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Draft version

Decision-making in Russia:

From Hierarchy to Networks?

Anton Steen

Department of Political Science,

University of Oslo

Paper prepared for the 28th

Annual ECPR Joint Session of Workshops 14.-19. April

2000, Copenhagen. Workshop: ‘The Management of Decision-making in the Centre of

Government in Eastern Europe and the CIS’.

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Introduction

The break down of the Soviet regime and dissolution of established decision-making

structures have resulted in unclear relations in politics and economy. However, despite

of strong centrifugal forces, the Russian Federation has also exhibited continuity with

the former regime and abilities of achieving a minimum level of integration. The

competing elites, who crushed the Soviet Union and almost tore the Russian

Federation apart, at the same time have vested interests in continuity and co-

ordination. The old bureaucratic elite saw their positions threatened. The new powerful

business and regional elites infiltrated the central state institutions to protect and

support their new status. The centrifugal forces of regime transition were balanced

against centripetal interests where elites tend to integrate in order to establish a new

basis of power. The thesis is that elite-networks are fundamental in this process of

finding a new balance between elite groups. Certainly, institutions will constitute the

framework for elite-interaction. But how and to which extent the Constitution, laws

and formal structures influence elite behaviour is more an open question. The point of

departure here is that elites are filling certain roles in organisations of some kind.

However, in new democracies the institutional impact will be rather weak and the

scope for elite-networks correspondingly greater.

The weak central power and rapidly changing elite coalitions have furthered

new forms of co-ordination. The traditions from the former regime with personal

contacts as a decision-making device revived. The networks provided a structure for

social relations, trust building and collaboration. Network, as co-ordination

mechanisms during the communist period were widespread among economic

enterprises and between the state and enterprise managers. Informal bonds and illegal

activities among reliable partners became essential to avoid not fulfilling the plan

requirements without being punished. The purpose of this chapter is to analyse

network formations among the Russian elite after change of regime and also outside

the economic sector in the particular turbulent year 1998. Networks as integrating

mechanisms are especially interesting from the perspective of how contact flows

diverge between institutions, and how experiences from the Soviet period influence

contact patterns.

Collusive behaviour as well as noble motives may generate elite networks.

Almost per definition such interactions are difficult to reveal and many speculations

and few systematic empirical studies have appeared in this area. Impressionistic

descriptions are flourishing and indicating the importance of such decision-making

mechanisms in Russia. A widespread notion is the idea of ‘nomenclature capitalism’

where elites from the previous regime through personal connections got prominent

positions in the new economy. Some theories, as will be discussed in a later section,

explain economic stagnation in post-communist countries with elites having interests

in only partial market reforms. The ambition here is not to disclose actual networks

between specific persons but to present some data that indicate some patterns of co-

operation between elites of different institutions. By interviewing elites about which

other institutions they interact with and how close the relationship is, hopefully it is

possible to provide a better empirical fundament for discussing the functioning of the

‘Russian network-state’. The following questions are asked: 1) Which elite groups are

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in contact with each other and how close? 2) How does ‘political capital’ (former

positions) influence network activities?

Intensive networks across institutions and recruitment through resources made

possible by former position, indicate a type of decision making culture that is different

from the Weberian conception of legal-rational governance. Networking may inhibit

depersonalised ‘rational’ decision-making. Legitimacy will emerge when decisions are

based on rules and disassociated with the incumbent of the office. In a clientellistic

system, legitimacy finds another basis and is grounded on trustful personal relations

between patron and client. Central aspects of legal rational systems are clear cut roles

between ‘politics’ and ‘administration’, an accepted demarcation between ‘public

sphere’ and ‘private sphere’, and ‘centre-periphery’ relations founded on well-defined

and legitimate interest-intermediation. Such a differentiation of roles generates

fundamental tensions in modern states that are processed through consensus-making

bargaining institutions. In the Russian case, institutionalised forms of bargaining are

largely absent. On the other hands roles are highly formalised and interlocked in

regulations. A main question is how personal networks are developing between

different elite-roles. For each of them one may expect specific patterns of contact and

variations in the importance of the ‘political capital’. What then is characteristic about

relations among these groups?

Politics and administration: Are politicians and bureaucrats forming networks

across institutions? Aberbach’s et. al. (1981) study of political and administrative

West-European elites demonstrates a rather convincing coherence with the Weberian

ideal roles as to basic orientations. If these roles have been differentiated also in

Russia one would expect the network contacts to be modest. One argument is that

‘political capital’ will be less important since the connection to the totalitarian past is

not beneficial in a democratic system. The opposite argument is that the past is not a

burden but an asset that can be converted into new positions.

State and market: How close are contacts between the leaders of state

administration/state enterprises and the new leaders of business companies? According

to theories of ‘distributional coalitions’ and ‘nomenklatura capitalism’ one would

expect close contacts. However, it is important to differentiate between leaders of the

ministries and those of state enterprises, where the last group is expected to have

especially close ties to private companies. Since many of the private business leaders

are younger persons, ‘political capital’ will be more important to the more established

leaders of state companies. The ‘grey-zone’ between state and market will create

especially good conditions for thriving ‘clientellism’.

