Toward Stability or Crisis?

Lilia Shevtsova & Scott A. Bruckner

Where Is Russia Headed?

It is undeniable that many aspects of Russian political life have changed since the Soviet Union was dismantled. During the past five years, a Russian president and legislature have been popularly, and unproblematically, elected. More significantly, a program of political liberalization has been so successfully--albeit perhaps not intentionally--sustained that many new players have emerged as claimants to power in national and regional politics. Although some think that these trends bode well for continued steady progress toward democracy and the market, many others have forecast long-term catastrophic social and political upheavals resulting from Russia's transition. Recent infighting in the Kremlin and fears that ailing president Boris Yeltsin will not finish his second term have only heightened concerns that disorder is on the horizon.

Strangely enough, neither the shock of Gorbachev's liberalization campaign ¹ nor the disruptive five years following the breakup of the Soviet Union have been enough to provoke protracted instability in Russia. It is true that rapid and far-reaching change is inherently destabilizing. But it is also obvious that Russia has largely been spared devastating turmoil. Why is this true, and for how long will the situation continue? And what does this mean for Russia's further steps toward liberalization?

The answer that we propose here is simple and may, for optimists, be disappointing. Despite its stunning evolution, Russian political life [End Page 12] has not really been dramatically transformed. Indeed, just beneath the surface of what is being cast as one of history's most remarkable transitions is an enduring inheritance from the past--old structures, networks, practices, personnel, and modes of interaction--that affects, and in some instances seriously impedes, the development of new institutions. Inherited structures and practices from the Soviet period are not likely to break down in the short run. That is probably not the best news for those who are eager to see Russia move more steadily and quickly forward along a path of political and economic reform. On the positive side, however, despite all the surface commotion, this type of evolution has been responsible for--and will likely continue to produce--the stability, albeit fragile, that has accompanied Russia's great transformation.

At first glance, Russia appears to have come a long way in its struggle to break with its totalitarian past. First, political life is now marked by a plurality of views and actors. This development is surely bolstered by the increasingly widespread appreciation for political competition, the clash of ideas, and open debate, which, in itself, represents a substantial achievement. ² Second, opposition movements are proliferating and now seem to be well entrenched as permanent features on Russia's political landscape. They are free to criticize government policies and officials (although not yet with complete impunity); they have the right to participate in elections; and they even dominate the Duma, the lower house of Russia's parliament. Finally, the Russian elite now seems to be firmly committed to elections as a means to effect its own renewal. This is one of the most extraordinary developments in Russian politics. Indeed, Yeltsin defied repeated predictions that both the parliamentary and presidential elections in 1995 and 1996, respectively, would be canceled because he feared that the Communist Party would trounce him and his allies. Moreover, as of the time of this writing, there has not been a single word from the Office of the President about canceling regional elections set for autumn 1996, despite some forecasts that opposition groups will fare exceptionally well and thereby regain a strong foothold in national politics. ³

In other areas as well, Russia evinces signs of a striking metamorphosis toward increased liberalism. On the economic front, there are some who believe that Russia has broken the stranglehold of centralized planning and irreversibly crossed the threshold to a market-governed economy. ⁴ While they are probably unduly optimistic, it is impossible to deny that competition among private interests is beginning to drive economic relations. Like their counterparts in Western liberal democracies, these interests lobby government officials for influence and advantage. Although still cast in a mostly unflattering light, this rich dynamic is captured in the press, which reports [End Page 13] daily on fierce clashes among manifold competitive interests representing multiple economic sectors.

Finally, strides have even been made in providing increased guarantees for individual liberties. Russians now enjoy freedoms of speech and organization, travel and movement, and access to uncensored mass media, foreign and domestic literature, and science texts. Russian citizens have eagerly seized these new freedoms, including the freedom to participate actively in politics. They turn out to vote, for instance, in numbers that put U.S. voters to shame. ⁵ While the gap between the Russian people and their leaders is still exceedingly wide, popular participation has begun to penetrate elite circles and have an impact on government policies. Strikes by unpaid workers, for instance, are a big reason why the government is seeking ways to avoid its perennial budget shortfalls. (It has not found any so far, but not for lack of effort.) And the antiwar protests that Yeltsin heard while on the campaign trail undoubtedly played a role in pushing him to seek an end to the war in Chechnya.

