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Federalism and Regional Policy in Contemporary Russia

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Federalism and Regional Policy in Contemporary Russia Federalism and Regional Policy in Contemporary Russia How do Russian leaders balance the need to decentralize governance in a socially and politically complex country with the need to guarantee political control of the state? Since the early 2000s Russian federal authorities have arranged a system of political control on regional elites and their leaders, providing a “police control” of special bodies subordinated by the federal center on policy implementation in the regions. Different mechanisms of fiscal federalism and investment policy have been used to ensure regional elites’ loyalty and a politically centralized but administratively decentralized system has been created. Asking clear, direct, and theoretically informed questions about the relation- ship between federalism, decentralization, and authoritarianism, this book explores the political survival of authoritarian leaders, the determinants of policy formulation, and theories of federalism and decentralization, to reach a new understanding of territorial governance in contemporary Russia. As such, it is an important work for students and researchers in Russian studies and regional and federal studies. Andrey Starodubtsev is a postdoctoral researcher at the Aleksanteri Institute, University of Helsinki, Finland. He collaborates with the Center for Moderniza- tion Studies, European University at St Petersburg and the Department of Polit- ical Science, National Research University Higher School of Economics – St Petersburg, Russia. His expertise covers the issues of federalism and regional policy as well as the problems of governance and modernization in contemporary Russia. Studies in Contemporary Russia Series Editor: Markku Kivinen Studies in Contemporary Russia is a series of cutting-edge, contemporary studies. These monographs, joint publications and edited volumes branch out into various disciplines, innovatively combining research methods and theories to approach the core questions of Russian modernisation; how do the dynamics of resources and rules affect the Russian economy and what are the prospects and needs of diversification? What is the impact of the changing state–society relationship? How does the emerging welfare regime work? What is the role of Russia in contemporary international relations? How should we understand the present Russian political system? What is the philosophical background of mod- ernisation as a whole and its Russian version in particular? The variety of opinions on these issues is vast. Some see increasingly less dif- ference between contemporary Russia and the Soviet Union while, at the other extreme, prominent experts regard Russia as a ‘more or less’ normal European state. At the same time new variants of modernisation are espoused as a result of Russian membership of the global BRIC powers. Combining aspects of Western and Soviet modernisation with some anti-modern or traditional tendencies the Russian case is ideal for probing deeper into the evolving nature of modernisa- tion. Which of the available courses Russia will follow remains an open ques- tion, but these trajectories provide the alternatives available for discussion in this ground-breaking and authoritative series. The editor and the editorial board of the series represent the Finnish Centre of Excellence in Russian Studies: Choices of Russian Modernisation. For a full list of titles in this series, please visit www.routledge.com/series/ ASHSER-1421 Authoritarian Modernization in The Other Russia Russia Local Experience and Societal Change Ideas, Institutions, and Policies Leo Granberg and Ann-Mari Sätre Edited by Vladimir Gel’man Federalism and Regional Policy in Philosophical and Cultural Contemporary Russia Interpretations of Russian Andrey Starodubtsev Modernisation Edited by Katja Lehtisaari and Arto Mustajoki Federalism and Regional Policy in Contemporary Russia Andrey Starodubtsev First published 2018 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2018 Andrey Starodubtsev The right of Andrey Starodubtsev to be identified as author of this work has been asserted by him in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. The Open Access version of this book, available at www.taylorfrancis. com, has been made available under a Creative Commons Attribution-Non Commercial-No Derivatives 4.0 license. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data A catalog record for this book has been requested ISBN: 978-1-472-46150-6 (hbk) ISBN: 978-1-315-58206-1 (ebk) Typeset in Times New Roman by Wearset Ltd, Boldon, Tyne and Wear To Anna Fomina, my best friend and partner, with love and gratitude Contents List of figures viii List of tables ix Preface x Introduction 1 1 Tertius gaudens: what is wrong with Russian federalism? 