Centre and regions: Is it so that the dramatically increasing autonomy for the

regions has resulted in broken ties with the centre? This is not necessarily so. Besides

the strengthened regional level, the economic crisis has worsened and made regions

more dependent on Moscow. If the bad economic situation influences the contact

patterns between centre and the regions, one may expect the leaders of poor regions to

be more active towards the centre than prosperous regions. The leaders of more well

off regions may be more concerned with strengthening their autonomy than contacting

the centre for economic support. In this group of regions one may expect the leaders to

be especially active with inter-regional contacts. A major part of the Soviet central

elite did not continue in the political centre and has found a new carrier possibilities in

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the regions. Therefore, one may expect that those who have higher positions in the

regions with a ‘political capital’ from the former regime, make possible a high activity

in both vertical and horizontal networks.

The purpose of this chapter may seem ambitious. To trace elite-networks that

are both unstable and difficult to disclose require a wide spectrum of data. One limit is

that elite-interviews are only one source on one point of time. However, it is a

systematic approach with many units and a high answering percentage. Given that the

answers are honest, this approach may say something substantial about the scope of

networks, and how past positions and family relations influence network contacts.

Types of network A broad Western literature on ‘network-theory’ exists and a lot of energy has been

used on defining what characterises a network. The discussion of network-connections

between state and society has clear associations with ‘corporatist’ and ‘pluralist’

theory. Van Warden (1992) systematises several network-dimensions of which the

most important are: number of participants, who are the participants, the functions of

the network (exchange of information or decision-making) and degree of

formalisation. On the one extreme of a network-continuum one finds limited

participation, important participants, frequent interaction, stability, decision-making

and formalisation. Here one may classify ‘corporatist’ arrangements that have been

named as ‘iron triangles’. The other extreme is characterised by extensive

participation, the participation is informal and varying from issue to issue, and

exchange of information and views are main activities. These kind of networks are

often called ‘issue networks’.

The data-material here does not include all these dimensions. The purpose has

more been to answer who contacts whom, how often? ‘Contact’ will imply several

forms of interaction: meeting, telephone and letter. The ways one elite-group is in

contact with other elites, and how intensive the contact is, defines the borders and the

importance of the network. The fact that elites interact and that interaction vary

between institutions, may indicate that some elites are more closely knitted together

than others.

This kind of indirect mapping of networks by interviews is necessarily related

with some methodological problems but have been used in several studies of elite-

interaction. The Norwegian (1983) and Swedish (Petterson 1989) power studies used

interviews to analyse contact patterns among the elites. In American and Australian

studies Higley et. al. (1991) and Heinz et. al. (1990) interviewed several elite groups to

disclose general contact patterns and more specialised ‘inner circles’ and ‘elite

cliques’. In Estonia, Latvia and Lithuania elite interviews were employed to analyse

how the new national elites of former Soviet republics interact and how elite

interlockedness is influenced by ethnic issues and national policies (Steen 1997). The

experiences from the Baltic elite-studies provide potentials for comparing elite-

networks between countries.

Network theory and the Russian case It has been maintained that after the demise of the previous hierarchical governing

system, elite-networks have gathered momentum and to a large extent have replaced

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hierarchical rule. Alternatively, networks after change of regime are regarded as

continuation of a Russian governing tradition that became widespread during the

Brechnev period. A rigid bureaucracy became an integral part of personalised patron-

client relations and stable elite connections.

Mancur Olson (1982, 1990) maintains economic decline under the Soviet

period and later in the Russian Federation may be explained by ‘distributional

coalitions’ organised around sectors and special interests among medium,- and

medium/top-level elites from the middle of the 1960’s. Especially under the Brechnev

period these elites escaped collective sanctions of the central state and formed a new

independent ‘class’ of administrators and planners out of control from the part

leadership. These personal networks could frustrate or hinder reforms in the segment

of the economy these elites administrated, providing stable position and resources. The

aggregated effect of such self-interests became formidable.

As Olson (1992) underlines, among ‘meso-elites’ and ‘sub-elites’ one will find

a considerable degree of conservatism. The resistance towards market reforms and

sympathy for central governance will be more widespread among these elites than

among the super-elite. Paradoxically, the network-alliances among the conservative

middle-elite undermined the collective rationality of the Soviet system. After the fall

of communism a similar mechanism has been observed by Hellmann (1998). The elite

supported in the outset liberal reforms like privatisation and a competitive market. But

as soon as privatisation is finished and the elite has gained control over and

monopolised the most attractive state assets, they are preventing further reforms that

may threaten their monopoly interests. The ‘financial oligarchs’ thereby effectively

weakened the rationality of a free market economy. These networks are small and

closed and extremely difficult to study. However, if the state-business relationship is

important one would expect the respondents of these groups to have rather extensive

contacts.

A basic precondition for the networks was the authorities’ control over

attractive resources. Well known is the Russian term ‘blat’, designating use of

personal networks and informal contacts to get access to public resources. Personal

interests are forwarded by ‘going around’ formal procedures and regulations

(Ledeneva 1998). ‘Blat’ is regarded an important part of the informal norms and

regarded as legitimate since it is deeply rooted in Russian political culture.

Accordingly, elite competition was considerable and some would maintain important

elements of ‘pluralism’ existed under the official façade. In the Soviet period the

appropriate network connections were rewarded with positions and material benefits

(like flats and consumer goods). During the privatisation period from 1993 to 1995/96

networks were of vital importance for redistribution of state property to the new

capitalists, and a new element was brought into the exchange relations: cash money to

a large extent replaced material goods.

Eisenstadt and Roniger (1980) maintain patron-client relations exist in all forms

of political systems. Typical of ‘pure’ patron-client systems are ‘generalised exchange

relations’ which are stable and based on informal agreements. But also important

elements of contest exist and negotiations about the terms of the exchange. In

particular with deep economic and social changes where resources are free floating,

the competition among elites to join favourable networks will be especially hard.