These advances--accomplished in just under a decade--are impressive, and merit the praise that they have received in most accounts of Russia's steps toward democracy and the market. But a closer look reveals a country that, at its core, has not yet evolved significantly from its Soviet past. Three areas of continuity are particularly striking. First, extant networks of political and economic actors have remained intact, have continued to thrive, and are now beginning to act as a brake on reform. Second, despite its smaller role, the government still occupies an inordinately important place in political and economic affairs. In fact, the government may not have retrenched far enough to allow the emergence of truly independent, nonstate interests. Finally, the government's performance in making itself accountable to the electorate and protecting individual liberties continues to be deplorable. In these three respects, political life in Russia remains "business as usual."

Old Networks and Personnel

Since Gorbachev's first attempts almost a decade ago to replace political personnel at various levels in the Soviet power structure, there has been only minimal turnover in the elite that ran and profited from the Soviet system. Indeed, those who eventually undertook to reform the regime were people who made it into the communist nomenklatura under Brezhnev and Gorbachev. Communism may have fallen, but most of the communists have not. Indeed, by becoming the orchestrators of many of the changes outlined above, the greater part of the communist elite has managed to strengthen its hold on power and its access to the nation's wealth. The most [End Page 14] important figures at the center (Yeltsin, Prime Minister Viktor Chernomyrdin, Federation Council Speaker Yegor Stroev, Duma Speaker Gennady Seleznev) and in the regions (Evgeny Nazdratenko, Eduard Rossel, and Vitaly Mukha) are all holdovers. Continuity of personnel has meant that long-established ties and practices of interaction have been kept. Specifically, the patron-client relationships that were vital in extending central power into the regions have persisted, as has the influence of parochial interest groups, which long ago captured the key Soviet decision-making organs.

It would be inaccurate to contend that newcomers have been completely excluded from the ranks of established networks and groups. Some openings for elite renewal were created during the period of liberalization under Gorbachev and even remained in place in the early postcommunist years from 1991 to 1993. During this time, new forces entered the elite, as pragmatists within the ruling group forged alliances with outsiders in order to break the power of the most reactionary elements in Russian leadership circles. ⁶ Moreover, systemic adjustments created openings for the rise of new types of groups, some of which have managed to penetrate the inner circle of leaders. Privatization and the shift toward the market, for instance, allowed for the emergence of a robust banking sector. As a result, a new group representing assertive financial interests took shape and quickly rose to the heights of influence. Representatives of this group (Presidential Chief of Staff Anatoly Chubais and First Deputy Prime Minister Vladimir Potanin, for example) now occupy key positions in the Office of the President and the government at large.

It is important to recognize that, in reforming the system and embracing outsiders, the extant ruling groups have primarily been trying to preserve their power and wealth as much as possible. Allowing unimpeded access to leadership circles by enabling unhindered competition for positions of power would hurt this goal. Opening the system up only slightly, and only to those who would accept the existing "rules of the game," would not. Accordingly, the entry into politics of new actors willing and able to propel the regime forward--a key part of political change--has been minimal.

The prospects for major turnover, moreover, are unpromising. Having mostly consolidated their positions, Russia's rulers since 1993--now an unbalanced mix that favors old over new interests--have worked hard to prevent challenges to their authority by striving to keep newcomers out of their ranks altogether. In fact, in spite of apparent divisiveness, a Russian ruling class is emerging, with its disparate components glued tightly together by a shared interest in self-preservation. As in the Soviet Union, where self-preservation was one of the leadership's highest priorities, those who have not been able to assimilate, who have challenged the power of [End Page 15] established personnel, have been ousted. Aleksandr Lebed, Russia's fastest-rising political star, is the most recent victim of this process. Thus "reformers" have turned into a potent brake on further transition by hindering elite circulation and with it leadership change.

