The Political Dimension of Economic Reform under Vladimir Putin: Obstacles, Pitfalls, and Opportunities

The Political Dimension of Economic Reform under Vladimir Putin
Obstacles, Pitfalls, and Opportunities

by Lilia Shevtsova
April 1, 2002

In this article, the author pays special attention to the obstacles that complicate the movement of Russia toward building an effective market.

Given that civil society and political pluralism are still weak, the overriding factor influencing Russia’s development is the political regime and its core—the presidency. Under Boris Yeltsin, in conditions of a rather advanced decentralization of authority, formal and informal centers of power that had arisen outside the presidency, and even in opposition to it, influenced the process of economic reform. In spring 2001, after much contemplation and deliberation, Russian President Vladimir Putin renewed efforts at economic reform in Russia. He sent a wide range of draft laws to parliament for approval, including a new land code, a package to de–bureaucratize the economy, and a judicial reform bill, and embarked on a new stage of liberalizing the economy. Under Putin, the presidency and structures that serve it are becoming factors that will determine whether or not the new spiral of economic liberalization is ultimately successful.

Putin has substantially reformed the political regime that had arisen under Yeltsin. When he came to power, Putin eliminated the main systemic factors that made up the essence of the Yeltsin presidency—a mechanism of shadowy checks and balances, the principle of connivance and permissiveness, and anticommunism. The new president also gave up the confederate way in which the Russian Federation functioned and curtailed reliance on oligarchs and governors acting as independent regional bosses. Most important, Putin eliminated Yeltsin’s main survival mechanism—his tactic of “dispensing” power to influential groups in exchange for their support.

Putin has built his regime on the following principles: first, reliance on a central bureaucracy and police and military structures; second, subjection and subordination as the main elements of rule; third, recentralization of power in the Kremlin; and fourth, loyalty as a basis for the formation and functioning of the ruling team. The regime that Putin had put together at the end of 2001 could tentatively be defined as a semi–authoritarian bureaucratic regime. [1] Putin purged his government of tsarist elements, put it on more pragmatic and administrative footing, and demonstrated his adherence to Richelieu’s principle of raison d’├ętat: the interest of the state can be attained by any means. Instead of Yeltsin’s anticommunism, Putin rules on the basis of mixing ideological slogans that he borrows from all political forces, including the communist party. He has shown a willingness to avoid any conflict that could divide society. In this regard, one may well wonder, of course, how a regime that is…

[1] On the essence of the regime of Vladimir Putin, see Archie Brown and Lilia Shevtsova, eds., Gorbachev, Yeltsin, Putin: Leadership in Russia’s Transition, Washington, DC: Carnegie Endowment for International Peace, 2001.