Decentralization and Recentralization in Russia

On October 25, 2000, Nikolai Petrov, currently visiting professor at Macalester Colleger and former scholar-in-residence at the Carnegie Moscow Center, discussed the development of Russian federalism under President Vladimir Putin. Petrov's discussion was moderated by Carnegie Endowment Senior Associate Michael McFaul; it was the first session of the "state of the State" monthly series, which seeks to increase understanding of the recent developments and prospects of key institutions of the Russian state.

Nikolai Petrov immediately identified his particular angle of analysis as the "state of centralization and de-centralization under Putin." Petrov pointed to center-regional relations as a key issue of internal politics in Russia today. He postulated that the development in center- regional relations since 1990 can be described by a model of pendulum oscillations, which reflect the balance between the alternative processes of de-centralization and centralization. The pendulum has been oscillating between longer periods of decentralization and shorter periods of centralization, until Putin's ascendancy. Petrov noted that even when the oscillation led to a greater decentralization, the center was consistently the determining actor of the changes.

The situation in the year 2000, however, is fundamentally different. Instead of yet another oscillation in favor of the center, what we observe is a shift in the axis of the pendulum towards centralization. Petrov explained that the reason for conceptualizing the changes of 2000 as a fundamental shift is alteration in the very mechanism of managing center-regional relations.

What is going on currently? Federal districts instituted by Putin are becoming more and more meaningful; they are not merely another administrative layer, but are taking on a multitude of functions. Petrov compared Putin's introduction of Federal Districts to Catherine the Great's administrative reform - she had appointed governors, without determining the exact borders of their gubernias, and allowed these borders to be defined by the governors themselves, subsequently confirming the resulting arrangements by decree. In this case, the prerogatives and powers of the seven federal representatives are not determined; each appointee is trying to define what are the prerogatives and powers in his particular district.

Council of Federation reform is another symptom of the pendulum axis shift. Putin's scheme for new Council formation involves an appointment of one representative from each region by the governor, and another one by the regional legislature, replacing the existing membership of governors and speakers themselves. While the new Council is planned to appear in a year and a half, changes will be felt much sooner, since those governors facing elections are losing their seats immediately.

In addition, there is a new federal intervention mechanism, which allows Putin to remove governors and dismiss regional parliaments. This innovation serves as a "fly-swatter" over the heads of the governors, and this threat is more important than its actual realization.

Budget allocations are also changed fundamentally in favor of the center and at the expense of the regions. Estimates for distribution of tax revenues range from 45%-55% (in favor of center) to 30%-70%. Moreover, the regional powers lose considerable control over expenditures as well as revenues to the branches of the federal treasury. Petrov brought up the example of the 6 poorest regions, where all of the expenditures will be controlled by the federal treasury branches.

Moreover, Putin's centralization activities augment federal control over the court and the police systems in the regions - areas that formerly were almost completely subordinated to regional powers. This is not done through any legal changes, but merely through a "realization of the center's prerogatives."

The general trend is the strengthening of the state, accompanied to a certain degree by a weakening of Russian democracy and a weakening of Russian federalism. Petrov classified this period as a period of "accelerated counter-revolution," and pointed out that none of Putin's reforms are new or invented by him. Petrov argued that these reforms are merely realizations of previous unrealized proposals of Chubais and others in Yeltsin's administration. All of the innovations were previously proposed, but never enjoyed a real possibility of implementation.

Putin can be seen in this case as a "crisis manager"; we should especially contrast him with Stepashin, who failed to organize the regional governors around the Kremlin and to prevent Primakov from forming his block. After Stepashin's failures, Putin appears to be realizing the goals of Kremlin's extant plans.

This is a counter-revolution because the regime had changed from a weak authoritarian one under Yeltsin, to a strong authoritarian one under Putin. Earlier, society was pushing Yeltsin in a certain direction, precluding him from forming a stronger authoritarianism. Putin, however, is so far supported by a society that is tired and prepared to let him take control. President Putin feels a certain freedom to move in any direction.

Why did Putin begin with the regions? Petrov offered three sets of reasons for the president's actions. First, it has been Putin's professional field of interest since he arrived to the Kremlin in 1997. Second, governors lost the war with the Kremlin, and it is natural for the Kremlin to change the rules to reflect that victory. And third, the political calendar of the forthcoming gubernatorial elections was favorable to the desired changes.

Why was Putin successful at pushing forth his reform? It is due to at least three things: once again, the political timing on the eve of the gubernatorial elections; the disconnection of the regional elites; and Putin's particular "secret weapon" of blackmail and kompromat. This latter weapon was used initially during the creation of the Unity party in support of Putin's presidential candidacy, and there is strong evidence that Putin and his team continue to use this tactic.