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Patron-client relations became an integral part of the Soviet system and were

moulded with hierarchy and certain norms of competence and loyalty. A more open

society, fragmented elites, a plurality of power bases and a weak political centre,

changed the traditional patron-client relations (Willerton 1998). Economic resources

and political support are the fundament for the exchange relations. Since the economic

situation of the elite may change very rapidly in an unstable market economy, and

regular elections have introduced an element of unpredictability, patron-client relations

tend to be less stable than before. One consequence of change of regime is more short-

lived elite-alliances. In particular the grey-zone between state and market have created

conditions for networks between actors in politics and the new business companies.

According to Kryshtanovskaya and White (1998) such coalitions are especially

important in the decision-making processes. The problems of economic development

in post-communist countries have been explained by that no change from plan to

market took place but a change from ‘plan’ to ‘clan’. This characterisation has been

used to describe the Hungarian case (Stark 1990), but probably fits even better with

Russia and in particular the Russian regions.

Among the Russian regions ‘patronage-politics’ and ‘political clans’ became

even more important than in the centre. Although clans and family-relations always

had considerable influence during the Soviet period, the liberal institutions as elections

and a ‘free’ press, opened new possibilities for ethnic and family based clan politics in

several regions (MacAuley 1997)1. Under turbulent circumstances the most predictable

factors are family based networks. One assumption is that among economic elites,

family-ties will be more wide spread than among other elite groups. The legal-rational

logic will mainly be absent in this field, compared to administrative and political elites

who are more obliged to formal procedures and therefore more easily are exposed to

criticism. Elite integration in the regions was decisive to carry out effective lobbying

towards the central authorities, in order to influence the distribution of state subsidies

and negotiating the terms of taxation. Effective regional lobbyists represented not only

their region. By controlling property, where the borderline between public and private

often were difficult to draw, the lobbyists operated as regional ‘patrons’ with large

potentials for personal economic gains. Stagnation regions became dependent on

bargaining with the federal government about subsidies while the richer regions with

natural resources made the best deals.

Who contacts whom: the flows of elite-contact. The following table shows which kind of leaders the respondents have been in contact

with.

1According to MacAuley (1997) the elite had few other choices. The only thing regional elites could

rely on were existing networks. It was particularly obviuous in some republics. In Tatarstan and Sakha

the only way of political consolidation was through ethnic based clan politics.

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Table 1: Contacts with leaders of other institutions every month or more often, (percent).

Contact with leaders of :

Elites in:

Federal

Cabinet

State

Duma

Federal

ministries

State

enterpr.

Reg.

gov.

Local

gov.

Political

parties

Trade

Unions

Private

Busines

s

Mass

Media

Civic

Organiz.

State Duma 70 99 76 78 84 81 90 46 35 80 75

Fed. Council 67 60 80 96 94 100 50 67 60 97 86

Fed. adm. 55 37 73 57 52 30 9 18 25 32 25

State enterpr. 18 2 42 68 46 56 2 36 72 22 36

Priv. business 8 8 26 74 41 56 6 14 90 24 28

Culture 20 18 44 66 44 44 22 28 54 68 64

Reg. govm. 19 34 29 88 91 93 44 39 58 84 70

Local govm. 19 20 25 80 72 92 31 29 63 75 67

All elites 29 35 40 79 76 79 38 35 56 70 62

N=980, Responsrate 97.1

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Starting with the total elite-respondents, the dominating targets for contact are leaders

of state enterprises, regional and local government leaders. The Federal Cabinet, State

Duma, and federal ministries have the overall lowest contact, together with trade

unions and political parties.

More interesting is the variation between the elite groups. What about contact

patterns between politics and administration? The deputies in the State Duma and

Federation Council have a close contact with leaders of federal ministries. 76-80% say

they have monthly or more often contact. But this is also the case for most other public

institutions, like the Federal Cabinet, regional/local government and leaders of state

enterprises. The leaders of the federal ministries, on the other hand, score low on

contacts with politicians in the State Duma. The contacts go more from the politicians

to the administration, than the opposite way. The administrative leaders have closest

contacts with the Federal Cabinet, the Federal ministries, leaders of state enterprises

and regional government. As expected from the more specified roles of administrators

the scope of contact will be more selective and restricted to state actors. Consequently,

the contacts to the societal and business sectors are relatively limited. The more

limited network relations among administrative leaders reflect more specialised

functions. The politician role is more general and inherently less confined to office

than to personal relations.

The politicians have near contacts with the societal sector like leaders of mass

media and civic organisations, and in particular the Federation Council have extensive

contacts. Compared to other institutions, contacts with trade union leaders are rather

modest.

Contacts between the state and the market: Business-leaders are very often in

contact, but they are also quite often in contact with other groups. Particularly

interesting is that leaders of state enterprises report a high level of contact (73%

contact leaders of private business monthly or more often). The contact with private

business leaders are in fact on a higher level than between the state enterprise leaders

themselves! And the contacts are mutual, with 74% of the business leaders contacting

leaders of state enterprises. State enterprises are also relatively often in contact with

the federal ministries but more seldom than with business leaders. The business

contact into the ministries is less widespread (26%). The patterns clearly demonstrate

the contention of an important ’grey zone’ between state enterprises and private

business. Privatisation of state property obviously has stimulated close exchange

networks in the economic field between state and business.

