Political Foundations of Post-Soviet Bad Governance

1. Political Foundations of Post-Soviet Bad Governance Vladimir Gel’man (European University at St.Petersburg / University of Helsinki) 48th ASEEES Annual Convention, Washington DC, November 2016

2. Political Foundations of Bad Governance • Why the quality of governance in some states and nations is much poorer than one might expect judging by degree of their socio-economic development? • Most states of post-Soviet Eurasia may be regarded as examples of bad governance by several international indicators – especially in terms of property rights, rule of law, and corruption (Transparency International 2015: Russia and Azerbaijan shared 119thplace with Guyana and Sierra Leone, Ukraine is at 130th place) – why? • What are the possible causal explanations of these phenomena? • How we can analyze bad governance in theoretical and comparative perspectives?

3. Political Foundations of Bad Governance • What is «bad governance»? • Governance - a rather loose yet popular term, which is used in many analyses of politico-economic mechanisms of governing the state (NOT those of corporate governance); • Governance became a catchword since the 1990s, when the World Bank launched its global project “Governance Matters” (Worldwide Governance Indicators) – the quality of governance in all states is evaluated according to six pillars: • (1) Voice and Accountability; (2) Political Stability and Lack of Violence; (3) Government Effectiveness; (4) Regulatory Quality; (5) Rule of Law; (6) Control of Corruption - six dimensions, or criteria of good governance

4. Political Foundations of Bad Governance • Is «bad governance» just an antimony for «good governance»? • Suboptimal solution for a definition: (1) lack and/or perversion of the rule of law – unrule of law; (2) high degree of corruption in all layers of governance;(3) poor regulatory quality;(4) ineffectiveness of government • BUT: «bad governance» may be considered as a basis for politico-economic order, established on the principles, which are different from those of «good governance»; • Bad governance is a norm, good governance is a deviation (see Golding, Lord of the Flies, as a role model)

5. Political Foundations of Bad Governance Basic principlesof politico-economic order of bad governance (Gel’man, 2016): (1) Rent extraction is the major goal and substantive purpose of governing the state at all levels of authority; (2) The mechanism of governing the state tends towards a hierarchy (the “power vertical”) with the only one major center of decision-making; (3) The autonomy of domestic political and economic actors vis-à-vis this center is conditional; (4) The formal institutions are arranged as by-products of the distribution of resources within the “power vertical” : they matter to the degree to which they contribute to rent-seeking; (5) The state apparatus within the “power vertical” is divided into several groups and/or informal cliques, which compete with each other for access to rents

6. Political Foundations of Bad Governance • These principles of bad governance maintained politico-economic order and control of the state by the ruling groups (rulers governed their respective states in order to get rents – Olson’s (1993) «roving bandit» model); • Bad governance – is a stable yet inefficient equilibrium, which may be broken only at certain occasions, and re-equilibration of politico-economic order (for example, after regime changes) is not so rare in a number of contemporary states (not only in post-Soviet Eurasia); • A need of shifting the mode of research on bad governance: • from normative critique to positive analysis, • from descriptions to explanations

7. Political Foundations of Bad Governance • Major symptoms of bad governance in post-Soviet Eurasia: • «State capture» from outside (oligarchs) or from inside (leaders and their cliques); • Privatization of gains and socialization of losses in the wake of socio-economic reforms; • Intentional making of socially inefficient institutions aimed to maximize rents; • Low chances for dynastic succession of personalist regimes: incentives for «roving» rather than «stationary» bandits – kleptocracy rules?; • The «vicious circle» of bad governance?

8. Political Foundations of Bad Governance What caused bad governance in post-Soviet Eurasia and beyond? Good governance – emerged as a response to domestic and international challenges (North, Weingast, 1989 on seventeen-century England); But present-day challenges are different than those of the past: no longer risk of losing state independence because of foreign conquest, risks of economic decline not necessarily caused major threats to survival of authoritarian leaders; domestic political risks may be managed through effective maintenance of ruling coalitions; Bad governance – the most rational solution for authoritarian leaders (Bueno de Mesquita, Smith, 2011)?

