Shadow Politics The Russian State in the 21st Century Pub145

8/7/2019 Shadow Politics The Russian State in the 21st Century Pub145

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SH ADOW POLI TI CS:

TH E RUSSI AN STAT E

I N TH E 21st CENTURY

Pet er J . St avr ak i s

December 8, 1997


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The views expr essed in thi s repor t are those of the author and do notnecessari ly reflect the offi cial policy or posi t ion of the Depart ment of theAr my, t he Department of Defense, or the U.S. Government . Thi s repor t

is cleared for public release; distr ibution i s unl imi ted.

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Comments per taining to thi s monograph are invi ted and should beforwarded to: Director, Strategic Studies Institute, U.S. Army WarCollege, Carlisle Barracks, PA 17013-5244. Comments also may beconveyed dir ect ly to the Conference Organi zer , Dr. Earl H. Tilford, Jr .,

by call ing commercial (717) 245-4086 or DSN 242-4086. Copies of t hi srepor t may be obtained fr om t he Publications and Production Office bycall ing commercial (717) 245-4133, DSN 242-4133, FAX (717) 245-3820,or via the Internet at r ummelr@carl isle-emh2.army.mil

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This monograph was originally presented at the U.S. Army War

College's Annual Strategy Conference held April 22-24, 1997. TheStrategic Studies Insti tut e is pleased to publish the paper as part of i tsConference Ser ies.

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Selected 1993 and all later Strategic Studies Institute (SSI)monographs are available on t he Strategic Studies Inst itut e Homepagefor electroni c dissemi nat ion. SSI 's Homepage address is: ht tp://carl isle-www.army.mil/usassi/

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FOREWORD

I n late Apr il 1997, the U.S. Ar my War College's St rategicStudies Institute hosted its Eighth Annual StrategyConference. The theme for this years conference wasRussia's Futur e as a World Power. For two days, scholars,military professionals, and policymakers from the UnitedStates, Europe, and Russia engaged in a very usefulexchange of ideas and viewpoint s.

In t he paper that follows, Dr. Peter J. Stavrakis, of t he

Kennan Institute for Advanced Russian Studies, describesthe emergence in Russia of a kind of oligarchic capitalism,cont rolled by old polit ical eli tes, and thr iving amid an ext ra-legal parallel shadow government . In shor t , rather than aWestern-style fr ee market plur al democracy, Dr . Stavraki scontends that Russia's central power structures to datehave derived from a fusion between corrupt governmentofficials and private sector eli t es. Together they prey on theresources and the potentially productive elements ofRussian society.

Dr . Stavrakis paint s an int r iguing por t rait of a Russiangovernment that resembles the weak states of Afr ica morethan those of Western Eur ope. He explores both simi larit iesand critical distinctions between African systems andtoday's Russia. While the differences are t ell ing, they do notaugur well for a progressive Russion transition, eitherdomest ically or int ernationally.

RICHARD H. WITHERSPOONColonel, U.S. ArmyDirector, Strategic Studies Institute

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BI OGRAPHI CAL SK ETCHOF TH E AUTHOR

PETER J. STAVRAKI S is Deputy Di rector of t he KennanInstitute for Advanced Russian Studies at the WoodrowWilson International Center for Scholars. He earned hisPh.D. in political science at the University of Wisconsin-Madison. From 1992-1993, Dr. Stavrakis was a researchscholar at the Inst i tut e where he studied the bureaucrati ct ransformation i n Russia and Kazakhstan. He is the author

of Moscow and Greek Communism, 1949-1994 (Cornell,1989) and coeditor of Beyond the Monolith: The Emergence of Regionalism in Post-Soviet Russia , forthcoming fromJohns Hopkins University Press.

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SH ADOW POLI TI CS:TH E RUSSI AN STAT EI N TH E 21st CENTURY

Russi a and t he Par adox of St ate Pow er .

Assessments of Russia's future possess a lamentabletendency t o oscillate between enthusiast ic opt imi sm aboutthe development of free market democracy or broodingpessimism concerning the vitality of Russia's absolutist

heritage, without providing many durable insights.1

Thegoal of this essay is to undertake a more penetratinganalysis of a paradox of state power t hat l ies at the heart offuture Russian politics. One of the distinguishing featuresof post-Soviet transition unquestionably has been thepolit ical eli te's remarkable autonomy of power: as the insti -tut ional infr ast ructur e of the old regime collapsed, polit icalelites concentrated on economic reform that later came to

resemble economic plunder , leaving an insti tut ional void inmany areas of government policy. Russia became, in thewords of Robert Jackson, a quasi-state: endowed with

juridical s tatehood, yet lacking the poli t ical wil l ,institutional capacity, and organized authority to protecthuman rights and provide socioeconomic welfare. 2 Thedebacle in Chechnya added the shocking realizat ion of t hedegeneration of Russian military capacity.

I n cont rast to normal societ ies where polit ical power iscircumscr ibed by an inst i tut ional framework and the rule oflaw, the void of t he t ransformat ion per iod provided Russianelites a rare oppor tunity t o exercise their power unfet teredby such constraint s. The resul t has been t o produce a weakRussian state in which institutional development occursonly at the whim of the political elite. An oligarchic

capitalism has taken hold in Moscow, yet the politicalcalculus remains paramount, state institutions under-developed, and the current elitereformist credentialsnotwi thstandinglives beyond t he reach of t he law.

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This is a cur ious and perplexing out come, for Russia hasmanaged not only to endure, but to score some veryimportant reform victories on the path to transformation.How can one explain the apparent paradox of a weak stateundertaking policies more durable political systems couldnot implement? Viewed fr om a comparative perspect ive, theparadox disappears as Russia's experience bears strikingsimilarities to other developing societies. In essence, thecr ises of governance and Russian eli t es' reform responsesreflect the pattern of political developmentor maldevel-opmentpresent in many African states. In the absence ofnormal state building, Russia's political elites, like their

African counterparts, undertook to construct a parallelpolitical authoritya shadow state 3 whose definingcharacteristic is a corrupt fusion between government andprivate sector elit es that stunt s inst i tut ional development ,survives through predation on productive processes insociety, and compels the majority of the population towithdraw from the sphere of legitimate commerce andpolitical activity.