Business leaders are quite often contacted by leaders in local government, in the

regions and in the cultural sector. One striking difference among politicians is the

rather high contact between the Federation Council and leaders of private businesses

(60% reporting contacts), while only 35% in the State Duma contacts business leaders.

Contacts between centre and regions: The central politicians have extensive

contacts with regional and local levels. Quite naturally, the Federation Council has

more contacts with leaders on regional and local leaders than the members of the State

Duma, who have considerable more contacts with party leaders. This difference

reflects the strong regional and geographic basis of the Federation Council, while the

State Duma has a functional representation through the parties. Central leaders in the

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ministries, state enterprises, private business and culture have a more moderate contact

with leaders on the local level.

The contact from the periphery to the centre exhibit quite opposite traits. The

regional and local elites to a much lesser extent are in contact with political and

administrative leaders on the central level. Their contacts first of all go to leader

colleagues, leaders in state enterprises, mass media and private business, in other

words actors outside the central political-bureaucratic arena. The low intensity of

upwards contacts in the political and administrative fields, while the downwards

political contacts are massive but not the administrative, may reflect more autonomous

administrative bodies on the regional level. The local bureaucracies are not asking for

or being told by central ministries, how to administer. On the other hand, the local

trend towards administrative autonomy is balanced against central politicians who

frequently communicate with lower levels. The pattern of contacts may be interpreted

as regional elites are getting more involved with communicating and establishing

networks with other regional and local leaders in the public and private sectors, than

turning to Moscow. This horizontal elite consolidation in the regions is to some extent

counteracted by vertical communication from the top politicians.

Conclusion: The data do not tell anything about formalisation, durability, the

subject of the contacts or if contacts have been consensual or conflictual. On the other

hand the patterns indicate the directions and intensity of contacts between sectors and

levels where networks are at work. The frequency of horizontal and vertical elite

contacts is at least a reflection of contact paths, what can be called ‘generalised

networks’, where some are more ardent than others. The contacts illuminate four

generalised networks:

1) Horizontal central political-administrative networks between the State Duma,

Federation Council, the Federal Cabinet and Federal Ministries;

2) Vertical top-down central-regional networks where the State Duma and Federation

Council initiate contacts with regional and local level;

3) Corporate networks between state and market where leaders of state enterprises

and private business companies communicate intensively;

4) State-society networks on central and regional levels where the political-

administrative elite interact with leaders of mass-media and civic organisations.

‘Political capital’ and new networks. How important are former regime positions for network-activities? It has been

maintained that the old nomenklatura to a large extent continued in new leaders

positions, often in the business field (Krystanovskaia and White 1998). Other studies

emphasise substantial elite change. In particular younger persons with high education

saw new opportunities for careers inside a democracy and market economy that the

former hierarchical system could not provide (Lane and Ross 1999). The central

political elite became largely replaced by a younger and materially ambitious

generation and in the private business sector they came to dominate even more.

Several of the former power elite found a new basis in their home regions. However,

in Russia as in other post-communist countries, political capital in terms of

connections and networks, became a major step stone for ambitious older generation

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elites to get leading positions in private business. In Estonia a large proportion of the

former members of the republican Central Committee by the middle of the 1990’s had

higher positions in private companies, while extremely few continued in politics and

public administration (Steen and Ruus 1999).

One main issue is how important political capital from the previous regime has

been for the new elite. ‘Political capital’ has a subjective as well as an objective side.

Is it so that the elite perceives former connections to be of importance for present

decision making, and to which extent do former position actually influence present

network activities. In the following sections the first question is if the Russian elite

sees political capital as having effects on decisions. The second is which positions the

elite-respondents had under the former regime. And third, the question is if and how

former position influences network activities almost ten years later.

Continuity and networks

Former regime affiliations influence on network activities after change of regime has

been axiomatic to some researchers. The idea of ‘old boys networks’ working in

clandestine, has had considerable impact and regarded almost as axiomatic by some

researchers. Others have argued that the existence of such networks is an empirical

question and not necessarily an integral part of the system as such. Before I go into

empirical evidence about the relationship between former elite positions and later

career in the power hierarchy and network activities, the very idea among the elite that

such connections exist, will be investigated. To the extent elites perceive that hidden

connections are important, one may assume their strategies and behaviour will be

influenced by such cognitions.

The following table shows the elite’s perceptions about the importance of

former Soviet connections.

Table 2 : Importance of Soviet connections (percent)*

Very important Not important

1 2 3 4 5 Mean N=

(100%)

State Duma 22 28 34 13 3 2,5 95

Fed. Counc. 20 23 23 20 13 2,8 30

Fed. min. 19 26 24 28 3 2,7 96

State ent. 40 23 13 15 8 2,3 47

Priv. busin. 14 39 26 8 12 2,6 49

Culture 25 33 25 6 10 2,4 48

Reg. gvmt. 29 34 22 9 5 2,3 420

Loc. gvmt. 25 26 28 14 7 2,5 170

All elite 26 31 24 13 6 2,4 955

*resp.rate: 97,5%

The elite perceives personal relations from the former regime to be of large importance

for decision making also several years later. Of the total elite 57% say such

connections are very or quite important and only 6% have the opinion that such

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connections are unimportant. In all elite groups a majority say such connections are

very or quite important, and there are only minor differences between the groups.

