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Analysis

Russian Federalism: Can It Be Rebuilt from the Ruins? By Darrell Slider, Moscow

Abstract As president, sharply reduced the power of ’s governors, removing them from the upper chamber of parliament and taking the power to appoint them, rather than letting their constituents elect them. However, these moves did not increase the governability of the regions. Minister of Regional Development Dmitry Kozak is now promoting a plan that would return considerable powers to the region. However, this plan has yet to win Kremlin endorsement and therefore has not been implemented.

Reducing Regional Autonomy governors were reappointed, either when their term ex- During his presidency, Vladimir Putin repeatedly em- pired or in advance, but the message that they could be phasized that he was the heir to a Russia that was near removed at any time was clearly communicated. Th at the point of disintegration. From the beginning, he set said, the governor remains the most powerful fi gure in restoring central control over Russia’s regions as his goal. any region, and there has been no mass exodus of gover- His approach was to both create new political institu- nors in search of more powerful or more rewarding posi- tions, early on termed the “vertical of authority,” and tions. Only two governors voluntarily accepted posts in reduce the autonomy of Russia’s governors and republic Moscow that they considered promotions: Yuri Trutnev presidents. Th e Kremlin turned out to be much more left Perm’ to oversee Russia’s energy assets as minister skilled at undermining governors than creating insti- for natural resources, while Sergei Sobianin left Tiumen’ tutions. In the process of recentralization, elements of to head the presidential administration under Putin. a federal system that had been emerging under Yeltsin More recently, he was named fi rst deputy prime minis- were deeply eroded or destroyed. ter in the new Putin-led government with a wide range Putin’s institutional innovations began with the cre- of responsibilities, including regional policy. ation of seven federal okrugs with a presidential repre- Another track for achieving recentralization was a sentative (polpred) assigned to each. Putin’s “eyes and redistribution of powers that took place in 2003–2004. ears in the regions” took on the job of monitoring the Functions that had been within the purview of regional work of governors and the regional branches of federal offi cials or shared with the center were brought under agencies. Th e okrugs were superimposed on the existing federal control. Th e lack of eff ective new institutions administrative structure in an eff ort to improve central meant that the decision-making authority shifted by de- control and coordination, but the polpreds’ ability to fault to existing central institutions – the national min- carry out this assignment was inadequate to the task. istries and their territorial representatives. Tax revenues In the ensuing years the Kremlin attempted to were reallocated from the regions to the center and re- hamstring governors using the full range of levers at turned to the regions only for particular, limited pur- its disposal. Putin removed regional leaders from the poses. Dmitry Kozak, the current minister of regional Federation Council, the upper chamber of the Russian development, has estimated that the ratio of federal to parliament, depriving the governors of their collective regional powers over regional policy became roughly veto over federal policies toward the regions. Prosecutors 70 percent to 30 percent. Th is shift was accompanied were ordered to initiate criminal proceedings against by a rapid expansion in the number of federal bureau- a large number of governors in 2003–2004, often for crats in the regions Russian Statistical Agency (Rosstat) relatively minor infractions, but which threatened re- data, while omitting many types of federal agencies in moval and possible prison terms. Most of these cases the regions such as law enforcement agencies, indicate were later dropped, though only after the Kremlin had the major trends that took place in the Putin years. End- made its point. of-the-year fi gures for 2001 and 2006 show the num- Perhaps most importantly, in the aftermath of the ber of federal executive offi cials in the regions increased Beslan school tragedy in September 2004, Putin elim- from 348,300 to 616,100. Th is growth far exceeded the inated popular elections of governors. Starting in 2005 number of regional-level bureaucrats both in quantity the president nominated governors, after which they and in the rate of increase. (In 2001 the number of re- were formally approved by regional legislatures. Many gional executive branch offi cials was 169,900; by the 2 rrussianussian aanalyticalnalytical russian analytical digest 43/08 ddigestigest