The recent attention Russian elites and internationalfinancial institutions have directed toward building statecapacity has made little progress in the Russian case; norshould thi s be expected given t he cur rent eli t e's phi losophyof governance. According to First Deputy Prime MinisterAnatol i i Chubais , 4 consolidation of power meansestablishing a tough dictatorship within the systems ofstate power . . . . To establish democracy in society r equi res adictatorship within the state. 5 Parallel to this hauntingecho of L eni ni st zeal has been an approach t o budget reformthat is a polar opposite of the vision encouraged by theWorld Bank in its 1997 World Development Report . Whilethe Bank has urged the creation of transparent stateinstitutions that provide, among other things, investmentin basic social services and infrastructure, and acomprehensive social safety net, Yeltsin, Chubais, andBoris Nemt sov have lobbied for a 1997 budget that inflictsmaximum damage on the Russian government's ability topur sue these object ives. Reformers retor t that auster ity i srequired to bring spending under control, following which

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reform can proceed more smoothly. Yet even former PrimeMinister Yegor Gaidar has criticized this approach asunrealistic. The main source of disorder in the economy,according to Gaidar, is the state because it gives outpromises and does not fulfi ll them. 6

The much vaunted struggle between the Russiangovernment and the economic monopolies also fails tobutt ress reformers' claims that they are building a rati onallegal state with limited powers. Gazprom has, to date,beaten back attempts to replace its leadership, while thegovernment has succeeded in forcing change at the top ofthe Unified Electrical System. Despite these differentoutcomes, the government remains the major shareholderin both monopolies, leaving the impression t hat the polit icalconflict is more a change of personnel than the ascendanceof a new concept ion of state power. In cont rast to the WorldBank's position that governments cannot provide growth,the new Russian polit ical eli t e appears fi rmly wedded to adifferent position; one in which the state remains a majorproperty owner and plays a decisive role in economicplanning. As Yurii Riazhskii recently lamented inMoskovski i Komsomolets , what kind of st ruggle between theauthorities and the monopolies can there be when thelargest monopolies are the aut hor it ies themselves? 7 State-building in Russia appears oriented toward institu-tionalizing pathologies rather then eliminating them.

Since comparative inquiry can lead at best to a par t ial

comprehension of societal development, a later sectionfocuses on distinctively Russian phenomena with thepotent ial to impel post -Soviet society t oward a far differentfuture than a simple comparison with African experiencewould indicate. Post-Soviet Russia must yet come to gripswith an unstable national identity, tied to the historicalexperience of being one of two central pivots of worldpolitics. The legacy of global success can be a powerful

catalyst for Russian behavior and distinguishes it fromvirtually every other non-Western country. The natur e andglobal impl ications of Russia's posit ive development remainto be determinedimportant obstacles might s t i l l

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undermine a restoration of great power statusbut it willl ikely achieve thi s despite having embraced, for the secondt ime in this cent ur y, a dysfunct ional model of sociopolit icaldevelopment . Russian ingenuity may yet lead society awayfrom the stagnation that has befallen much of the Africancontinent, but for how long this can be sustained, andwhether any future transition will be as peaceful as thepresent, are questions as yet impossible to answer.

Western security also depends to a considerable extenton an accurate assessment of the future trajectory of theRussian state. In t hi s respect , recognizing the impr int of theshadow state on Russia's development allows us tounderstand that successful reform is something quitedifferent fr om Western hopes. Success in Russia is nothingless than the t ransformat ion of a weak state int o a vehiclethat can cont rol a dynamic and aggressive capit alist system.Political elites will not shrink from using the state to suittheir individual objectives, whether it be through thepenetration of society or the subordination of constitu-t ional ism and the rul e of l aw to the exigencies of sovereignpower. Regional and global cooperation with such a statewill be a daunting challenge in the 21st century, for thecorrupt state capitalism emerging in Russia has more incommon wi th past imper ial t radit ion than the civil societythe West will nurture and defend in the next century.Perhaps more troubling, Russia's success on its presenttrajectory might make it a model to be emulated in otherregions of the world. In Africa, as elsewhere, weak statesst ruggling to cope wi th t he growt h of cr ime and corrupt ionmight view Russian success as an indicator they should dolikewise.

Russi a and Afr i ca Compar ed: St ate Capacit y,Feud ali sm, I nt er nat i onal Assi st ance.

Some observers have begun the task of placing Russianaffairs in a more nuanced perspective. David Remnick, forexample, notes the important respects in which condi t ionsin Russia are undeniably better than in the tsarist andcommunist past and is caut iously optimi st ic as to whether

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radical change is possible in Russia. Even so, a betterRussian fut ur e involves a painful (and presumably lengthy)t ransit ional per iod, and a government that must begin t ofight corruption and work toward the creation of a legalorder and a st rengthened cour t system. 8 Michael McFaul,rest ing pr imar ily on Russia's alleged success in developingelectoral inst i tut ions in the past 2 years, also finds reason t opraise what he characterizes as transition withoutconsolidation. Yet, McFaul remains concerned about theemergence of an a-civil society in Russia, the persistentfailur e of polit ical part ies to develop on Russian ter rain, thecontinued dominance of a small oligarchic elite inhibiting

the growth of the small business sector, and the overallweakness of state insti tut ions. 9

The problem, however , is that these preliminary foraysinto the post-Soviet future are either too timid or toocharitable; for Russian politics and society have deviatedfundamentally from Western and European norms andpractices. Corruption and organized crime have graduatedfrom being a baseline norm for describing conditions incontemporary Russia to its defining essence. The RussianOrganized Crime Task Force at the Cent er for St rategic andInternational Studies has, for example, concluded thatRussia is a criminal syndicalist state, where gangsters,corrupt government officials and businessmen have becomethe most potent elements of society. 10 This, combined wi thelites' vir tually unaccountable polit ical power , has pushedRussia onto a developmental trajectory with greaterresemblance to African, not West European, experience.

The growing similarity in physical description betweenAfrican states and Russia further reinforces the parallel.William Reno describesin terms strikingly similar to theRussia casethe t ragic condi t ion of Afr ican states possessedof remarkable natural abundance yet characterized by ahuge accumulation of riches by a few powerful men, a

minuscule and shrinking formal economy, acceleratingmass impoverishment . . . and the collapse of basic stateinstitutions. 11 This differs l it t le from the character izati onprovided by the St. Peter sbur g Ti mes : A select few in Russia

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grow fabulously wealthy while the vast majority of thecount ry grows poorer . This is a recipe for a U.S.-style GreatDepression in which a surplus of goods no one can affordfloods the country; or . . . a Mexico-style course ofdevelopment. 12 Despite the Russian government officialsoptimism of an economic turnaround in the wake ofsuccessful monetary stabilization and the defeat ofinflation, the Russian GDP in June 1997 continued toshrink. 13 The Russian economy is near ing a mind-bogglingdecade of economic contraction, making Mexico's dilemmaseem manageable by compar ison.

Another area of convergence concerns t he rapid collapseof state capacity. McFaul's claim that much of Russia'sproblems are attributable to low state capacity is correct,but comparison with the African case reveals the centralriddle that has now appeared in Russia: despite thedeplorable condition of its formal institutions, Russia hasnever theless accompl ished some important goals, includingtur ning over most state proper ty to a select ent repreneur ialeli te, muzzling and direct ing the mass media, carrying outsubstantial vote fraud during the presidential elections,and enforcing a consti tut ional referendum that key Russianoffi cials now admit did not receive sufficient voter turnout tostand as a legitimate result. 14 His characterization of thepresidential elections as relatively free and fair, butaccompanied by falsification in Chechnya and Dagestan,Yeltsin's gross violation of campaign limits, the media'sopen propagation of Yeltsin, and numerous countingirregularities, 15 leaves one wondering precisely whatinsti tut ional capacit ies were being developed: the abili ty tohold regular elections, or the capacity to determine theiroutcome?

