Changing Institutions and Incentives in Russia : Patrons, Clients, and Brokers Vladimir Gel’man

1. Changing Institutions and Incentives in Russia: Patrons, Clients, and Brokers Vladimir Gel’man (European University at St.Petersburg / University of Helsinki) ASEEES Annual Convention, Boston, MA, 8 December 2018

2. Changing Institutions and Incentives in Russia • Principles of governance in Russia (Gel’man, 2017: 499): (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

3. Changing Institutions and Incentives in Russia • The regime and the state maintained governance in Russia pretty well in the 2000s and 2010s, but how sustainable it will be in the future? • Rising challenges (as of 2018): • (1) Increasing perceptions of regime’s existential threats amid international confrontation (repressive ”politics of fear” etc.); • (2) Declining mass patronage amid sluggish economic growth (increasing taxes, the rise of retirement age, etc.); • (3) More intensive conflicts among elite cliques for the shrinking pie of rents and resources; • To what extent these challenges will be crucial for regime’s survival?

4. Changing Institutions and Incentives in Russia • The best description of resilient personalist authoritarian regime in the fiction literature – Gabriel Garcia Marquez, The Autumn of the Patriarch (1975); • Long-standing personalist dominance of the ageing leader, who increasingly relied upon low-intensive coercion; • Endless struggle between pro-regime cliques, including coercive apparatus of the state and family members; • Notorious inefficiency of governance and increasing international dependence; • … yet despite all domestic and international challenges, regime tenured for 100 years until the death of the leader

5. Changing Institutions and Incentives in Russia • Clients: • No more positive incentives to loyalty – less material benefits for masses amid their conspicuous disrespect by elites; • Declining mass support of political status-quo (gradually falling approval rates of the overall order as well as of political leadership); • Increasing socio-economic and environmental protests across the regions; • … but no major anti-regime political mobilization as of yet (alternatives to the status-quo are not so attractive, while perceived costs of regime changes looks incredibly high)

6. Changing Institutions and Incentives in Russia • Brokers: • Mid-level actors of the ”power vertical” – regional and local officials, public sector managers, representatives of business etc.: between the Kremlin and hard place; • No more interests for improving performance, increasing risks of criminal prosecution (Rogov, 2018), no expectations on overcoming negative economic and international trends; • Conflicting incentives: • would-be beneficiaries (Levada-Center: increase of public support of regional governors to 62% in November 2018)? • or potential victims (”shifting the blame” strategy, purges of cadres?)

7. Changing Institutions and Incentives in Russia Patrons: Increasingly chaotic policy planning and decision-making amid decline of efficiency of state propaganda (the case of increasing of retirement age); Increasing replacement of positive incentives to negative ones, and top-down translation of these incentives; ”Wait-and-see” tactics as a systematic response to numerous ad hoc challenges; Expectations of the ”turning point” of 2024 (the end of Putin’s fourth term in office) and the major institutional changes; What next?

8. Changing Institutions and Incentives in Russia Low-level equilibrium of Russia’s bad governance is vulnerable to exogenous shocks, but sill resilient enough to avoid regime collapse (unless the Kremlin will make crucial mistakes); If not collapse, then what? (1) further political and institutional decay a la The Autumn of the Patriarch up until physical extinction of the current generation of the Russian leaders (”Will Putin’s System Survive till 2042?” (Travin, 2016)); (2) further ”tightening of the screws” with turn to high-intensity coercion and increasing top-down pressure a la Day of the Oprichnik (Sorokin, 2006); Bottom line: the current regime and the state in Russia cannot be improved. The question is: how to eliminate regime and the state?

9. Changing Institutions and Incentives in Russia Comments are welcome! (vgelman@eu.spb.ru, vladimir.gelman@helsinki.fi)