david.hezy@gmail.

com He 1

Kaiwei He (david.hezy@gmail.com)

Democracy and Markets

Final---Russia

A thoughtful paper. However, the writing was unclear in spots,

and the discussion of Russia as a competitive authoritarian regime

was somewhat problematic. On the whole, though, a good job.

Grade for paper: B+

Grade for course: A

Lying on the Eurasian continent, Russia has a vast territory and a kind of

civilization deeply influenced by both the East and the West. In Russia, the state

always plays a leading role in national development. In history, arguments about

Russian’s path of development never stopped. After failed Soviet eastern way and

Boris Yeltsin’s western way, Russia now is exploring its own road, led by Vladimir

Putin.

Since he took over from Yeltsin in 1999, Putin hasve won two elections and have

successfully been through two terms. Because the constitution limits that a president

could not serve for more than two terms, Putin transferred to serve as premier after his

second term as the president. And Dmitri Medvedev became the president of Russia.

Even so, Putin actually acted as the president during his four years as prime minister.
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And he used the hand of Medvedev to prolong the tenure of presidents from four

years to six years (Pan 2008). In 2012, Putin was elected as the president of Russia

again. And now, Putin is considering to campaign for his fourth term of office in 2018.

If so, Putin will hold power until 2024.

Ten years after the collapse of the Soviet Union, Russia’s economy and politics

fell into disorder. The reason why the Putin regime could rise upon such a weak

foundation was the quick recovery of Russia’s economy, which benefited from the

high demand for resources due to strong global economy and the soaring international

energy prices. Meanwhile, Putin also has a broad mass base. The Russian people have

pretty strong national pride and tend to see the positioning of the country from the

view of maintain the national dignity and national interests. The concept of a powerful

country is deeply ingrained in Russian people’s heart. Among the successive rulers of

Russia, those who could lead to a national prosperity usually had high reputations,

and the presidents who had high reputations were able to centralize power to

consolidate their positions in the name of "democracy".

In the article of “Popular Autocrats”, the author Martin K. Dimitrov points out

that the popularity of authoritarian incumbents should be paid attention to awk in

order to explain authoritarian resilience and breakdown in post-communist Eurasia. In

his view, the incumbents normally use three strategies to ensure high levels of

popularity: economic populism, anti-Western nationalism, and muzzling the media.

Russian president Vladimir Putin is a typical example of popular autocrats who

successfully use the strategies and build a resilient regime that enjoy mass support
 david.hezy@gmail.com He 3

(Dimitrov 2009; 81). Good

Moreover, the elections play an important role in maintaining the stability of the

Putin regime. Based on the general requirements of democratic election, the basic

principles of Russia's presidential election, the qualifications, rights, obligations of

voters and candidates, and the election process, etc. have been established and

perfected through the constitution and the law of the presidential election. For

example, the law of the presidential election stipulates a series of basic principles of

presidential election, including the principle of universality and the principle of

equality of the right to vote, the principle of direct election, the principle of

multi-candidate election and the principle of secret ballot etc. These principles are

established and abode by as basic elements of democratic elections (Bai 2005; 25).

Therefore, the system of Russia's presidential election tends to be democratic, and its

practical operation formally meets the requirements of democracy. In other words,

Russia’s presidential electoral system has been established as a kind of superficial

democracy mechanism. Such an electoral system provides the Putin regime with

legitimacy. This is a little unclear. Putin is genuinely popular, but the electoral

playing field is heavily tilted against the opposition because of Putin’s control of the

press and his exploitation of the economic resources of the state. This is why most

people would characterize Putin’s Russia as a competitive authoritarian regime, not a

democracy.

For more than a decade, phenomena such as money politics and vote buying

have occurred from time to time in Russia’s elections, but they are not the main
 david.hezy@gmail.com He 4

obstacles of the development of Russia's electoral system. The real obstacle is

Russia's current political system.

ok Although the design of Russia's political system follows the principle of

"check and balance" — the legislative, administrative and judicial branches are

respectively independent and contained by each other, in fact, the President has great

and extensive powers above the parliament, the government and the court. In the

presidential campaign, these powers can often affect the public opinion to a great

extent and become the key of winning the election. It is not hard to see that every

president, including both Yeltsin and Putin, carried out campaign strategies positively

and actively with the help of the power of the state in order to win the election.

Specifically, using the power of the state can provide some conveniences for the

ruling candidates, as following:

Firstly, the President enjoys an extensive power of appointment and removal of

personnel, so the ruling candidate can use this power to appoint or remove

government officials to pander to the minds of voters or rope competitors in.