Hence formal state capacity is low, but this void wasfi l led by the Yelt sin polit ical eli t e wi th a network of cont act sthat made survival possible. Survival, and not societal

development, is the central objective for Russian elites; afact that makes the post-communist period more nearlycomparable to the African case. Unlike their communistpredecessors, however, the new Russian elite have

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reali zed that sur vival need not preclude reaping immensefinancial rewards from holding political power. Like theirAfr ican counterpar ts, Russia's rulers have not hesitated todebauch formal institutions to develop their own alliancesthat relied as much on i l legali ty and corruption as they didstate power. Russia's privatization program is a case inpoint . Lauded int ially as an heroic effor t to put property inprivate hands, it is now i nfamous for i t s heavy reliance oncorrupt procedures that favored a tight circle of Chubaisint imates. I t also fail ed dismally in i t s basic mission, as thestate retains effective control, even ownership, over manyproductive asset s.

Russia's rulers have been aided by the low priorityaccorded to societal development by int ernat ional fi nancialinst i tut ions. Where i t was not an af ter thought inmacroeconomic policy, democrat izat ion was considered asthe natural result of sound economic development. 16 TheWorld Bank and Int ernational M onetary Fund (IMF) ear lyon encouraged the adoption of crisis managementst rategies precisely because they permi t ted a narrow cliqueto circumvent inst i tut ional arr angement s and const raint s.Yet members of this initial clique have now become theessential pivots of an alternative political order thatcircumvents the formal one. Moreover, Russian elitesquickly realized that a professed claim to act decisivelywould receive suppor t fr om Western int ernat ional financialinst i tut ions and permi t them t o avoid the responsibil i t ies ofbuilding a normal state. Western agencies' markedpreference for cent ral r ule also undermined parall el effor tsto promote political decentralization, without whichdemocratic development was unlikely. Ultimately,macroeconomic analysis was unable to grasp the logicunder ly ing po l i t i cs in Russ ia where , l ike Afr ica ,domination and cont rol . . . ar ise from par t icular histor iesand are concerned wi th much more than simple cont rol overthe all ocation of resour ces. 17

Another key feature of the political transformation inRussia has been t he decent ralizat ion of polit ical power. Asthe initial threat of disintegration receded, many regional

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authorities sought to minimize dependence on Moscowthr ough development of aut onomous economic policies andpolit ical inst i tut ions. Resul ts have vari ed widely, but thereis l it t le quest ion that cent ral author ity is present ly weakerthan i t has ever been in cont emporary Russia. A distur bingvariable has emerged in this process, however, as Moscowelites are seeking to reclaim their influence in t he regions.I nstead of t he format ion of a genuine federal (or confederal)system on the base of t he sham federation of the Soviet era,center-periphery relations have emerged as an unstablefield in which political and personal agreements create achaot ic patchwork of r elations between Moscow and i t s new

boyars.The deinstitutionalization of regional politics reflects

most vividly that Russia is now more nearly a feudalsyst em r ather than a federal one. Federal syst ems requirea const i t ut ional fr amework, the rule of law and effi cacious

judic ia l ins t i tu t ions to funct ion, yet , as VladimirShlapentokh has argued, present day Russia is char-acterized by the replacement of formal institutional rolesin favor of personal t ies, the privati zati on of much of t heresponsibilities of the public sphere, the profusion ofprivate armies to safeguard the gains of individuals, andthe growth of pervasive corruption. 18 Russian regionalpoli t icians, compelled to place their own poli t ical fates inconflict with the fate of their country, have attempted tosecure their positions by maximizing the room formaneuver at the regional level. This assures bothindependence f rom Moscow as we l l a s open ingoppor tunit ies to the global market for regional economi es.The haphazard nature of this process has created (orperhaps recreated) in Russia a new class of boyar s whosesurvival rests either on resisting the depredations ofMoscow, or reachi ng profi t able bil ater al agreement s wi ththe center. In the new feudal Russia, Shlapentokh'sobservat ion that Russian poli t icians are so absorbed wi thachi eving private goals that they . . . ignore the int erest s oftheir countries resonates with the African experience inwhich Crawford Young ident ifi ed the pathology of state

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corrupt ion and associated violent pract ices. Corrupt ion is acentral problem in Russia, yet the cohabitation of statepower with government corruption will prevent it frombeing confronted honestly by new elites. The fusion ofgovernment and criminal activities is no stranger to sub-Saharan Africa, though the parallel development oforganized crime perhaps has placed Russia in the lead inthis category. As Giulietto Chiesa observed, in Russia thequestion is not whether individuals are engaged incorruption, but to what degree. 21 Organized crimemaint ains it s deep penetration of Russian state and societyand, according to one estimate, generated more than U.S.

$900 mi llion in r evenues in 1996.22

I n fact , the requir ement sof survival within the shadow state necessitate a heavyreliance on corrupt practices to circumvent institutionsthatrightly or wronglyobstruct elite objectives. Thepurpor ted impor tance of corrupt pract ices for reformoft entolerated by Western assistance providersunderminegovernmental and social institutions and provide theindigenous mafia with easy access to officials.

Th e Shadow St ate and Ru ssi an Poli t i cs.

Parallels between Russian and African politics allrevolve around the weak state, the existence of which hasnow been acknowledged by many observers of Russia. 23

Unfor tunately, the subsequent call s for st rengthening statecapacity direct attent ion away fr om t he cent ral i ssues of t he

post-reform era. Chief among these is the need to explainthe apparent paradox of power in Russia and Afr ica: I f t hestate has undergone institutional collapse, what accountsfor its continued existence? How has it been possible for aRussian hobbled Leviathan to push thr ough, among otherthings, the most painful and massive transfer of propertyand resour ces fr om publi c to private ownership in history? I fthe state is indeed so weak, what explains the defensive

posture of Russia's energy and electricity monopolies asthey do bat t le wi th members of t he government ? How do weunderstand a state that retains substantial ownership ofand control over mammoth producers such as Gazprom,

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statepublic and private, legal and criminal, personal andofficialto create a working equivalent of state inst i tut ions.

I t is this shadow state in Russia that fr ames the polit icalcontext within which questions of Russia's socioeconomic

development, national identity and global role will beanswered. In t he process, eli tes wi ll arrogate to themselvesthe right to determine whether, when and at what paceformal state institutions might be allowed to survive.Consequent ly, what Western observers have concluded is amuddl ing down (or muddl ing through for thoseoptimist ically inclined) of r eform era Russia is actually t heemergence of a new accommodation among political elitesas they seek broad and pervasive control over the wealth-creating sectors unleashed in t he wake of r eform.

The Core of the Shadow State . Many state institutionshave collapsed, and the vacuum has been filled by aconstellation of government and new commercial eliteswhose existence rests upon a denial of the fundamentalinstitutions and practices of the rational-legal state. The

epitome of t hi s was reached in Russia with t he consolidationof power in Moscow by a narrow array of politicians andbankers overseeing t he so-called cour t banks. As Yeltsinlanguished between l ife and death, polit ically in 1995-1996,then physically in 1996-1997, wealthy new Russians suchas Bor is Berezovsky (Avt ovaz), Vladimir Gusinsky (MOSTBank), Vladmir Potanin (Uneximbank), Peter Aven andMikhail Friedman (Alpha Bank), Mikhail Khodorkovsky

(Bank Menatep), Aleksandr Smolensky (Stolichny Bank),and others established a financial oligarchy and moved int ogovernment post s. 27 These in turn were the key financialsupporters of Anatolii Chubais, who has now become(institutional position notwithstanding) the second mostpowerful individual in Russia. The subsequent depart ur e ofmany in t his clique from t heir formal posts has done li t t le todiminish their influence, as inst i tut ional posit ion within the

shadow state does not reflect political standing within theelite.