9. Political Foundations of Bad Governance Popular explanations of prevalence of bad governance in post-Soviet Eurasia in the literature: «bad guys» vs. «good guys» («reformers» vs. rent-seekers) – but the same «guys» may be both «good» and «bad», depending upon their self-interests; principal incompatibility of «bad peculiarities» of Russia and Eurasia – but how we can explain certain success stories amid overall gloomy environment (the case of Georgia under Saakashvili and after)?; Theoretically-driven non-regional explanations: (1) The «legacy» (or «legacies») of the past; (2) Authoritarianism vs. democratization; (3) International influence

10. Political Foundations of Bad Governance • «Legacy of the past» - a durable causal relationship between past institutions and policies on subsequent practices or beliefs, long beyond the life of the regimes, institutions, and policies that gave birth to them (Kotkin, Beissinger, 2014: 7); • Reference to Communist «legacies» and/or to entire Russian past – they often perceived as a «curse» which prevents any progress; • But how these bad «legacies» became parts of present-day and future practices?; • Mode of translation of «legacies» through «cultural schemata» – a powerful tool of ruling groups (intentional construction of normative ideals / role models)

11. Political Foundations of Bad Governance • «Good Soviet Union» - politico-economic order, which looks a bit similar to those of the USSR, but lacks its immanent defects (a sort of elite-driven ideational normative menu); • Menu includes selectively chosen elements of Soviet experience: hierarchy of the «power vertical», low circulation of elites, close nature and privileged status of ruling groups, state control over the major media, repressive state policy for diminishing dissent; • Menu excludes: relatively low inequality and state-led social guarantees; • Added to the menu: market economy (no shortage of goods and services), lack of institutional constrains for appropriation of rents, and existence of an international interface for legalization of status and income of elites in developed states • «Good Soviet Union» legitimized bad governance due to the lack of viable alternatives to it

12. Political Foundations of Bad Governance • The emergence and entrenchment of authoritarian regimes creates political and institutional environment, most often favorable for bad governance («for every Lee Kwan Yew in Singapore there are many like Mobutu Sese Seko in Kongo» - Rodrik, 2010); • Electoral authoritarian regimes are even worse for quality of governance than «hegemonic» (classical) dictatorships – short time horizon for planning, politicization of state apparatus, few incentives for improving quality of governance (unlike in China or even in the USSR); • BUT! – regime changes and democratization often not led to revision of bad governance, and often aggravated problems due to «regime cycles» – replacement of competing cliques of «crooks and thieves» in power?

13. Political Foundations of Bad Governance • Democratization may (but not always should) create certain conditions for radical renewal and reforming of the state apparatus; • Estonia – «success story» in the region of Eastern Europe (major changes in the state apparatus) (Abrams, Fish, 2015); • Georgia – a major reloading of the state apparatus after 2003 Rose revolution; • Russia – great elite continuity in the 1990s, especially in the state apparatus, isolation of reformers; • Ukraine – limited changes in the state apparatus even after 2014; • Should we regard high circulation of elites as a condition for overcoming bad governance?

14. Political Foundations of Bad Governance International linkages and leverages – limited effects on governing states (they may work as a complementary factor to domestic efforts but not as a substitute); International programs of promotion and advancement of policy reforms (including aimed to improving quality of governance) – often inefficient due to the lack of control from donors and manipulations from reciepients; «Winning combination» is possible only in case of favorable match of domestic and international factors of improvement of quality of governance (EU conditionality for Eastern Europe and imposing constraints on sovereignty); But in post-Soviet Eurasia there is no way to constrain their sovereignty at least as of yet: even pro-Western governments are not EU puppets…

15. Political Foundations of Bad Governance The rise of bad governance in post-Soviet Eurasia is resulted from the lack of constrains for maximization of power and rents by ruling elites, and aggravated because of several factors: (1) ideational orientation of elites and society-at-large on «legacy» of the past and on the «good Soviet Union» as a normative ideal / role model for ruling groups and for respective countries; (2) limited circulation of elites (including those in the state apparatus) and reproduction of ruling groups in the region; (3) weak influence of the West on governing post-Soviet states and lack of mechanisms of international enforcement towards them; Few «success stories» - exceptions, which prove the rule? Effects of bad governance – from growing pains to chronic deceases…

16. Political Foundations of Bad Governance How to analyze bad governance in post-Soviet Eurasia? What causes similarities and differences in various instances of bad governance as well as attempts of its overcoming at the level of: certain countries (Georgia, Russia, Ukraine); certain policy fields (taxation, administrative reforms, police reforms, higher education?); certain approaches to changing governance (wholesale vs. step-by-step policy reforms in certain areas); What about effects of economic growth (and/or lack thereof on instances of bad governancein mid-term perspective? What about effects of generational changes on bad governance (if there are any effects)? Other issues?

17. Political Foundations of Bad Governance Thanks for your interest! Comments are welcome (vgelman@eu.spb.ru)