The term ‘modernization’ is usually associated with the process of democratization. However, all political systems are exposed to evolution and monocentric states (i.e. states without real separation of powers, with a single decision-making center) are no exception.

Generally, political scientists call such societies authoritarian. Nowadays this term has a negative connotation; therefore, a more neutral expression which describes the same social phenomenon, ‘monocentric state,’ is more frequently used in Russian scientific literature.

There is no doubt that the Soviet Union was an example of an authoritarian state in which the rigidity of the state structure, which sometimes assumed a totalitarian character, varied in different periods. Massive state interference in society affected all levels and systems of life. The powerful political police, following up any signs of nonconformity and disobedience, was formed with the explicit purpose of realizing this complex task.

This rigidity in the state structure created many problems; with the lapse of time, ideology degenerated into hollow demagoguery detached from reality and the prestige of the ruling elite (with an average age of seventy), was crumbling. Furthermore, the lack of freedom of movement and the Iron Curtain created myths about heavenly life in the West. Just as an increase in pressure in physical systems inevitably leads to an explosion, in the Soviet Union the seeds of independence and civil initiative that had been forced to the underground eventually gave shoots and grew into dissident coteries with an activity so desperate in its protest that it could no longer be concealed from society.

Flexible materials bend when under pressure while inflexible materials break. It was the inflexibility of the Soviet system which caused its impetuous collapse.

In the spring of 2000, after a brief reflection, the new president of Russia, Vladimir Putin, and his circle decided to veer from the democratic way. The state was extremely weakened and it ceased to be an effective network of administrative links controlled by a single center.

The regional elites behaved more and more like feudal princes. The financial oligarchs placed demands on the authorities, forcing decisions that were advantageous for their businesses. The separation of powers formally registered in the Constitution never took root. The first attempts of the young parliament to oppose the Kremlin’s decisions were repressed with tanks in 1993. The bureaucracy lost their bearings and the hierarchy of power was disturbed.

PUTTING THINGS IN ORDER

These huge problems could probably have been solved in different ways, specifically by continuing democratic reforms. However, the administration that came to power in 2000 chose a different path. Vladimir Putin, succeeding Boris Yeltsin in the post of President of the Russian Federation, concluded that Russia should be brought back to its traditional mode of life, order should be restored in the system, and modernization should be started only when he held tight all the controls.

Thus a new goal was formulated – to regain state control in all important spheres of life. What impeded them? The key hurdle was the existence of several centers of power competing with the Kremlin for the resources and controls. Potential danger was seen in the governors (especially those from rich regions), the freethinking and obstinate State Duma with a Communist majority, the oligarchs who got an idea of their own omnipotence, the independent mass-media, opposition parties, and public organizations not controlled by the Kremlin. These centers of power needed to be eliminated or placed under control.

The oligarchs. Putin tried to come to terms with the oligarchs by peacefully concluding the so-called “kebab agreement” in May 2000. The essence of the agreement was mutual сoninterference: Putin would not interfere in the oligarchs’ businesses on the condition that the oligarchs would not interfere in politics. However, the self-assured businessmen who used to think that any political project could be realized with the help of money, took a skeptical view on the “kebab agreement.” The NTV channel owned by Vladimir Gusinsky persistently criticized the second war in Chechnya launched by Putin. As a result, Gusinsky’s activity was recognized by the authorities as most dangerous. The persecution of Gusinsky began in 2000 and resulted in his fleeing Russia, the crushing defeat of NTV channel and its subsequent transfer into Gazprom’s ownership.

Simultaneously, Boris Berezovsky who controlled TV Channel 1 (ORT) and TV Channel 6, was also put under extreme pressure. In spite of the vehement struggle, Berezovsky failed to retain his channels and had to flee to Great Britain to avoid prosecution. In 2002, the NTV and ORT cases were settled and both channels went under the control of the authorities.

In 2003, criminal proceedings were launched against another major businessman, Yakov Goldovsky, the chief of SIBUR. The General Prosecutor’s Office accused him of abuse of power. As a result, SIBUR was placed under Gazprom’s control.

In the same year, an attack was leveled at Gosincor which was headed by Boris Yeltsin’s friend and former chief of his administration, Yuri Petrov. Petrov was accused of having stolen 300 tons of silver in 1996 through the intermediary of Guta-Bank, of which his son, Alexander, was president. The case ended with Gosincor’s liquidation and Guta-Bank’s turning under the control of the state-owned Vneshtorgbank.

