A Normal Country

Andrei Shleifer and Daniel Treisman

From Foreign Affairs, March/April 2004

Summary:  Conventional wisdom in the West says that post-Cold War Russia has been a disastrous failure. The facts say otherwise. Aspects of Russia's performance over the last decade may have been disappointing, but the notion that the country has gone through an economic cataclysm and political relapse is wrong--more a comment on overblown expectations than on Russia's actual experience. Compared to other countries at a similar level of economic and political development, Russia looks more the norm than the exception.

Andrei Shleifer is Whipple V.N. Jones Professor of Economics at Harvard University. Daniel Treisman is Associate Professor of Political Science at the University of California, Los Angeles. For full references and data sources see http://papers.nber.org/papers/w10057.

Yet what about sources less dependent on the perception of outsiders? In the summer of 1999, the World Bank and the EBRD conducted a survey of business managers in 22 postcommunist countries. Respondents were asked to estimate the share of annual revenues that "firms like theirs" typically devoted to unofficial payments to public officials "in order to get things done." Such payments might be made, the questionnaire added, to facilitate connection to public utilities, to obtain licenses or permits, to improve relations with tax collectors, or in relation to customs or imports. Respondents were also asked to what extent the sale of parliamentary laws, presidential decrees, or court decisions had directly affected their businesses, in the hope of measuring the extent to which policymakers were co-opted by business.

On both the "burden of bribery" and "state capture" dimensions, Russia ranked right in the middle of its postcommunist peers. On average, Russian firms reportedly paid 2.8 percent of revenues on bribes, less than in Ukraine and Uzbekistan, and far less than in Azerbaijan (5.7 percent) and Kyrgyzstan (5.3 percent). The percentage who said it was "sometimes," "frequently," "mostly," or "always" necessary for their firms to make extra, unofficial payments to public officials in order to influence the content of new laws, decrees, or regulations was also about average: 9 percent, compared to 24 percent in Azerbaijan, 14 percent in Latvia and Lithuania, and 2 percent in Belarus and Uzbekistan. In both cases, Russian responses were very close to what one would predict given Russia's relative level of economic development.

How does corruption in Russia affect individuals? The UN conducts a cross-national survey of crime victims. Between 1996 and 2000, it asked urban residents in a number of countries the following question: "In some countries, there is a problem of corruption among government or public officials. During [the last year] has any government official, for instance a customs officer, a police officer or inspector in your country asked you, or expected you, to pay a bribe for his service?" The percentage of positive responses in Russia was about average for the developing and middle-income countries surveyed. Some 17 percent of Russians said they had been asked for or had been expected to pay bribes in the preceding year, fewer than in Argentina, Brazil, Lithuania, or Romania. Again, Russia's relative position was almost exactly what one would expect given its per capita income.

UNFREE AND UNFAIR?

Western evaluations of Russia's political institutions in the last ten years have been scathing. In June 2000, The Economist declared Russia to be a "phony democracy." By contrast, the magazine recently labeled Iran -- where scholars can be sentenced to death for religious dissidence and an unelected religious council vets all legislation -- a "quasi-democracy." The advocacy group Freedom House has given Russia a "5" for political freedom and a "5" for civil liberties since 2000 on a scale ranging from "1" (highest) to "7" (lowest). This score suggests that Russia's political regime is less free than Brazil's military junta of the late 1970s and ranks its commitment to civil liberties below that of Nigeria in 1991 under the dictatorship of Major General Ibrahim Babangida. Kuwait -- even though it is a hereditary emirate where political parties are illegal, women cannot vote in legislative elections, and criticism of the emir is punishable by imprisonment -- gets a better rating for political freedom.

Critics of Russia's democracy focus on several points. Russian leaders are accused of manipulating elections through control of the state media, harassment or censorship of the independent press, and use of judicial and administrative levers to intimidate or incapacitate rivals. Voters are portrayed as apathetic and gullible. At the same time, big business is seen as subverting the democratic process through its financial support of favored candidates. The combination of voter apathy and official manipulation means, in the grim but quite representative view of one New York Times reporter, that during the last decade "there has been no truly democratic choice of new leaders" in Russia.

Just how bad is Russia's democracy? How restricted are its news media? Certainly, Russia's political institutions and civic freedoms are imperfect in many ways. And the trend under Putin has been worrying and could deteriorate further. By any objective comparative standard, however, Western condemnations of the country's institutions in the last ten years have been grossly overblown. Russia's politics have been among the most democratic in the region. And defects in the country's democracy resemble those found in many other middle-income countries.

Elections since 1991 have been frequent. Seven national ballots -- four parliamentary and three presidential -- took place between 1991 and 2003. In each, candidates representing all parts of the political spectrum ran. Parties and electoral blocs were free to organize, with few exceptions, and a large number managed to register. International observers, although critical of imbalanced media coverage and isolated improprieties, have generally given Russian elections high marks. This is in contrast to reports on surrounding countries and on many middle-income democracies elsewhere in the world. The Organization for Security and Cooperation in Europe (OSCE), for example, characterized the 1993 and 1995 elections as "free and fair." Later missions described the 1996 and 1999 votes as "consolidating representative democracy." And the vote-counting process in both 1999 and 2000 exhibited "transparency, accountability, and accuracy that fully met accepted international standards." The OSCE expressed stronger reservations about the 2003 parliamentary election, noting "the extensive use of the state apparatus and media favoritism" to benefit the pro-Putin United Russia Party, although it also praised the Central Election Commission for its "professional organization" of the election.

Supposedly apathetic Russian voters have actually participated in elections at higher rates than their U.S. counterparts. Turnout in Russian elections has never dipped below about 54 percent (and was as high as 75 percent in 1991), compared to an average U.S. turnout rate of about 50 percent of the voting-age population in recent congressional and presidential elections.