How Russia’s ‘Sistema’ Leads To The ‘Modernization Trap’

Comment on Interview with Alena Ledeneva http://www.rferl.org/content/interview-russia-alena-ledeneva-sistema/24944910.html

Ledeneva is one of the few to have confronted the reality that in order to reform Russia and the other post-Soviet republics, one has to understand the mechanisms underlying the system. 

Interestingly, it was Putin’s answer to her question about corruption that opened Ledeneva's eyes to the existence of “The System” and its importance.  Many believe Putin has created a “Power Vertical.” Yet, if such a “Power Vertical” actually existed, Putin should only have to snap his fingers to get things done.  Everyone in such an all-powerful structure should immediately jump to carry out his commands. Yet, Ledeneva argues that if Putin really wants to get something done, he has to send his best friend to do it.  How many “best friends” can Putin have?  Moreover, if a Power Vertical really existed, why should he need to use his best friend to get something done?  A Power Vertical that actually worked would presuppose strong, well-functioning institutions, not just informal personal relationships. 

Ledeneva shows that the informal-governance instruments that make up the "Sistema”undermine institutions.  On paper Putin may have enormous powers and, in fact, he does have substantial power when he directs his attention to some specific issue or project.  Yet overall, he doesn't know all that much about what goes on in the power structure outside the Kremlin, and he does not have nearly as much control over it as is widely believed. 

"Those informal-governance instruments,” Ledeneva writes, “actually come back and hit you by undermining the workings of formal institutions, which remain weak [and] nonoperational. And you then suck yourself into the whirl of informality that is very much personalized and cannot be used in a controlled way."  Putin understands very well what is going on, yet it appears he engages in the very kinds of behavior which he so severely criticizes.  “You know,” Putin told Ledeneva, “it is no good to punish people individually. You need a whole change of sistema in order to get rid of corruption.”  It is instructive that this was so clear to Putin so long ago. 

Some might object that such informal use of friends for problem solving, far from being unique to Russia and other former Soviet republics, can be found everywhere.  They might point to patronage appointments in the United States, and similar practices elsewhere. Yet, such practices are entirely different from the informal arrangements to which Ledeneva refers. Patronage appointments in the U.S. are "best friends" who are infiltrated into governmental institutions to act as the President's loyal agents. Patronage appointments have an effect opposite to that of the informal arrangements about which Ledeneva writes. Having loyal friends inside governmental institutions strengthen a President's control of these institutions. In contrast to this, Ledeneva is referring to informal problem-solving though networks of friends OUTSIDE of institutions, which works to UNDERMINE institutions. Using best friends to solve specific problems is not common in American Government, though it does happen occasionally. Robert Kennedy's role in the Cuban Missile Crisis is a classic example.   

In a conversation I had with Ledeneva she agreed that, to a significant extent, the behavioral patterns she describes were already formed under the Soviet regime, and that the sistema as it exists today is a direct legacy of the Soviet sistema.  Georgi Arbatov's book which,like hers, is also entitled The System (Человек Системы), complements her argument.  Ledeneva's informal networks closely resemble those Arbatov describes.  Mainstream Western specialists on the Soviet Union used to characterize the Soviet regime as totalitarian.  Тhey used to refer to the Soviet economy as a “planned economy.” Yet, the sistema Arbatov describes is far from the command and control system specialists on the Soviet Union assumed to exist.  As Nikolai Shmelev writes his 1987 article in Novy Mir,  “attempts to establish 100% control over everything leads to such anarchy and lack of control that, by comparison, any normal anarchy seems the very mother of order.”  Already in the Soviet period, institutions did not work.  They were largely paralyzed, so people had to make use of informal instruments, friendships, networks to solve problems.  Such solutions worked imperfectly and only some of the time. 

