No. 201 18 April 2017
russian analytical digest
www.css.ethz.ch/en/publications/rad.html www.laender-analysen.de
FEDERALISM
■■ANALYSIS Kremlin–Governor Relations in the Run-Up to the 2018 Presidential Elections 2 Carolina De Stefano, Washington, D.C. ■■ANALYSIS The Origin and Development of Federalism in Russia 7 Angela Di Gregorio, Milan ■■ANALYSIS Bureaucratic Strength and Presidential Inattention: Disempowering Territorial Development Instruments in Russia 10 Andrey Starodubtsev, Helsinki ■■MAPS Administrative Subdivisions of the Russian Federation 1999 and 2017 14
Institute for European, Research Centre Center for German Association for Russian, and Eurasian Studies Institute of History for East European Studies Security Studies East European Studies The George Washington University of Zurich University University of Bremen ETH Zurich RUSSIAN ANALYTICAL DIGEST No. 201, 18 April 2017 2
ANALYSIS
Kremlin–Governor Relations in the Run-Up to the 2018 Presidential Elections Carolina De Stefano, Washington, D.C. Abstract The evolution of Kremlin-governor relations is driven by the center’s dilemma of how to exert control over the regions without undermining regional stability. In view of the 2018 presidential elections, the Kremlin solution to this dilemma is not a long-term strategy, but a shortsighted technocratic approach together with a stronger official anti-elite and anti-corruption line.
Control v. Competence sentatives3 and the governors lost their automatic mem- Despite the relentless verticalization of powers under- bership in the Federaion Council, the upper chamber of taken in Russia since 2000, the relationship between the Federal Assembly. Instead, the regions had to elect the Kremlin and the governors continues to be more their own representatives from among the members of delicate and less unidirectional than what it may seem. the regional parliaments and, in the process, the senators One of the main reasons is that neither legal reforms lost their judicial immunity, which had been a valuable nor electoral engineering have been able to solve a major benefit for key members of the regional elite. Kremlin dilemma: how to exert direct, pervasive control The Kremlin kept tight political control over the over the governors without undermining the effective process of selecting regional leaders. In 2004, direct local political management needed to guarantee, if not gubernatorial elections were abolished in favor of direct economic development, then at least political stability? presidential appointment. In the context of the country’s economic stagnation The 2011–2012 protest movements, however, made and, more importantly, in the run-up to the 2018 pres- abruptly clear that the increased control over the gov- idential elections, the need to address this dilemma is ernors was not enough to guarantee political order and becoming more urgent. Looking at the series of recent stability in the regions. On the contrary, the choice of governors’ resignations and subsequent replacements, it depriving governors of any source of personal, local seems that the central government’s short-term—and legitimacy potentially threatened Russia’s stability by shortsighted—solution is an increasing technocratic undermining the benefits of institutional centralization. approach combined with a stronger official anti-cor- Dmitri Gorenburg foresaw this risk from the very intro- ruption line targeting not only the governors, but the duction of the presidential appointment in 2004, noting country’s political elite more generally. that “rather than having reliable, competent adminis- trators who implement the central government’s policies No Legal Reforms Are Political Panaceas without much discussion, Moscow is likely to get cau- The evolution of the legally defined powers of Russian tious, semi-competent yes-men who will often be una- governors1 has been a major and undisputable manifes- ble to control events in the regions they are appointed tation of the progressive recentralization and verticaliza- to rule’.4 tion undertaken in Russia since Vladimir Putin became As political stability became an urgent priority, president.2 This process started right after his election in Putin’s third term was inaugurated in 2012 by the rein- 2000. Aiming at regaining control of the regions (which statement of direct gubernatorial elections. The search had enjoyed extensive, but chaotic autonomy during the for stability aside, the direct elections of the governors Yeltsin era), Putin implemented a series of institutional perform another important task in times of trouble: in reforms. Already in 2000, the 89 federal subjects were case of popular discontent, there is someone other than divided into seven districts headed by presidential repre- the central government to blame. Finally, in 2013 an ambiguous, half-way solution was found: the approval of a law—still in force today—that gives the regions a “non-direct elections” option, that is 1 The governors’ formal titles are Head of administration or Pres- ident, depending on the legislation of the republic or region in question. 3 Orttung, R. (2001). Putin’s federal reform package: a recipe for 2 For a deeper analysis of the evolution of Russian federalism in unchecked Kremlin power. Demokratizatsiya 9 (3): 341–9, 342. the last two decades, see the contribution of Angela Di Grego- 4 Gorenburg, D. (2004). The View of Russian Electoral Reforms rio in this issue. from Russia’s Ethnic Republics. PONARS Policy Memo 338, 3. RUSSIAN ANALYTICAL DIGEST No. 201, 18 April 2017 3
the possibility for regional parliaments to chose a gov- the city of Moscow Maxim Reshetnikov. The next day ernor from a list of candidates presented by political Buriatia Governor Vjacheslav Nagovitsyn was ousted parties instead of holding direct elections.5 This provi- and replaced by the republic’s deputy minister of trans- sion reflects another source of central government con- port Aleksei Tsydenov. This switch apparently resulted cern: the need to treat regions that vary greatly among from an internal conflict, as well as the high ratings themselves in a different manner. Indeed, this law was of the Communist Party’s regional candidate.7 In the conceived for potentially unstable regions, above all the case of the Perm region and Buriatia, the main reasons North Caucasus, where the presidential appointment for the changes were both the Kremlin’s and popular was still seen as preferable to direct elections, which discontent.8 were deemed too uncertain. The majority of the repub- On the 13th, the 14th and the 15th of February resig- lics, despite central pressure, did not take this legisla- nations were respectively presented by the governor of tion into consideration.6 Of course, even where elections Novgorod oblast Sergey Mitin, by Riazan’s governor are held, the Kremlin still exerts considerable pressure Oleg Kovalev and by the governor of Karelia Aleksandr over who becomes governor by disqualifying undesir- Khudilainen. In the case of Karelia, the resignation was able candidates. widely anticipated and explained by the governor’s low ratings. Khudilainen has been replaced by Artur Parfen- Recent Governors’ Resignations: Is There chikov, who previously pursued a legal career.9 a Logic? At the beginning of April, Udmurtia Governor Alek- In recent months, a relatively large number of gover- sandr Soloviev and Marii El Governor Leonid Markelov nors resigned and were promptly replaced by presiden- were arrested on bribery charges.10 Soloviev was replaced tial appointees. Some hypotheses on the overall logic by the Secretary of Russia’s Civic Chamber Aleksandr behind these decisions can be made, although the rea- Brechalov and the Governor of Marii El by the legal sons that led to these