of the golden age of rapid economic growth and great expectations from 1999 to 2008 will return, at least in the foreseeable future. Yet now the time is ripe to reconsider the role of the authoritarian modernization project in Russia’s political and economic changes at the end of the twentieth and the beginning of the twenty-first century with an emphasis on the central ideas, institutions, and policies that contributed to this project and its implementation. This focus will help to explain the role of authoritarian modernization in the making of bad governance in Russia. Discussing these issues is essential not only for an understanding of the logic and peculiarities of post-Communist changes in Russia but also for mapping Russia’s trajectories onto the global map of varieties of modernization, both in contemporary and historical comparative perspective.

Indeed, why have Russia and its neighbors in post-Soviet Eurasia pursued authoritarian modernization after the Soviet collapse (unlike some countries of post-Communist Eastern Europe)? What is the ideational agenda behind this project and why does it dominate Russia’s post-Communist political landscape? What are the mechanisms that maintain this project and how have they adopted, absorbed, and affected various institutions and practices of governance in Russia? Why has this project brought diverse results in various policy areas, and why have the consequences of certain policies become rather controversial from the viewpoint of governing the country? And why, despite so many controversies, shortcomings, and flaws, has this project remained attractive in the eyes of a large proportion of Russian elites and Russian citizens? This chapter is intended to address some of these questions and propose several tentative answers, which will be also discussed in the following chapters, aimed at analyzing the impact of the authoritarian modernization project in post-Communist Russia on Russia’s politics of bad governance.

The Discreet Charm

of

Authoritarian Modernization

The concept of modernization (like any major concept in the social sciences) has its own distinct history. Since the boom of modernization theory in the 1950s and 1960s,15 through nearly universal criticism in the 1970s and 1980s, there has been a large question mark hanging over the term “modernization.” However, more recently this conceptual framework has been revived with regard to analyzing the influence of social, economic, political, and cultural changes on the developmental trajectories of states and nations in a comparative and historical perspective.16 This is why in present-day scholarly jargon, modernization is merely associated with progress and development in various directions (be it human capital, economic prosperity, and/or political freedoms) as well as with certain policies in various areas aimed toward such progress in one way or another. These policies are often labeled “reforms,” although some critics tend to portray them in a negative light as instances of “neoliberalism.”17 Scholars of different disciplines and academic schools attempt to discover the causal mechanisms of developmental progress and regress in various countries and understand the logic of why some of them over time tend to move toward the “open access order”18 and the prevalence of “inclusive” economic and/or political institutions, while others do not.19

One of the most contentious issues of modernization, which arises in numerous discussions, is related to the impact of political regime dynamics on modernization—to what extent the success and failure of modernization depends upon democracy and/or authoritarianism. Can socioeconomic development be pursued successfully simultaneously with political democratization (“broad,” or democratic modernization) or rather, should economic growth and development precede political opening (“narrow,” or authoritarian modernization)? Yet, from a distant historical perspective, major European modernizations were authoritarian nearly by default,20 and in the second half of the twentieth century this issue came to the forefront in the atmosphere of bipolar rivalry between Communist and capitalist systems during the Cold War. At that time, some proponents of development theories, alongside international organizations such as the World Bank, openly endorsed ideas of authoritarian modernization, mainly for political purposes21 perceiving them as an instrument for countering Communist expansion and opposition to populist economic policies.22 This approach is deeply rooted in scholarly literature23 and is fueled by success stories of various authoritarian reforms, ranging from South Korea in the 1960s–1980s to Chile under Pinochet. The idea of authoritarian policy-making was popular at that time among many international experts in the World Bank and other agencies, as they believed that authoritarianism would be able to implement those unpopular policies that are so often blocked under democratic regimes.