Finally, there was Mikhail Khodorkovsky. Not only did he control the Duma majority but he was also very active in establishing Open Russia, a non-governmental organization. The Federal Security Service sent numerous warning messages to the Kremlin: the ambitious oligarch had to be stopped immediately as Khodorkovsky’s ratings were rising and his representative offices in the regions were growing stronger. The Kremlin regarded it as preparation for the presidential bid. The obstinate oligarch didn’t compromise with the authorities and was imprisoned for 8 years.

The YUKOS case was the last straw that produced a real shock on the Russian business community. It became clear that there was no way to play games with Putin and that anyone testing the waters of politics would be bitterly suppressed. The businessmen understood perfectly well: the new rules of the game must be accepted, otherwise they will have to leave the country.

Uneasiness and the awareness that the state would crush anyone who angered the Kremlin reigned in business. Now direct interference in politics, not only by business, but also through any social activity was forbidden. It was believed that even those engaged in charity were working to develop their image and could therefore represent a potential threat at the polls. The role of big business (if it wished to continue making money in Russia) was clear: keep silent and sponsor only those projects that are initiated by the Kremlin. Meanwhile, oppressive actions against the oligarchs increased President Putin’s popularity, with approval ratings rising to over 70 percent.

The result of the war between the state and big business carried out during Putin’s first presidential term was the suppression of the oligarchy. They gave up attempts to “play politics.” At the same time a pool of private businessmen who actively supported state social and political projects was formed. Some of these businessmen belonged to the cohort of “Yeltsin’s oligarchs,” while others were closely linked to the new presidential team.

Yet the main outcome of the tough reforms in this sphere was that private business continued to exist, and this imparted a different tone to the further development in the country. Having taken a step back by curbing a number of democratic achievements of the 1990s, the authorities did not continue to tighten the screw. In fact, the presence of a free capital zone appears to be a source of modernization ideas in today’s Russia.

The governors. The problem of the governors’ independence was resolved with the help of the following reforms:

The summer of 2000 saw the formation of federal districts and the introduction of presidential plenipotentiaries who formed a layer between the Kremlin and the regions. The governors thereby automatically moved down one rung on the ladder.

Simultaneously, the procedure of forming the Federal Council was changed. The governors were ousted from the Council and therefore lost a perfect platform for formulating a unified strategy. The State Council, an advisory body to the Head of State, replaced this function, with all the governors automatically becoming its members.

In autumn 2004 the election of governors was abolished.

As a result of these reforms, the governors were politically marginalized. They lost an open platform for discussions (sessions of the upper house of parliament) and a new layer appeared between them and the Kremlin in the form of presidential plenipotentiaries (75 percent of whom were military officers, largely from intelligence services). Governors were no longer guests on political TV programs; the proceedings of the newly formed State Council were not broadly covered by the media, while the President was the main character of the brief news reports.

Gubernatorial behavior changed: gripped by fear they no longer criticized the Kremlin or came out with populist declarations. Now they were not politicians but economic executives who knew their place and didn’t dare argue with the federal center. Thus the authorities elevated the difficulties in controlling the once defiant regional elite. Regional governors were now fully dependent on the center’s attitude towards them.

Despite these innovations, the Kremlin still perceived the regional elite as something alien. It feared that the regions might still spring a surprise – the majority of the governors were still holdovers from the Yeltsin era elite (as compared to the Presidential Administration which was mostly comprised of Putin’s associates – about 70% of his key staff by 2003).

With time, the body of the governors changed, yet these changes were not abrupt but rather gradual. The new governors were in some ways similar to their counterparts in tsarist Russia while in other ways they bore some resemblance to the first members of the regional Communist Party committees in Soviet Russia. They were fully subjugated by the Kremlin; their role was reduced to showing loyalty and devotion to the center. The sword of Damocles threatened every governor with dismissal or criminal prosecution for abuse of the old system of sinecure.

At the end of 2004, a new reform was undertaken as the final step in this process. The new regulations changed the procedure for forming executive agencies in the constituent entities of the Russian Federation. The new federal law eliminated the election of governors by plebiscite. From now on the president would recommend a candidate for the governor’s post who would then be approved by the regional parliament. Thus the regional political elite were put under complete control of the federal center.

The year 2005 saw the launch of a new process – the enlargement of regions. A referendum on the integration of the Krasnoyarsk Region, the Taimyr (Dolgano-Nenets) and the Evenk Autonomous Districts marked the start of the integration process. The referendum showed that the residents of these regions favored integration, which was reaffirmed in the corresponding constitutional law. This procedure of integration was later used in the Perm Region and the Komi-Permyatski Autonomous District, the Kamchatka Region and the Koryak Autonomous District, the Irkutsk Region and the Ust-Ordyn Buryat Autonomous District.