Secondly, the President has the right to adjust the national policies to increase

political capital to run for an election. During the election campaign, the ruling

candidate often adopts some administrative measures such as providing retroactive

wages and pensions to ease social contradictions and stabilize the voters. President

Putin won the favors and supports of voters through tough policies on Chechnya and

the second Chechen War became his exclusive political resource.

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Thirdly, Russia’s political system lacks an effective mechanism of restraint and

supervision, thus the ruling candidate is able to take advantage of the government’s

resource superiorities to help his campaign. President Putin once carried out national

publicity and promotion activities in the inspections across the country.

Fourthly, the ruling candidate could benefit from modifying laws correlated with

presidential elections. Since the first presidential election in 1999, a new law of

presidential elections which made the ruling candidate a beneficiary was enacted

before the elections in Russia (Xu 2008). This is more like it. But it somewhat

contradicts your earlier description of elections as democratic.

In the eyes of westerners, Putin is pushing personal dictatorship and Russia's

democracy is manipulated by him. But as to Russians who have been through the

collapse of the Soviet union and the Yeltsin era, this kind of circumstance is not

surprising. Since Gorbachev's reforms, the abuse of democracy has caused disorder

and disintegration of the state. Then Russian people came to realize that Russia's

political system should be subordinated to maintain and strengthen the national

authority and its international status. Obviously, Russian people recognized Putin's

managed democracy. They volunteered to go to the polls to vote for Putin, to express

their faith in him. On the issue of democracy, Putin did not yield to the pressure of the

West. He insisted to follow a path in accordance with Russia's characteristics. He also

put forward the concept of sovereign democracy, to show to the world that Russia

would decide autonomously how to develop and that it doesn’t need advice (Zuo F

2008).
 david.hezy@gmail.com He 6

However, western countries have been skeptical of Putin's political

democratization. They think that Russia will return back to the traditional political

system under the Putin regime and even become Stalinist. In addition, the

international community is generally believed that Putin's governing ideas and

policies embody the authoritarian and that the political form of current Russia is

competitive authoritarian regime. This regime seriously undermines the political

democratization process of Russia.

Commented [1]: L&W do not think these regimes are

The competitive authoritarian regime is a kind of transitional political form
“transitional.” They can remain stable for a very long time.

between the democratic political system and the authoritarian political system. Former

Soviet bloc countries which have used totalitarian political systems for a long time

normally adopt the competitive authoritarian regime during their transitional phases in

the beginning stages of political modernization (Levitsky, Way 2002; 53). The

transition length varies from country to country, determined by the specific nationality,

culture, historical tradition and social and economic factors of each country.

Russia’s competitive authoritarian regime is a phenomenon emerged under the

specific historical background in the process of Russia’s political transition.

Additionally, the Russian nationality has a long-standing and profound dictatorship

tradition. There was no democracy in tsarist times or in the soviet union period. The

process of political democracy only started since 1991, when the Soviet union

collapsed and the system began to fundamentally transformed. As a result, Russian

people entrust the development of the state and the revival of the nation to a good

leader. This kind of consciousness has its ideological and cultural foundation. With
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the deepening of system transformation, the competitive authoritarian regime may not

become Russia's long-term political form, and the current centralization may not

become a real dictatorship. Russia is less likely to return to a totalitarian system of

Stalin's era. However, the process from the competitive authoritarian to the democracy

will be very long and difficult and the result can't be guaranteed.

President Putin monopolizes all powers, muzzles the media, cracks down

dissenters, controls economic lifelines and renovates financial oligarchs in domestic.

Externally, he uses Russia chauvinism to push hegemony; for example, he waged the

war in Georgia, meddled in Ukraine and militarily intervened in Syria. Putin is

capable of doing all those things because the swift rise of the price of oil has sustained

the development of Russian economy. The oil and natural gas account for two-thirds

of Russia's total exports. Russia is a country supported by petroleum economy (Vinik

2014). The rise and fall of international crude oil prices directly affect the prosperity

and decline of the Russian economy.

President Putin attaches great importance the role of the state in the development

of market economy. He did not put the focus of economic transition on the ownership

reform, but emphasized on the control of the important resources. In the Yeltsin period,

most of the oil resources were in the hands of private consortia. Putin established

policies to crack down the oligarchs shortly after taking office in 2000, in order to

stabilize the economy. At the same time, the Iraq war started. The international crude

oil prices thereupon rose sharply, and the oil exports substantially drove the economic

growth because the most crude oil export profits were turned over to the state. Since
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2003, Russia started the asset restructuring in the field of energy and increased the

proportion of state-owned composition. In order to control the wealth of private oil

companies, the Russian government monopolizes in the oil exports and controls the

pipelines. Thus the state controls a third of Russia's oil and 90% of the gas (Zuo F

2008). State-owned enterprises have regained the dominance of the energy sector.