The triumphant perception of global democratization after the end of the Cold War24 was short-lived, and discussions on the advantages and disadvantages of authoritarian modernization, dating back to the 1960s, reemerged within the context of post-Communist changes.25 Support for the project of narrow authoritarian modernization came from the proponents of the Chinese developmental trajectory amid numerous problems of democratic development in various parts of the globe.26 These discussions were also relevant in the Russian domestic context, as sacrificing democratization for the sake of economic reforms became a mainstream of Russian politics and policy-making soon after the Soviet collapse against the background of the “roaring” 1990s.27 This approach was vigorously advocated in 2009 by then-president Dmitry Medvedev in his manifesto on Russian modernization.28 Judging from this perspective, contemporary Russia may be regarded as a laboratory for authoritarian modernization, with its dilemmas, challenges, and constraints. Since the failure of Gorbachev’s reforms, when political opening and inconsistent economic half-measures contributed to the collapse of the Soviet Union, Russia’s rulers have tended to limit or curtail political freedoms and prioritize economic development and state-building in their agenda. While this development has brought mixed and controversial results, the question of the impact of various factors on implementing the authoritarian modernization project remains open, and reexamining the post-Communist Russian experience with an emphasis on its ideas, institutions, and policies might shed some light on these issues. In particular, how did the sources and mechanisms of authoritarian modernization in Russia (and elsewhere) affect the rise of bad governance?

The main arguments for the authoritarian modernization project—in Russia and elsewhere—are both ideational and pragmatic (their lines are complementary rather than antinomies). In terms of ideas, the authoritarian modernization project is based upon normative criticism of the political and social empowerment of citizens in modernizing countries as a source of major instability, conflict, and disorder.29 A sequence that implies a gradual construction of a strong and efficient state and long-term economic growth and development, as well as possible postponement of democratization for many decades, is considered a desirable alternative; although it is not a combination of the best of both worlds, it is at least an avoidance of their worst combination. In pragmatic terms of conducting policy reforms, authoritarian modernization is preferred over a democratic one because the process of democratization as such presents a risky environment for building efficient states and markets. In essence, democratic regimes are full of inherent defects that make economic reforms problematic. Among these defects, the following are the most important:

competitive elections result in “political business cycles,” which contribute to short-term populist policy solutions and prevent the implementation of long-term developmental plans;30

the separation of powers allows powerful veto players to block major policy decisions and/or dilute their substance;31 moreover, for federal states, the difficult combination of horizontal and vertical separation of powers may contribute to the risks of “joint decision traps”;32

multiparty governments and coalition politics result in adopting compromise policies, which also bring instability because of the fragility of party cooperation;33 and

the representation of interest groups and political parties stimulates the domination of distributional coalitions that are engaged in rent-seeking and aimed at state capture (that is, turning state policies into hostages of private actors) by leveraging their access to governmental posts to reward their allies.34

These pitfalls are unavoidable in various political contexts. Many experts have noted the inefficiency of policy reforms under democracies, ranging from Latin America35 to Eastern Europe,36 where both the interests of political actors and the institutional settings hindered efficient socioeconomic policies or even contributed to their failure. This criticism is so widespread that it has contributed to hopes for reform-minded leaders, supported by teams of well-qualified experts, who would be capable of modernizing their respective countries without the fear of losing power and/or being trapped by populists and rent-seekers. It is no wonder that some authors have suggested implementing major socioeconomic reforms in Russia under conditions of authoritarianism as a response to the “dilemma of simultaneity.”37 Again, within the framework of this argument, democratization is considered at best a distant side effect of step-by-step creation of efficient institutions that provide stable long-term economic growth. Given the fact that the average economic growth in both democratic and nondemocratic regimes in the second half of the twentieth century was nearly the same,38 it is unsurprising that the authoritarian modernization project has been perceived as a plausible recipe for several countries, including post-Communist ones, by some experts,39 despite major criticism from others.40

Why is the evidence for the performance of authoritarian modernization so mixed, to say the least? In fact, the experience of the various states and societies involved is different in terms of their initial conditions and international and historical environment. Not many countries combine the advantages of relative underdevelopment and strong potential for catching up with advanced states and societies41 with an “embedded autonomy” of the state apparatus42 and a “Weberian” quality of bureaucracy,43 as well as with a relatively high level of human development. This combination cannot emerge by default and/or be built by design, at least in the short term. On a related note, few of these countries can effectively conduct export-oriented policies against the background of deep international engagement and a favorable global economic and political climate.

