Deregulation, Digitalization and Decentralization will Work Only if There is a Fourth ‘D’ – Democratization, Gelman Says

Paul Goble

            Staunton, June 28 – Russian officials and analysts recognize that the quality of public administration in Russia is abysmally low, and many have proposed reforms known as “the 3 Ds,” deregulation, digitalization and decentralization to address them. But those will only work, Vladimir Gelman says, if they are accompanied by democratization.

            The European University professor argues that otherwise steps taken toward the other three goals, however useful they may appear, will be substitutes for reform rather than real reform and will leave the country not much better off than it is today because each will be vitiated by the lack of democratization (ridl.io/ru/reformy-i-substituty/).

            The 3D plan isn’t working because the country’s political and economic system is based on rent-seeking by the ruling group who “govern Russia in order to steal as much as possible for as long as possible.” And these elites thus “seek to prevent changes in the political status quo at all costs,” thus limiting the ability of subordinates to introduce positive change.

            Deregulation began to be pushed in 2019 when Prime Minister Dmitry Medvedev called for the establishment of “a regulatory guillotine” to eliminate barriers to entrepreneurial activity, and his successor Mikhail Mishustin has continued this theme. But it hasn’t worked as intended, Gelman says.

            On the one hand, businesses have pressed for lifting environmental restrictions, triggering protests by those concerned with protecting the environment. And on the other, for every regulation the government has lifted, it has put even more in place, thus leaving business in a worse position than it was.

            Something similar has happened with digitalization. Its advocates outside the government see it as increasing efficiency, but the government itself views it as a way to tighten its control over the population. And decentralization has failed because to this day, the Kremlin cares more about political loyalty of elites than about improving the quality of governance.

            Under some but not all conditions, democratization can overcome these problems, Gelman says, but it would be compromised completely “if regime change in Russia means the replacement of one bunch of ‘crooks and thieves’ with another while keeping the rules of bad governance unchanged and in place.”

            Ukraine since 2014 is an example of that. The country moved toward democracy but entrenched elites remained in place and as a result, “it has become fundamentally impossible [for Kyiv] to renew the state apparatus and undertake major reforms of its most important elements such as the judiciary and law enforcement organs.”

            For Russia to break out into a better future, Gelman says, “it will thus need not just free elections and independent media but also an effective and capable government that can clean up the havoc wreaked by its predecessor but also need to create new incentives for improving the quality of governance” quickly.

            That won’t be easy, the St. Petersburg scholar says, because any change will have to overcome the inevitable dissent of those who will lose power if reforms are carried out. At the same time, he says, there is “some good news.”  Russia now has a skilled expert community from which new officials could be drawn.

            And at the same time, Gelman argues, “contrary to popular stereotypes, the quality of the Russian apparatus in many government agencies is far from poor: there are many competent technocrats out there, willing and able to implement needed reforms” if they get the proper signals from a democratically elected government.

            But “if the democratization of Russia and the reforms of its state structures are delayed for many decades and replaced by poor substitutes, this potential for progress is likely to go to waste,” Gelman says. And it could even happen in that case that “the degradation of Russia’s state structures” would become “irreversible.”

            In that event, he concludes, “Russia could face what the Soviet Union was confronted by at the end of perestroika, a time when the existing state turned out to be incapable of changing anything for the better” and leaving Russians with only one option: seeking to “dismantle” it completely. Few in Russia would like to see such an attempt made yet again.