20 2 Why has regional development in Russia failed? 61 3 Who, how, when, and how much? Factors of the redistribution of intergovernmental transfers in Russia 102 4 Decentralize but not federalize: coordination, subordination, and control in Russian territorial governance 125 Conclusion 155 Appendix 1 159 Appendix 2 160 Appendix 3 161 Appendix 4 162 Appendix 5 164 Appendix 6 167 Index 168 Figures I.1 The dynamics of freedom in the USSR and the Russian Federation 13 2.1 Distribution of incomes between different governmental levels in 2011 in several federations 66 2.2 Federal and regional shares of budgetary incomes in Russia in 1992–1999 and 2003–2011 81 2.3 The number of federal programs 83 2.4 Share of intergovernmental transfers in the federal budget’s expenditures 91 3.1 Average value of transfers from the federal budget to subnational budgets in republics and other types of subnational units 110 3.2 Average value of gross regional product per 10 000 residents in republics and other types of subnational units 110 3.3 The number of federal programs in the 2000s and 2010s 114 4.1 Ratio of federal and subnational budget revenues in the Russian Federation in 1992–2011 134 4.2 Number of officials at the national and subnational governmental levels in 2000–2013 135 4.3 Dynamics of allocation of expenses in the field of education in 2000–2015 144 4.4 Dynamics of change in expenses for education in three Russian republics in 2001 and 2015 144 Tables 2.1 Models of intergovernmental financial relations 68 2.2 Decline in industrial production in the regions of Russia in 2008–2009 88 4.1 Sequences of decentralization and their effects on the intergovernmental balance of power 128 4.2 Social expenditures of the Russian consolidated budget in 2005, 2010, and 2015 (in billion rubles) 138 A1.1 Descriptive statistics 159 A2.1 Results of the regression analysis of annual distribution of intergovernmental budget transfers 160 A3.1 Results of the regression analysis of distribution of annual intergovernmental budget transfers grouped in periods 161 A4.1 List of the governmental programs and subprograms 162 Preface In his classic book on federalism (1964), William Riker presented a brief two- page analysis of the process of the Soviet Union’s formation as a federal state, setting it alongside not only Yugoslavia, but also West Germany, Austria, and Switzerland. In response to the obvious question from all those who were sur- prised by the statement that an unfree state, one practicing mass terror and forced displacement of peoples, as a polity, complied with the principles of self-rule and shared rule, Riker noted: Since 1923 the Soviet Union has been highly centralized and for that reason many scholars have refused to call it a federalism. This refusal is, however, merely the expression of the American-Commonwealth mythology that fed- eralism ought to prevent tyranny. Since the Soviet Union preserved all the features of federalism, the mere fact that its federalism fails to prevent tyranny should not lead to casting it out of the class of federalism. Rather it should lead to a re-evaluation of what federalism means and implies. (Riker, 1964: 39–40) Although I completely disagree with the statement that “the Soviet Union pre- served all the features of federalism,” I have always interpreted this paragraph as Riker suggesting that we should examine the features of territorial governance in states that are simultaneously complex (with a large territory, plural society, etc.), and not democratic. It is the desire to understand how one should manage a country that, though born to be a federation, has not realized the federal canon, that compelled me to write this work. This book is focused on Russia, a country that claims a federal structure in its constitution and its full name, but which has not for a single day been consistent with the classic principles of federalism. For many years, Russia has served as an example of the contemporary authoritarian state for the world of political science. The shift in politics research from studying the formation, development, and changes of its political regime to studying how that regime influences the functioning of the state and society has reserved Russia’s position as a “crucial case” for many years to come. For me, the Russian case is important because it clearly shows how the central government forms a territorial governance system Preface xi as the authoritarian regime grows stronger, how it solves its immediate adminis- trative tasks, and what political constraints it frequently faces. The book is based on the materials of a number of studies of the political factors of territorial governance in Russia. The first of them, “Tertius gaudens: Circumstances of Formation of a Federal State in Russia,” was conducted in 2002–2005 at the Faculty of Political and Social Sciences, Petrozavodsk State University.
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