Also, one should consider the effects of varieties of authoritarianism given their differences in longevity and performance. While among hegemonic autocracies, monarchies and one-party states are better suited to conducting long-term developmental policies and improving their quality of governance, but personalist regimes are rarely successful in this respect because of their relatively short life expectancy.44 They suffer from the same defects as democratic polities, that is, political business cycles and distributional coalitions of rent-seekers do not disappear under conditions of electoral authoritarianism. But these regimes also rely heavily on mechanisms such as a politicized state-controlled economy and the patronage and buying of loyalty of the elites and the masses alike.45 All of these instances provide incentives for politicians and bureaucrats that prevent the implementation of major policy changes. In addition, they also face the risk of leadership change as an outcome of electoral conflicts and elite breakdowns, and this key challenge contributes to a short-term planning horizon in electoral authoritarian regimes vis-à-vis their hegemonic counterparts.46 Since the regime’s survival depends on mass support to a greater degree than either in hegemonic autocracies or in democracies, large-scale modernization (even in a narrow format) is a risky project for electoral authoritarian regimes and their leaders who tend to avoid long-term developmental goals.47

Yet another important constraint for authoritarian modernization is the limited set of political tools available to a regime to achieve such a project’s goals. In pursuit of policy reforms, authoritarian leaders can rely on bureaucrats, siloviki, or the hegemonic (or dominant) party, or a combination of these pillars.48 However, these mechanisms are rarely useful for implementing reforms. For efficient use of bureaucracy (one tool of authoritarian modernization that was employed in Russia) the reformers need a decent quality to the state apparatus: a high level of professional qualification among officials, strong incentives for them to achieve the goals set by the reformers, and an embedded state autonomy (the bureaucracy’s insulation from the influence of interest groups).49 Leaders cannot develop these conditions from scratch, they can build these mechanisms only over a long period of time. However, the longevity of authoritarian regimes is usually much shorter than what is necessary to build an efficient state bureaucracy.

Finally, the ideational considerations of political leaders and their perceptions of the past, present, and future of their respective countries greatly influence their policy agendas in terms of priorities, directions, and choices. Even those leaders who aim at authoritarian modernization may opt for different role models and pursue different strategies. And even the good intentions of policy reforms do not always lead to success, given the fact that conducting policy changes is not only a technocratic matter of expertise and advice but also a political matter of the balance of interests and incentives among the powerful members of authoritarian winning coalitions, which are built and maintained around rulers. The hidden but stiff competition among various segments of elites often explains why policy reforms may be sacrificed for the sake of the regime’s stability in order to prevent possible elite breakdown.50

From this perspective, the Russian experience of authoritarian modernization, both historical and contemporary, is rather contradictory. On the one hand, Russia was and still is in the second echelon of countries in terms of socioeconomic and human development, well above the global average level, and numerous attempts at its modernization in the nineteenth, twentieth, and twenty-first centuries were essentially intended to catch up to advanced states and societies. Still, the poor quality of the state, and especially of its bureaucracy, which for a long time has operated within the framework of patrimonial governance, has remained the weakest link of Russian modernization over decades and centuries,51 although the rapid changes after the Great Reforms of Alexander II greatly reduced the time lag between Russia and its European neighbors.52 Apart from Russia’s imperial past, numerous experts have devoted many pages to discussing the negative effects of Communist legacies on contemporary developments,53 so the initial conditions of post-Soviet modernization in Russia already do not sound very promising. On the other hand, the semi-peripheral position of Russia in the global economy and the outstandingly high role of natural resource sectors in its development, alongside the difficult consequences of Soviet strategic planning, have contributed to major “bear traps” of post-Soviet modernization.54 Certainly, the relative isolation of Russia from the outside world in terms of both linkages and leverages55 and the juxtaposition of Russia to the West in terms of international politics—both during the Cold War and after the annexation of Crimea—were hardly productive for modernization.

Regarding the political regime dimension, two attempts at Russia’s democratization—after the monarchy was overthrown in 1917 and after the collapse of Communism in 1991—have failed. The former resulted in civil war, and the latter coincided with the breakdown of the Soviet state. In both cases, these failures paved the way for the emergence of authoritarian regimes on the ruins of unfulfilled democratic promises. However, the Soviet authoritarian modernization under Stalin caused a colossal number of victims and heavy losses of human potential while its economic achievements were questionable.56 The post-Stalin rejection of repressions as the main tool of governing the country brought mixed consequences to Soviet socioeconomic development, and over time the potential of Soviet modernization was completely exhausted.57 The post-Soviet authoritarian modernization project, to some extent, also emerged on the ruins of unfulfilled promises of democratization and economic reforms under Gorbachev,58 while the mixed results of the market changes of the 1990s after the Soviet collapse contributed to the rise of the Russian economy in the 2000s59 against the background of increasing authoritarian tendencies.