The recent gubernatorial elections serve as good indicators of governors' weakness. Two cases that Petrov brought our attention to are St. Petersburg and the Kursk oblast. He proposed that the Kremlin's strategy is not to replace bad guys with good guys, but to weaken regional power itself, and force the governor to become subordinate to the Kremlin. Vladimir Yakovlev's election in St. Petersburg and his recent behavior towards the Kremlin illustrate that judgement. The last minute disqualification of Rutskoi from the Kursk gubernatorial election shows another trend - the increased use of semi-legal tactics by the center in order to advance its goals. Petrov expressed the opinion that Rutskoi's removal was actually not in Putin's interests, so it is likely that someone other than Putin - either in the Kremlin or the corresponding federal district -- is responsible for this action. But this does indicate that courts and other enforcement mechanisms are under the center's influence. This influence is likely to grow stronger, since the very establishment of the federal regions is a kind of "bypass surgery" - the federal representatives are responsible to the increasingly powerful Security Council, and are essentially under its control. Another thing Petrov brought to our attention is that a greater number of issues are being classified as security issues - such as information security and regional security - and thus are placed within the purview of the same Security Council.

The important question to ask now is what are the general purposes of all these actions? Some people argue that the new federal package just increased the level of bureaucracy, and rendered the state structures even less manageable and controllable. But it is also possible to look at this from another angle: Yeltsin had created a huge political machine that was very cumbersome, elements of which were clearly not working. All of Yeltsin's efforts, however, were directed towards keeping that machine together, and keeping it going; Putin decided to change some parts of the machine, as well as construct some new mechanisms. Some of these new mechanisms are currently working in parallel with the existing ones, but in time may take over completely. In this light, the federal districts are not another layer of bureaucracy, but a structure parallel to the regions, intended to eventually replace the regions; the Security Council is not a second government, but a parallel institution intended to concentrate power within itself.

Petrov concluded with an assessment of Putin's changes to Yeltsin's machine. The new structures created by Putin are trying to move the system in a very particular direction - towards a more effective and stronger state, but also towards an "FSB-ization" of political life.

Question and Answer Period

Michael McFaul posed the first two questions, and the first addressed continuity and change: Why was Putin able to enact the reforms which Petrov claims Yeltsin wanted but could not realize? Is it the influence of society who restrained Yeltsin and empowered Putin to action, or is it special features of Putin's personality that are responsible?

In answering, Petrov emphasized several factors he believes to be responsible for Putin's successes. First, Putin is acting in a climate of greater political consolidation, which was not present for Yeltsin. Second, Putin's government is enjoying a kind of political stability that the previous government did not: for the first time, political horizons of center are greater than those of the regions. That is, previously regional leaders were granted long-term benefits in exchange for short-term concessions to the center (such as electoral support); now, they are receiving short-term incentives (non-intervention in their regional elections) in exchange for their support of the long-term legal changes favoring the center. Third, Putin and his team possess the political will that Yeltsin lacked. Yeltsin's focus has been on a system of checks and balances throughout his presidency; all his resources were devoted to the maintenance of his somewhat dysfunctional political machine. Now, because of the determination to change elements of Yeltsin's machine, all checks and balances are disappearing.

Two other factors can be identified, that are connected with Putin's position. First, his connection with the security services is significant. Unlike his predecessors Primakov and Stepashin, Putin is heading a system in control of huge regional branches. As a result, Putin has access to greater administrative and financial resources at his disposal. Second, the fortuitous budget surplus enables Putin to pay for the courts and the police in the regions, rendering these more compliant with the center than they were while financed by the regions. When and if the benefits of a surplus disappear, controlling the regions will become harder for the center.

McFaul also asked Petrov to identify one hypothesis or argument about the Yeltsin regime that he has revised in light of Putin's era .
Petrov replied that he can now see better that Yeltsin's regime was a weak authoritarian one, and most elements of democracy were present only due to constraints, and not democratic will of the President and his administration. As he had emphasized before, the continuity between Yeltsin's intentions and Putin's actions now come to light. The developments in center-regional relations also reveal the importance of checks and balances, and the relative unimportance of who is "the chief guy." Since the continuity in intentions from Yeltsin to Putin is now more apparent, we can attribute the shift of the pendulum's axis towards centralization to the diminishing role of the checks and balances system.

The discussion that followed highlighted the differences between a strong and an authoritarian state. One participant suggested that we must not equate a strong authoritarian state and a strong state; the former may be strong enough to maintain itself, but it is not truly strong, since it can not accomplish real changes or enforce its policies. Most participants agreed that while Putin's administration appears to be dealing serious blows to the regional powers, it is largely powerless to effect real policy changes in the social and economic realms. Petrov agreed with the distinction between authoritarian and strong states, and added that the currently favorable economic climate is creating an illusion of the effectiveness of Putin's government.