WELFARE REFORMS IN POST-SOVIET STATES: A COMPARISON OF SOCIAL BENEFITS REFORM IN RUSSIA AND KAZAKHSTAN by ELENA MALTSEVA A thesis submitted in conformity with the requirements for the Degree of Doctor of Philosophy Graduate Department of Political Science University of Toronto © Copyright by Elena Maltseva (2012) Welfare Reforms in Post-Soviet States: A Comparison of Social Benefits Reform in Russia and Kazakhstan Elena Maltseva Doctor of Philosophy Political Science University of Toronto (2012) Abstract: Concerned with the question of why governments display varying degrees of success in implementing social reforms, (judged by their ability to arrive at coherent policy outcomes), my dissertation aims to identify the most important factors responsible for the stagnation of social benefits reform in Russia, as opposed to its successful implementation in Kazakhstan. Given their comparable Soviet political and economic characteristics in the immediate aftermath of Communism’s disintegration, why did the implementation of social benefits reform succeed in Kazakhstan, but largely fail in Russia? I argue that although several political and institutional factors did, to a certain degree, influence the course of social benefits reform in these two countries, their success or failure was ultimately determined by the capacity of key state actors to frame the problem and form an effective policy coalition that could further the reform agenda despite various political and institutional obstacles and socioeconomic challenges. In the case of Kazakhstan, the successful implementation of the social benefits reform was a result of a bold and skillful endeavour by Kazakhstani authorities, who used the existing conditions to justify the reform initiative and achieve the reform’s original objectives. By contrast, in Russia, the failure to effectively restructure the old Soviet social benefits system was rooted largely in the political instability of the Yeltsin era, and a lack of commitment to the reforms on the part of key political actors. And when the reform was finally launched, its ill-considered policies and the government’s failure to ii form the broad coalition and effectively frame the problem led to public protests and subsequent reform stagnation. Based on in-depth fieldwork conducted in Russia and Kazakhstan in 2006 and 2008, my study enriches the literature on the transformation of post-communist welfare regimes, and contributes important insights to the central question in the literature on public policy, that is, when, why and how policies change. It also enhances our understanding of political and public policy processes in transitional and competitive authoritarian contexts. iii To the two most important people in my life—my husband Denis and my dearest daughter Natasha. Thank you for waiting patiently “until mama finishes her book.” To my parents, whom I deeply love and who always believed in me. Thank you for your love, support and patience. iv Acknowledgments I am deeply indebted to all those who contributed to and helped me in the realisation of this work. First of all, I would like to sincerely thank my supervisor, Professor Peter Solomon, for his valuable advice and guidance throughout the conceptual and practical development of this dissertation. I am also very grateful to Professors Edward Schatz and Joe Wong for their insightful and valuable comments and continuous support throughout all these years. I also want to extend my heartfelt gratitude to all the people who assisted me during the various stages of my research in Russia, Kazakhstan and Canada. In particular, special thanks go to Tatiana Pomytkina, Natalia Evdokimova, Svetlana Koval’skaia and Zauresh Battalova. Finally, I also want to thank Petra Dreiser for proofreading the text and making sensitive observations about it. My gratitude also goes to my friends Olga Klymenko, Adilia Riou-Boulgakova and Vera Ashvarina who helped me immensely during these years. I am indeed blessed to have such wonderful friends. v Table of Contents ABSTRACT................................................................................................................................ ii ACKNOWLEDGMENTS........................................................................................................... v TABLE OF CONTENTS………………………………………………………………………. vi LIST OF TABLES……………………………………………………………………………... ix LIST OF FIGURES……………………………………………………………………………. x LIST OF APPENDICES………………………………………………………………………. xi LIST OF ABBREVIATIONS………………………………………………………………….. xii NOTE ON TRANSLITERATION AND STYLE…………..…………………………………. xiii CHAPTER 1: SETTING THE SCENE: REFORMING THE POST-SOVIET WELFARE STATE…………………………………………………………………………... 1 1.1. Introduction…………………………………………………………….............................. 