The electoral authoritarian regime that emerged in Russia after the Soviet collapse of the USSR is not unique, but it has several features defined by the pattern of post-Communist transformation. In the 1990s, policy reforms faced the problem of a weak state with a high level of horizontal and vertical fragmentation.60 As a result, the central government resorted to compromises with oligarchs and regional leaders, which raised the social costs of the reforms.61 Strengthening state capacity, alongside the rapid economic growth of the 2000s, allowed the central government to implement its policies relatively successfully and reduce the influence of oligarchs and regional leaders alike.62 But the poor quality of public administration and the bureaucracy’s inefficiency were major constraints.63 By the time of the Soviet collapse, the bureaucratic machine had already been suffering from deep institutional decay, and the post-Soviet period deepened these problems. Electoral authoritarianism provided incentives for the use of the state apparatus to maximize electoral results64 to the detriment of the quality of governance, as the Kremlin preferred loyalty rather than efficiency in political appointments.65 The regime’s dependence on buying electoral loyalty, so vividly visible in the 1990s,66 increased further still in the 2000s and in the 2010s.67 In sum, such a combination of features of Russia’s regime created the main barriers to the authoritarian modernization project.

Finally, ideas and perceptions also affected the authoritarian modernization project in Russia. While Soviet authoritarian modernization was driven by the ideas of Communism and by the ambition of building a new international role model for other societies, the post-Soviet ideational agenda was different in many ways. First, in late twentieth-century and early twenty-first-century Russia, ideas played a relatively negligible role vis-à-vis the material interests of elites and of society at large.68 Second, for the political leaders who came to power in Russia in the 2000s, the perceptions of “a good Soviet Union”—an updated version of political, economic, and international system of the past, which would demonstrate a good performance and avoid risks of major changes—served as a role model that determined their ideational frame of reference.69 To some extent, these tendencies also resulted from overreaction by elites and the mass public to the collapse of Communism and of the Soviet Union. But in practice, retrospectively oriented worldviews are hardly conducive to any modernization projects, including authoritarian ones. Perceptions of an existential threat to the political status quo (which were driven by the wave of regime changes in post-Soviet Eurasia, labeled “color revolutions”) also impeded modernization plans because of shortening time horizons for elites and because of the need to divert the state’s resources to buying the loyalty of elites and the masses alike.70 In addition, the regime’s focus on media manipulation, which serves as a major tool for maintaining contemporary authoritarian regimes (known as informational autocracies),71 contributed to misperceptions not only among society at large but also among elites who often made ill-suited decisions because of a lack of independent sources of information and inappropriate feedback. For as long as Russia experienced rapid economic growth from 1999 to 2008, these regime-induced flaws of the authoritarian modernization project were partly compensated for by the inflow of money, which was sufficient for keeping the winning coalition together and avoiding major schisms among elites and public demand for changes. In the 2010s, against the background of rising economic problems and major conflict with the West, the risk of regime disequilibrium greatly increased,72 and the authoritarian modernization project in Russia came under question.

Still, the “myth of authoritarian growth”73 remained a mainstream of Russia’s approach to socioeconomic development and policy-making after the Soviet collapse against the background of strong statist and illiberal components of thinking among Russian elites.74 No democratic alternatives for modernization projects regarding the agenda of socioeconomic development were discussed seriously, and these issues lie at the heart of policies followed both in the conflict-ridden 1990s75 and during the period of “imposed consensus” of the 2000s.76 However, a positive combination of factors brought certain successes using this approach during the wave of policy reforms launched in the early 2000s, which may be regarded as the golden age of Russia’s authoritarian modernization project. The overcoming of the protracted transformation recession of the 1990s, the restoration of the coercive capacity of the Russian state, the major recentralization of governance, and the consolidation of the Russian elites, as well as prudent technocratic solutions in certain areas such as tax and fiscal reforms, resulted in numerous advancements in Russia’s socioeconomic development in various fields.77 As one can observe from figures 1 through 4, the period between 2000 and 2005 was very productive for improving the quality of governance in Russia in terms of the rule of law, control of corruption, regulatory quality, and government effectiveness. This improvement largely reflected the effects of policy reforms, which are analyzed in more detail in chapter 4.