Holding open elections does make it more difficult for Russia's leaders to protect against the emergence of challengers. In the Soviet system, the right to be listed on a ballot--and, therefore, to enter into inner elite circles--was granted only to those who had demonstrated for years their willingness to play by the rules of the game. But in postcommunist Russia, to the extent that the leadership is still able to block the rise of "aberrant" interests, the potential benefit from elections as a mechanism for effecting elite renewal may be canceled out. Moreover, there is some basis for believing that elections are not immune to tampering by the government. In fact, articles in the Russian press in the wake of the 1996 presidential election reflect a good deal of soul-searching about how far Russia has really gone down the path to democracy. Of greatest concern have been electoral irregularities that include inequitable access to funds, media bias in favor of current leaders, and falsification of results. ⁷

The Russian economy has not been spared this dynamic. Early and rapid privatization ("nomenklatura privatization," as it is often called) mostly entrenched the power of those who already controlled the levers of economic power in the Soviet Union. Having taken advantage of market reforms to formalize their hold on wealth through the introduction of private ownership rights, economic "winners" have become interested in protecting their gains by excluding new entrants into the market. This is often accomplished by brutally criminal means. In addition, a fast-moving process of alliance building between financial and industrial groups in Moscow and in the regions, and with regional bosses, is under way. These financial-industrial groups are huge monopolies that pose a significant threat to the survival of medium-sized and smaller businesses in the leading sectors of the economy. Thus Russia has come to a stage where giants from the past have allied with a small group of strong new interests in a fight for control over property and access to state funds. Many often cite the mafiya as one of the greatest forces blocking the entry of new actors into Russian economic life. But the role of large financial and industrial groups, with close ties to bureaucrats and possibly to criminal elements as well, may be just as, if not more, threatening to the emergence of new economic agents.

An Oversized Government

As noted earlier, liberalization has given rise to private interests, but these interests--even powerful corporate monopolies--have failed [End Page 16] to supplant the state as the key actor in postcommunist Russia. Indeed, the role that the government currently plays is not all that different from the inordinately large role played by its Soviet predecessor.

Objective constraints have something to do with keeping the government at the forefront of economic and political life. On the political side, harsh economic conditions have made it almost impossible for nongovernmental organizations (NGOs)--the traditional voice of private interests and a key ingredient of democratization--to thrive in Russia. In a country where the average monthly wage is barely above subsistence level, and where the practices of corporate giving, private foundation support, and citizen giving are still alien, opportunities for indigenous fundraising by NGOs are almost nil. To survive, NGOs have had to rely almost exclusively on foreign donors. But these sources of support are both temporary and extremely limited. As a result, the number of organizations enabling self-government and fostering participation from below in Russia is far lower than during the later Gorbachev period. By default, then, the state plays a bigger role in political life. It is ironic that, while the interest in participation from below is on the rise, vehicles for channeling this impulse into opportunities for self-government remain sorely limited.

These same constraints have kept the government heavily involved in the economy. Public expenditures on social programs, for instance, remain extravagant. ⁸ Private suppliers of pensions, health care, and education have begun to proliferate, but this process continues to be exceedingly slow. As a result, while the Russian government's social expenditures have declined somewhat, they are still well above the average for transitional economies at similar levels of per-capita GDP. ⁹ In addition, despite a sustained program of privatization, ¹⁰ many newly privatized firms are not yet self-sufficient and must rely heavily on government subsidies. ¹¹ Thus at a time when most have focused on the achievements of Russia's privatization campaign, Russian analysts are speaking of the "governmentalization of the economy" and the limits thereby imposed on privatized entities.

Objective constraints aside, the state's withdrawal from political and economic affairs has also been impeded by reluctant officials and citizens. Socialist ideas persist both about the proper role of government and about the dangers that private interests can pose to social welfare. Overall, the popular desire for smaller government has been slow to develop. This is not surprising in a country where privatization and liberalization have been associated by most with hardship and deprivation, where entrepreneurial activity is seen to be the work of unchecked criminals, ¹² and where for more than seven decades citizens were weaned on the notion that the state is the great [End Page 17] provider. But this creates obvious incentives for vote-seeking politicians to advocate and enact increased state intervention.