resignations vary from case to case. expert and judge of the Commercial Court Aleksandr They can mainly be grouped into the following: corrup- Evstifeev.11 tion scandals, conflictual relations with the local elite What do all these resignations have in common? and popular discontent. First, the majority of the regions listed above will hold In October 2016, Kaliningrad’s governor Evgeniy gubernatorial elections in October 2017.12 The center’s Zinichev was replaced by the youngest Russian gover- priority is to choose their candidates for the upcoming nor to date Anton Alikhanov, who previously served in elections by appointing them as temporary represent- several national ministries. atives in advance of the voting. Acting in this manner, Sergei Yastrebov, the head of the Yaroslavl Region, the party is bypassed and the future candidate has time had been dismissed on 28 July 2016 and his post was not only to prepare a political campaign—thus proba- given to the former deputy minister of internal affairs, bly assuring his victory 13—but also to calmly establish Dmitry Mironov. the Kremlin’s new political agenda in view of the 2018 On the same day two other resignations took effect: presidential elections.14 Kirov Governor Nikita Belykh and Sebastopol Gover- Second, the resignations did not end the careers of nor Sergei Menyailo. Belykh’s resignation resulted from the politicians involved. Notwithstanding his unpop- a corruption scandal and he was replaced by the head ularity, Karelia’s former governor Khudilainen is, for of the Russian registry Igor Vasilyev. Menyailo, in con- trast, seems to have been forced to resign due to a per- sonal conflict with the previous speaker of the local legis- lative assembly Aleksei Chaly. In Sevastopol, Menyailo’s 7 < http://www.vedomosti.ru/politics/ post has been taken by the former minister of trade articles/2017/02/07/676566-putin> Dmitri Ovsiannikov. 8
example, expected to continue his political career in strated a rising preference for people coming from the Saint Petersburg in the near future.15 Kremlin’s—shrinking—inner circle than for personal- Looking at the presidential appointees, a third gen- ities coming from the political ranks. eral pattern that can be identified is an increasing pref- The second trend is the Kremlin’s tougher anti-cor- erence not only for people coming from the security ruption and anti-elite stance. In parallel with governors’ structures—something that is hardly new—but, more resignations, in 2016 there were a series of corruption importantly, for young technocrats who previously scandals involving high-level elites, including the head of worked in federal offices or ministries and who have the Federal Customs Service Andrei Belyainov in July19 no, or very little, political experience. While in most of and the Head of an anti-corruption unit of the Interior the cases, the new governors do not have direct connec- Ministry Aleksei Zakharchenko in September.20 In the tions with the regions’ political machines, they might current context of economic stagnation and in the run- have a direct personal link with the region. This is, for up to the presidential election, this line allows the Krem- example, the case for the new Buriatia governor Tsyde- lin to present itself as an arbiter standing above the polit- nov (40 years old, Buriat-born but with a political career ical fray, as well as to eventually blame the elite—and in Moscow) and the new governor of Perm Reshetnikov particularly, the governors—for the economic situation (40 years old, originally from Perm).16 and the lack of structural reforms. On the whole, these trends put governors in a highly The Technocratic Approach and the Lack of uncomfortable and contradictory position: as members a Long-Term Strategy of an elite that is incapable of renewing itself and wary On the one hand, this series of resignations should not be of changes, they too are focused on their own survival.21 seen as the launch of a new wave of purges, nor as a com- In this sense, they support the Kremlin’s line since they pletely new trend in the Kremlin’s relationship with the are interested in holding on to their power after the 2018 governors. During the last 15 years, there were many elections. At the same time, there is the feeling—par- gubernatorial resignations as well as reshuffles, partic- ticularly in non-economically relevant regions—that ularly in cases where United Russia affiliated governors local politicians could increasingly become the target performed poorly.17 More generally, far from having of an anti-elite stance, which is mainly aimed at lend- an overall long-term strategy of regional development, ing an impression of honesty to the federal leadership, the main driving, persistent line of action by the center which is in search of new sources of legitimacy. toward the regions appears to be a contingent approach Furthermore, the governors’ survival also depends on that tries to anticipate or react to tensions and local insta- a difficult, delicate balance between showing passive loy- bility on a case-by-case basis. alty to the center and taking relatively independent and On the other hand, the common pattern running popular initiatives in order to gain popular approval in through these recent decisions has to be seen in the their regions. In a period of economic crisis, governors light of the upcoming 2018 presidential elections and could start claiming more responsibilities and autonomy, corresponds, on the whole, to the general, recent evo- thus putting pressure on the current, shortsighted gov- lution of the relationship between the Kremlin and the ernmental approach towards center-periphery relations. Russian political elite.18 Indeed, in the midst of Putin’s third term two main trends can be observed. First, since Conclusion 2012 Russia’s political system has experienced a techno- The recent governors’ resignations are not the product of cratic shift and a deepening process of bureaucratization a precise and comprehensive long-term Kremlin strategy, within the United Russia ruling party, as well as the fed- nor do they represent a new wave of purges or a dramatic eral state structures. These tendencies, among other fac- reshuffling and renewal of the elite. In fact, all the recent tors, depend on the fact that technocrats seem to best changes were “technical decisions”22understandable in respond to the center’s combined increasing need for light of the gubernatorial elections set for October 2017 loyalty and effective local management in times of eco- and the 2018 presidential elections. nomic slowdown and in the absence of a broad develop- These short-term solutions given by the Kremlin to mental strategy. Furthermore, many voters have demon- the dilemma between verticalization and efficient local
15
political management are an ambiguous compromise. Considering Russia’s current political power bal- While continuing to highly privilege centralization over ances, it is highly probable that the solutions will lead, regional autonomy, the search for popular legitimacy, or without any surprise, to Putin’s reelection in 2018 and at least its appearance, leads the center to appoint gover- that the non-systemic opposition will have neither the nors and then hope that they can win popular elections. strength, nor the means, to become a threat to the gov- Moreover, in the view of the 2018 presidential elections, ernment’s stability. Nevertheless, these solutions do not the guarantee for social order and for the elite’s survival provide any answer on how to guarantee a more sustain- is mainly found in technocratic figures rather than ide- able balance between verticalization and regional stabil- ologues whose primary interest is party building. ity in the long term.
