Patrimonialism in Post-Soviet Russia
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NOTE FROM MR. KEENE: While this article represents an accurate but somewhat
pessimistic view of the current political climate in Russia, it should
be read as background information, exposing one flawed facet of an otherwise
elegant country. Your overall business strategy should consider all of
the facets, the assets and liabilities of a venture in this region, with
a careful eye toward avoiding or navigating around the more obvious obstacles
and with an emphasis on the positive, workable opportunities, of which
there are many.
Reprinted with permission from RFE/RL, Inc.
by Donald N. Jensen
Copyright ╘ RFE/RL 1997, All Rights Reserved
"Much of what we [in the West] took for granted in our free market system and assumed to be human nature was not nature at all but culture," Federal Reserve Board Chairman Alan Greenspan said at the Woodrow Wilson Award dinner in New York in June. Dismantling a centrally planned economy such as the one that existed in the former Soviet Union, he added, does not automatically establish a free market. In fact, one aspect of Russia's culture--what scholars such as Richard Pipes and Max Weber have called patrimonialism--has ensured that its post-Soviet political and economic transformation would be especially difficult.
According to Pipes's definition, the sovereign of a patrimonial state views himself as both the ruler of the country and its proprietor. Political authority is seen as an extension of the rights of property ownership, with both land and people at the sovereign's disposal. Citizens are assigned duties but have no rights. By contrast, "the existence of private property as a realm over which public authority normally exercises no jurisdiction is the thing that distinguishes Western political experience from all the rest," Pipes argues.
In pre-1917 Russia, the tsar "owned" the nation, its vast resources, and its citizens. The state concentrated in its hands the most profitable branches of commerce and industry and gave favored parts of the nobility economic privileges in exchange for their support. The civil service practiced a byproduct of patrimonialism whereby responsibility for administering lands and collecting taxes was handed over to civil servants, who, in exchange, were allowed to keep a portion of what they collected. This practice fostered corruption, which became part and parcel of public administration. Although some aspects of patrimonialism weakened or disappeared in late tsarist Russia, the consequences for the growth of democracy in Russia were severe: a small middle class, weak state institutions, and underdeveloped rule of law.
Soviet communism was an especially virulent form of patrimonialism. Although Marxism denied the existence of private property, in practice the state and party "owned" virtually everything--publishing houses, sanatoria, public buildings, and businesses--as well as controlling state revenues. In reality, citizens' rights that existed on paper were for the state to give or take away.
Today Russia has to overcome not only the burden of its Soviet past -- too often conceived of only in macroeconomic terms -- but also a patrimonial inheritance of much longer standing, which is retarding the development of a law-based state. Privatization, the infamous loans-for-shares transactions, and the state's reliance on nominally private "authorized" banks to handle large amounts of its money are just three examples of patrimonialism's continued vitality.
In addition to its tendency to weaken democratic development, patrimonialism fosters a close relationship between business and politics. The government holds large chunks of stock in key industries. State efforts to regulate entrepreneurial activities are half-hearted. Patrimonialism means that political authority often depends on leaders' business contacts and leads to the dominance of clan politics, whereby politicians, businessmen, media entrepreneurs, and security forces use the political process to vie for control over the economy. Patrimonialism is also reflected in the increasing identity of Russian foreign policy with the economic interests of specific clans and lobbies. This trend was most clearly demonstrated by the appointment of tycoon Boris Berezovskii, who has extensive holdings in the oil and gas industries, to oversee implementation of the Chechnya settlement as deputy secretary of the Security Council.
With the government playing such a patrimonial role in property relations, crime is all-pervasive. There is traditional "organized crime," including drug trafficking, racketeering, and prostitution. White-collar crime, such as bribery, embezzlement, and the extortion of protection money, is also widespread, reflecting the weakness of the state. Official corruption, which President Boris Yeltsin's government sometimes sponsors in the name of economic reform and revenue raising, exists in the form of insider trading, preferential treatment in the granting of licenses, and the banking of state funds in favored financial institutions. Moreover, the government routinely uses corruption charges in the struggle for political power.
On a more positive note, there is unprecedented popular acceptance of civil liberties and elections as a way to legitimize political authority. Society is steadily being demilitarized and economy integrated into the international community. However, Russia's patrimonial heritage has ensured that corruption and lawlessness are not a just a passing phase but a systemic problem that is unlikely to go away anytime soon. "Corruption is an old problem of ours," Yeltsin said in a recent radio address. "Corruption is like weeds. No matter how hard you try to get rid of them, they keep reappearing." The fight against corruption is likely to be a long struggle.
The author is associate director of RFE/RL's Broadcasting Division.
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