Narrow self-interest has also played a part in maintaining the government's large role in economic and political affairs. Understandably, bureaucrats who face the prospect of joblessness have been crying out against--and even trying to undermine--efforts to shrink the government. Their cries could grow louder if reformers in the central government are able to act on a recent proposal to slash the number of Russia's administrative regions. More subtle and more disturbing, however, is the preservation of a system in which patrons of various economic sectors are represented in government and, as public servants, do not have to relinquish their private business interests. The openings for rent-seeking thus created are evident even at the highest levels. For instance, Prime Minister Viktor Chernomyrdin used his position to direct the privatization of Gazprom, a multibillion-dollar asset in which he is alleged to have acquired a significant share. Vladimir Potanin, a banker, has used his recent appointment as deputy prime minister to block a reversal of the controversial "loans-for-shares" program, of which his bank has been a leading beneficiary. Sadly, such interventions elicit only minimal public outcry.

Finally, suggesting that the postcommunist Russian government is oversized and overinvolved in economic and political life is not also to deny that the government is exceedingly weak and ineffective. In fact, it cannot perform many of its basic functions, including collecting revenue, providing for social welfare, undertaking the much-needed reform of its armed forces, combating crime, and maintaining public order. Accordingly, as in Soviet times, the Russian government remains mostly a lumbering giant that feeds off society to ensure its survival without providing much in return.

The introduction of competitive elections, whatever their shortcomings, has raised the potential cost to government officials of ignoring their constituents' interests. The parliamentary elections of December 1995, as well as the 52 races for regional governorships in autumn 1996, have clearly shown that voters will reject incumbents whom they find unsatisfactory. But while accountability is now a component of Russian politics, this does not mean that elected officials are necessarily much more responsive to citizens' interests than they were in the Soviet period. In fact, voters had more opportunities to make an impact on decision-making circles during the later Gorbachev years (1989-91). The holders of many key government posts are still beholden to well-organized parochial interests. Thus the Russian government's level of responsiveness to citizens has remained disappointing.

In this respect, Russia may not be very different from its [End Page 18] democratic counterparts. Elected officials in most societies respond to demands from voters as a function of the latter's ability to organize, to lobby the government, and to punish irresponsible politicians. As in Russia, this commonly translates into greater allocations and favors for well-organized, wealthy economic interests, ¹³ and increased attention to other constituents mainly during election years. But the consequence of this practice in postcommunist Russia is that the government has not been forced to abandon its odious past practices.

Nowhere is this more apparent than in the area of safeguards for individual rights, where improvement has been marginal at best. While indigenous and foreign human rights advocacy and watchdog organizations now work openly in Russia, they are too thin on the ground to press effectively for more rights protection. Yet aside from them, no consolidated force has taken up the human rights cause. As a result, the Russian government routinely dismisses complaints about its violations of basic rights.

The war in Chechnya is perhaps the most glaring example of how, without a well-developed constituency for the protection of basic rights, the state can treat its own citizens with exceptional brutality. While estimates vary, everyone agrees that the war has killed at least 50,000 people and rendered tens of thousands more homeless, and all this in just about two years. More than a year of antiwar protests went unheeded, until Yeltsin's fear of losing votes during his reelection bid caused him finally to get serious about ending the disastrous conflict. Violations of press freedoms provide another example. Journalists who dared to show the president and the government in an unfavorable light became regular targets of Kremlin harassment. Only when powerful patrons of media sources made their way into government circles did these abuses end, though these same media sources are now accused of having become government mouthpieces.

The Pattern of Change in Russia

It should be clear from the foregoing that postcommunist Russia has become a hybrid, blending old and new elements. Contrary to what some have suggested, this is not necessarily indicative of revolutionary change that has severed the country from its past. On the contrary, it suggests that Russia's transformation may not be all that exceptional, marked as it is by a relatively steady process of building the future on a foundation of enduring remnants from the Soviet system.

Political systems and practices ordinarily break slowly with--and are usually bound by--layers of the past. ¹⁴ This is because change so often takes place within the four corners of extant institutions, which [End Page 19] impinge on decisions about the future order. Organizations, groups, and individuals that benefit from the status quo will understandably have strong incentives to try to preserve it. Those who derive no benefit from, or who are harmed by, existing institutions will work to replace them. Thus attempts to alter the system will involve wrangling between challengers and those who are empowered by current institutions. Replacing institutions is costly, and the empowered have unique resources that they can use to eliminate or co-opt challengers. Consequently, core structures are rarely fatally threatened. In most instances, transformations are characterized by marginal adaptations, rearrangements, and reconfigurations of current institutional forms. More sweeping change, if it occurs at all, will be a very drawn-out process indeed.