About the Author Carolina de Stefano is a visiting scholar at the Institute for European, Russian and Eurasian Studies (IERES), George Washington University and a PhD candidate at Sant’Anna School of Advanced Studies in Pisa.
Upcoming Gubernatorial Elections, Single Voting Day, 10 September 2017 Region Governor Former (if dismissed or resigned Official reason for dis- Interim Governor/ or Head of before end of term) or incumbent missal or resignation Head of Republic (if Republic Governor/Head of Republic and of former governor/ former Governor/ dates of office (official end of new office or remarks Head of Republic term, if incumbent dismissed or (where applicable) resigned/dismissed resigned before end of term) before end of term) Republic of Head of V.V. Nagovitsyn 10 July 2007–7 Resigned before end A.S. Tsydenov from 7 Buriatia Republic February 2017 (May 2017) of term February 2017 Republic of Head of A.P. Khudilainen 22 May 2012– Resigned before end A.O. Parfenchikov Karelia Republic 15 February 2017 (May 2017) of term from 15 February 2017 Mari El Re- Head of L.I. Markelov 17 January 2001–6 Resigned before end A.A. Yevstiseyev from public Republic April 2017 (September 2020) of term; arrested on 6 April 2017 13 April 2017 due to investigation for accepting bribes Republic of Head of V.D. Volkov 10 May 2012–12 Resigned before end V.D. Volkov from 12 Mordovia Republic April 2017 (May 2017) of term April 2017 Udmurt Head of A.V. Soloviov 19 February 2014–4 Dismissed by Pres- A.B. Brechalov from 4 Republic Republic April 2017 (September 2019) ident Putin before April 2017 the end of term due to loss of confidence/ from 4 April 2017 under investigation for accepting bribes Perm Krai Governor V.F. Basargin 28 April 2012–6 Resigned before end of M.G. Reshetnikov February 2017 (May 2017) term at own request/ from 6 February 2017 from 10 February 2017 Head of Federal Service for Supervision of Transport (Ros- transnadzor) Belgorod Governor Ye.S. Savchenko 18 December n.a. n.a. Region 1993–20 October 2017
continued overleaf RUSSIAN ANALYTICAL DIGEST No. 201, 18 April 2017 6
Upcoming Gubernatorial Elections, Single Voting Day, 10 September 2017 (continued)
Region Governor Former (if dismissed or resigned Official reason for dis- Interim Governor/ or Head of before end of term) or incumbent missal or resignation Head of Republic (if Republic Governor/Head of Republic and of former governor/ former Governor/ dates of office (official end of new office or remarks Head of Republic term, if incumbent dismissed or (where applicable) resigned/dismissed resigned before end of term) before end of term) Kaliningrad Governor N.N. Tsukanov 30 August 2010– Resigned before end of E.N. Zinichev 28 Region 28 July 2016 (September 2020) term at own request/ July–6 October 2016 From 28 July 2016 A.A. Alikhanov from President Putin’s 6 October 2016 plenipotentiary envoy to the Northwestern Federal District Kirov Region Governor N.Yu. Belykh 15 January 1990–28 Dismissed by Pres- I.V. Vasil'ev from 28 July 2016 (September 2019) ident Putin before the July 2016 end of term due to loss of confidence Novgorod Governor S.G. Mitin 7 August–7 February Resigned before the A.S. Nikitin from 7 Region 2017 (October 2017) end of term at own February 2017 request Riazan Governor O.N. Kovaliov 12 April 2008–14 Resigned before the N.V. Liubimov from Region February 2017 (October 2017) end of term at own 14 February 2017 request Saratov Governor V.V. Radayev 5 April 2012–17 Resigned before the V.V. Radayev Region March 2017 (April 2017) end of term at own request Sverdlovsk Governor Ye.V. Kuivashev 14 May 2012–17 Resigned before the Ye.V. Kuivashev from Region April 2017 (May 2017) end of term at own 17 April 2017 request Tomsk Governor S.A. Zhvachkin 17 March Resigned before the S.A. Zhvachkin from Region 2012–21 February 2017 end of term at own 21 February 2017 request/from 21 February 2017 Interim Governor of Tomsk Region Yaroslavl Governor S.N. Yastrebov 28 April 2012–28 Resigned before the D.Yu. Mironov from Region July 2016 (May 2017) end of term at own 28 July 2016 request/from 23 January 2017 Deputy Minister for Natural Resources City of Governor S.I. Menyailo 14 April 2014–28 Resigned before the D.V. Ovsyannikov Sevastopol* July 2016 (April 2019) end of term at own from 28 July 2016 request/from 28 July 2016 President Putin’s plenipotentiary envoy to the Siberian Federal District * Annexed Ukrainian territory; annexation not recognized by international community Sources:
ANALYSIS
The Origin and Development of Federalism in Russia Angela Di Gregorio, Milan Abstract Several features of Russia’s federal system have continued for centuries and remain in place today. The prin- ciples of sovereignty and territorial integrity are chief among them.