end of 2006 the fi gure was around 200,000.) Th e larg- port on human development in Russian regions, the est increase in federal offi cials in the regions took place UNDP found that Moscow and oil-rich Tiumen’ were in 2005, 29.3 percent in one year. at the level of the Czech Republic, St. Petersburg and Finally, Putin put considerable eff ort into creating Tatarstan approached Bulgaria’s level of development, a new, hierarchical structure for political control from while the lagging regions of Ingushetia and Tuva were the center. Th e Kremlin helped the (UR) closer to Mongolia or Guatemala. Th e trend was for bet- party achieve a near monopoly on political activity at ter performing regions to add to their relative advantage, both the federal and regional levels. By 2007 almost while poor regions fell further behind. A 2008 Ministry all governors had joined the party, and it succeeded of Regional Development (Minregion) report found, for in gaining a sizable majority in nearly all regional leg- example, that industrial output in the top 10 regions islatures. In May 2008 the last region with a non-UR exceeded the bottom ten regions by 33.5 times in 2006 majority in its legislature, Stavropol’ krai, fell into line. and 39.1 times in 2007. Poor regional investment cli- As in other regions, this outcome was a product less of mates were the norm. Progress in rebuilding Soviet-era popular support for the party than of pressure on leg- infrastructure was inadequate, particularly in the poor- islators to change their party affi liation. est regions. Small business development in the same re- While the creation of a political monopoly all but de- gions was stalled or deteriorating. From the standpoint stroyed Russia’s emerging party system, United Russia’s of removing bottlenecks to growth and social-economic eff ectiveness as an instrument of centralization was low. development, recentralization was not working. Only now is United Russia beginning to create what Th e shift in functions to Moscow-based ministries it terms a “cadre reserve” to fi ll the top regional posts. produced massive coordination problems. Central Governors were not governors because they were mem- funds were being allocated through Moscow-based bers of UR; they became members of UR because they ministries or agencies, often without taking into ac- were governors, and the Kremlin insisted that they join. count regional needs. Waste and duplication in the use Th e party had few tools, other than the threat of expul- of federal funds, and common bureaucratic pathologies sion, to exercise discipline. Political power within a re- manifested themselves everywhere. A situation emerged gion resided with the governor. As the Russian politi- that could be termed “dual insubordination.” Ministry cal scientist and UR deputy Sergei Markov put it, “Th e territorial representatives were far from Moscow, and head of the Voronezh branch of United Russia does control of subordinates was weak. Lack of formal sub- not give orders to the governor who is a party member, ordination to governors meant they were often free to it’s the governor who gives orders to the head of the do as they chose, and that had little to do with regional Voronezh branch of United Russia.” Still, the relation- interests. (Not coincidentally, the Putin era was marked ship between governors and the Kremlin shifted dra- by a major increase in corruption in the regions.) Th e re- matically in favor of the latter. sult was a situation where governors were now appoint- ed by Putin, but he had taken away from them ultimate Failure to Increase Governability responsibility for much that went on in their regions. Did Putin’s centralizing policies do anything to im- prove the governability of Russia? Th ey certainly helped A New Round of Reforms achieve the reelection of Putin to a second term in It is to Putin’s credit that he sought a change that would 2004, the creation of a United Russia supermajority in address these problems. Late in his second term, he the Duma elections in 2003 and 2007, and the 2008 brought back to Moscow his close adviser Dmitry election of Putin’s choice to succeed him as president, Kozak, who had been serving as polpred in the south- Dmitry Medvedev. Governors and republic presidents ern okrug. (After Beslan, Kozak had been sent to try to were reportedly given specifi c targets to meet in turn- restore stability in the region, which includes the trou- out and the percentage of the vote, and they responded bled republics.) In September 2007 with all of the instruments at their disposal. Kozak was named Minister of Regional Development In key respects, however, recentralization was a fail- and given a major role in designing a new policy to- ure. Redistribution of budgetary funds and regional ward the regions. Kozak’s three years in Russia’s south investment (the few “donor” regions providing the re- gave him new insights on how recentralization worked sources) were taking place in a context of high govern- in practice. In speeches and interviews Kozak argued ment revenues generated by oil prices, but the impact that recentralization had gone too far and that a funda- on regional development was negligible. Th e Putin years mental change in regional policy was needed. were marked by a growth in regional inequality, not its While he avoided using the term federalism, in fact reduction. Russia has the widest gap between rich and Kozak’s proposals called for a new relationship between poor regions of any developed country. In its 2007 re- center and regions that would strengthen governors at 3 rrussianussian aanalyticalnalytical russian analytical digest 43/08 ddigestigest

the expense of federal ministries. Th e preference would Th ere has been virtually no public discussion of re- be for decisions to be made at the lowest possible level, suming popular election of governors. Governors would and this would apply as well to municipal authorities, apparently be accountable only to the center, not to who would become less dependent on governors. voters. Kozak’s plan entails the use of statistical in- Th e new approach represents a return to decentral- dicators to assess the performance of regional leaders. ized governance of regions with the main emphasis on Expectations would be higher for regions that received economic performance. Th e federal role would be lim- greater assistance from the center—the poorest, most ited to law enforcement and establishing the “rules of “economically depressed” regions. Th ey would be ex- the game” in the regions. Such an approach would in- pected to produce jobs, housing, increased investment, clude, for example, antimonopoly regulation and fi nan- and small business development at a rate higher than cial monitoring. In the most radical interpretation of the Russian mean. If they fail, not only would the re- Kozak’s program, most federal agencies in the regions gion risk losing budgetary incentives, but governors would be dissolved, and regions would take over the could expect to lose their posts. day-to-day regulation of economic activity. Federal en- Kozak fi rst detailed his proposals in October 2007, tities, such as Minregion and the Ministry of Economic but to date his new regional policy has not received fi nal Development, would award investment funds based on endorsement by the Kremlin and Putin’s government. It regional investment proposals in order to avoid dupli- still requires a legislative foundation. One can assume cation and encourage a division of labor among regions. that most ministries will attempt to block any change It is in this context that Kozak has talked about the cre- in their regional functions. But in his favor, Kozak’s ini- ation of ten “macroregions” in order to view territorial tiative coincides broadly with the priorities that Dmitry economic plans from a broader perspective. Governors Medvedev has promoted from the start of his presidency. would have much more fl exibility in setting economic Radical administrative reform in the regions would be priorities, infrastructure policy, and establishing a fa- consistent with reducing corruption and lowering the vorable investment climate. Budgetary funds would go barriers to small business that are impeding Russian directly to regional and local governments for these pur- economic development. poses, and the most successful reformers would be re- warded with fi nancial incentives for their regions.

About the author Darrell Slider is Professor of Government and International Aff airs at the University of South Florida (Tampa). He is currently conducting research in Moscow.

Recommended Reading • Darrell Slider, “Putin’s Southern Strategy: Dmitriy Kozak and the Dilemmas of Recentralization,” Post-Soviet Aff airs, v. 24, no. 2 (April–June 2008), pp. 177–197. • United Nations Development Program, National Human Development Report Russian Federation 2006/2007 Russia’s Regions: Goals, Challenges, Achievements (2007). • Trud i zaniatost’ v Rossii 2007 g., Moscow: Rosstat, 2008. • Ministry of Regional Development, Osnovnye tendentsii razvitiia regionov Rossiiskoi Federatsii v 2006–2007 godakh (sbornik materialov)

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