There are some exceptions: leaders of state enterprises and regional leaders are

especially concerned with the significance of networks of the past. Compared to other

elates, among managers of state enterprises and regional leaders the continuity of

persons has been more prominent. More continuity means more stable networks that

can be made use of. The higher mobility and elite change among other elite groups,

especially among central political and administrative elites, with a new generation of

younger ambitious people coming in, imply a more clear cut break with the past. New

networks are created which not have so many roots to persons from the previous

system.

How then is this picture of subjective perceptions that elite connections during

the Soviet period are important, compared to the actual positions the elite had during

that period. In the following sections former party connection and elected position in

legislative bodies are analysed.

Party position during the former regime

The question about connections to the former regime relates both to how widespread

such connections were and to type of connection. Revealing background among the

elite is not very straightforward. First, an indirect question was asked about

membership in general, not specified to a specific party. 97% of the respondents

answer they were member of a political party or movement before 1991, i.e. during the

Soviet period. The most astonishing is not only the high percentage but also the small

variation between the groups. Among the business elite 94% had been members, while

in the Federation Council, Federal ministries and state enterprises 100% have such a

background. Probably most of these refer to membership in the Communist Party of

the Soviet Union (CPSU) or the Young Communist League (YCL). The response-rate

was as high as 99%.

Then, the respondents who confirmed some kind of membership in a party were

asked which party or organisation they had been a member of and former position. The

response-rate dropped to 72% (707 out of 980) for the CPSU and 97% for the YCL2.

In other words the elite as of 1998 had a massive background from the then ruling

party. Since YCL membership in most cases overlaps with later CPSU membership,

the analysis will be restricted to the latter. Membership in the CPSU was the first basic

step towards climbing in the hierarchy. Membership was quite exclusive and only a

smaller percentage of the Soviet population was party members. Harasymiw (1984)

reports 7.5% for Russia and 6.8% for the USSR as of 1981. How many years of

CPSU-membership has the present elite?

2 The percentage with former CPSU membership is much higher among the Russian elite than among

elites in the Baltic states (Steen 1997).

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Table 3: Years of membership in the CPSU (percent)

1-5 6-10 11-15 16-20 21-25 26-30 31+ Mean S.d. N=

100%

State Duma 8 11 15 28 15 15 6 18 9 79

Fed. Council - 4 32 29 21 11 4 19 6 28

Fed. ministr. 10 21 21 18 17 7 7 16 8 75

State enterpr. 6 22 19 28 14 8 3 16 8 36

Priv. busin. 9 9 30 26 13 9 4 16 8 23

Culture 7 28 17 14 24 7 3 15 8 30

Reg. gvmnt. 13 18 24 21 13 8 2 15 8 321

Loc. gvmnt 16 24 18 20 13 8 1 14 8 115

All elite 11 18 22 22 15 9 3 16 8 707

For the total elite the mean period of membership years was in 1998 as high as 16

years with only smaller differences between the institutions. The central political elite

in the State Duma and Federation Council had the longest tenure as CPSU members,

many with 20 to 30 years of membership. Also among other elite groups, e.g. in state

enterprises and private business a majority has more than 16 years with party

membership. Taking CPSU membership as an indicator of the legacy of the past, the

new elite even several years after the fall of communism were dominated by persons

who had been party members for a longer period. A background as long-lasting

member seems to be an important precondition to elite-status after change of regime.

One may assume that the impetus of the past will increase with number of membership

years, position in the party and positions in decision-making bodies.

Probably even more important for later access to the elite is type of position

during the former regime. The higher former position the more political capital can be

converted to later elite status and network access. It makes quite a difference with

rank-and-file membership, compared to having been a top party leader. The

‘convertibility thesis’ raises one general question having two different implications:

First, former position is important for later career. Second, former position influences

status after regime change irrespective of ‘sector’. Third, political capital will be

specialised and converted to later elite status within the same field.

If ‘political capital’ is highly convertible from one regime to another and

between sectors, one will expect post-communist elites to be recruited from former

higher positions with minor differences between the elite groups. On the other hand, if

former position implies ‘specialisation’ of ‘political capital’, former political elites will

tend to convert former positions into political careers in the same sector. The next

table shows the position of the former party members.

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Table 4: Former position in the CPSU among present elites, (percent)

Ordinary member Mid-level leader Top-level leader N=100%

State Duma 42 32 27 79

Fed. Council 29 21 50 28

Fed. ministr. 61 37 1 75

State ent. 56 33 11 36

Priv. busin. 56 43 - 23

Culture 57 30 13 30

Reg. gvmnt. 44 31 25 321

Loc. gvmnt 55 25 20 115

All elite 48 31 21 707

On average about half of the party members have been leaders, and among them 21%

were leaders on the highest level. Between the elite groups there are large variations.

As many 50% of the Federal Council members say they were top-leaders in the

Communist Party and only 29% were ordinary members. Also in the State Duma and

in regional and local government, several have a top-leader background. In the other

groups, mid-level leader background is more common. The business elite and leaders

in Federal ministries and state enterprises are, compared to the political elite, to a

larger extent recruited from rank-and-file members and mid-level-leaders. Much of the

same pattern is found for former membership in the Young Communist Leage

(Komsomol). As many as 97% of the respondents had been members of the

Komsomol, among whom 43% had some type of leader position. Also here the

deputies in the Federation Council and the State Duma have the highest proportion

with leader positions.