As is the case in Afr ican societ ies, the shadow state is setin mot ion by a single dominant leader , whose chief t ask is to

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define and enforce the rules of elite engagement whichbalance rivalries among competing clans. Hence, thereformist clanheaded by Chubais, his acolytes andbenefactorsis offset by the presence of other clans amongthe dominant coalition: Prime Minister Viktor Cherno-myrdin and the red directors branching out into theproductive economy, and National Security Advisor IvanRybkin establishing an avenue for negotiations with thecommunists. Surrounding this core is a constellation ofpersonalities, each of which is building resources andwait ing for the oppor tuni t ies that a fractured or weakenedcoalition might present: Yuri Luzhkov, Mayor of Moscow;

former national security advisor Aleksandr Lebed; andVladimir Zhirinovsky, member of parliament and head ofthe Liberal Demcratic Par ty of Russia.

Conflict wi thin t he core of t he shadow state t ranspires atseveral levels: one involving effor t s to displace the dominantleader which, as the case of Seke Sese Mobutu in Zairereflects, are periods of maximal systemic instabili ty, oft eninvolving widespread violence and unrest. A paralleldevelopment in Russia would be the splintering of theChubais clan. Alternatively, an event or crisis withinRussia might occur that proves a convenient lever for eit herLuzhkov, Lebed, or Zhir inovsky to exploit . A qualit ati velydifferent form of eli te conflict is that which occur s among theclans comprising the ruling elite. Here, Yeltsin as primus inter pares balances the conflict ing ambit ions and agendasof his subordinates. This conduces a kind of internallethargy in which t he zeal for polit ical victory is blunted bythe blandishments of power. Consequently, Russia as ashadow state will present an external image of politicaltur bulence, but , if conflict does not involve a chal lenge to thedominant leader, the system will retain considerableinternal stability. Equally important, policies that appearsupportive of a reform agenda will be pursued largely fortheir cont r ibut ion t o enhancing polit ical eli t es' prospect s forsurvival , rather than any commitment to societaldevelopment.

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Effor t s to develop the rul e of law and a professional civi lservice will be resisted as they impose institutional andlegal rest raint s that l imit eli t e maneuverabili ty. I n Russia'scase, a broader corrupt ion of society was as essent ial to eli tesurvival as it was to the reform agenda. In his earlierincarnation as head of the State Committee on Property(GKI ), for example, Chubais used foreign assistance fundsto construct Russia's massive privatization program.Russian Privatization Centers (RPCs) were created toimplement the program, yet the RPCs needed to recruitpersonnel. A ready pool of labor was found among Chubaisacolyt es wi thin the Russian civi l service, who were secret ly

paid for their consulting work on privatization projects.Such consulting is unacceptable under any conception of aneutral public service, yet Chubais could count on findingmany recruits, given the low wages paid to civil servants.P r i v a t i z a t i o n t h u s t r i u m p h e d i n R u s s i a o n l y b yannihilating the possibility of a genuine civil service. 28 Forgood measur e, the Parliament 's effor t s to pass civi l servicelegislat ionwhich would have made such act ivi ty

il legalwere foiled by the resistance of the execut ive.The Predatory State . A second prominent feature of the

shadow state is a predatory elite-society relationship inwhich a congeries of elites scavenges off the productiveelement s of society wi th l i t t le or no regard for the rule of law.Product ivi ty t hat emerges out side of cent ral cont rol is eitherquickly coopted or taxed, or ret reats st i l l fur theroft en i ntothe i l legal economyto preserve i t s autonomy. This has hada particularly damaging effect on foreign investment, asWestern investors confront legal conditions that turnagainst their advantage almost as soon as their venturesdevelop some promise. The arbit rary nature wi th which t axlaws were interpreted and enforced, for example, sofrustrated General Electric that it elected to close itsMoscow subsidiary. 29 Similarly, Australia's Star Miningrecently learned that its purchase of part of Lenzoloto, asmall gold mining business, was invalidated because itpurportedly violated privatization rules. The problem, asnoted by The Fi nancial Ti mes , is that t he laws are so vague,the bulk of t he Russian stock market could easily be deemed

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to have breached these rules. 30 Trans-World Metals, aLondon-based metals company that has acquired asubstantial por t ion of t he Russian aluminum indust ry, hasalso been caught in the maelstrom of elite conflict. Trans-World's sin, apparently, was to acquire its investmentsunder the patronage of former Kremlin security chiefAlexander Korzhakov and former First Deputy PrimeMini ster Oleg Soskovets. Once both of these men were fi redby Yeltsin, and the aluminum industry came undersuspicion of support ing Lebed, Tr ans World became an easytarget for state agencies controlled by Chubais andChernomyrdin. Not surprisingly, local Russian officials

soon nullifi ed it s stake in at least one major smelter .31

Domestic actors are also fair game for the predatorystate. Moscow Mayor Yuri Luzhkov recently succeeded inusing a modest municipal payroll tax on Moscow residentsto generate a road fund of approximately $645 mill ion. Yetthe federal par liament has ent ered the pictur e and passed alaw requir ing that at l east half this amount must be spenton the national road system. Parliament, evidently withexecut ive suppor t , effect ively str ipped the mayor of cont rolover part of the municipal budget. 32 Similar ly, the cent ralgovernment has been assiduously diverting tax revenuesfor it s own unspecifi ed pur poses. According to Argumenti i Fakti , the Accounting Chamber of the Russian Federationdiscovered that, while the government collected all taxesdue for 1995, it paid out only two-thi rds of t he budget fundsearmarked for social spending, including salaries andpensions. The government also overspent by a factor of fouron grants to private companies, and created a separatefundin excess of $600 millionout of temporarily freemonetary funds. Not surprisingly, the AccountingChamber also determined that budgetary payments arenot made according to the law, but by uncoordinatedinstruct ions, decrees, let ters, and telegrams. 33

Creating the Commer ical Class . A thi rd dist inguishingfeature of the shadow state is the negligible to nonexistentemphasis placed on maintaining distinctions between thepublic sphere and pri vate sphere, and moni tor ing the l imi t

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of state int rusion int o social processes and insti tut ions. Bycontrast, the Russian state and economy are largely aproduct of the corrupt fusion between these sectors as stateeli tes and wealt hy ent repreneur s funct ion at a level beyondthe reach of the rul e of l aw. Relations between t hese eli tesare of necessity int imate for , as Olga Krysht anovskaya hasnoted, the reformist state elites played a crucial role indetermining the specific content and character of theprivate banking and entrepreneurial strata in capitalistRussia. 34 Indeed, a key weakness of the first stage ofRuss ia ' s mass pr ivat iza t ion was that i t providedpreferential access to the privatization process to red

directors and rapidly growing banksboth of which havebecome key element s of the cur rent polit ical eli te. Even thisinjustice is modified by arbitrary exception: Yeltsin'sdecision to give Mayor Yur i Luzhkov sole cont rol over priva-tization in Moscow. By doling out the richest real estateprize to Luzhkovin blatant contradiction to reformpolicyYeltsin effectively cemented the mayor's politicaland economi c independence wi thin t he highest levels of t he

elite. In return, Luzhkov has supported Yeltsin at everycritical juncture to date, despite persistent rumors of hisown presidential ambitions.

