Federalism in Russia

Abstract

Reforms during the 1990s in Russia entailed not only economic liberalization and democratization but also transition from a highly centralized unitary state to a highly decentralized federal state. Since the advent of Vladimir Putin’s presidency, former president Boris Yeltsin’s experiments with decentralization have been recognized as unsuccessful and as leading to the very collapse of Russia. A consensus has emerged—among scholars, politicians, and the society at large—that the attempt to build a successful federal system in the 1990s badly failed. The new Russian leadership has been consistently taking measures since 2000 to recentralize both public finance and politics. This chapter addresses the following questions: Why did Yeltsin’s decentralization fail? What mistakes (if any) were made in the 1990s? How effective is Putin’s reversal of Yeltsin’s decentralization? Where is the notorious “vertical of power” taking Russia? These questions have no easy answers, but the experience of other federal states and an examination of Russia’s own political economy of intergovernmental relations suggest that the approach being implemented now is no less dangerous than the spontaneous decentralization of the 1990s. Indeed, because of the size of the country and the heterogeneity of its regions, federalism in Russia is inevitable. For the effective functioning of the principles of federalism, Russia needs the “vertical of power,” which political economists refer to as political centralization. The “verticals,” however, can be different. Other countries’ experience with federalism, particularly Mexico and China, shows that the measures that Putin and company are undertaking are unlikely to succeed.