It is in this way that old structures continue to anchor Russia to the past. The collapse of communism did not create an institutional vacuum. Sizeable chunks of the old system have persisted into the postcommunist era and, through bargaining, compromise, and struggle with new interests, form the stuff out of which a future order is being constructed. Opposition movements, for instance, are no longer interested in eliminating the current regime, but want to work with it to achieve greater control over resources for themselves. As a result, the process of change will necessarily bear the mark of Soviet-era influences.

This pattern of change raises two questions about Russia's future. First, to what extent will tension between old and new elements undermine stability in Russia? Second, given the strong influence of the past on the shape of new structures, has Russia come to the end of the road on its journey toward democracy?

Future Stability

The hybrid nature of the regime that has emerged in postcommunist Russia generates enormous stresses. But there are currently many other sources of considerable pressure on the state. The situation in Chechnya, now inextricably bound up with a power struggle in Moscow, remains as volatile as ever. Then there are the basic problems of state-building that have yet to be resolved: defining the nation in an ethnically mixed population, building consensus on power-sharing among all regional leaders, and creating a meaningful, post-superpower international role. Seemingly incompatible principles of political order (democracy, authoritarianism, populism, and oligarchy) now coexist and, through powerful representatives in the elite, vie for exclusive legitimacy. Disastrously poor revenue collection, insolvent banks, and pressures flowing from an embittered populace's demands for timely wage payments and a more tightly [End Page 20] woven safety net led many experts to predict a devastating economic crisis during the winter of 1996-97. The International Monetary Fund's October 1996 announcement that it would withhold installments of emergency financing until there is marked improvement on revenue collection makes this crisis even more likely.

From all of this, it would appear that Russia is barely in balance and that any move to restore equilibrium might risk sending the economy into a nosedive, provoking a devastating social outburst, or causing the Federation to collapse. While all the ingredients are present for an explosion, the system remarkably seems to continue to hold. Its chaotic and fragile appearance notwithstanding, the postcommunist regime has begun to acquire an inner logic that accounts for its stability and survival. Old and new elements appear to be reaching a stage of accommodation that allows them to coexist more or less peacefully. This has helped the postcommunist system to bear up under the stresses that pull at both the elite and the society at large. Whether this logic will strike deeper roots and continue to flourish, however, remains to be seen. For now, it operates both from above and from below.

The Russian government comprises an astounding mix of interests. Representatives of virtually every political stripe (liberals, conservatives, democrats, communists, centrists, "great power" advocates, and populists) are present in key positions of central power. The presence of multiple competing interests leads to frequent intra-elite clashes, which have recently begun to be played out in the open. Until now, however, the inclusion of competing interests within the regime, rather than undermining stability, has actually helped to preserve it. Its rich mix of personnel gives the government a convincing spokesperson representing virtually every position in the country. In this manner, the Kremlin is like a chameleon, able to change its political hue to protect itself against challenges to its authority without altering its underlying essence. This has allowed Yeltsin's team to flexibly and effectively respond to emerging crises.

It has also made it more difficult for a serious opposition to develop. Those opposed to Yeltsin's government (democrats, communists, and "great power" advocates) have in fact become participants in it and, like the Yeltsin team, are increasingly bound by an interest in preserving the system that legitimates them. The victories of communist-backed Vadim Gustov and Aleksandr Rutskoi in the recent Leningrad Oblast and Kursk gubernatorial races, respectively, are cases in point. While each ran his campaign in vigorous opposition to the current regime, statements made upon winning revealed that neither would in fact play an opposition role. Instead both intend to work closely with the government, on which they would need to rely for support in any case. This indicates that [End Page 21] the ideological differences between the various opposition groups and the ruling elite have been exaggerated. In fact, Russia is becoming one of the least ideological of regimes; politicians can abandon their convictions for diametrically opposed ones with virtual impunity. Yeltsin is a master at this, his shifting rhetoric making him appear at various times as a democrat, an autocrat, a socialist, an integrationist, and an isolationist.