An Evolving Entity larations of sovereignty and then of independence from The Russian Federation is a federal state born from the 14 of the 15 constituent components, starting from the dissolution of the Soviet Union, of which it was the Baltic republics. Only Russia did not declare its inde- main component part. It became the successor state to pendence, thus succeeding in being considered the suc- the USSR in all major international institutions, includ- cessor state to the USSR. ing the UN Security Council. Before the August 1991 coup—which demonstrated Currently, the Russian Federation consists of 85 con- the weakness of the center and pushed the republics stituent entities (referred to in Russian as “subjects of the to secede from the Union—the Soviet authorities had Federation” and divided into 6 different types), and is prepared a draft of a new federal treaty that included the largest state in the world from a territorial point of a broad decentralization favoring the republics. How- view. It is a multi-national state, made up of about 160 ever, this treaty proved to be too little too late and did different peoples. Russians, nevertheless, are the pre- not prevent the collapse of the union. When the USSR dominant ethnic group in almost all the subjects of the finally did dissolve, it was replaced by the Common- Federation. Geographical and cultural features have pro- wealth of Independent States, a supranational organi- foundly influenced the institutional structure of Russia, zation defined by weak ties among the former repub- particularly its double European and Asian identities. lics and the predominance of the Russian Federation. Only after the definitive dissolution of the USSR, Rus- From Monarchy to Soviet Government and sia itself proceeded on a journey away from the Soviet Beyond model. We can label this experience a “transition to On the eve of the February 1917 revolution, which democracy” only in general terms. marked the end of the Romanov’s centuries-old abso- lute monarchy, Russia was a huge country located Center–Periphery Relations between Europe and Asia where political power had From the point of view of center–periphery relations, been exerted in a centralized way. Some narrow lib- contemporary Russia demonstrates elements of con- eral reforms introduced by the Fundamental Laws of tinuity with past regimes, since some fundamental 1906 did little to change the monolithic face of tsarist ideas derive from the ethnic and geographical features power, which because of its conservative myopia suf- of the immense country. These include the principles fered a total defeat, physically disappearing from the of unity (edinstvo) and state integrity (gosudarstven- scene. The Soviet state (from 1918 to 1922, the “Rus- naia tselostnost'), which were always necessary to hold sian Soviet Federative Socialist Republic” and from 1922 together the boundless territory inhabited by non- until 1991 the “Union of Soviet Socialist Republics”) Russian populations especially in remote areas, and was the prototype of the socialist form of organization that are part of the Byzantine and Orthodox heritage of power and economy, becoming a model imposed of the country. Considering the lack of natural fron- not only in the other former components of the Tsar- tiers and the existence of strategic resources in many ist Empire, but also in the rest of Central and Eastern of the more remote areas, centralization has always Europe after World War II. been an unavoidable choice. However, it is difficult The economic crisis of the 1980s led to the disinte- to justify such centralization during the transition to gration of the Soviet Empire. The goal of Mikhail Gor- a system formally inspired by the division of powers, bachev’s reforms was impossible to reach. His efforts to both horizontally and vertically. For that reason, the separate the party from the state in a context in which Russian version of the division of powers, as defined the party and the state were totally identified with one in the fundamental provisions of the 1993 Constitu- another inevitably weakened the party and consequently tion, contradict the Western conception of the princi- the state, causing its collapse. The political issue was ple in many ways. The unitary principle and state integ- compounded by the territorial one, allowing the disin- rity are among the founding values of the Russian legal tegration of the Soviet Union following a series of dec- order that the head of state is called upon to protect. RUSSIAN ANALYTICAL DIGEST No. 201, 18 April 2017 8
The unification function is reflected by the frequent a weakening of ties between the center and the USSR recourse, in the constitutional lexicon, to the adjec- republics which then led to the dissolution of the Soviet tive edenii (unitary), which is also found in the name Union in December 1991. Subsequently, the same trend of the party whose birth was favoured by the Kremlin continued in Russia, where President Yeltsin, elected for in 2001, Edinaia Rossiia (United Russia). the first time in June 1991 with direct suffrage, initially From the perspective of territorial decentralization, exploited the centrifugal tendencies to assert the auto- the 1993 Constitution is the arrival point in a process nomy of Russia against the Soviet center. Then, after in which centrifugal and centripetal forces clashed in the collapse of the USSR, Yeltsin behaved the same the transition from one political regime to the next. way to get the support of the peripheries in his strug- Taking into account the fact that the Tsarist Empire, gle for power with the Congress of People’s Deputies. the Soviet Union and post-Soviet Russia are multina- But once started, this process risked becoming danger- tional states, the situation evolved from the absolute ous. In fact, Yeltsin has struggled to counter the centrif- centralism of the Empire (with the exception of Fin- ugal tendencies that have emerged in the first years of land and the Polish territories), through the ethnic enforcement of the Constitution, the so-called “parade and “apparent” federalism during the Socialist rule of sovereignties:” Federal subjects, especially republics, up to the current federalism. The latter system applies, acted in blatant conflict with the federal legislation however, to a state that is territorially smaller than in putting in place a real “law war.” This is the period of the past and in whose “federal structure” (federativ- military intervention in Chechnya and of a severe eco- noe ustroistvo) includes ethnic-based entities as well as nomic crisis caused by the transition to a market econ- territorially defined units, which have also risen to the omy. Squeezed between the communists (the majority rank of “federal subjects.” party in the Duma until 2001) and the regional gover- nors, the authority of the President wavered and with Russia’s Contemporary Federalism it, given the characteristics of the transition period, also To understand the characteristics of current Russian fed- that of the Russian state, risking moving from “decen- eralism, one