President Putin uses the rises of the international oil and gas prices to improve the

financial situation of Russia and the living standard of the residents. By controlling

the energy and building influenced large energy enterprises, energy enterprises have

become a kind of diplomatic weapon and improved the international status of Russia.

Since 2000, Russia’s annual GDP growth was at around 7% (TradingEconomics).

Russia has become one of the fast economic growth countries in the world, known as

one of the "BRIC" countries. In 2007, Russia was back into the world's top ten

economies. But prices are now very low. How will that affect Putin’s power?

However, the point is that Russia's economic development is due to rising energy

prices rather than President Putin. Russia's political system under the Putin regime has

no obvious change on the surface, but actually its democratic connotation has greatly

reduced. Putin resorted to a series of measures which were deviated from democracy

in controlling the media and local authorities and clamping down on human rights

groups. The autocracy has given rise to more corruption, reducing the protection of

ownership and the social public security. It is fundamentally limiting the development

of market economy. The relationship between Putin's autocracy and Russia’s

economic growth is no causal but is constraint. However, it is precisely the economic

 david.hezy@gmail.com He 9

prosperity and abundance of life brought by the oil wealth give Putin Russian people's

trust and support. Putin's authoritarian luckily catches up with the economic growth.

There is little evidence that Putin’s dictatorship in recent years has promoted more

effective governance and economic development. On the contrary, the oil wealth and

economic monopoly have made Putin’s regime more deviated from democracy. The

fact that most of the oil wealth are in the hands of a dictator will only make return to

democracy more impossible.

Russia is highly sensitive to energy prices, because oil and gas tax hold up half of

the national budget income. High dependence on energy exports makes Russia fail to

form a sustainable and balanced modern economic development model. The

development of Russian oil companies will be greatly affected by external macro

environment, which affects the national economic development and people's living

standard and eventually leads to shake of the existing political system. For example,

after the international financial crisis hit in 2008, the international market oil prices

fell sharply. In 2009, as the oil revenues dropped, the Rouble depreciated, the rate of

inflation rose, domestic product competitiveness fell and the international capital fled

away. At that time, as the government of prime minister, Putin rapidly took

intervention measures such as spending one third of the country's foreign exchange

reserves to stabilize the Rouble (Zuo P 2015). Although his measures stabilized the

fragile banking system, the economy still declined sharply.

Daniel Treisman, in his article "Putin's popularity since 2010", says that because

of the dissatisfaction with economic and political outcome, Russians have begun to
 david.hezy@gmail.com He 10

increasingly blame Putin's regime; and Putin's approval rate falls. What people want

are not only higher wages but also justice and dignity, especially for those who come

from new creative class. The opponents of Putin exist in almost all different groups

(Treisman 2014; 384). Of course, economics still play an important role. Treisman

claims the linkage between respondent's views of Putin and perceived economic

performance are tighter. Russians like concrete benefits much more than vague hope

now, focusing more on their living standards. He thinks although large reserves and

high oil price can give Putin some room to maneuver, if the situation of economy

becomes worse than people thought, "the political effects may be pronounced" (385).

Now, with the slump of oil and natural gas prices, the Rouble has depreciated.

And invading Ukraine Crimean leads to a decline of Russia’s international reputation,

and thus western countries impose economic sanctions. The depression of Russia's

economy is beyond imagination. Russia economy decreased by 3.7% in 2015;

revenues from oil and gas exports decreased sharply (fastFT 2016). People who

take dim views on Russia's economy have increased dramatically since the end of last

year. In 2016, the Russian economy is expected to shrink from 0.5% to 1% (Chance

2016).

Many observers are worried that, although Russia has reserves of nearly 90

billion dollars (Harrison, 2014), hammered by a slump in oil prices beginning in 2014,

Russian government may run out of its reserves and will be forced to introduce an

extreme austerity policies by the end of this year. To save Russia economy from the

oil crisis, Putin intends to sell state-owned assets; meanwhile, he reduces government
 david.hezy@gmail.com He 11

spending sharply. Low oil prices will continue to intensify Russia's economic decline,

and Putin's dictatorship may have damaged the economy's ability to recover from this

shock.