1 1.2. Public Policy-Making in Post-Soviet States: The Argument………................................... 19 1.3. Significance of the Topic..................................................................................................... 28 1.4. Chapter Outlines………………………………………………………............................... 30 CHAPTER 2: PUBLIC POLICY AND WELFARE REFORMS IN THEORY................. 32 2.1. Introduction……………………………………………………………………………….. 32 2.2. Policy Change and Welfare Reforms: Literature Review………………………................ 32 2.3. Ideas, Policy Discourse, and Political Framing…………………………………................ 40 2.4. From Policy Formulation to Policy Implementation: Understanding the Challenges of “Getting Things Done”…………………………………..................................... 47 2.5. Reform Experience in the Post-Soviet States: Literature Review………………................ 56 2.6. What Drives Policy Change? – Developing a Framework for Analysing the Social Benefits Reform in Kazakhstan and Russia…………………………………………………..... 66 CHAPTER 3: THE ORIGINS AND EVOLUTION OF THE PRE-SOVIET AND SOVIET WELFARE ARRANGEMENTS………………………………………………..… 80 3.1. Introduction........................................................................................................................... 80 3.2. Overview of the Social Care System in Imperial Russia…………….................................. 80 3.3. Kazakhstan’s Social Fabric in the pre-Soviet and Soviet Period………………………….. 93 3.4. The Birth and Evolution of the Soviet Welfare State……………………………………... 102 3.5. Concluding Remarks……………………………………………………………………..... 115 vi CHAPTER 4: POLITICAL TRANSFORMATION IN POST-SOVIET 118 KAZAKHSTAN.......................................................................................................................... 4.1. Introduction……………………………………………………………………………….... 118 4.2. Political Developments in Kazakhstan Since Independence………………………….......... 118 4.2.1. The Power Struggle on the Way to the 1995 Constitution……………………............. 120 4.2.2. The 1995 Constitution and Kazakhstan’s Institutional Structure………………........... 124 4.3. The Development of Political Parties and Party System in Kazakhstan…………………… 131 4.4. Understanding Nazarbaev’s Clan Politics………………………………………………...... 133 4.5. Centre-Regional Relations in Post-Soviet Kazakhstan…………………………………...... 137 4.6. Economic Decentralisation and the Dynamics in Centre-Periphery Relations...................... 143 4.7. Concluding Remarks……………………………………………………………………...... 149 CHAPTER 5: CHALLENGES OF TRANSITION IN THE POST-SOVIET KAZAKHSTAN……………………………………………………………………………….. 151 5.1. Introduction………………………………………………………………………………... 151 5.2. Multi-Ethnic Population and Problems of Territorial Integration…………………………. 153 5.3. Reforming Kazakhstan’s Economy………………………………………………………... 159 5.4. Conclusion…………………………………………………………………………………. 167 CHAPTER 6: WELFARE REFORMS IN KAZAKHSTAN, 1991-2010.............................. 170 6.1. Introduction………………………………………………………………………………... 170 6.2. Reforming the Welfare State Amidst Deep Economic Crisis and Social Collapse……...... 170 6.3. Developing Targeted Social Assistance Program, 1999-2004…………………………….. 200 6.4. What Explains the Success of Kazakhstan’s Welfare Reform?............................................ 208 CHAPTER 7: MUDDLING THROUGH: THE POLITICS OF WELFARE REFORM UNDER BORIS YELTSIN, 1991-1999…………………………………………………….... 215 7.1. Introduction……………………………………………………………………………..…. 215 7.2. The Fall of Communism and the Rise of Boris Yeltsin, 1985-1991………………………. 216 7.3. Gaidar’s Welfare Reforms in the Context of Institutional, Political and Economic Crises, 1992-1996……………………………………………………………………………..……….. 223 7.4. Restructuring the Russian Welfare State, Attempt Nr. 2: 1996-1999…………………….. 257 7.5. Understanding the Causes of Welfare Reform Stagnation Under Boris Yeltsin…………. 274 CHAPTER 8: THE POLITICS OF WELFARE REFORM UNDER VLADIMIR PUTIN, 2000-2008…………………………………………………………………………...... 278 8.1. Introduction………………………………………………………………………………... 278 vii 8.2. Political, Institutional and Economic Changes under Putin, 2000-2004………………....... 279 8.3. Perception of the Problem by the Public before the Summer of 2004……………….…..... 286 8.4. Policy Formulation: The Context, the Framing Strategy and the Main Actors………........ 290 8.4.1. The Background……………………………………………………………………… 290 8.4.2. Framing the Problem: The Early Stages of the Reform................................................ 294 8.4.3. Preparing for Reform Implementation and Persuading the Public (Summer to Fall 2004)………………………………………………………………………………………… 298 8.4.4. Monetisation Law Nr. 122: The Essence of the Reform and Expected Policy Outcomes……………………………………………………………………………………. 315 8.5. Description of the Implementation Process: Reorganizing