Yet one cannot step into the same river twice: the widely proclaimed proposal of modernization made by Dmitry Medvedev during his presidency78 was just a brief campaign with an emphasis on technological advancements (such as high-tech development and other innovations). This campaign faced major structural and institutional constraints, and during the turbulent political changes of the 2010s it brought partial and controversial results. These results were accompanied by major instances of misbehavior by state officials79 or even faded away entirely. In fact, the modernization campaign has nearly been forgotten by the Russian public at the moment of writing this book and had rather negligible impact on the dynamics of the quality of governance in Russia. However, the boom of the 2000s is still perceived as a kind of model for the modernization project in Russia, even though it was a context-bounded phenomenon.

Besides these explanations, the attractiveness of the authoritarian modernization project in Russia is also rooted more deeply: the perceptions of the “uniqueness” and “special path” of the country and obsession with status-seeking among Russian elites, intellectuals, and society at large provide fertile grounds for this approach.80 As one of Putin’s former advisors confessed in an interview, in the early 2000s the major arguments in the Kremlin’s inner circle for the need for authoritarian modernization were related to the claim of strengthening Russia’s international position: “Putin became the author of the ‘Russian miracle’ despite widespread expectations that Russia would leave the global stage and turn into a second-order country like Indonesia.”81 Although international ambitions often contributed to the rise of entrepreneurship and catch-up development among late-modernizing countries,82 in Russia’s case they also coincided with a desire for major revenge vis-à-vis the West given the loss of great power status after the end of the Cold War and the collapse of the Soviet Union (judged by Putin to be “the greatest geopolitical catastrophe of the twentieth century”). In other words, economic development and related social changes (the increase in incomes, education, and the like) were perceived by Russia’s rulers merely as means rather than goals of modernization. These tendencies became explicit after 2014, in the wake of Russia’s conflict with the West over Ukraine, which contributed not only to its increasing international isolation but also to a major shift in its domestic agenda. The authoritarian modernization project was not officially curtailed, but its modernization dimension has been reduced to naught amid sluggish economic growth and stagnation of real incomes of Russians. Not only has there been a “tightening of the screws” in the political arena,83 but economic development priorities have also been supplanted by ambitious geopolitical goals and foreign policy tasks. Policy moves ranging from an import ban on many foreign food products, which caused a steep rise in consumer prices and poor-quality import substitutes, to the law on preferential use of Russian computers and software for state orders and in state-owned companies greatly benefited certain interest groups but were not conducive to the country’s development. However, it is too early to discuss whether the myth of authoritarian growth in Russia will be debunked any time soon. Even though these ideas and related policies might no longer be a part of the current agenda, the discreet charm of the authoritarian modernization project is powerful not only because of the endurance of ideas and institutions but also because of the vested interests of those who benefit from this project.

Dilemmas, Challenges, and Constraints

The authoritarian modernization project in contemporary Russia faces several dilemmas, challenges, and constraints. Without attempting to compile an exhaustive catalog, some of the related issues are worth further consideration in light of Russia’s experience. In addition to the classic dilemmas of an authoritarian regime’s response to rising political demands in the wake of modernization (the “king’s dilemma”) and a ruler’s response to inefficiency of the state bureaucracy (the “politician’s dilemma”), one may also consider important challenges that placed unavoidable constraints on this project. They include the challenge of unfulfilled promises (when expectations of progress and rapid catch-up to advanced countries proved to be wrong) and the challenge of mediocrity (despite claims of Russia’s greatness, in fact its socioeconomic profile is close to that of an average “normal country”).84