The next stage of elite-creation transpired with thesecondmore controversialphase of the privatizationprogram. The loans-for-shares scheme developed byChubais allowed for a select group of Russian banks to t akeover or become major shareholders in some of the mostvaluable real estate of t he Russian government . In r etur n,these banks were supposed to provide loans to the Russiangovernment, making available much needed financing forthe budget. The controversies surrounding such anarrangement were several: first, membership in the selectgroup of l icensed banks had no compet it ive or mer itor iousbasis. Winning bankers were, not sur prisingly, int imates ofthe Chubais clan. 35 Second, shares in the auctionedent erprises were sold at huge discounts, all owing the cour tbanks to later sell these same assets and reap windfallprofits. Norilsk Nikel, for example, was valued atapproximately U.S.$20 billion, yet 38 percent of the

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enterprise's shares were auctioned off for a mere U.S.$170mi llion t o Oneximbank, whose dir ector , Vladimir Potanin,subsequently became First Deputy Prime Minister of theRussian government . 36

There is still more to this story, however. According tothe Account ing Chamber of the Russian Federation, shor t lybefore the loans for shares auctions, the governmentcredited the banks that would win t enders an amount equalto the cash those same banks . . . hand[ed] over to thegovernment for shares. 37 The method of privatizingRussia's largest ent erpr ises was best summed up by The St.Petersbur g Times : Much l ike the Stalin-era show t r ials, theauctions' for these industrial giants were riggedthegovernment deput ized a bank to organize each auct ion; t hatsame bank put in a bid of i t s own, disqualifi ed it s opponent sand won'. 38 In one bold stroke, the Russian reformgovernment t ransferred most of t he country's r ichest assetsat a loss and created and consolidated the new capitalistclass that received this largesse.

Such suppor t naturally works in both direct ions: whilereformers among the political elite aided in picking thecapitalist winners, the latter returned the favor byproviding crucial support in times of crisis. The neweconomic elite played a critical role in the successfulreelection of President Yeltsin. Berezovsky has describedthe financial and organizational support the group ofseven bankers provided Yeltsin, even claiming as their

initiative the appointment of Chubais as presidential chiefof staff. 39 This is complemented by their cont rol of t he massmedia, which is either owned or controlled by the likes ofBerezovsky, Gusinsky, Gazprom, and other members of thenew financial oligarchy. Lukoil and Uneximbank, forexample, Izvestiya's two largest stockholders, recentlyousted I gor Golembiovsky from his posit ion as President ofRussia's leading daily newspaper for publishing a piece

detailing Chubais' use of foreign assistance funds to secur efor himself an int erest -free loan of $3 million. Even t houghChubais claimed he did nothing illegal, Golembiovsky's

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exercise of freedom of the press caused his corporatebenfactors to rein him in. 40

I n sum, the genesis and patterns of int eract ion betweenpolitical and economic elites closely resembles the African

case as descr ibed by Jean Fr ancois Bayar t :In Afr ica, the state is the prime (though not t he only) channel ofaccumulation . . . Even the successful businessmen in theinformal sector are highl y dependent on the state because theyneed constantly to circumvent regulations and obtain officialpermi ts. I t is, therefore, ot iose to seek to establi sh a conceptualdifference between the private and public sectors. Both areinstruments of a dominant class striving to establish itshegemony. 41

The Autonomy of Pol i ti cal Power . A four th aspect of t heshadow state is the extent to which power at the eli t e levelhas been delinked from societal pressures. The absence ofinstitutional or legal constraints allows political actors toshape and reshape political alliances as the capacities ofstate and economy shift. This, and not some presumedt it anic conflict between reformers and conservatives inthe Kremlin, accounts for the unsystematic nature ofreform, as well as the elites' limited commitment to thegoals of r eform. H ence, the media coul d easily be muzzled inan electoral contest, just as it subsequently sought everyoppor tuni ty t o por t ray Alexander Lebed in an unfavorablelight.

Alternatively, repeated efforts to reform the state willsucceed only to the extent that the individuals present ly inpower in Moscow view institution-building as a profitableact ivity. St rengthening the state, the cur rent clarion callof virtually all Western supporters of reform, will proceederratically and remain subject to reversal should politicalexpediency require it. The predatory character of stateact ivity regarding foreign investment and local government

is inst ruct ive in t his regard. Simi larl y, Chubais' vision of adictatorship within the state does not augur well fordemocratic institutional development.

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The Russian government's renewed drive to enforcebankruptcy proceedings might be taken by some as a signthat Russia is trying, at last, to bend an ungovernablesociety in the direction of fiscally responsible policy. Therecent success in compelling Gazprom to pay a substantialpor t ion of i t s tax ar rears could also indicate progress in t hi sdir ect ion. But The Financial Ti mes remains unconvinced,concluding, in consonance with the present analysis, thatrecent event s only harden t he impression that Gazprom i sdriven by the diktats of influent ial r ival polit ical-financialclans' rather than the interests of its shareholders. 42

Similarly, Yeltsin's unilateral action in transferring

cont rolling shareholding in t he Moskvich car plant reflects apersistent wi ll ingness to undermi ne sound economi c policyby polit ical favor . The plant now falls under the jur isdict ionof Mayor Luzhkov and is exempt from bankruptcyproceedings. 43 That Luzhkov simply is too powerful totackle is belied by the parliament's subsequent action indepriving Moscow of most of its municipal road fund.Yeltsin's act ion is consistent , however , wi th t he explanation

that granting Moskvich an exemption was useful inmollifying challengers to the existing elite coalition.

Societal Withdrawal and Economic Decline . Fifth,Russia reflects the excessive depression of economicproduct ivity and societal wi thdrawal character ist ic of manyAfrican societies that is part of the pathology of statedecay. 44 In t e rna t iona l f i nanc ia l i n s t i t u t ions ( t heInternational Monetary Fund and, to a lesser extent, TheWorld Bank) and Western states are r ight to encour age theRussian government to pur sue a sound financial policy andmacroeconomic stabilization. Unfortunately, the one-sidedmanner in which t hi s policy was pur suedat the expense ofvir tual ly al l productive plants in the countryhassimultaneously destroyed substantial valuable assets andengendered a population deeply suspicious of Western,especially American, foreign assistance.

Parallel to this has been the pervasive withdrawal ofRussian society from politics. The famed politicalquiescence of the Russian publicits unwillingness to

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participate in mass strikes and other forms of socialunrestis seized upon eagerly by Western politicians asevidence that things are on track in Russia, despite thedifficulties. This might indeed appear to be the case, aswidespread wage nonpayment, shortages in some regions,and a steep drop in t he pur chasing power of the ruble havefailed to catalyze social unrest. But from the Africanperspective, societal withdrawal emerges as the moreplausible explanation. Why should ordinary Russians taketheir demands to a government that evinces no interest inremedying it s i lls? This resonates deeply in Russian history,where art iculating one's gr ievances inevitably brought st il l

worse conditions. The logical response is to amass as muchwealth as possible wi thout drawing the att ent ion of t he taxpolice or the local mafia, or both. Sequestering resourcesfr om a predatory state, whether food or money, is a commonfeature of developing societies and conforms well withRussian/Soviet exper ience. Reform-era Russia cont inues inthi s t radit ion as reflected by the amount of personal incomethat goes unreported: average household incomes are

approximately U.S.$205-220 per month, well above theofficial figure of U.S.$120-130. Such behavior is reinforcedby the wi despread percept ion t hat police, secur ity servicesand most other government agencies are corrupt . 45

Withdrawal has its analog among regional authoritieswho are as aware of the center's acquisitive tendency anddepressive macroeconomic policies, as they are the need tosustain local productivity. Regions therefore have strongincentives either to mask productive enterprises, or reachan accommodation with central elites in advance. Theirdifferent ial abili t ies to pursue either cour se wi ll fur ther fuelthe development of feudal relations.