A key to the working of this hybrid system is the president in his role as arbiter among contending groups. By virtue of his constitutionally mandated authority, the president is able to contain the ambitions of organized interests by settling disputes between different groups and structuring governmental appointments so as to balance power among them. The result has been the creation of a refereed field in which societal battles can be fought out in a controlled manner. This has permitted the release of pressures that might otherwise be fatal to the regime. (It remains to be seen whether Aleksandr Lebed's ouster from the Office of the President may not have been a serious misstep by Yeltsin that eliminated an important perspective from the regime's refereed field of conflict.)

But because it relies so heavily on the president, this arrangement is extremely fragile. Without the arbiter, tension mounts and policy making becomes unfocused. All of this was evident not long after Yeltsin withdrew from the scene following the first round of presidential elections this summer. With the president out of the picture, the government, the Office of the President, and the Security Council vied for the reins of authority. The result for policy has mainly been gridlock. With Lebed out and Chubais in control of the levers of power, the prospect of instability within the regime has increased. Clearly, Russia's future stability hinges on whether equilibrium among the various interest groups will be restored by Yeltsin's reemergence or the appearance of a new arbiter.

Alongside mechanisms that regulate elite conflict, there are forces working from below to enhance stability in three ways. First, having lived through eight decades of mostly unsuccessful experiments in political and economic development, people are now demanding an end to disruptions in their lives. Elections give them a powerful vehicle for claiming long-term calm from the country's leaders. And in electing a president this summer, that is exactly what they did. Even those voters who had not benefited from life under Yeltsin revealed their aversion to promises of revolution and programs for change by reelecting the incumbent. (Yeltsin ran a brilliantly effective campaign that capitalized on this mood by emphasizing preservation of the status quo.) Politicians who advocate radical shifts in any direction are now unelectable.

Second, despite widespread dissatisfaction, fragmentation prevents [End Page 22] private citizens from organizing and protesting on a scale that would upset the regime. Disruptive strikes and protests do occur in Russia. Strikes by coal miners and workers in transportation, for instance, are a perennial source of woe for the central government. But these have so far remained relatively isolated, and major social upheavals have been avoided.

Third, except for Chechnya, a kind of modus vivendi has emerged between the federal government and Russia's regional leaders. Despite some initial tensions over the division of power and resources immediately following the Soviet Union's collapse, the regions have defied predictions that they would emerge as a strong source of opposition to the central government. Like their federal counterparts, regional leaders are interested in stability and have accordingly tried to reach accommodations with federal authorities in order to achieve it. This has mostly been accomplished through a system of treaties that are designed to regulate the federal government's relations with the provinces. The treaties were negotiated and executed by regional leaders and the Russian president (who chose not to involve the Federal Assembly), leading some to see the arrangement as a potential source of instability. ¹⁵ This is particularly true because many treaties with the strongest regions violate core provisions of the federal Constitution. So far, however, the treaties have been effective, turning former opposition leaders in the regions into supporters of the current central regime. The president of Tatarstan, Mintimer Shaimiev, is a clear example.

Toward Democracy or Authoritarianism?

How does the coexistence of pressures for change and ties to the past affect Russia's transition to democracy? There is no simple answer.

In the first two years after the collapse of the Soviet Union (1991-93), various paths of development were possible in Russia. Among them were the indefinite preservation of the system's mixed features, a stronger tilt toward authoritarianism, and the perpetuation of oligarchy. But also during this period, Russia faced its first genuine opportunity to move decisively toward democracy: democratic and liberal ideas were supported by private citizens who seemed prepared to make sacrifices in the name of a more stable and democratic future; Yeltsin and his team enjoyed considerable influence in society; Russia's power structures (e.g., the Interior Ministry and intelligence forces) were weakened and as such unable to impede the political developments that were overtaking the nation; and, finally, there was a favorable international environment in which to pursue a program of market reform and democratization. [End Page 23]

Unfortunately, this opportunity was missed. In part Russia's leaders were to blame, as were democratic intellectuals who early on had a fairly strong influence over Yeltsin and could probably have made a significant impact on the process of change. But there were also objective circumstances blocking Russia's road to democracy. A weak--and mostly forgotten--tradition of private property, the lack of a middle class, the demands of nation-building, a perpetually impending economic crisis, explosive ethnic tensions, persistent insecurity in international affairs, and the need to demobilize a militarized economy were aspects of the Soviet legacy that made the achievement of democratic rule in Russia a daunting challenge.