More importantly, the shocking inflation is also squeezing Russia people's

wallets. Based on the report by Institute of Social Analysis and Forecasts of Russia,

“in February 2016 Russians' real income in comparison to the same period in 2015

had declined by 6.9 percent and real salaries had declined by 2.6 percent” (Kostyrev

2016). Because on the one hand, the rouble exchange rate and the price of oil fell to

a historical bottom, on another hand, it suffered from the price of mutual sanctions

which prohibit doing business with western countries. With almost all food prices

have risen, the Russian banking also granted more loans than the same time last year,

only to fulfill citizens’ daily basic needs. As people’s lives are becoming tougher, how

long Putin can hold is still unknown, but sooner or later, this would largely damage

his approval rating.

With the economy recession taking place in Russia, both domestic and western

critics have implied more frequently that Russia is now at the very edge of turmoil,

even collapse. With the gathering of destabilizing forces, a thunder storm is about to

come. In this situation, large-scale riots are very likely to occur, thereby failed

transition to democracy in Putin's Russia may return to democracy.? unclear

Certainly, some cultural factors could make Putin continue to control Russia,

burying the possibility of western democracy. Right after the collapse of the Soviet
 david.hezy@gmail.com He 12

Union, Yeltsin announced that Russia was no longer a unified ideology, people began

to have blind faith in western values of democracy and freedom. Since Putin was in

power, the ideology of Russian had been rebuilt, emphasizing patriotism and the idea

of being a powerful country. The cultural heritages of Russian are messianism, such as

imperial thinking, traditional expansion, respect for authority etc (Zuo F 2008). These

are all based on a strong country and the willingness of become even stronger.

Russian people focus on their national honor more than their individual happiness.

Putin verbally expressed his value of respecting for freedom, human rights and

democracy, nevertheless, he put the goal of pursuing the great powers as his first

mission. Paying attention on patriotic and powerful education was agreed by the

majority in Russia.

The consciousness of being a great power is the core of Russian recovery. It is

determined by the features of Russia's economy, culture and geopolitics.In the entire

history of Russia, the ideological tendencies and the state policies all depended on this

consciousness. Even today, it still plays a decisive role. Putin insists that the purpose

of inheriting the heritage of history is to seize the future. In Putin’s point of view, only

through advocating the legacy of outstanding values and patriotic tradition from

fathers in the youth could unite the power of next generations to fight for national

power and win the country's future. Since 2001, the Russian Federal Government has

promulgated outline of the national patriotic education every five years (Zuo P 2015).

At the beginning that Putin reached the apex of power, Russia needed his

iron-fisted and tough political style to eliminate confusion for the future. He used to
 david.hezy@gmail.com He 13

be the only hero the country could rely on. In the minds of Putin's proponents, what

they need was not a so-called democracy, but a strongman who can take sense of

security back and restore the once-mighty empire. It seemed as if stability and

prosperity brought by such strongman politics were enough to compensate for the lack

of democracy and freedom, but the strongman politics is not democratic after all. The

obsession of strongman is likely to cause the indulgence and assistance of

authoritarianism.

The reason why there are always term limits in all democratic systems is that

the system designers knew that there is no guarantee that a person could own a kind

character all the time, no matter how distinguished and capable he is. Most

importantly, the foundation of the democracy itself is a estimation of "evil human

nature" that power tends to corrupt, and absolute power corrupts absolutely. The

longer a ruler serves, the bigger the power he has. With more chances to be tempted,

the possibility of corruption and abuse of power becomes greater. More dangerously,

if a leader serves long enough, his power may be large enough to subvert the

democratic system itself.

Since Putin makes no secret of his favor of dictatorship, this causes a split

among the youth who once had blind faith in him. The new generation in Russia is not

satisfied with the status quo, they begin to learn more about the outside world through

the network. In the twenty years since the Soviet collapse, Russians' real incomes

have increased, but democratic institutions have not kept up. Corruption is rife,

freedom is limited and democracy is denied; the Russians have good reasons for
 david.hezy@gmail.com He 14

political disaffection, especially today, under the economic recession led by the sharp

fall in the price of oil and sanctions from the west. More and more middle-class and

young generation require social changes. The way to meet their requirements is most

directly reflected on resistance against Putin's dictatorship.

Putin should clearly recognize that citizens have a strong feeling of

dissatisfaction to the political monopoly and authoritarianism. He must launch a

reform, especially political one, with the aim of pushing Russia's democratic

development forward. In other words, Putin is under great pressure from people to

change the state system. To be a great power, which is also the Russian masses

pursued, Putin has stressed that Russia has to concentrate on developing the economy

and strengthening military power, winning widespread approval of the Russia people

who have nationalism tradition. However, the slowness of democratization will arouse

strong discontent among the people, making economic development more difficult. So,

how to advance democratic reforms in the next 5-10 years is not only a problem for

the country, but also a major challenge for Putin himself.

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