After the Deluge

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After the Deluge After the Deluge After the Deluge Regional Crises and Political Consolidation in Russia Daniel S. Treisman Ann Arbor To Susi Copyright © by the University of Michigan 1999 All rights reserved Published in the United States of America by The University of Michigan Press Manufactured in the United States of America j` Printed on acid-free paper 2002 2001 2000 1999 4 3 2 1 No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, or otherwise, without the written permission of the publisher. A CIP catalog record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Treisman, Daniel. After the deluge : regional crises and political consolidation in Russia / Daniel S. Treisman. p. cm. Includes bibliographical references and index. ISBN 0-472-10998-7 (alk. paper) 1. Federal government—Russia (Federation) 2. Central-local government relations—Russia (Federation) 3. Russia (Federation)—Politics and government—1991– I. Title. JN6693.5.S8T74 1999 351.47—dc21 99-37664 CIP Contents List of Figures . vii List of Tables . ix Acknowledgments . xi Chapter 1. Introduction . 1 Chapter 2. Center and Regions in Russia . 28 Chapter 3. Fiscal Transfers and Fiscal Appeasement . 47 Chapter 4. Public Spending and Regional Voting . 81 Chapter 5. Political Strategies of Regional Governors . 120 Chapter 6. Yugoslavia, the USSR, Czechoslovakia—and Russia . 137 Chapter 7. Conclusion: Democratization and Political Integration . 161 Appendix A . 181 Appendix B . 189 Appendix C . 209 Appendix D . 216 Notes . 221 References . 241 Index . 259 Figures 3.1. “Winners” and “losers” from fiscal redistribution, 1992 56 4.1. Regional vote for Yeltsin in 1991 presidential election 83 4.2. Vote of trust in Yeltsin, April 1993 referendum 84 4.3. Change in regional vote for Yeltsin, 1991 election to April 1993 referendum 85 4.4. Vote for the three most pro-reform blocs in December 1993 86 4.5. Vote for major pro-reform blocs and for Communists, December 1995 87 4.6. Second-round vote for Yeltsin in 1996 presidential election 88 A1. The threshold function for regional rebellion 183 A2. Threshold function and cumulative density of s 184 A3. Increasing tax 185 A4. Tax increase with selective appeasement 186 A5. Appeasement with imperfect information 187 Tables 2.1. Elections of Regional Leaders, January 1991 through June 1996 32 3.1. Estimated State Budget Revenues and Expenditures in Russia in the Early 1990s 50 3.2. Estimated Fiscal and Financial Transfers from Center to Regions, 1992–96 53 3.3. What Explains the Pattern of Net Center-to-Region Transfers in Russia, 1992–96? 61 3.4. What Explains the Pattern of Particular Transfers and of Regional Tax Retention, Russia 1992? 68 3.5. Change in Ranking of Regions in Terms of Net Central Transfers, 1988–92 76 4.1. Relationship between Central Transfers and Regional Budget Spending 93 4.2. Voting for Yeltsin and Incumbent Pro-Reform Blocs 95 4.3. The 1996 Presidential Election: Voting for Yeltsin in Rounds 1 and 2 101 4.4. Why Did Different Regions Support Different Political Blocs in the December 1993 Parliamentary Election? 104 4.5. Independent Variables Correlated with the (North-South) Latitude of Regions’ Capital Cities 109 4.6. Logistic Regression of Whether the Incumbent Governor Was Reelected if Regional Election Held 114 4.7. Logistic Regression of Whether the Most Senior Regional Executive Official Running in December 1993 Federation Council Election Was Elected 116 5.1. Which Regional Chief Executives Opposed Yeltsin at Moments of Constitutional Crisis? 126 5.2. Which Regional Chief Executives Supported Yeltsin During 1996 Presidential Election Campaign? 130 5.3. Aid, Voting, and Governors’ Strategies in Three Russian Regions 133 6.1. Federal Own Revenue in Three Reforming Communist Federations and Russia 140 x Tables 6.2. Federal Expenditures in Three Reforming Communist Federations and Russia 141 6.3. Consolidated Budget Revenues in Three Reforming Communist Federations and Russia 143 6.4. Federal Budget Balance in Three Reforming Communist Federations and Russia 145 6.5. Grants from Federation to Czech and Slovak Governments, in Percent of Czechoslovakia GDP 146 6.6. Yugoslavia, Financing the Federation 147 6.7. Republic Budget Expenditure per Capita in Czechoslovakia 1989 and 1992 149 6.8. Expenditures of State (Federal 1 Republic) Budgets on Social Security Benefits, Czechoslovakia 149 6.9. Growth of M1 in Czech and Slovak Republics, 1991–92 150 6.10. Domestic Credit Growth in Czech and Slovak Republics, 1991–92 150 6.11. Estimated Interrepublican Redistribution in Yugoslavia, 1986 153 6.12. Operations of the Yugoslav Federal Development Fund in the Late 1980s 154 6.13. Access to Concessionary Loans and Money Creation of Three Yugoslav Republics, 1987 154 6.14. Net Budget Transfers from the Union 156 6.15. Estimated Net Indirect Transfers to Republics as Result of Underpriced Exports/Imports of Oil and Gas, and Overpriced Exports/Imports of Non–Oil-and-Gas Goods, 1990 