The “king’s dilemma,” outlined by Samuel Huntington in his analysis of risks of modernization in traditional monarchies,85 remains relevant in post-Communist Russia. Economic growth and development, which lie at the heart of the authoritarian modernization project, have contributed to the rise of mass demand for political freedoms (first and foremost, among the urban middle class) as an unintended consequence. The wave of political protests that swept Russia in 2011–2012 was a typical instance of this demand caused by the economic and political changes of the 1990s and 2000s.86 Thus, the political leadership faced a difficult choice between the continuation of the authoritarian modernization project (increasing the risk of further political disequilibrium) and preservation of their rule at any cost, including the reduction of this project. While hegemonic authoritarian regimes often take the risk of modernization because of their reliance upon a traditional monarchy, dominant party, or military,87 electoral authoritarian regimes are based upon political institutions that mimic and substitute for those of democracies (such as elections, political parties, and legislatures)88 and are therefore more vulnerable to political disequilibrium. The reliance of Russia’s rulers upon sophisticated techniques of political control such as tools of state dominance over the Internet and umbrella GONGOs (government-organized non-government organizations)89 is intended to mitigate these risks, but their impact is limited and may result in unintended and undesired side effects in terms of development. These considerations, alongside the short-time horizon of electoral authoritarian regimes, provide more incentives for curtailing the authoritarian modernization project if rulers perceive major domestic and international threats to their political survival—although these threats may be overestimated.

The asymmetric response of Russia’s rulers to the 2011–2012 mass protests, which included not only tightening of the screws in domestic politics but also launching a major international conflict with the West over Ukraine, was in a way, also addressed to the king’s dilemma. Then Vladimir Putin suddenly shifted his priorities from development to geopolitics and sacrificed the goals of modernization for the sake of international influence and domestic popularity.90 Although this response provided other risks of disequilibrium than those caused by economic growth and development, from the viewpoint of modernization its consequences were even more devastating than attempts to preserve the political status quo (more typical for the king’s dilemma). Policy reforms disappeared from the Russian leadership’s list of priorities, and it is difficult to expect that the agenda of rapid growth and development that was so vigorously advocated in the early 2000s will be revitalized any time soon under the current regime’s conditions.

The “politician’s dilemma” was analyzed by Barbara Geddes in her study of policy reforms in Latin America:91 the top-down modernization efforts of the political leadership encountered resistance from major interest groups and the notorious inefficiency of the bureaucracy. The essence of reforms can be buried or perverted or alternatively, they can be implemented only through a partial solution where rulers offer some special conditions for their conduct, known as “pockets of efficiency.”92 This dilemma became acute in contemporary Russia, and several failures of major policy reforms clearly demonstrated its salience.93 Russia’s reformers either adjusted their proposals to compromise with bureaucracy and/or interest groups or attempted to bypass standard procedures and find some alternative institutional solutions for conducting certain policies. In both instances, policy successes were rather mixed.

A compromise solution was achieved in the early 2000s in the case of the pension reform policy in Russia, which might have long-term effects for further generations, while its adoption and implementation was able to bring immediate gains and losses to current political and policy actors. The major conflict between two policy coalitions, the liberal “young reformers,” who promoted new ideas of adoption of an accumulative pension system, and the old-style bureaucracy, which insisted on preservation of the previous status quo mainly because of its vested interests, resulted in an imperfect compromise between these two approaches.94 While the interests of all participants were satisfied, the policy outcomes were suboptimal, and opportunities for major changes were missed. In other words, the previous status quo of the inefficient and deficient pension system has been preserved for the sake of maintaining a balance between the demands of state bureaucrats, employees, and employers. Yet the problems of the inefficiency of the pension system continued over time, while the deficit of the Pension Fund steadily increased. In the end, this solution paved the way to the unpopular sudden increase in retirement age for Russians in 2018, which has not been accompanied by structural reforms and has merely reproduced the status quo at the citizens’ expense.95 Policy compromises with bureaucrats and with major interest groups (such as old-style trade unions in the case of labor reform)96 contributed to the weakening of proposed policy changes, and policy outcomes were far from the desires of the proponents of modernization. Meanwhile, attempts to bypass regular procedures may contribute to short-term successful policy implementation, but in the medium term these policy innovations may face major revisions (some of these issues are discussed in chapter 6).