But these deficiencies were--and continue to be--counterbalanced by significant constraints that work against the establishment of authoritarianism. Authoritarian tendencies in Russia are stymied by the inability of any single group to monopolize power for an extended period; intolerance among regional elites for the reestablishment of strong central authority; a widespread feeling that, to survive, Russia needs to be a responsible member of the world community; and the center's inability to count on effective armed-forces support.

It is also true, however, that prospects for further democratic development have grown dimmer. Disillusionment with policies pursued under the banner of democratization has prompted broad segments of the public to turn toward nationalist-authoritarian or even socialist ideas with renewed sympathy. ¹⁶ What most people are concerned with is neither reform nor increased protection of individual liberties, but order, personal safety, and defense against any further slippage of living standards. As a result of this change in public attitudes, the future of democracy and reform in Russia is under a cloud, for if these attitudes spread widely enough, democratic procedures may produce antidemocratic results. Indeed, it is not unlikely that the next presidential election will put a figure with authoritarian, antireform tendencies in the Kremlin.

Is Russia heading toward stability or crisis? The answer to this question is mixed. It lies in the hybrid nature of the current regime and the settlement about the future order that has apparently been reached by Russia's old and new interests. Having more or less securely entrenched themselves in a system that preserves their power and wealth, members of the elite are now interested in protecting it from further transformation. This may not provide the most favorable environment for fostering reform or deepening democracy. Moreover, it is unlikely that any reformist thrust from society will soon be felt. Societal fragmentation, aversion to change, and demands for greater order and protection will prevent social groups from emerging as the kind of potent political force that would be required to keep Russia's government moving in a reformist direction. [End Page 24]

The good news is that the conservative values that now prevail within the leadership group and in society may be the key to stability. What is not yet clear, however, is whether stability can be sustained over the long term. Much will depend not only on what happens to Yeltsin or who is chosen as his successor, but on how the ruling group as a whole manages to maintain the status quo. Certainly, achieving stability might be very good for development, although it would probably occur at a much slower pace than during the past decade. But if preserving the status quo means continually excluding new entrants from the market or politics, then stagnation and not regulated reform will be the likely result. As in the late Soviet regime, this could be an opening for crisis.

As for the future of democracy, it is important to recall that outcomes in Russia are difficult to predict. Few, for instance, expected the collapse of the Soviet Union. Nonetheless, democratic values are beginning to take root in postcommunist Russia. Despite many missteps and missed opportunities, the majority in Russia may begin to conclude that democracy is one of the few appealing games in town. The important question in the end, however, is what the cost of a democratic outcome will be and who will ultimately have to bear it.

Lilia Shevtsova is senior associate at the Carnegie Moscow Center, Carnegie Endowment for International Peace. She previously served as deputy director of the Institute of International Economic and Political Studies of the Russian Academy of Sciences.

Scott A. Bruckner is director of the Carnegie Moscow Center. A version of this essay will appear in the Carnegie Endowment's forthcoming volume Russia After the Soviet Collapse.

Notes

1. Gorbachev's liberalization campaign was an attempt to civilize the regime and to increase his own power against hard-liners in the Communist Party through temporary alliances with moderate forces outside the elite. It is now clear that liberalization, as distinct from democratization, was never meant to be a means either for effecting the wholesale renewal of the elite or for permanently opening up the inner political circle to pressure from subelite interests. See Adam Przeworski, Democracy and the Market: Political and Economic Reforms in Eastern Europe and Latin America (New York: Cambridge University Press, 1991).

2. For instance, a public opinion poll conducted in September 1996 by the All-Russia Center for the Study of Public Opinion showed that 57 percent of those polled regarded the introduction of freedom of speech as the most positive change since 1985. Moskovskii komsomolets, 14 October 1996.

3. Success in the regional polls could thrust the communist and nationalist opposition into a dominant position in the Federation Council (the Federal Assembly's upper house), giving them control over both houses of parliament.