In 1987, I visited the Institute of Marxism-Leninism at the Central Committee at the Central Committee of the Communist Party of the Soviet Union.  The Head of the Department of Contemporary Soviet History, Vasily Lipitsky, told me his Department had been tasked by the Politburo to prepare a revised history of the Communist Party of the Soviet Union.  Yet, the Party Archive would not give them the documents they needed.  “Your Director is a member of the Central Committee,” I said. “Why doesn't he just phone Gorbachev and ask for help?”  “Our Director can’t phone Gorbachev,” Lipitsky said, “Gorbachev has to phone him.”  “Then why doesn’t he call the Secretary of the Central Committee responsible for the Institute (Vadim Medvedev)?”  “Our Director can’t phone Medvedev,” Lipitsky said, “Medvedev has to phone him.”  “What about the Director of the archive,” I asked?  Can your Director phone him?”“Yes,” Lipitsky replied, “but the Archive Director will tell him that he cannot release the documents without an order from the Politburo."   

In 1991, I had a conversation with Igor Krivoguz, then Head of the Department of Political Science at the Institute of Social Science at the Central Committee of the Communist Party of the Soviet Union.  I was curious to know how Perestroika was progressing in the provinces.  Krivoguz said that had been no change.  How was that possible, I asked?  In my course on Soviet Government, I tell students that the Central Committee has a corps of Inspectors who go out to the provinces to make sure Party policy is being carried out? Does this Corps of Inspectors still exist?"  "Yes it does," Krivoguz said.  "Then why don’t they report lack of compliance with Party policy when they return to Moscow?"  “Look,” he said, “the Inspector flies to the regional capital. The whole Party Committee meets him at the airport.  They roll out the red carpet, they wine him, dine him, and show him everything he wants to see.  He then goes back to Moscow and reports that everything is fine.”  “Doesn't Gorbachev know this,” I asked, to which Krivoguz replied,“Gorbachev knows it very well."  So why doesn't he do something about it,” I asked?  “Gorbachev has so many problems,” Krivoguz said. 

Ledeneva quotes Gorbachev as saying: "you know, I changed my region in Stavropol and I was so pleased with that and I thought I knew how to do it, so when I came to Moscow, I just thought I'd do the same, but on a bigger stage. Then, I realized, you cannot move even one single person in terms of appointments and personnel because everything is so tightly knit and co-dependent and working in these kinds of sistema dependencies that I was really in despair." Gorbachev said -- "you cannot change sistema at all." What can be done to change the sistema and build institutions in Russia that work?  

Ledeneva does not pay much attention to what has been going on underneath the surface that might actually transform the sistema.  This is among the most important areas needing attention from Russia specialists.  Dmitry Trenin, in his outstanding little book,Getting Russia Right, points to three factors that are driving profound change in Russia: (1) the appearance of money; (2) the disappearance of ideology, and (3) the rise of regional centers. 

Under the Soviet regime, sistema embraced everything—not only government, but also the economy and social life.  The rise of money has led to both the emergence of multiple centers of power and to the institutionalization that necessarily results from this.  Institutions, like contracts and the mechanisms that enforce them, develop in market economies since markets cannot function without them.  Such institutions tend to erode the personal relationship patterns of which "Sistema" consists. Needs for profitability and efficiency drive institutionalization.  It may be that too much of the Russian economy is still under the control of individuals in government, thus continuing to bind the economy to sistema. Yet, economic development has been progressively eroding away this overlap, and will continue to do so. 

The disappearance of ideology as an instrument of control and management has had a powerful rationalizing effect on economics and society in the former Soviet republics.  The Communist Party and its ideology used to be intimately bound up with the economy and society,with ideology typically taking precedence over rationality.  A Party apparatchik was secure, even if he made serious mistakes, as long as he remained loyal.  And the hold of ideology on the sistema was ultimately backed up by fear. 

Sistema means primarily the political system, and the impact of the political system on society and the economy has been declining since Soviet times.  Yet, the Sistema remains extremely important, and helps explain why so many of the problems faced by Russia and other former Soviet republics appear so intractable.  

Nevertheless, it must be admitted that, as Putin noted in an interview with German television, the situation has changed enormously.  "Just compare the situation in the Soviet Union and in modern Russia in terms of the development of the economy,political sphere, and all other areas associated with democracy," Putin said. "The difference is colossal. But do you want us to cover in two decades a path that it took other countries 200, 300, 400 years to cover?" RIA-Novosti, 5 April 2013/