must consider a number of features of Rus- tralization” to “disintegration.” sian legislative and jurisprudential life that have changed so much since the Constitution was adopted that they The Putin Era now are often in conflict with its key principles. We refer, The next phase, the Putin era, was characterized by a pro- for example, to the division of competencies between the gressive centralization, to the point of distorting the federal and regional government (legislation has severely real nature of federalism. Reforms started in 2000 were limited the number of shared competencies) and the abil- intended to strengthen the state in order to ensure its sur- ity to select the subjects’ institutions. The same applies vival, to restore the so-called “power vertical” and a “uni- to the representation of the subjects in the upper house fied legal space” edinoe( pravovoe prostranstvo) and there- of the Federal Assembly, the Federation Council. Even fore the constitutional legality at every level of public the number of subjects has been reduced: the merging power (the “dictatorship of law”, in the words of Putin). process, although based on bottom-up initiatives, has In the first year of his presidency, Putin introduced been strongly driven from above to allow the Kremlin a number of significant measures, such as the plenipo- to exert greater control over a smaller number of regions. tentiary representatives of the President in the regions Consequently, it is difficult to find among Russia’s -fed (to better connect the different administrative levels eral practices several of the principles usually deemed but in fact for the purpose of control), and the new law essential to contemporary federalism, such as subsidi- on the upper house of the Federal Assembly, depriv- arity, cooperation between the center and the periph- ing regional governors and speakers of regional parlia- ery, and solidarity. ments of the senator seat, passing this to their simple The evolution of Russian federalism from 1990 delegates. In 2000 he introduced “federal interference,” onwards can be divided into two main phases, which namely the possibility for federal authorities, especially correspond to two different political periods: The first the President, to dissolve regional legislative assemblies one—started in the late-Soviet period and early 1990s— and dismiss heads of regional executives, generally in is characterized by decentralization of federal power and cases of non-compliance with federal legislation. In 2001 the consequent expansion of the subjects’ autonomy. The the law on political parties banned the formation of second is a phase of gradual and inexorable centraliza- regional parties by imposing the nationalization of polit- tion begun in 2000s. ical actors and so forbidding the creation of a governors’ The first phase, between 1990 and 1999, was charac- party. In 2003 the division of competencies between terized by a progressive decentralization, starting with the center, the regions and the local governments were RUSSIAN ANALYTICAL DIGEST No. 201, 18 April 2017 9
redefined, weakening the lower levels of government. were therefore introduced: own and delegated, with dif- In 2004 the Kremlin dictated further adjustments to ferent types of financing. the allocation of competencies and the elimination of Centralization has now replaced the subsidiarity direct elections for governors as well as a simplification principle. For several important matters, the federal of the “interference” mechanisms in favor of the Pres- government took full power and the federation subjects ident. In 2005 a new system for the Duma elections not were deprived of any possibility to intervene, including only raised the threshold from 5% to 7%, but intro- possession, use and disposal of land, subsoil, water and duced a new electoral formula that required the legisla- other natural resources; the allocation of state prop- tive seat be distributed by proportional representation, erty; and public security. Of particular importance is thus eliminating the 225 seats that had previously been the use of natural resources: with the slogan “the nat- allocated through the majority system. The majority sys- ural heritage belongs to the people of the republic” the tem usually rewarded candidates who were locally well so-called “parade of sovereignties” began in the early known and often independent of the parties (the mixed 1990s and several republics tried to assert control over electoral system was reintroduced in 2014 and re-applied the natural resources on their land. The same position to the September 2016 elections but without apprecia- had been one of the fundamental points of the Decla- ble results for independents). Between 2005 and 2008 ration of State Sovereignty of the RSFSR and one of the there have been some mergers of federal entities, drop- most important topics in the separation of Russia (and ping the number of federal subjects from 89 to 83. In the other republics) from the USSR. 2014 Russia’s annexation of Crimea led to the incorpo- Additional adjustments in the context of federal ration of two new subjects: the Republic of Crimea and relations have also been introduced by new electoral the City of Federal Relevance of Sevastopol. legislation and revised regulation of political parties. The most painful issue is the division of responsi- This legislation completed—but also partly over- bilities and powers between the federal and regional turned—a constitutional framework that would have levels, a process which began in 2003, moving to a sort allowed different versions of decentralization. of administrative decentralization. The law of July 4, Both federalism and the political system have under- 2003 dictated the rules by reserving most of the powers gone major transformations since the Constitution was to the federal level, unless they can be delegated to the adopted. The two are linked in a common design of cen- regions. In particular, the subjects have been conferred tralization and simplification. responsibilities that they are obliged to carry out using their own budgets. Two types of powers of the subjects
About the Author Angela Di Gregorio is Professor of Public Comparative Law at the Department of International Studies, University of Milan. RUSSIAN ANALYTICAL DIGEST No. 201, 18 April 2017 10
ANALYSIS
Bureaucratic Strength and Presidential Inattention: Disempowering Territorial Development Instruments in Russia Andrey Starodubtsev, Helsinki Abstract In spite of increasing funding and the establishment of special budget instruments, government policy aimed at the economic development of different parts of Russia’s territory has not demonstrated significant success. This article suggests that one of the causes for these shortcomings is the influence of the bureaucracy, which disempowers every new mechanism for resolving current economic problems in the Russian regions, even if doing so has a negative impact on the economic development of the country as a whole. This issue has not been a priority for Russia’s powerful presidency.