The challenge of unfulfilled promises has been an inherent feature of Russia’s modernization since the early Soviet period. After the Bolshevik Revolution, Russia failed to catch up to advanced countries in terms of the economic development of its major components such as labor productivity or living standards, despite the positive effects of industrialization, urbanization, and education; the main flaws of Soviet modernization were unavoidable and contributed to the collapse of Communism.97 The attempt to reform the Soviet system under Gorbachev was ill-prepared and based on many illusions and misunderstandings among the elites, so it is no wonder that its failure was perceived by Russian society as an unfulfilled promise. The turbulent period of post-Soviet reforms of the 1990s also had a controversial impact on public perceptions, and these major disillusionments were only partially compensated for during the period of rapid economic growth between 1999 and 2008. They also contributed to mass expectations of the “strong state” as the main if not the only provider of material well-being for Russians. The problem is that the end of this boom and the increasing troubles of the Russian economy further aggravated the perceptions of unfulfilled promises among elites and masses alike: the failure of Medvedev’s modernization campaign and the following wave of protests in 2011–2012 were clear evidence of that. To some extent, large-scale state propaganda in Russia and the tendency toward the country’s international self-isolation, although instrumental for the survival of the regime and its rulers, fueled these perceptions, contrary to Abraham Lincoln’s famous remark that one cannot fool all the people all the time. The primary danger of lost illusions relates to certain feelings that any modernization efforts in Russia (whether authoritarian or not) may be doomed nearly by default regardless of the contents and mode of conduct of policy reforms.98 Despite the fact that these feelings are strongly grounded in some interpretations of Russian culture, both historical and contemporary, one should avoid falling into the hopelessness of determinism and not see Russia as a country lacking any prospects for successful modernization.

The challenge of mediocrity results from the belief, quite widespread among many Russians, that Russia is a great and unique country, and it is worthy of extraordinary first-rate recognition by other states and nations because of its major past achievements in various areas, ranging from military victories to cultural glories. This retrospective understanding of Russia’s place in the modern world contributes to certain status-seeking efforts but is of limited relevance to a present-day modernization strategy. In many ways, Russia is an average normal country with numerous problems not so dissimilar to mid-developed states and nations. In a sense, the disjuncture between self-perception and reality is similar to the behavior of some teenagers. Drawing parallels with the distribution of pupils in a school class, Russia is neither an “A” student of world development (like Denmark) nor a complete “F” student à la Zimbabwe, but rather something of a “C” student. It is not much different from say, Argentina, one of the fast-growing economies and emerging democracies of the early twentieth century, which recently lost even regional leadership to a more dynamic Brazil after some decades of turbulent regime changes. Like some “C” students, Russia is more or less coping with its current troubles but cannot radically improve its grades. Like many “C” students, Russia simultaneously demonstrates an envy of more successful “A” students and juxtaposition of itself to them: despite the official rhetoric of fear and loathing of the West, Russians prefer to drive a Mercedes or a Toyota, use an iPhone or a Samsung, and want their children and grandchildren to graduate from Oxford or Harvard. The awkward combination of mediocrity and inadequate self-estimation affects not only Russia’s ideational agenda but also its institutional performance, as the country does little to improve its quality of governance—again, similarly to some “C” students, who invest little effort in elevating their poor grades.

This list of dilemmas and challenges is hardly unique, having been faced by several autocracies that found themselves between a rock and a hard place when they aimed at modernization and rapid socioeconomic development, on the one hand, and preservation of power of authoritarian rulers, on the other. As Bruce Bueno de Mesquita and his coauthors rightly put it, due to the primacy of politics over policy, autocrats often tend to sacrifice goals of modernization for the sake of their own political survival.99 Although such a prioritization is natural and such a statement is empirically based on solid evidence from several dictatorships, the connection between authoritarianism and modernization is not always substitutive, but rather, complementary. In other words, some authoritarian leaders pursue modernization-oriented policies simultaneously with building and fortifying their powers and try to achieve their goals in both areas. At first sight, such a dual-track strategy under the auspices of benevolent dictators sounds like a reasonable solution to the numerous problems of authoritarian modernization. However, the above-stated dilemmas and challenges impose certain constraints on implementing this strategy in real terms. It does not mean that autocrats always sacrifice modernization-oriented policies (as the logic of political survival presumes) but the goals and means of these policies undergo major changes. And yes, Russia is not unique in this respect: by the 2020s the authoritarian modernization agenda in Russia has been sacrificed for the sake of political regime stability. 100