4. The most outspoken proponent of this perspective is Anders Åslund. See, for instance, How Russia Became a Market Economy (Washington, D.C.: Brookings Institution, 1995).

5. Turnout in the December 1995 parliamentary election, for instance, was 64.4 percent. In the first and second rounds of the 1996 presidential election, turnout was 69.7 percent and 68.8 percent, respectively.

6. Reactionary elements within the Communist Party were those who failed to understand the urgent need for systemic adjustments. As such, they represented the greatest threat to the preservation of the ruling elite's power. Pragmatists in the Communist Party were, therefore, interested in removing them. But moving reactionaries in the party out of the way was just as much an act of self-preservation for pragmatists as it was a raw grab for greater power.

7. A recent study of falsification estimates that vote fraud may have been as high as 15 percent. See A.A. Sobianin and B.G. Sukhovol'skii, Demokratiia, ogranichennaia fal'sifikatsiiami: Vybory I referendumy v Rossii v 1991-1993 gg (Democracy that is limited by falsification: Elections and referenda in Russia, 1991-1993) (Moscow: Proektnaia gruppa po pravam cheloveka, 1995).

8. Most estimates put Russian government expenditures on social programs at around 20 percent of GDP. Given the government's failure to meet revenue targets, these levels are impossible to sustain. For an estimated breakdown of government income and expenditures on social programs in Russia, see Mikhail Dmitriev, "Biudzhetnaia politika Rossii v usloviakh finansovoi stabilizatsii" (Russian budgetary politics during financial stabilization) (Carnegie Moscow Center, October 1996).

9. Russia's public expenditures on social programs are at least 10 to 15 percent higher than those for transitional economies at similar levels of development. For a comparison of levels of public expenditures in various transitional economies, see World Bank, World Development Report 1996: From Plan to Market (New York: Oxford University Press, 1996), ch. 7.

10. As of mid-1995, the European Bank for Reconstruction and Development estimated that the private-sector share of GDP in Russia was approximately 55 percent. Transition Report: Investment and Enterprise Development (London: European Bank for Reconstruction and Development, 1995), as cited in World Economic Outlook (Washington, D.C.: International Monetary Fund, 1996), 84. By the end of summer 1996, that share had probably increased by another 5 percentage points.

11. During 1995, government subsidies to enterprises are estimated to have been around 7 percent of GDP. This figure, which is well above the level of subsidization of enterprises in other transitional economies of the former Soviet Union and Central and Eastern Europe, does not even reflect indirect subsidies that are provided through tax amnesties. For estimates on the level of Russian government subsidies to enterprises for various years, see Dmitriev, "Biudzhetnaia politika Rossii v usloviakh finansovoi stabilizatsii."

12. Some of these attitudes are not unfounded. Many sectors of the economy have indeed been captured by criminal elements, and corruption is a perversely normal part of Russian business transacting. For a useful survey of crime and corruption in Russian economic affairs, see Stephen Handelman, Comrade Criminal: Russia's New Mafiya (New Haven: Yale University Press, 1995).

13. This is not to deny that in Russia this practice is more extreme. One example is the central government's reluctance--until very recently--to punish the largest corporate tax evaders despite serious revenue shortfalls that have delayed wage and pension payments.

14. This type of development is frequently referred to as "path dependence." See Paul David, "Clio and the Economics of QWERTY," American Economic Review 75 (May 1985): 332-37. David's argument can be applied to the post-Soviet transition. See Scott A. Bruckner, "Beyond Soviet Studies: The New Institutional Alternative," in Daniel Orlovsky, ed., Beyond Soviet Studies (Washington, D.C.: Woodrow Wilson Center Press, 1995), 198-221.

15. For a discussion of this problem, see Vladimir Lysenko, "Power Sharing and the Experience of the Russian Federation" (paper presented at a Carnegie Corporation conference on "Preventing Deadly Conflict: Strategies and Institutions," Moscow, 14-16 August 1996).

16. For a survey of popular attitudes in the wake of the 1996 presidential election, see Jerry F. Hough, Evelyn Davidheiser, and Susan Goodrich Lehmann, The 1996 Presidential Election (Washington, D.C.: Brookings Institution Press, 1996).

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