The data from the previous two tables supports the contention that political

capital is important for later career. Former party membership in the CPSU is

widespread, a large majority was members during many years and a considerable

proportion had positions as leaders. However, the type of political capital implies

specialisation and limitations on later possibilities. Previous experiences as top-party

leaders obviously canalise former elites into the central, regional and local political

arenas. For post-communist elite groups outside politics, former party-membership

and mid-level leader experiences is common but top-leader experiences rare. It is in

particular clear that in private business and federal ministries, political capital in terms

of former top-party positions is less important.

Positions in legislative bodies

The respondents were asked if they had been deputies to some legislative USSSR

bodies, The Supreme Council of the USSR, the Supreme Council of the RSFSR,

regional councils (republic or oblast Soviet) or local councils (city, district or rural

Soviet). 36% (354) of the respondents has been elected to some council.

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Table 5: Former member of a Soviet legislative council (percent)

Yes N(=100%)

State Duma 66 100

Fed. Council 83 30

Fed. ministries 10 100

State enterprizes 20 50

Private business 10 50

Culture 18 49

Reg. government 42 426

Loc. government 29 173

All elite 36 978

*resp.rate: 99,8%

Such a background is found among many members of the Federation Council (83%)

and in the State Duma (66%). Also on the regional level quite a few have such

experiences. In private business and federal administration only 10% have been

deputies. This picture fits well with former party careers, as demonstrated above.

A background as deputy may vary a great deal: from local government to

bodies representing the whole USSSR. In the following table the 352 respondents with

a career as elected deputy are distributed on the several councils (Soviets).

Table 6: Proportion of present elites who were elected representatives of different

Soviet Legislative bodies3, (percent)

Supreme

Soviet

USSR

Supreme

Soviet

RSFSR

Rep./

oblast

Soviet

City,

district,

rural

Soviet

Member

%

Member

%

Member

%

Member

%

N =

State Duma 9 18 45 73 66

Fed. Counc 4 20 76 60 25

Fed. min. - 10 10 90 10

State ent. - - - 100 10

Priv. bus. - - 20 80 5

Culture 22 - 33 67 9

Reg. gvm. 3 4 27 88 179

Loc. gvm. - 2 12 96 50

All elite 4 8 31 84 354

Since several elites have had more than one position as deputy the total sums up to

more than 100%. For the total elite 84% has experience as deputy on the local level,

3 The positions sum up to more than 100% since many respondents have had positions on several

levels. Question asked: “Were you ever elected as a deputy to some Soviet legislative body during the

Soviet period? If yes, in which of the following bodies were you an elected representative?”

15

31% from republican level, 8% from the Russian republic and 4% from the Supreme

Council of the Soviet Union. Most of the elite groups started their career as deputies

on the local level but few advanced to the top level. Although there is no dominating

experience among the present elite from top elected positions, the data quite clearly

indicate that those who succeeded in becoming higher elected deputies in the Soviet

system on oblast and republican level, later tend continue with electoral politics after

change of regime. The State Duma and Federation Council are in this respect

representing continuity from the previous regime. Many persons who have had their

first electoral experiences with Soviet institutions on lower levels seem to use such

‘political capital’ to advance into the political elite after change of regime. This kind

‘continuity’ is however different from the idea of reproduction of the Soviet

nomenklatura. More than 90% of the respondents in the State Duma and 100% in

Federation Council have completed graduate studies, and a large proportion have

academic degrees. This ‘intellectual capital’ is combined with considerable experience

over time from lower levels of the political system4. The new top elected elite

obviously are academics who got new career ladders in the political sector, but they

are not the ‘bright youngsters’. This group seems more to have been attracted by the

business opportunities outside politics. The new political elite has combined different

kinds of ‘capital’ into political influence. ‘Intellectual capital’ from high education and

leading positions in the state bureaucracy5 are linked with ‘political’ capital from

lower levels in the Soviet period. Not a single resource but a ‘package of capital’,

common to a large majority of the political elite, are important conditions for

constituting common frameworks of thinking and behaviour.

Former position and network contacts

If former position in the political system is important for behaviour after change of

regime, one would expect the higher position during the previous regime the more

active a person will be in post-Soviet networks. What is interesting, is in which sector

and on which level former ‘political capital’ has effect. Network activity6 as of 1998

is here correlated with former position in the CPSU and having been elected to some

Soviet legislative body.

4 Average age of the State Duma respondents is 50 years, with only 6% under 34 years. In the

Federation Council average is 53 years with none under 34 years. 5 More than 80% of the respondents in the State Duma and Federation Council have a background as

director or leader in state bureaucracy. 6 Gamma-coefficients. Network activity is measured as frequency of contacts (weekly, monthly,

sometimes a year, never) with leaders of various institutions, position in the CPSU: ordinary member,

mid-level leader, top-leader. Soviet deputy is dichotomised into those who had and those who had not

such positions.

16

Table 7: Contact frequency and position in CPSU/deputy to Soviet bodies.

Contact with leaders of: CPSU-

position

Soviet-

deputy

Federal cabinet .03 .16*

State Duma .14* .38**

Federal adm. -.06 .08

Regional govnm. .21** .36**

Local govnm. .20** .34**

Political parties .13* .34**

Trade unions -.01 .18**

Private business -.11* -.11*

Mass media .13* .28*

Civic organisations .03 .18**

State enterprises .03 .10

Average N= 707 976 Gamma-coefficients

**Correlation is significant at the 0.01 level

*Correlation is significant at the 0.05 level

A higher previous position in the Communist Party is especially correlated with

contacts with leaders in regional and local government. A second group is deputies in

the State Duma, party leaders and leaders in mass media. ‘Political capital’ seems to be

especially convertible to contacts in the political field on central and regional levels.