Failed Experiment opment of Russia as a whole. I will demonstrate how In 2007, the Russian government made the decision to federal and regional bureaucrats transform initially nar- create a special economic zone in the Republic of Altai, rowly-targeted instruments of territorial development named the Altai Valley.1 The project involved creating into regular tools of regional policy, thereby weakening a lake, with several islands hosting hotels and other tour- their essence and decreasing their effectiveness. ist infrastructure. The lake’s construction took three years, from 2009 to the end of 2011. In January 2012, Territorial Development to Achieve National builders started to fill the lake with water, but soon dis- Economic Growth covered that the water was draining from the lake due to Before 2005, only one instrument of long-term territo- serious errors in its engineering. After several attempts rial support existed in Russia, namely targeted federal to fix the problem, in 2016 the government decided to programs (federal'nye tselevye programmy). In addition, close the project. By that time, more than four billion special economic zones had existed since the 1990s in rubles had been spent from the federal budget to develop two regions (the Kaliningrad and Magadan Oblasts). the zone (Chernyshov, 2013). But the economic growth of the 2000s and the reform- This case is not unique. In 2016, the Audit Chamber ist intentions of Vladimir Putin’s government allowed of the Russian Federation announced the results of its the federal policy makers to create a system of financial inspection of several special economic zones (includ- and legal instruments aimed at accelerating economic ing the Altai Valley) and drew the conclusion that they and social development in the regions. were completely ineffective. One of the auditors claimed: German Gref, then minister of economic develop- “The process of the special economic zones’ creation and ment and trade, persuaded President Putin to create two management is characterized by formalism, irresponsi- mechanisms of territorial development—the new model bility, and impunity, and by the lack of executive dis- of special economic zones and the Investment Fund of cipline and responsibility for decisions and their con- the Russian Federation. To enlist the president’s sup- sequences. No real economic effect from the special port, Gref declared strict principles for the distribu- economic zones was achieved” (Audit, 2016). tion of financial and other types of resources within As a result, the Audit Chamber proposed revising the frameworks of the new mechanisms. Both of them the government’s approach to creating, managing and implied obligatory competition between regional gov- assessing the effectiveness of the economic zones, as well ernments, which were expected to suggest thoroughly as of other tools of regional development that had been thought-out projects with clear potential to attract pri- actively established in the 2000s and 2010s. vate investments and significant contributions to the In this article I try to explain the poor results from country’s economic well-being. such regional development mechanisms. My argument Both instruments were devised as specifically-tar- emphasizes rent-seeking behavior by bureaucrats, who geted measures to ensure conditions in different terri- tend to use all new policy instruments to increase their tories for economic breakthroughs significant for the own resources and fulfill current tasks of regional devel- economic development of the country as a whole. Ide- opment, instead of achieving strategic goals for the devel- ologically, the Ministry of Economic Development and Trade embodied the spatially-blind approach to territo- 1 This article is a contribution to the Center of Excellence “Choices rial development—the officials’ attention was focused of Russian Modernization”, funded by the Academy of Finland not on regions and their needs, but on projects and their RUSSIAN ANALYTICAL DIGEST No. 201, 18 April 2017 11
potential success. Consequently, the regional leaders in using the instrument. But that demand failed. As were to present themselves not as representatives of a result, by 2013, 31 new zones (in addition to the two regional communities, but as managers responsible for “old” ones) had been established—6 industrial, 5 innova- the development of concrete territories. tion, 3 port, and 17 tourist. The industrial and innova- However, in practice, these instruments’ internal tion zones were placed in regions characterized by a rel- contradictions have led to inconsistent and counter-pro- atively high level of socio-economic development: the ductive implementation. Moscow, Leningrad, Lipetsk and Tomsk Oblasts, and the Republic of Tatarstan. The tourist zones were located Special Economic Zones and Their Successors in the less prosperous regions: the Stavropol and Altai Initially, the Ministry of Economic Development Krais, the Republic of Altai, the Republic of Buryatia intended to establish two types of special economic and several republics of the North Caucasus. In 2016, zones—industrial and innovation. The industrial zones the federal government assessed the effectiveness of the were to be located in Russia’s biggest industrial centers, zones and found that some of them did not have serious which had significant potential for development and investors to demonstrate the needed economic results. As were experiencing a lack of resources, while the innova- such, six tourist zones and two port zones were closed. tion zones were designed to support existing technolog- Meanwhile, another federal agency, the Ministry ical centers, including Novosibirsk, Tomsk, and Mos- for the Development of the Russian Far East, proposed cow (Fedotova, 2005). a new mechanism of territorial development— terri- Yet in the process of discussions of the law on spe- tories of advanced development (TORs, territorii oper- cial economic zones in 2005, regional governments, ezhauschego razvitiia). In general, TORs are similar to the members of the State Duma and representatives of other special economic zones: they are territories that provide federal ministries criticized the Ministry of Economic their residents with special conditions for doing business. Development’s approach (Granik, 2005). Regional lob- But unlike the zones, the TORs received unprecedented byists insisted that the system of establishing and man- rights. The ministry was able to defend the right not to aging the zones be more decentralized and attractive for divide the TORs into types and, consequently, to attract different types of investors, even those ready to contrib- different kinds of businesses, including the most profit- ute comparatively insignificant funds to developmental able for each new territory. Additionally, the TORs’ con- projects. In turn, representatives of different federal min- ditions were more attractive to investors. They included istries argued against the stipulation that only the men- the reduction of several tax rates (property tax, land tax, tioned types of zones could be created. For example, the mining tax, and profit tax), a duty-free regime for for- Ministry of Communications demanded the creation of eign products and the absence of limitations on use of a specific type of zone which would be appropriate for foreign labor by resident companies. the telecommunication industry. Initially, the TORs were designed exclusively as Minister Gref’s administrative capacity in 2005 was a mechanism for the development of the regions in the enough to insulate this decision from the influence of Russian Far East, which suffered from a lack of invest- interest