The State Duma. Another important problem to be solved was subjugating the State Duma to the Kremlin and ousting bright and popular opposition members from it. During the 1999 elections Putin was not ready to tackle an issue of this magnitude, although the Presidential Administration did make an effort to form a central political party by bringing together devoted like-minded deputies. In 2003, Putin was prepared for the State Duma elections. The Kremlin dedicated significant resources to the United Russia party, which was by now consolidated both organizationally and financially. A large number of regional elite and civil servants joined the party supported by the president himself. Moreover, a new party called Rodina was formed on the Kremlin’s initiative. The party was designed to deprive the Communist Party of votes in order to marginalize the Communists in the Duma.

The 2003 State Duma election campaign demanded incredible efforts on the part of the authorities but it proved immensely successful. Putin was able to secure a majority in the State Duma in excess of the two-thirds he needed. The Democrats were ousted from the parliament, making it possible for the Kremlin to carry out any desired reform. The Duma was completely managed by the Kremlin and ceased to be an independent arm of the government.

However, full restitution of a one-party system did not take place. The ruling party was put into a competitive environment. On short notice (acting upon directives from state authorities) new parties were formed to create “opposition” to the United Russia party. This kind of artificial competition between political parties gradually changed the political scene of Russian elections.

Now support from the Kremlin was no longer sufficient, each party had to learn how to earn it and use it proficiently. The mock-up political parties were thrown into real elections where they had to learn to survive, and win. Perhaps the results were already a foregone conclusion previously determined by the Kremlin, which was not interested in electoral upheavals or orange revolutions. The authorities needed legitimate elections and the newly formed parties had no other choice than to learn how to win.

The changes in the electoral legislation between 2004 and 2006 made the authorities’ intention even more obvious: the urgent formation of larger parties which could be competitive at the elections. This was the only way for the ruling elite to escape overthrows, revolutions, or “hour-glass” elections that threaten sweeping changes and can turn the system upside down.

THE ELECTORLA SYSTEM

During the same period, the electoral system also underwent reform which increasingly normalized the political process. All unaffiliated charismatic leaders disappeared from the political arena; political parties became the sole instrument of political struggle, forming the only instrument of public politics. In 2001 the electoral legislation underwent its first reforms, increasing the minimum party size to 10,000 people. The process of enlarging parties was further strengthened in 2004, when the minimum size was increased to 50,000 people, thereby destroying a number of small parties. In 2005, further amendments were made to strengthen political parties. The mixed (majoritarian/proportional representation) electoral system was replaced with a proportional system (i.e. elections based on lists of candidates from the political parties), a minimum of 7 percent of the vote was required for election to the State Duma and electoral blocs were prohibited. The admissible portion of inauthentic signatures for any given political party was reduced from 25 to 5 percent.

These changes had a dramatic effect on the political process across the country. On the one hand, the reforms surely aimed to strengthen the multi-party system since they made it impossible for charismatic singletons to succeed politically. On the other hand, they led to the bureaucratization of political parties; they became the only platform from which to launch a political career. Also, there was now remarkable difference between old parties formed under Yeltsin and the new parties. The old parties either joined the opposition and became more radical, or left politics entirely under pressure from the authorities.

The mission of the new ruling parties was to become organizations that would endorse officials in power. The reforms were perceived by different elite groups as a signal: those who wanted to emphasize their loyalty to the Kremlin and the president began to join the ruling parties en masse. Interestingly, the safer the members of any given elite group felt, the less likely they were to join a given party. Therefore there are now very few party members among Kremlin officials close to the President and, at the same time, most of the sidelined governors are members of United Russia (see Table 1).

Table 1. The Portion of the Members of the United Russia in the Elite Groups

*As of June 1, 2009, the number of the governors-members of the UR increased to 72 people (the data of the UR Central Executive Committee).

This conclusion is supported by the data on the rise to power of key officials. Members of United Russia make up 85.7 percent of the heads of sovereign entities appointed or elected before the year 2000 while among “the Putin governors” who assumed office after 2000, the percentage of UR members was only 77.1 percent. At the same time, “the “sidelined made up a minority (less that 3 percent) among the officials of the Presidential Administration and the Security Council. This shows that membership in the party created a protective shield, especially for those whose loyalty was called into question.

United Russia further consolidated its position both organizationally and financially. A majority of the regional elite and officials became members of the party supported by the President himself. The 2003 State Duma elections were marked by the party’s impressive victory, which won more than two-thirds of the seats. The next two years were marked by further UR victories at the regional elections, which led to the party gaining the majority of seats in the legislative assemblies. On average, UR deputies got 62 percent in the legislatures, while in some regions this number exceeded 80 percent (Nizhni Novgorod and Omsk regions). This provided an opportunity for the ruling party to control gubernatorial appointments and the composition of the Federal Council.