In sum, the current Russian non-state resembles inimportant respects the shadow state characteristic ofAfr ican societ ies. This ent ity emerges despite (and perhaps

because of) formal institutional decay with the objective ofsustaining a par t icular eli te in power rather than producinga r a t iona l - l ega l f r amework devo ted to soc i e t a ltransformation. This explains the apparent paradox of

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Russia's simultaneous weakness while possessingremarkable political strength in selected areas. Thepr imacy of clan polit ics Russian-style over legal and socialinstitutions also indicates that further reform will be afunction of elite self-interest, rather than any sense ofcommitment to societal development .

In addition, the African comparison reveals thatRussia's longer term political development will defy anyeasy characterization as black, brown, or red.Pessimists and opt imi st s alike are bound to be disappoint edas Russia will neither disintegrate, nor will it develop aharmonious fusion of civilized capitalism and democracy.Instead, Russia is headed for an etatist future, refractedthrough the flawed prism of the contemporary state.Capitalism, albeit excessively state-centered, has replacedthe communi st regime and ruling eli tes wi ll intermit tent lytolerate greater freedom of expression while retainingcont rol of t he media. Sudden and abrupt changes wi thin t herul ing coali t ion wi ll hold insti tut ional development hostageand project an external image of political turbulence, evenas the political system retains surprising stability.Constitutionalism and rule of law will remain lower orderpriorities for an elite that needs to resort to violence,coercion and extra-legal measur es to ensure i t s sur vival.

The only unaddressed issue concerns the impact ofRussia's shadow state on its international ambitions.Viewed externally, weak states of the Russian type are

little more than quasi-states as described by Jackson.Unl ike Afr ican societ ies, however , Russia has a long hi storyas European and global empi re. The allur e of past glory andthe humiliation of present weakness will inevitably beaddressed by the ruling elite. Powerful internal factorssuggest such a situation cannot long endure, a consid-eration with profound international implications: theRussian military, presently one of the most debauched

institutions, must eventually be made into an effectiveinst rument of state policy. 46

These considerations bring us to the limits of areasonable comparison between Russia and post-colonial

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Africa. Imperial collapse and the influence of the outsideworld have helped shape a style of politics and distortedinstitutional context similar to Africa's. But historicRussian ambit ions and a far more favorable resour ce basepossess the potent ial t o impel Russia in a dir ect ion differentfrom the seemingly ineradicable malaise that has settledinto sub-Saharan Africa. It is precisely the prospect ofRussia's success where other weak states have failed thatmakes it imperative to comprehend accurately thedynamics of the shadow state.

Russi an and Afr i can Di ver gence I mper ia l L egacy and Nat i onal I dent i ty .

Defenders of the uniqueness of Russian experience willdoubtless take issue with the present comparison on thegrounds that resor t ing to Afr ican exper ience to explain thephenomenon of Russia's paradoxically weak state doesviolence to the role of cultural variables. They may alsopoint to instances where post-Soviet developmentsseemingly can be explained within the framework ofRussian historical experience. The focus of this analysis,however, was not to show the irrelevance of idiosyncraticfactors, but to demonstrate that the syndr ome of t he shadowstate is a pathology of politics that exists within a broadspect rum of societ ies. Indeed, it is quite l ikely that Russianhistorical experience has provided the appropriatesociocultural substratum which, when combined with

reform policies, produced the shadow state. Perhaps mostsignificant, the possibility that deformed or dysfunctionalstate structures can successfully institutionalize aconception of political power substantially different fromWestern standards is an important realization, especially i fone such society is an historic rival of the West. As DavidBrown has argued with data drawn from Liberia, viablebureaucracies may be sustained by elaborate rule

structures which bear little relationship to the Weberianideal-type. Such rule structures need not necessarily beful ly t ransparent to their publics and pract it ioners, thoughthey may never theless have considerable power to order the

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socia l wor ld . 4 7 Russia ' s emergent shadow s ta tecomfortably conforms to this assessment.

Several unique attributes of Russian social andhi stor ical exper ience wil l unquest ionably influence polit ical

development . First , Russia (and the Soviet Union before i t )possesses ext ensive experience in t he global compet it ion forpower. In this century (as well as the next) global powerprojection has become a key aspect of the state system.Jackson notes that, with few exceptions, states are eitherpenetrated by others or themselves became the object ofterritorial aggrandizement. 48 Russia has vivid memories ofboth and it s rul ing eli tes would find it intolerable to again beat the mercy of t he state system. The present dictates of t heIMF already grate against its sensibilities and Russia hasthe potential to be far less patient with the constraintsimposed by international assistance than many othersocieties.

The globalization of capital and investment flows hascompounded the predicament of quasi-states as economic

processes compromise sovereignty without resort toterritorial expansion. While much of the rest of the worldhas grappled with this reality for several decades, Russiaremained insulated behind the walls of communi sm. To theloss of imper ial t er r i tory and status in 1991 came a secondshock to the Russian psyche: economic progress required aloss of control over domestic life. The travails of economicreform for the rul ing eli te are thus l i t t le more than a prelude

to the larger need to organize societal forces to restore toRussia the ful l sovereignt y of a nati on-state. I ronically, therequirement s of compet it ion in t he state system appear asthe only factors capable of persuading Russian eli t es to t aketheir societal obligations seriouslyeven if only in aninstrumental sense. Absent a major shock to thesystemthe death of Yeltsin, mass social unrest, or clanwarfareglobal rivalry will eventually compel Russia's

rulers to focus on raising productivity and restoring theinst i tut ions (i .e., the mi li tary) that can r eturn Russia to theconcert of Great Powers.