groups and to push the law, including its ini- ments and labor. But quite soon the president made the tial strict principles for the mechanism’s functioning, decision to extend the mechanism to the Russian mono- through the government and the parliament. But as early towns that had been suffering from some of the gravest as 2006, the government declared the creation of tourist problems of social well-being since the 2008 economic and recreational zones, and, in 2007, port zones. These crisis. As a result, in 2015 nine TORs appeared in Kha- decisions were the result of pressure from a coalition of barovsk, Primorsky and Kamchatka Krais, the Republic parliamentarians and “sectoral” ministries. The ideol- of Sakha, the Chukotka Autonomous Okrug and Amur ogy of the new zones’ creators was significantly differ- Oblast, and in 2016 16 more TORs were created in var- ent from Gref’s initial idea. Instead of the development ious parts of Russia. of points of growth for the country’s economy, the new While special economic zones and territories of zones were intended to solve current problems in two advanced development are the most significant examples, sectors—tourism and transportation. in recent years the government has created many instru- It is noteworthy that the Ministry of Economic ments aimed at accelerated development of the territorial Development and Trade and the special governmen- economy, including innovation-focused territorial clusters, tal agency responsible for the management of the zones industrial parks, agricultural parks, technological parks, firmly supported these new initiatives, although the high-tech industrial parks, tourist parks, zones of territorial Ministry of Finance continued to demand compliance development, and special economic zones established by with the original principle of highly selective funding regional governments. Their emergence and growing quan- RUSSIAN ANALYTICAL DIGEST No. 201, 18 April 2017 12
tity are an effect of the strategy employed by the bureau- water treatment plants in Bashkortostan and Karelia, cracy at all levels of government, intended to raise addi- a plant for the production of glass containers in Tula tional budgetary funds. Most have enjoyed the financial Oblast, a logistics complex in Voronezh Oblast, and support of the federal or regional budgets, but have not many others. Thus, the Investment Fund, an instrument demonstrated significant results. During its discussion of of support for national economic projects, was trans- special economic zones, the Audit Chamber claimed that formed into a means of assistance for regional economies. the number of such policy tools is excessive and provides lit- tle benefit for both the nation and the regions (Audit, 2016). Conclusion The two cases presented above demonstrate a situation The Investment Fund: From National that can be described as disempowerment of instruments Interests to Regional Ones of territorial development. The reasons for this outcome A similar story can be told about the Investment Fund of lie in domination by bureaucratic interests, combined the Russian Federation, another idea from the reform- with a lack of political will to change the current pat- driven team headed by German Gref. The government tern of territorial development. established the fund in 2006 with the declared goal of The instruments’ initial ideology contradicted the co-financing large investment projects that would con- interests of the governmental bureaucracy at both fed- tribute to the development of the country as a whole eral and regional levels. The federal officials seek to diver- within the sphere of infrastructure development. Pub- sify channels for spending of budgetary funds so as to lic money was to complement the investments of pri- achieve the goals of their ministries. The case of the vate companies, which would invest at least 25% of the Ministry of Communications’ request to create special common project costs. economic zones for telecommunication companies, and Initially, the Investment Fund, like the special eco- the subsequent creation of the port and tourist zones, as nomic zones, was designed as a spatially-blind mechanism. well as the Ministry for the Development of the Rus- But as early as 2007, when German Gref left his position sian Far East’s successful initiative to establish territories in the government, the fund was placed under the respon- of advanced development, are good examples of the sibility of the Ministry of Regional Development. Dmitry strategic behavior of federal bureaucrats with the aim Kozak, then minister of regional development, stated that of increasing their own resource capacities through con- financial support would be allocated to regional develop- trolling the tools of territorial development. mental projects. Consequently, in addition to nation-wide In its turn, the regional bureaucracy does not agree investment projects (those with a minimal investment of with ignoring the interests of regional development and 5 billion rubles per project), opportunities for funding actively works to change the instruments’ ideology from would also be given to regional projects (with a mini- spatially-blind to regionally-based. As a result, by enlist- mal investment of 500 million rubles). According to the ing the support of the Ministry of Regional Develop- new rules, every region could seek to receive financing ment, regional governments have gained access to finan- within the limits of annually redistributed quotas, cal- cial support for regional projects from the Investment culated with a special formula designed by the Ministry. Fund of the Russian Federation. This money was targeted at regions that lacked resources, These results come as no surprise to those who under- but could offer promising developmental ideas. stand the revolutionary nature of German Gref’s policy Thus, again, a tool designed to support and acceler- measures, as the proposals ignored the rooted interests of ate development beyond the boundaries of the capitals, both the “sectoral” federal ministers and the governors. and to provide potential points of growth with unpreced- But such radical policy changes can be made only with ented public and private investments, was transformed the support of dominant political actors. In the 2000s into a mechanism of support for regional projects. To and 2010s, Vladimir Putin has been such an actor, and spot the differences between the initial and subsequent has been able to achieve several reforms while protecting approaches to spending the Investment Fund’s resources, the reformers and their initiatives (Gel’man, Starodubt- one need only to look at the projects being supported by sev, 2016). However, the economic dimension of territorial the government. The list of national projects includes 11 development has never been on the shortlist for the pres- programs aimed at the development of transportation idential agenda. Hence, federal and regional bureaucrats infrastructure in different parts of the country (a sea use all available opportunities to redirect budgetary funds port in St Petersburg, development of the Volga–Baltic to resolving their current bureaucratic tasks instead of Waterway, construction of railways in territories that are allocating them to long-term projects with delayed effects. difficult to access, etc.). In its turn, the list of 39 regional See overleaf for information about the author and projects includes an industrial park in Tatarstan, waste- bibliography. RUSSIAN ANALYTICAL DIGEST No. 201, 18 April 2017 13
About the Author Andrey Starodubtsev is a postdoctoral researcher at the Aleksanteri Institute, University of Helsinki.
