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Russia beyond 2012: the challenges of the network state

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In a Russia that is neither a traditional authoritarian regime run by hereditary dynasty, nor a true democracy with power focused in official institutions, the distribution of power is best understood as a web of unofficial networks. This, explains Vadim Kononenko, is why the return of Putin to the presidency is more important to the circles he patronises than to the man himself.

Vadim Kononenko
28 November 2011

There are two things that strike any student of Russian government. The first is the perpetual lack of order in the country and its politics. The second is the clear gap between declared intents and outcomes; between rhetoric and practice. This leads to many puzzling contradictions about the nature of political power and governance in Russia. At any moment in its history the Russian state seems to be at once omnipresent in society, while also and severely estranged from it; strong and concentrated around the figure of the rule, while at the same time fragmented and dispersed among powerful courtiers and their networks.    

Despite the clear lack of order or efficient management, the Russian state has historically proved itself viable enough to withstand enormous external and internal pressures.

'Under Putin [....] power returned to state offices from corporate ones, but it was brought back by personal, informal networks.'

There have been two protracted internal conflicts in Chechnya in 1994 and 1999, two major economic recessions in 1998 and 2008, as well as a series of technological catastrophes, terrorist acts and other accidents, all of which have been accompanied a shockingly high number of casualties and appallingly low performance on the part of the state institutions.

How is it that the Russian government managed to maintain legitimacy and ensure its survival amidst such turmoil?

Network-ization of the state

The answer to this question is often presented as the direct consequence of Vladmir Putin’s policy position of strengthening the state - the imposition of a so-called “power vertical”. Of course, the prevailing concern at the end of Yeltsin’s 1990s was indeed the fragility of the Russian state, which was over-dependent on a group of well-placed oligarchs. Putin was reasonably successful in restoring the authority of the state over these magnates.

However, while under Putin the state has indeed been re-centralized and Russia has regained sovereign power, the actual qualities of the state, the logic and rationality of policy-making changed, and in a very peculiar way. Power returned to state offices from corporate ones, but it was brought back by personal, informal networks. These are not the same oligarchic clans which were calling shots in the 1990s, but rather elite groups which are now located within the state itself. This, once again, makes the border between the public and private impossible to draw in Russia. Furthermore, it makes it difficult to distinguish the state from the ruling networks because during the time they have been enjoying direct access to power, the ruling groups have begun to identify themselves with the state, which acts as their protector.

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Symbiosis of the formal institutions with the most influential groups formed in the strategic sectors of the economy has been trademark of Putin’s Russia.

Russia’s ruling groups can be region-based (and the main example of this is the infamous “St Petersburg group”, which emerged around Putin and became source of many functionaries and key officials in the top of state administration). More often, however, they are based on personal loyalty to a patron and informal exchange of information and resources. The most influential groups are formed in strategic sectors of the economy: natural resources (e.g. those networks associated with the state gas giant Gazprom or the state oil company Rosneft), the military-industrial sector, and transport and communications.

What you see in Russia is a sort of symbiosis between such informal groups and the formal institutions of the state. Elite groups foster their own special interests by infiltrating institutions — in effect merging with the state — while at the same time being able to maintain their own position as unaccountable to these institutions. The state is thus chronically weak and subordinate to the networks, yet kept afloat as a sort of institutional carcass that the networks need.

'Elite groups foster their own special interests by infiltrating institutions — in effect merging with the state — while at the same time being able to maintain their own position as unaccountable to these institutions. The state is thus chronically weak and subordinate to the networks, yet kept afloat as a sort of institutional carcass that the networks need.'

A sustainable system?

So far, these structures have proved unusually durable. Rumours that some networks were gravitating towards an alternative leader in President Medvedev have, for example, been shown to be highly exaggerated. Throughout the course of the Medvedev term, Putin remained the unquestioned leader of the networks in power; Medvedev himself professed personal loyalty to Putin, preferring to identify himself as a member  of the ruling network rather than its leader. By the same logic, Putin’s return to the presidency can be interpreted not as a move to secure his position as the supreme arbiter of elite networks (he would be able to exert his enormous influence from any office of state administration), but rather to strengthen both the authority of the presidency and his own popularity with the Russian people.

That said, both Russia’s ruling networks and their leader will face unusual pressures in the months and years ahead. First, the economic development and the long-lasting effect of the financial crisis of 2009 (coupled with the ongoing recession in the west) will be a major external source of insecurity. According to government reports, there are enough budgetary resources to sustain the current level of expenditure, but it is absolutely insufficient to finance planned modernisation reforms in infrastructure, energy efficiency, healthcare and education. It is also obvious that the regions are developing at greatly different rates and it will be difficult to manage the growing gap between the regions and the federal centre.

The other challenge lies in legitimacy. There has been always a discrepancy between image and reality, and rhetoric of the strong independent state and actual policies reflecting special interests of the networks. The favourable economic development of the past decade made this discrepancy easy to conceal, in particular when compared to the real and painful decline in the 1990s. Hence the importance of big “national projects” such as the Sochi Olympics in 2014 and the Skolkovo high-tech business area in the Moscow region. However, if the economy is not going to develop fast and the criticism towards the system increases, the ruling networks will have to seek legitimacy elsewhere. This is possible – for example through integration projects with other ex-Soviet states – but will again require significant financial resources.

Challenges from within

Lastly, there is the challenge of how the networks renew themselves, and how new members are promoted to leading positions. Because such networks are very tight and opaque, it is difficult to see new ideas and fresh faces emerging in this kind of system. In more authoritarian and isolationist systems, members of the ruling network renew themselves through internal purges and infighting. In clan-based societies, ruling networks are renewed through hereditary succession. In democracies, elite networks are renewed through free and fair elections and party competition.

In the Russian system, none of these options seem to be fully feasible, although all take place to a limited extent. There has been some infighting between competing members of the ruling networks (as shown in the ousting of former Moscow mayor Luzhkov), yet this competition is neither so common nor so pervasive as to enable new, younger members to force their way through. Meanwhile there are indeed signs of a new “aristocracy”, with many members of the elite linked through their children’s marriages, but it is not yet clear whether the heirs, who spend a great deal of their time abroad, will have the same hunger for power as the parents. Finally, the political competition is so limited that promotion through political institutions such as the United Russia party is not guaranteed for newcomers, even those with the right connections. 

Russia: ahead of the network curve?

Interestingly, Russia is not the only state that has evolved into a network state. Ever since Michel Foucault suggested that modern political power has less to do with domination and control than with managing and manipulating, many commentators have predicted the decline of the institutionalised, formal state and the emergence of informal network-based politics around the world. Niall Ferguson used a recent issue of Prospect magazine to suggest networks represent a more effective form of governance than the top-down approaches of the traditional state.

'Russia, in its typically contradictory fashion, combines traditional statist approaches to power and the latest political technologies of network governance.'

Russia, in its typically contradictory fashion, combines traditional statist approaches to power and the latest political technologies of network governance. Ultimately, the future of Putin’s network – and with it the future of the Russian state itself – depends on how effectively it is able, over the next six years, to address the economic and political challenges and, above all, the challenge of its own internal renewal.

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Vadim Kononenko is a researcher at the Finnish Institute of International Affairs. He co-authored Russia as a Network State. What Works in Russia When State Institutions Do Not? Edited by Vadim Kononenko and Arkady Moshes, Palgrave Macmillan, 2011, 208 pages

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