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A second factor with a distinctly unique impact onRussia concerns still unresolved questions of nationalidentity. Where African societies can at least point to thecolonial metropole as the architect of their despair, Russialies at t he heart of a mul t inational empire that denied theexistence of nat ions. Recent imper ial memory l ingers in theRussian consciousness, int eract ing wi th memories of powerlost . These myt hs of empire are powerful; so powerful that ,as Frederick Starr notes, they are capable of penetratingWestern scholarly discour se. 49 To the extent that the Sovietmythic legacy continues to dominate Russian thinking,eli tes wi ll find fer t i le soil in t he public mood for building a

Russian state which matches the cont our s of the communistera. Even if not expansioni st in cont ent , such a conceptionretains the close link between identity and state power.National self-definition, most likely with prodding fromstate eli t es, will reinforce the sent iment s ari sing from t heloss of sovereignty and control in the state system.Permeat ing all of t hese issues is the cent ral tension betweenempire and multiethnic polity, which recent experience

reveals ends either in conflict or disint egration.Russia's decentralization will also be an important

factor shaping political development. In keeping with itsfeudal natur e, the capabili t ies of regional leaders wi ll vary,and some will succeed in creating stable, effective regionalgovernment s to at t ract foreign capit al. The combinat ion ofregional resources combined with reliable access to globalmarkets is a potent ant idote to the encroachment of cent ralauthority. Russia's political and economic development inthe next century will be unbalanced as successful regionswill coexist with failures, always leaving center-peripheryrelations open to the temptation of abuse at the hands ofcent ral eli tes. Never theless, successful regional leaders willbecome increasingly skillful at either dodging the dictates ofMoscow, or offer ing flatt er ing ent rees to cent ral power thatmake accommodations possible. The danger remains thatthi s may not come to pass, principally because Moscow hasalways preferred polit ical cont rol to economic performance,if the latter brings with it a loosening of the imperialrestraints. The IMF's view that regionalization is an

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impediment to macroeconomi c policy is also likely to fur therembolden central elites contemplating a restoration ofMoscow's hegemony. Regional policy can therefore move ineither of t wo diametr ically opposed direct ions: towards theembrace of provincial autonomy and the creation of aninfrastructure that can exploit its benefits, or toward arevanche of t he cent er and greater acr imony and conflict incent er-periphery relations.

Final ly, Russia possesses a human and natur al resour cebase that defies comparison with the African continent.Even wi th i t s environment and population t hreatened, theenormous investment in education and training in thenatural sciences by the Soviet regime has left a skilledworkforce that can be harnessed quickly. Unlike post-colonial societ ies which t end to brist le wi th economists andpolit ical scient ists, Russia can marshal t rained engineers,physicists, chemists, and other professions essential tocatalyzing a post -Soviet economi c t ransit ion.

I f all of t hese factors moved in a posit ive direct ion, their

cumulat ive impact would be to create a dynamicenvironment that pressed the Russian political elite toreverse the current pattern and restore the link betweenpolit ics and societal development . One might be tempt ed toconclude that a kind of self-perfection process is at work,whereby a Russian state is gradually constructedresembl ing Western exper ience. A self-int erested eli te maynot wi sh i t , so thi s logic goes, but the exigencies of t he global

role i t hopes to restore compel state and economy t o functionmore effect ively.

I s such a gradualist t hesis that holds out the promise ofRussia being made modern piecemeal too optimistic?Probably so; for, as Jackson has pointed out, even incorrupt societ ies government s can set standards of probityand try to enforce them. 50 Hence, even if Russia were todevelop a more efficient economy and a modest ly r esponsivepoli t ical system, it will carry with i t the histor ical impr int ofthe shadow state: the state will preserve its predatoryproclivit ies and the element s of a democratic polity and civi lsociety will be tolerated only to the extent they do not

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infringe upon the imperatives of elite political survival.Favorable conditions can also be undone by the tragicproclivi ty of Russia to fall vict im t o ideologues. Communistrulers evinced little concern as they savaged their ownsociety and jeopardized it s futur e for the sake of a doct r inefr om which only a few stood to benefi t . Sadly, Russia's newreformers appear to have emulated their communistpredecessors in this respect. Most disturbing, however, isthat Russia can avoid this fate and head in a moreconstructive direction principally by basing a vision of thefutur e on i t s legacy as a global power. Successful reform willbring wi th it a more content ious int ernational environment .

* * * * *

In musing on the Russian future, Remnick sees noreason why Russia cannot overcome its absolutist pastmuch in t he same way that Germany and Japan did dur ingthi s cent ur y. There is considerable t rut h t o thi s, as Russiatoday has opened doors of oppor tunity t hat previously neverexisted. Yet comparison with German experience can bedeceptive. Weimar Germany struggled with threats tosecurity and stability following military defeat andeconomi c collapse, only t o conclude that regime sur vival layin permitting rulers to operate above the legal order. Suchcomparisons are less instructive than the African casebecause they are insufficiently attentive to fundamentaldifferences between post-war German and Japanesedevelopment and post-Cold War Russia. The path of theformer never ent ail ed the moral degradat ion and wholesalecriminalization that has been a distinguishing feature ofreform-era Russia. German and Japanese cultures andpolit ical inst i tut ions, moreover , recognize the aut onomy ofsociety and economy, even as their state traditions permitthese spheres to be shaped and molded. European stateshave developed careful ly ca l ibra ted ins t i tu t ionalmechani sms for the deployment of state power in pur sui t ofsocioeconomic development . In Russia the exercise of powerremains a much cruder affair .

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The unique factors affect ing Russian eli tes suggest thatthe oppor tunity exists to modify t he Afr ican shadow state toproduce a substantial measure of economic stability. Theprice for success within this framework will be high, asRussia will retain its authoritarian character and statetradition. The associated criminality, violence, andexcessive concent ration of power that envelope such a statewi ll confound hopes for a democratic breakthr ough and sapthe product ive potent ial of society. More distur bing fr om theWestern standpoint , however , wi ll be the subordinat ion ofconstitutionalism and civil society to the dictates of elitepolit ics. The charit able explanation i s that polit ical eli tes,

unwi ll ing to believe that t heir subjects or their r ivals will beconstitutionalists, feel obliged to be authoritarian.Whatever the reason, present reform policies open theopportunity for Russia's return to the community of greatpowers; but the deformat ions of state power that reform hasinst i tut ionalized carr y the unset t l ing promise that t he nextcent ur y wi ll be one of challenge for the West in i t s relationswi th Russia.

ENDNOTES

1. See, for example, Richar d Pipes, Russia's Past , Russia's Fut ur e,Commentary , No. 101, June 1996, pp. 30-38; or Daniel Yergin andThane Gustafson, Russia 2010 and What It Means for the World , NewYork, NY: Random House, 1993.

2. Robert H. Jackson, Quasi-States: Sovereignty, International Relations, and the Third World , Cambridge: Cambridge UniversityPress, 1990, p. 21.

3. Thi s term i s taken fr om the work of Will iam Reno, Corrupti on and State Pol i t i cs in Sier ra Leone , Cambridge: Cambridge Universi ty Press,1995.

4. That Chubais is simultaneously M inister of Finance also reflectsRussia's focus on political power at the expense of administrativecapacity: while policy effectiveness rests on increasing bureaucraticspecialization and subdivision of administrative authority, Russia'snew elites resemble their predecessors in concentrating bureaucraticresources around themselves.

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5. Marshall Ingwerson, Running Russia, The Christian Science Monitor , ht tp://www.csmoni tor , November 1, 1996, Int ernat ional , p. 1.

6. The New York Times , May 22, 1997, pp. 1, 6.

7. Moskovskii Komsomolets , May 23, 1997.

8. See his Resur rection: The Str uggle for A N ew Russia , New York:Random House, 1997, pp. 355-367, especially p. 362.

9. See Transition without Consolidation, Freedom Revi ew 28,1997, No. 1, pp. 30-49.

10. Frank Cil luffo and Rober t Johnston, Russian Organized Crime:Problem Won't Go Away, Financial Post , Canada, June 21, 1997.