Bibliography • Audit (2016). Za 10 Let OEZ Tak i Ne Stali Deistvennym Instrumentom Podderzhki Ekonomiki, in: Audit Chamber’s Official Site,
MAPS
Administrative Subdivisions of the Russian Federation 1999 and 2017
Russian Federation A i i r i S i i io 1 to 84
to 7
to 62
to 7 to 82
MOSCOW
to 87 Kazakhstan
A i i r i i Uzbekistan Republic Autonomous Region (Oblast) Mongolia Autonomous Okrug National border Krai Administrative border Map created by S. Dutzmann Region (Oblast) Leipzig, 2007 Border of an autonomous okrug within (captions translated by Russian Federal City a region (oblast) or krai Analytical Digest)
1. Murmansk region 24. Belgorod region 47. Kirov region 70. Republic of Khakassia 2. Republic of Karelia 25. Lipetsk region 48. Udmurt Republic 71. Altai Republic 3. Leningrad region 26. Tambov region 49. Perm region 72. Tyva Republic 4. Pskov region 27. Voronezh region 50. Komi-Permyak Autonomous Okrug 73. Irkutsk region 5. Novgorod region 28. Volgograd region 51. Republic of Tatarstan 74. Ust-Orda Buryat Autonomous 6. Vologda region 29. Rostov region 52. Republic of Bashkortostan Okrug 7. Arkhangelsk 30. Krasnodar krai 53. Ulyanovsk region 75. Republic of Buryatia 8. Nenets Autonomous Okrug 31. Republic of Adygea 54. Samara region 76. Chita region 9. Komi Republic 32. Stavropol krai 55. Orenburg region 77. Agin-Buryat Autonomous Okrug 10. Kaliningrad region 33. Karachay-Cherkess Republic 56. Chelyabinsk region 78. Primorsky krai 11. Tver region 34. Kabardino-Balkar Republic 57. Kurgan region 79. Jewish Autonomous region 12. Smolensk region 35. Republic of North Ossetia-Alania 58. Tyumen region 80. Khabarovsk krai 13. Moscow region 36. Ingush Republic 59. Sverdlovsk region 81. Amur region 14. Yaroslavl region 37. Chechen Republic 60. Khanty-Mansi Autonomous Okrug 82. Sakha (Yakutia) Republic 15. Kostroma region 38. Republic of Dagestan 61. Yamalo-Nenets Autonomous Okrug 83. Magadan region 16. Ivanovo region 39. Kalmyk Republic 62. Krasnoyarsk krai 84. Chukotka Autonomous Okrug 17. Vladimir region 40. Astrakhan region 63. Evenk Autonomous Okrug 85. Kamchatka region 18. Ryazan region 41. Saratov region 64. Taymyr Autonomous Okrug 86. Koryak Autonomous Okrug 19. Tula region 42. Penza region 65. Tomsk region 87. Sakhalin region 20. Kaluga region 43. Republic of Mordovia 66. Omsk region 88. St. Petersburg 21. Bryansk region 44. Nizhny Novgorod region 67. Novosibirsk region 89. Moscow 22. Oryol region 45. Chuvash Republic 68. Altai krai 23. Kursk region 46. Republic of Mari El 69. Kemerovo region RUSSIAN ANALYTICAL DIGEST No. 201, 18 April 2017 15
Russian Federation A i i r i S i i io 2017
MOSCOW
84*
85*
Kazakhstan
Uzbekistan A i i r i i Republic Mongolia Autonomous Region (Oblast) Autonomous Okrug Map created by S. Dutzmann National border Leipzig, 2007 Krai Administrative border (captions translated by Russian Analytical Digest) Region (Oblast) Border of an autonomous okrug within Federal City a region (oblast) or krai Annexed Ukrainian territory
1. Murmansk region 23. Kursk region 45. Chuvash Republic 67. Republic of Khakassia 2. Republic of Karelia 24. Belgorod region 46. Republic of Mari El 68. Altai Republic 3. Leningrad region 25. Lipetsk region 47. Kirov region 69. Tyva Republic 4. Pskov region 26. Tambov region 48. Udmurt Republic 70. Irkutsk region 5. Novgorod region 27. Voronezh region 49. Perm krai 71. Republic of Buryatia 6. Vologda region 28. Volgograd region 50. Republic of Tatarstan 72. Zabaikalsky krai 7. Arkhangelsk 29. Rostov region 51. Republic of Bashkortostan 73. Primorsky krai 8. Nenets Autonomous Okrug 30. Krasnodar krai 52. Ulyanovsk region 74. Jewish Autonomous region 9. Komi Republic 31. Republic of Adygea 53. Samara region 75. Khabarovsk krai 10. Kaliningrad region 32. Stavropol krai 54. Orenburg region 76. Amur region 11. Tver region 33. Karachay-Cherkess Republic 55. Chelyabinsk region 77. Sakha (Yakutia) Republic 12. Smolensk region 34. Kabardino-Balkar Republic 56. Kurgan region 78. Magadan region 13. Moscow region 35. Republic of North Ossetia-Alania 57. Tyumen region 79. Chukotka Autonomous Okrug 14. Yaroslavl region 36. Ingush Republic 58. Sverdlovsk region 80. Kamchatka krai 15. Kostroma region 37. Chechen Republic 59. Khanty-Mansi Autonomous Okrug 81. Sakhalin region 16. Ivanovo region 38. Republic of Dagestan 60. Yamalo-Nenets Autonomous Okrug 82. St. Petersburg 17. Vladimir region 39. Kalmyk Republic 61. Krasnoyarsk krai 83. Moscow 18. Ryazan region 40. Astrakhan region 62. Tomsk region 84. Republic of Crimea* 19. Tula region 41. Saratov region 63. Omsk region 85. Sevastopol* 20. Kaluga region 42. Penza region 64. Novosibirsk region 21. Bryansk region 43. Republic of Mordovia 65. Altai krai 22. Oryol region 44. Nizhny Novgorod region 66. Kemerovo region
* Annexed Ukrainian territory; annexation not recognized by international community RUSSIAN ANALYTICAL DIGEST No. 201, 18 April 2017 16
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