158 B1. Center-to-Region Transfers and Regional Tax Share, Russia 1994 190 B2. Regions’ Ranks in Net Transfers Received 194 B3. Index of Social Infrastructure Underdevelopment 200 B4. Index of Pace of Economic Reform 202 B5. Sovereignty Declarations, August 1990–May 1991 203 B6. Characteristics of the Independent Variables Used in Final Regressions 204 B7. Correlation Coefficients for Independent Variables Used in Same Long Regression in Table 3.3 207 B8. Breakdown of the Dependent Variable, 1992 207 B9. Breakdown of the Dependent Variable, 1994 208 C1. Characteristics of Russia’s Regions 214 D1. Which Regional Delegations to the 1993 Congress of People’s Deputies Voted with Yeltsin’s Side? 217 Acknowledgments I have accumulated debts—intellectual and otherwise—to many people in the course of researching and writing this book. Peter Hall, Andrew Walder, and especially Tim Colton provided insightful suggestions and generous encour- agement during the period of its germination as a Ph.D. dissertation in the Government Department at Harvard. Andrei Shleifer has been a source of in- tellectual stimulation throughout, as well as penetrating comment on the cur- rent state of Russian politics. Jim Alt, Robert Bates, Robert Conrad, Tim Frye, and Joel Hellman read earlier versions of parts of the book and offered useful insights. Phil Roeder read the manuscript in its entirety and provided invalu- able criticism. His careful reading forced me to clarify my thinking on various points and has greatly improved the final product. Deborah Treisman, Michel Treisman, and Hans Landesmann also read parts of the final manuscript and made valuable suggestions. Other colleagues swapped insights into the current state of Russian politics; I would like to thank in particular Michael McFaul, Steve Solnick, Yitzhak Brudny, and Robert Moser. I am more than grateful to my colleagues in the political science depart- ment at UCLA for the atmosphere of intellectual curiosity and good humor in which the final manuscript took shape. Lev Freinkman, of the World Bank, has been more than generous with his expertise on numerous occasions. I am grate- ful also to participants in seminars and workshops where I presented earlier ver- sions of parts of the argument, at Harvard, Yale, UCLA, the University of Penn- sylvania, and the U.S. Institute of Peace, as well as at the American Political Science Association 1995 and 1996 annual meetings and the American Eco- nomic Association 1998 annual meeting. In Russia, I have trespassed on the patience of more people than can be listed here. Leonid Smirnyagin and Aleksei Lavrov generously shared their data and insights over the course of several years. Others have found the time to pro- vide their own perspectives on Russia’s emerging politics. I am grateful in par- ticular to Ramazan Abdulatipov, Aleksandr Belousov, Yuri Blokhin, Viktor Filonov, Boris Fyodorov, Sergei Ignatev, Gabibulla Khasaev, Mikhail Leontev, Aleksandr Morozov, Oleg Morozov, Mikhail Motorin, Vitali Naishul, Valery Pavlov, Sergei Shatalov, Sergei Sinelnikov, Viktor Stepanov, Andrei Yakovlev, and Mark Yanovsky. Mark Bond, Konstantin Borovoi, Ruslan Shamurin, xii Acknowledgments Mikhail Zhivilo, and Yuri Zhivilo provided broader insight into the world of Russian business and politics, and Sergei Lazaruk into the Moscow cultural tusovka. Charles Myers at the University of Michigan Press shepherded the manu- script through the editorial process with patience and dedication. I am grateful also to anonymous readers of the mansucript—some for valuable comments and suggestions, others for securing the additional time necessary to see my ar- guments confirmed by subsequent developments. I would like to acknowledge financial support from the Harvard University Russian Research Center, which provided a summer grant and a postdoctoral fellowship at crucial periods, as well as the UCLA Academic Senate and Center for European and Russian Studies. My understanding of center-region relations was enhanced toward the end by participation in a technical support project offering advice on fiscal fed- eralism to the Russian Ministry of Finance, funded by USAID under the direc- tion of Robert Conrad. No part of the argument in this book should, of course, be attributed to USAID or any other funding organization. Chapter 3 draws upon my earlier work in “The Politics of Intergovern- mental Transfers in Post-Soviet Russia,” British Journal of Political Science 26 (1996): 299–335, and “Fiscal Redistribution in a Fragile Federation: Moscow and the Regions in 1994,” British Journal of Political Science 28 (1998): 185– 200. I am grateful to the British Journal of Political Science and Cambridge University Press for permission to excerpt. On a personal note, I am grateful to my parents, Anne Kahneman and Michel Treisman, and my stepfather, Danny Kahneman, for the constant sup- port, interest, and understanding they have shown through the years as this pro- ject took form.
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