11. Reno, p. 9.

12. If a Handful of Banks Hold All the Money, Why Should theGovernment Be Happy?, The St. Petersburg Times , June 9-15, 1997,http:://www.spb.su/times/currrent/edit9.html.

13. The Fi nancial Ti mes , July 17, 1997, p. 2.

14. Stephen White confirmed that officials in the Russian CentralElectoral Commission have now accepted that the turnout for theconstitutional referendum was below the required 50 percent.According to White, confirming this is impossible as the ballots havebeen destroyed. Kennan Insti tut e Seminar , April 1, 1997.

15. McFaul , pp. 30-31.

16. Anders Aslund reflects this overly simplistic understanding ofthe requirements of political change in Russia. His view that radical

economic reforms should have been checked by democratic cont rols andpublic education programs naively assumes the task of politicalt ransformat ion t o be merely the mechanist ic application of r eforms ontoa receptive society. In practice, however, deeply rooted cultural factorshave either absorbed or defeated any limi ted efforts at poli t ical r eform.Achievement s and Fai lur es of Reform, K ennan Inst itute Newslet ter ,The Woodrow Wi lson I nt ernational Cent er for Scholars, Vol. 14, No. 13,1997.

17. Achille Mbembe, Pouvoir, violence et accumulation, Politique Africaine , Vol. 39, 1990, p. 24, as cited in Reno, p. 12.

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18. Vladimi r Shlapentokh, Ear ly Feudali smThe Best Parall el forCont emporary Russia, Europe-Asia Studies , Vol. 48, No. 3, 1996, pp.393-411.

19. Shlapentokh, p. 395; Young, as cited in Reno, p. 17. A moredetailed analysis of the relevance of the feudal model to Africancondi t ions can be found in Joshua Forrest, Asynchr oni c Compar isons:Weak States in Post-Coloni al Afr ica and Medieval Eur ope, Comparing Nations: Concepts, Strategies, Substance , Mattei Dogan and AliKazancigil , eds., Oxford: Blackwell , 1994.

20. Conversat ion wi th aut hor , Mar ch 13, 1997.

21. Comments made dur ing a Woodrow Wilson Center Colloquiumon corrupt ion, September 26, 1996. Shl apent okh, p. 401, also notes that

by 1995, most active people in the country were in practice linkeddir ect ly or indir ect ly . . . eit her with corrupt officials or with a cr iminalorganizat ion. Another more recent example deta i l ing thepervasiveness of Russian organized crime can be found in DavidHoffmann, Banditry Threatens the New Russia, The Washington Post , May 12, 1997, pp. A1, 15.

22. The Fi nancial Ti mes , Apr il 14, 1997, p. 3.

23. Ironicall y, many of those call ing for strengthening the state hadearl ier been l eading proponent s of i ts destruct ion.

24. Gazprom, the most prominent target of a recent governmentoffensive against monopolies, recently succeeded in resisting efforts toreplace its director, Rem Viakhirev. The Financial Times , June 30,1997, p. 1.

25. Nezavisimaya gazeta , November 26, 1995.

26. Reno, p. 17.

27. The Fi nancial Ti mes , November 1, 1996, p. 15.

28. This account of the civil service was provided to the author byYurt Boldyrev, Deputy Chairman of the Accounting Chamber of theRussian Federation, December 14, 1996. More on t he role of RPCs in t heprivatization program can be found in Janine Wedel, Clique-RunOrganizations and U.S. Economic Aid: An Institutional Analysis,

Demokratizatsiya , Vol. 4, No. 4, Fall 1996, pp. 571-602.29. Financial Ti mes , March 20, 1997, p. 3.

30. Financial Ti mes , April 10, 1997, p. 12.

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31. The Independent , March 15, 1997; as cited in Johnson's List.An even more blatant expropr iation of Western i nt erests occur red lastautumn when the Russian government terminated the work of NMRothschild in developing a U.S.$1 billion telecommunications shareoffer . The government turned i t over to MOST Bank and Alfa Bank, bothof which are members of t he charmed group of seven. The Financial Times , November 26, 1996, p. 1.

32. Financial Times , April 8, 1997, p. 2; see also Moskovskii Komsomolets , May 23, 1997.

33. Yeltsin Seeks Cont rol of Cash, The St. Peter sbur g Ti mes , Apri l7-13, 1997, ht tp://www.spb.su/t imes/cur rent / yel tsin-seeks.html .

34. The New Russian Business El i tes, Kennan I nsti tut e Seminar ,

April 2, 1996.

35. Equally important, their short-term interest in defeating theCommuni st Par ty i n t he upcoming elect ions was shared by several otherinfluential clans within the Yeltsin government. This commonimmediate object ive did not preclude a fall ing out in t he fut ur e, whichhas in fact taken place.

36. Details on the Norilsk Nikel transaction and others is taken

from an interview with Yur i Boldyrev, Vice Chairman of the Account ingChamber, Novaia ezhednevnaia gazeta , October 28, 1996, pp. 1, 5.Potanin i s a member of t he so-called group of seven who resigned hispost as director of Oneximbank to take his posi t ion i n t he government .He was recent ly r emoved fr om t hi s post , but the loss of formal posit iondoes dimini sh hi s infl uence wi thin t he government .

37. Weak in the Knees Over Chubais, The St. Petersburg Times ,March 24-30, 1997, http://www.spb.su/times/current/party-lines.html.Chubais has apparently also admitted that the auctions were amistake from an ethical point of view. No one, however, is urgingthat t hings be set r ight.

38. The St. Petersbur g Ti mes , June 9-15, 1997, ht tp:://www.spb.su/-times/current.edit9.html.

39. The Fi nancial Ti mes , November 1, 1996, p. 15.

40. The story is detail ed in K redit ui i l i pr oigraesh!, Izvestiya , July

1, 1997; and Cit izen Kane' on Pushk in Square, The Washi ngton Post ,July 13, 1997, p. A20. Chubais'response to the Izvestiya piece appearedin Izvestiya , Jul y 7, 1997.

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41. Civil Society in Africa, Patrick Chabal, ed. Political Domination in Afr ica , Cambridge: Cambridge Universi ty Press, 1986,pp. 115-116, as ci ted in Reno, p. 16.

42. The Lex Column, June 30, 1997, p. 18.

43. The Fi nancial Ti mes , Apri l 3, 1997, p. 2.

44. M. Crawford Young and Thomas Tur ner , The Ri se and Decl ine of the Zair i an State , Madison, WI : Universi ty of Wisconsin Press, 1985, pp.302-303, 405.

45. Survey: Russians Richer, Coy, The St. Peter sbur g Ti mes , Apri l7-13, 1997, http://www.spb.su/t imes/cur rent / sur vey.html .

46. Ironically, Russia's military is in even worse condition thanAfr ican societ ies, where the armed forces have t radit ionally occupied arole as the most technologically advancedand politically active institution.

47. David Brown, Bureaucracy as an Issue in Third WorldManagement: An African Case Study, Public Administration and Development , Vol. 9, 1989, p. 377.

48. Jackson, p. 193.

49. S. Frederick Starr, Introduction: The Legacy of History inRussia and the New States of Eurasia, in The Legacy of History in Russia and the New States of Eur asia , S. Freder ick Starr , ed., Ar monk,NY: M.E. Sharpe, 1994, p. 9.

50. Jackson, p. 193.

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