In essence, these challenges and dilemmas put significant constraints on improving the quality of governance in Russia. On the one hand, proponents of an authoritarian modernization strategy aim at a delicate balance between achievements in growth and development and maintenance of the political status quo. On the other hand, attempts at improving the quality of governance may be risky for unity of the winning coalitions because they pose threats to the vested interests of rent-seekers of various kinds. It is no wonder that incentives for major policy changes that may challenge the politico-economic order of bad governance have become limited to short-term campaigns and have weakened over time. While in the early twenty-first century the post-Communist Russian experience may be considered an example of a coexistence of authoritarian modernization and bad governance under a dual-track strategy, after 2014 the agenda of modernization has been wiped away while persistence of authoritarianism remains the goal, thus strengthening the politico-economic order of bad governance.

Authoritarian Modernization

in

Russia

—

Mission: Impossible?

It is no wonder that rent-seeking, poor quality of the state regulations and lack of the rule of law impose major barriers to successful implementation of policy reforms. However, unlike many Third World countries, which are widely perceived as hotbeds of stagnation under dictatorships, post-Soviet Russia for a while displays an opposite trend: rapid economic growth in the 2000s served as a major source of building and further maintenance of the politico-economic order of bad governance. At that time, Russia’s ruling groups were interested in growth and development not only to increase the amount of rents and to satisfy the appetites of numerous rent-seekers but also because of the need for legitimation of the political regime.101 Although by the 2020s this agenda was seemingly exhausted, and the word “modernization” almost disappeared from Russian political discourse after Dmitry Medvedev lost his presidential post in 2012,102 great developmental ambitions (in the form of national projects and the like) remained an important part of policy-making in Russia. The reshuffling of the Russian government in 2020 further revitalized ambitions of a successful implementation of the authoritarian modernization project. Post-Soviet bad governance in Russia implicitly assumes high aspirations by ruling groups. But given the conditions of the Russian state and regime, the agenda of narrow modernization faces major obstacles. Policy reforms that infringe on the interests of influential rent-seekers have often been curtailed, and even those policies backed by powerful supporters may lead to unintended and undesired consequences. These consequences depend not only on specific policies in certain areas, but to a great degree on the hierarchical mechanism of policy-making within the framework of the power vertical, with its aggravation of principal-agent problems (analyzed in detail in chapter 2). Therefore, policy reforms in various areas in Russia have often resulted in privatization of gains and socialization of losses but have not much improved its institutional performance. These outcomes, however, make chances for successful socioeconomic advancement more and more elusive over time. Although the modernization efforts were not entirely in vain, their effects have often been partial, controversial, and short-lived.

To summarize, the political conditions of the authoritarian modernization project in Russia in the 2000s were quite unfavorable to begin with; the combination of electoral authoritarianism and poor quality of governance hindered the success of full-scale simultaneous reforms in various social and economic areas. The reformers could only hope to establish some pockets of efficiency and achieve success in certain high-priority policy areas where the reforms could be more successful, while in other policy areas reforms could either be suspended or fail completely. While an analysis of Russian modernization in the 2000s confirms these expectations, a closer look at the political and institutional environment of adoption and implementation of policy changes in Russia will help to understand the patterns and variations in policy reforms in different areas, analyzed in more detail in chapter 4.

Although considering recent developments in Russia one might argue that the post-Soviet authoritarian modernization project is nearly exhausted and has little chance of continuing in the foreseeable future, 103 it is worth considering its experience further. Modernization as such will be a necessary part of the agenda for Russia’s development. Its ideas, institutions, and policies are still to be discussed, even though now there are no signs that a new window of opportunity is about to open. One should learn certain lessons from the trial-and-error reforms and counterreforms of the recent past, accumulate knowledge about their advances and setbacks, and not repeat the same wrong moves. These lessons may be labeled “Mission: Impossible.” Similarly to the film series, authoritarian modernization in Russia may include several episodes with recurring protagonists and may be popular among the public. Unlike the films, however, the success of the Impossible Mission Force under a dual-track strategy is highly unlikely.