Former party status is not important for contacts in the economic fields, on the

contrary rank-and-file membership in the CPSU seems to be more conducive to

contacts in the busieness field than higher positions. On the other hand contacts with

mass media leaders tend to be strengthened by ‘political capital’.

The other type of ‘political capital’ is related to the legislative bodies of the

USSR. As demonstrated in table 5, 36% (354 respondents) have been deputies on

various levels, mostly in local and regional representative councils. The differences in

contact patterns are quite considerable between former deputies and others. Those who

were elected to some council (Soviet) are much more in contact with political leaders

than those who were not deputies during the Soviet period. The contact with the State

Duma, regional/local government, and political parties are substantially related to such

a background. When former status as deputy is specified to type of Soviet elected

body, deputies from the former Supreme Soviet of the Russian Republic (RSFSR) is

most clearly related to post-communist networks. This group of persons scores very

high on contacts with leaders in the State Duma, political parties, Federal government

and Federal administration7.

Comparing with position in the CPSU, the effect for contacts of having been a

Soviet deputy, is considerably stronger and also wider. Contacts with leaders of trade

unions and civic organizations are significantly influenced by having been active in

7 The number with background as deputy to the Supreme Soviet of the RSFSR is 28. Although the

number is small the effects are clear: State Duma .43**; political parties .32*;

Federal government .41**; Federal administration .32**.

17

Soviet legislative bodies, but not by party status. ‘Political capital’ has several

dimensions where the institutional affiliations may vary with consequences for later

elite status. The only negative correlation is for contacts with business leaders. As for

party position, status as deputy has a negative effect on relations with business. If

‘political capital’ can be converted into ‘economic capital’, and one implication is

close connections to the business field, one would expect a positive connection here.

The data does not support the thesis that ‘political capital’ is transformed into

‘economic capital’ in this sense. The main is that former ‘political capital’ is used to

create new ‘political capital’. This conclusion conforms to Lane and Ross (1999),

asserting that political assets from the former regime under the Yeltsin period were not

exchanged into economic capital, thereby contesting the widely held view that the

former political elite was ‘reproduced’ from politics to economics. The new positions

in the economy were occupied by the former managerial class, who turned their

intellectual capital into economic assets. Obviously, several of the previous managers,

of whom many had been politically active during the Soviet period, went into politics.

What the data shows is that such a political background matters a lot for generating

networks and potentials as deputies in the political arena after change of regime.

Thereby in the political field a direct ‘path’ was established between the previous and

present regime. The same background from the Soviet period and close interaction

after change of regime among these political elites sustained certain cognitive models

of how to solve economic problems where the state have a strong position8. The new

democratic institutions put them in a veto position, able to stop or halt economic

reform plans from above.

Conclusions

The subject of this paper has been elite-networks, focusing on how tightly woven the

webs are, and if experiences of the past may influence contacts. Democratisation

means differentiation among elites. The expectations that politics and administration

are specialised and behave as separate ‘institutionalised groups’ does not get support.

The interaction between political leaders and leaders of federal administrative bodies

is close. The politicians are also very active with contacting leaders of other

institutions like state enterprises, mass media and regional government. Compared to

the other elite-groups, a very large proportion among the political elite has brought

with them Soviet experiences as previous political activists and leaders. Such a

‘political capital’ seems to be important for getting access to new political positions

and for the intensity of network activities.

A second change came with more autonomous regions. The same active central

political elites are found here. They contact regional and local elites very often. The

regional elites are also in close contact with each other but is surprisingly seldom

contacting elites on the federal level. Leaders of stagnation and periphery regions are

not contacting central authorities more often than those coming from reform regions.

8 See chapter 4 and 5 about the strange mix of rather pro-state attitudes in the economy, combined with

individualst and competitive values.

18

The only difference is found for leaders of central regions who tend to be most in

contact with the Moscow leadership. Geography plays a role for contact intensity.

The third corner in the tri-lateral Russian transformation is the new business

sector forming new relationships between state and market. The extraordinarily tight

relationship between business leaders themselves, and between business and leaders of

state enterprises, illustrates the establishing of a new elite-segment in Russia. The

contacts between leaders of state enterprises and business are strong and mutual, and

contacts are flowing frequently both ways. Such a concentrated bilateral contact is not

found between any other institutions9. The existence of this active segment gives

support to Olsons (1982) contention of ‘distributional coalitions’ undermining the

economy during the Soviet period and which later formed ‘winners get all’ coalitions

with the new business leaders, thereby crippling the new market economy10

. Treisman

(1995) calls such relations an ‘administrative market’. The new market system is not

replacing the former system but becomes interlocked with ‘systems of personalised

redistribution’… where… ‘established interpersonal networks apparently continue to

determine financial allocation in practice’ (p.967).

Åslund (1997) also explains insufficient reforms and economic stagnation with

dysfunctional elite behaviour. ‘The dominant problem of the transition in Russia was

rent-seeking, implying that certain people used the state to their benefits, either reaping

monopoly rents thanks to state intervention, or receiving subsidies from the

government’ (p.184). This is in contrast to an earlier and more optimistic statement

from Åslund (1995) remarking that since private business leaders seek profit in the

market, they will have a weak incentive for contacting the administration.