The 2007 elections affirmed that for the first time since the dissolution of the Communist Party of the Soviet Union (CPSU), a party was formed capable of becoming the backbone of the state. It had all the features that made it similar to the CPSU – the wide network of regional organizations, discipline, methods of the agitation and advocacy, and the style as a whole. Like the CPSU, United Russia was under the patronage of the Kremlin. The regional officers of the party were directly managed by the governors, who were personally responsible for the party’s position in the region and the election results. However, there are also some differences: United Russia was not an all-encompassing party. It did not have that same multidivisional structure and it did not enjoy the support in absolutely all social classes. It existed in a competitive environment, even though it had an upper hand during elections, financial superiority, the advantages in organizing public events and support from the media. Nevertheless, United Russia was a pro-state party, a party for the state, but never a party-state.

Thus, in spite of all reservations we have to admit that there was formed a multi-party system in Russia, and that United Russia had to prove its resilience in a competitive electoral struggle. There was one more important difference: it failed to become an ideological party. Its political creed was unquestioning support of the President. The ideology of “sovereign democracy” suggested by the Kremlin remained an unsolved puzzle for society, who could only make out that “Russia is not America,” and that “we will take our own path.” What was that path? The answer was left out.

These huge efforts paid off in the 2007 parliamentary elections. United Russia got 64.3 percent of the votes and won 315 seats in the Parliament, which exceeded the two-thirds majority by 15 seats.

THE POLITICAL ELITE

The vast majority (82.1 percent) of today’s political elite were appointed after 2000, so they can be justifiably referred to as “the Putin elite.” The group with the highest share of officials appointed after 2000 is to be found in the Presidential Administration (97.4 percent) and the smallest share, among the governors (59.3 percent). An analysis of career trends shows that, by and large, “Putin’s team” was formed by 2003 (late summer 2002 is the average point of entry into service) when the inflow of new recruits gave way to slight rotation of resources and the bulk of the state authority was formed. From 2000 to 2008, the St. Petersburg contingent was growing steadily; they currently represent 25.6 percent of the top-level state officials.

The rotation of positions within the political elite goes along two distinct trends: the first is related to electoral activity, and the second to the designation to post. Movement within the elite unites members of the government with the Presidential Administration staff members who move within these structures and swap cadres. For instance, 51.3 percent of the top-level officials in the Presidential Administration came from the government, and 16.3% of the officials transferred in the opposite direction. At the same time, only a few members of these structures became deputies or governors (0.8 percent became governors, 4.8 percent became State Duma deputies, and 1.6 percent became members of the Federation Council).

The above suggests that the Russian political elite has split into two groups – bureaucracy (those appointed to their positions) and electocracy (those who are elected). These groups became institutionalized and came to exist independently without mixing much. The electocrats worked in political parties and engaged themselves in election campaigns, in drafting bills, and in public politics. The bureaucrats climbed the career ladder within the departmental hierarchy, making but rare appearances in public politics. The group of electocrats developed professionally by including more and more lawyers and legal advisors. Bureaucrats gradually moved towards management roles, becoming increasingly capable of running huge systems.

Yet the public opinion differentiates between them in a different way: the electocrats are labeled as demagogues and babblers, the bureaucratic officials are perceived as corrupted.

The style of work of the Russian establishment gradually changed, depending on how many of those who had “Soviet nomenclature experience” survived there. Whereas there were 38 percent with such experience during the first term of Putin’s presidency, by 2008 their share dropped to 34 percent. The highest proportion of the former bureaucratic elite can be found among the governors (56 percent of them held office in the Soviet bureaucratic system) and members of the Federation Council (48.2 percent). The lowest representation of this group is among the members of the Presidential Administration (12.8 percent only). This could be explained by the different rate of rotation: in the upper levels of the bureaucracy mobility was much speedier than in the regions – one can still find real sanctuaries of “Sovietism” there.

Table 2. Features of the Political Elite in 2008

An important feature of the Russian political elite today is the increased number of those officials who previously worked either in economic structures or had business experience; 39.8 percent of the elite fall into this category. Moreover, the younger an official is, the more likely it is that he has an association with private capital. The ratio between executive managers and owners in private business is now 1:8 in favor of the former; and 52.3 percent of all members of the government and 43.9 percent of the governors have experience of working in economic structures. It is clear that the piecemeal replacement of “Soviet-style executives” by “private entrepreneurs” in the Russian establishment will also affect the nature of the current reforms and the mindset of the ruling elite in this country.