Leaders of state enterprises got incentives to vegetate on the state and blocking

reforms, rather than restructuring their enterprises. The data shows that the main

lobbying object in the state not is the politicians but the leaders of ministries, a contact

that is rather high and mutual. While Treisman and Åslund undescore the contact

between leaders of state enterprises and government, which is confirmed in this study,

the data also illustrates an extremely close connection in the ’grey-sone-segment’

between state enterprises and private business. The state enterprise leaders are

especially active as intermediators between state and market. In the ‘culture of rent-

seeking’ (Åslund 1999:86) the tripartite informal contacts is a vital precondition to

building trust and exchanging benefits. Of course such networks will vary between

sectors and over time but all are characterised by personal relations that “have been

impermeable to the penetration of abstract processes such as competition, generalised

trust, or law” Mc Daniel (1996:166).

From such a perspective collusive networks are devastating for economic

reforms and the most obvious explanation of why things went from bad to worse. The

above quoted authors have in common a ‘decision’-approach to reforms. Ideal Western

inspired reforms were decided and tried implemented by the top level of the political

system. Experience shows, however, that ideals are seldom realised and very seldom

in Russia. The specific Russian idea of government as ‘surgeon’ by the ‘right men’

9 Even the high mutual interaction between the State Duma and the Federation Council is exceeded by

the state-market contacts. 10

As illustrated in chapter XX the leaders of state enterprises is a special group characterised by close

family ties, emphasising ‘clientellism’ and hold the opinion of large mafia-influence in most areas.

19

was, and according to McDaniel developed by Yeltsin himself, only prolonging a

Russian tradition going centuries back. The combination of the bravery and skills of

the ‘enlightened ruler’ and the idea of technocratic social engineering from above, is a

type of top-down state quite different from other state conceptions. During history this

model has been oscillating between extreme reform optimism and catastrophic results

in terms of human costs, economic stalemate and a cynical civil society. In fact, the

Russian Constitution of 1993, which is built on the principle of a strong federal

presidency and only partly separation of powers, opens for the swing of pendulum top-

down policy reforms. Even if the constitution reflects liberal principles, type and

enforcement of reforms will depend on the actual president in office. In the event the

strong presidency is occupied by an authoritarian personality, the policies will come

into contradiction with its liberal clauses (Sakwa 1996).

Among normative economists, like Åslund, a top-down approach explanation

of why the economic reforms failed, becomes a question of the ‘quality’ of the top

decision-makers. The failure was because of lack of moral leadership, leaders were not

following all economic advises from the West, got economic self-interests and became

corrupt. Such a ‘decision-making’ perspective fits in with a hierarchical model of the

state. This mental model of reality will influence the choices of the decision-makers:

the economic ‘shock therapy’ was intended to be implemented under cultural

conditions leading to massive failure.

The failure of the Russian reform program, Hedlund (1999) maintains, is

explained by Russian cultural peculiarities rooted in ‘the heavy burden of history’, so-

called ‘path-dependencies’. It created insurmountable obstacles to implementing

Western economic ideas in a setting alien to the norms of a market economy. North’s

(1990) theory of economic change introduces a more explicit institutional perspective.

He maintains that formal rules, e.g. new economic plans or programs may easily be

changed by the top leadership. However, the outcome will always be determined by

informal norms which change only gradually, and central control over enforcement

instruments.

Alternatively, a ‘process-perspective’ is not focussing departures from ideals or

goals but how unforeseen processes are being generated and influencing the final

result. The close networks between private business leaders and leaders of state

enterprises, as shown in this chapter, is an empirical illustration of such consequences.

From a top-down-perspective such network activities are ‘abnormalities’ which

logically should be eliminated because the plan is inherently ‘good’11

. The Russian

change of regime was, however, a three-lateral transformation of both economy,

politics and federal system, and political pluralism has been institutionalised with the

Constitution of 1993. Under such circumstances the new type of Russian economy can

hardly be analysed only from the top-down ‘plan perspective’. What will emerge over

time is the outcome of very complex processes ‘from below’. If the results deviate or

not from a formal plan is less interesting than regarding the ‘plan’ as a ‘symbol’ elites

on lower levels are using for their own benefits.

11

As Hedlund (1999) maintains, the Stalin mode of shock therapy was to liquidate opponents when

implementation failed because of unforeseen opposition.

20

Informal norms and lack of enforcement instruments constitute the context in

which actual processes take place. From this angle networks and the ‘culture of rent-

seeking’ is not dysfunctional but serve some basic political and social functions one

has to understand. The informal network structures can be seen, not as obstacles to

rational behaviour but as forms of ‘specific exchange’ between elates. It makes

possible consensus, predictability and solving specific problems, not only for the elite

but also for the employees in bureaucracy and in state and private enterprises, and for

the general population. With weak central authorities and a apathetic society the web

of networks among top,- and middle level elites is a necessary way of elite-interaction

beneficial to problem-solving that could not be made otherwise. The ‘path

dependency’ made possible the survival of basic Russian values, intermediated by elite

continuity and networks in the political field, and opening for new hectic networks in

the state-business intersection.

The costs of a fully developed networking state are obvious and it remains to be

seen if it will be a part of a learning process, becoming more embedded in legal

rationality, and gradually institutionalising as a special form of Russian state-market

model adapted to Russian culture. Or, if a new round of idealistic cleaning up reforms

will bring the pendulum back to more centralised rule and use of direct orders and

control mechanisms, consequently making less scope for alliances across institutions

and elite networks.

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