By 2009, the share of security officials holding highest political offices reached 42.3 percent and the representation of business rose to 40 percent. The proportion of women, intelligentsia and youth has been declining while blue-collars have disappeared from the bodies of government altogether.

Changes in the political system in 2000 through 2008 went under the banner of Sovietization, elimination of alternative centers of power, and regulation and subordination of every element of the state machinery. This key trend in the political process was accompanied by the return to basic principles of state management that were characteristic of the late Soviet period in Russia’s history and are now being revisited in a modernized and technocratic form. The elite that was accountable for all these transformations changed, too. Charismatic public politicians left the establishment and were replaced by “people of the system” who had relevant experience in government service, were loyal to their leadership and shared its political views. The state grew stronger and the statists became the dominant group within the political class.

STATE CAPITALISM

The 2004 to 2008 period witnessed another process, that of active penetration by the political elite into the management of economic structures.

During Yeltsin’s tenure state companies were losing their significance. All commercially attractive enterprises were put up for auction and went private. The state owned only one oil company – Rosneft, the least profitable and most technically backward.  The state also owned natural monopolies, military-industrial enterprises and unprofitable, yet socially important, enterprises. As a rule, their boards of directors included ministerial officials and members of the state property management committee.

Under Putin things began to change. State companies started to play an increasingly significant role in the economy, holding private entrepreneurs at bay in some sectors. Gazprom, Rosneft and other energy giants were getting stronger and stronger, while their boards were increasingly staffed by Putin’s circle.

In January 2005, the government decided to bring a number of the largest Russian companies under the direct control of the Cabinet of Ministers. These companies can be divided into two groups (let’s call them group A and group B). Group A includes 27 companies, while B has 44 companies (in 2007 there were 41 companies in group B). These enterprises cover the main sectors of the economy: fuel and energy (including the electric power industry and the atomic industry), the military industrial complex, transport and communications, the banking sector, and the electronic media.

The more significant the company, the more ministers are likely to sit on its board of directors. This means that a company’s status is correlated with the status of its board members. Members of the Presidential Administration on a board were an unambiguous sign of the company’s special significance (see Table 3).

Table 3. Elite Groups Represented in the Boards of Directors of the Key State Enterprises

* The sum by column is more than 100% as one and the same person could be qualified both as a security, law-enforcement and defense officer (silovik), and/or as a member of another elite group.

Nowadays the boards of directors of large state-owned companies consist of government representatives (73.7 percent), members of the Presidential Administration (7.5 percent), and security officials (26.1 percent). Regional authorities do not have strong representation on the board of directors. They are on the board of less than 2 percent of the A-list companies and about 7 percent of the B-list companies. This suggests that local administrations are unable to influence the development of strategic companies or their power is rather limited. It is also worthwhile noting that the heads of the companies are rarely members of the board themselves. In the A-list they are represented in 21 of the 27 companies, and in B-list they are in the board of directors in 9 companies out of 41 (only 20 percent). This highlights the fact that top management is excluded from the decision-making process and is limited to exercising executive functions only.

THE OUTCOME OF THE AUTHORITARIAN MODERNIZATION

The result of the post-Yeltsin reforms was a profound modernization of the Russian state. Attempts to quickly switch to democratic practices created such a grave threat to the state that the government decided to scale back some of the democratic reforms, restore subordination and manageability of the system, and only then restart the modernization process and soften the regime.

The state itself became actually the only source for the modernization efforts. The authorities  ousted opposition leaders from the media, and then from politics. The Kremlin’s opponents were forced to leave the political scene. The radicalization of the democrats and the subsequent decrease in the number of their supporters eventually brought a loss in their electorate, who partly crossed over to Putin’s side as they approved of his neo-conservative reforms.

Who supported the authorities in their modernizations efforts? It was the broad political class who had a mass party and also business people who were genuinely interested in the innovative path of the country’s development. But those two allies could hardly be active. The supreme power itself was guilty of the fact that all those close to the party were afraid to take the initiative, as they knew all too well what the consequences could be.

This is the major problem of modernization projects in authoritarian states: the government has to face social problems alone. Even with the tacit support from the public, it is difficult to address large-scale tasks in the absence of active civil society. Innovations demand freedom, which is still lacking. For too long, those who dared to ruin the parade, stand out and act on their own, have been prosecuted. And Mikhail Khodorkovsky, who is still in detention, reminds everybody who strives for independence of what can happen when the state prefers “sovereign democracy” to simple democracy.