The End of Soviet Rule and
the Emergence of Post-Communist Russia
Mikhail Gorbachev
Communist true believer
Last General Secretary of
the Communist Party of
the Soviet Union
What motivated Gorbachev
to initiate reform of the
communist system?
Mikhail Gorbachev
The End of Soviet Rule and
the Emergence of Post-Communist Russia
What motivated
Gorbachev to initiate
reform of the
communist system?
 weak incentives
 lack of efficiency
 lack of innovation
 (graph)
The End of Soviet Rule and
the Emergence of Post-Communist Russia
Key elements in Gorbachev’s
reform program
 Economic restructuring
(Perestroika)
 Political openness
(Glasnost )
 Limited democracy
(Demokratizatsiia)
ultimately led to collapse of
Soviet Union
The End of Soviet Rule and
the Emergence of Post-Communist Russia
Gorbachev’s reforms
 Provoked attempted coup

By party apparatchik (hacks)
(August 1991)
Gennady Yanayev
The End of Soviet Rule and
the Emergence of Post-Communist Russia

Radical reformers inside
the Communist Party
resisted the coup

Boris Yeltsin


Party official
President of the rubberstamp legislature of
Russian part of Soviet
hierarchy
Boris Yeltsin
The End of Soviet Rule and
the Emergence of Post-Communist Russia



Yeltsin declares
independence of Russian
Republic (December 1991)
Republics withdrawal from
Soviet Union
Gorbachev resigns
Boris Yeltsin
Introducing post-Soviet Russia

New Russia (Russian
Federation)
 Elections,

“Not Free” (Freedom
House)
 HDI

but
rank—65th
2004 GDP < 1989 GDP
Now, Putin’s Russia
Post-Soviet Russia: Neo-liberal reforms

Yeltsin as a radical reformer
 Influence
of neo-liberal theory,
US economists, International Monetary Fund
 1992: “shock therapy”/ “big bang”
 Destroy the state planning/regulatory
apparatus
Post-Soviet Russia: Neo-liberal
reforms

“Shock therapy” 1992
 Dismantle

planned economy
End state-set prices on January 2, 1992
Post-Soviet Russia: Neo-liberal reforms
Year
1990
1991
1992
1993
1994
1995
Real GDP
-2.1
-12.9
-18.5
-12.0
-15.0
-4.0
Industrial
Output
-0.1
-8.0
-18.9
-16.2
-20.9
-3.0
Agricultural
Output
-3.5
-4.5
-9.0
-4.0
-9.0
-8.0
5
93
880
320
Consumer
Price
Inflation
→ 1,354
Post-Soviet Russia: Neo-liberal reforms

“Shock therapy” 1992
 Dismantle
planned economy
Privatize state-owned industry
 Initial privatization of state-owned enterprises
under Yeltsin

 vouchers to citizens (w/ little information)
“nomenklatura privatization”
 future oligarchs also buy up vouchers
Post-Soviet Russia: Neo-liberal reforms
Year
1990
1991
1992
1993
1994
1995
Real GDP
-2.1
-12.9
-18.5
-12.0
-15.0
-4.0
Industrial
Output
-0.1
-8.0
-18.9 → -16.2
-20.9
-3.0
Agricultural
Output
-3.5
-4.5
-9.0
-4.0
-9.0
-8.0
5
93
1,354
880
320
Consumer
Price
Inflation
Privatization

Who benefits from privatization?
1. Former factory directors
2. Nomenklatura  ministers of gas industry turned
ministry into private company Gazprom (oil and gas)
3. Upstarts (former black marketeers) turned oligarchs

1996 “loans for shares” auctions of state assets
 Well-connected
businessmen like Khodorkovsky got
key state assets -- including major parts of the energy
sector -- at bargain basement prices in exchange for
financial support for Yeltsin’s government in lead up to
1996 elections.
The End of Soviet Rule and
the Emergence of Post-Communist
Russia

“It was simply too much to expect that a
market system would suddenly materialize
out of nothing. After all, for 70 years the
state and the Communist Party had done
everything they could to stamp out any
remnant of market behavior…”
(Marshall Goldman)
The End of Soviet Rule and
the Emergence of Post-Communist
Russia
 Incomes decline by 50% from 1991-93
 Inequality explodes



Gini coefficient 1988 = 24; 1998 = 45
Sex (HIV/AIDS), alcohol (ism), and drugs
Population declines by 5 million in a decade
(1992-2002)

Highest mortality rate in Europe
 Lowest birth rate in Europe
Putin’s Russia:
creeping authoritarianism

Bureaucrats take charge of the economy
 Attacking
oligarchs who had amassed incredible
wealth and power
 Asserting
control over
 Energy sector

Ex: Yukos—Russia’s largest oil company
 Headed by Khodokovsky (oligarch) arrested
 State took over his shares in company
Putin’s Russia: creeping
authoritarianism

Bureaucrats in charge of the economy
 Attacking
oligarchs who had amassed
incredible wealth and power
 Asserting control over

Media sector
2000 Gusinsky Media Most—arrested on fraud,
embezzlement
 2003 Press Ministry closed independent tv station (TVS)
for “financial crisis”
 Example: state authorities can shut down news
organizations for campaign coverage deemed to be
biased

Murders of journalists
Anna Politkovskaya
Journalist Politkovskaya’s Anti-Putin Book Published in UK
October 15, 2004
Moscow News
A book by the famous Russian journalist Anna Politkovskaya, entitled Putin’s
Russia, was published in the United Kingdom on Thursday.
The book describes the Russian president, Vladimir Putin, in a devastating light,
The Independent newspaper wrote on Friday. It has not been published in Russia.
The journalist, who works at Novaya Gazeta, calls him “a KGB snoop” and warns
that he is moving the country back to a Soviet-style dictatorship, the paper wrote.
Politkovskaya compares Putin to Joseph Stalin, to an over-promoted spy and to a
miserable humiliated functionary from a Nikolai Gogol story.
“Under President Putin we won’t be able to forge democracy in Russia and will only
turn back to the past.
Reporter's Murder Leads to Wide Speculation
October 9, 2006
“JOURNALIST, GOVERNMENT CRITIC MURDERED: The
murder of Anna Politkovskaya, possibly the strongest journalistic
voice in opposition to the government of President Vladimir V. Putin
and Russia's war in Chechnya led all the major newspapers today.
Ms. Politkovskaya, a contributor to the independent Novaya Gazeta
newspaper, was shot three or four times in the stairwell of her
apartment in Moscow on Saturday afternoon.
“One of Ms. Politkovskaya's colleagues at Novaya Gazeta [said] that
anyone could have been behind the murder: members of Russia's
intelligence services, Chechens associated with Mr. Kadyrov, the
police, or pseudo-patriots and fascists.
Russia’s Evolving Political System

The Impact of the Economy on Political Attitudes

See also O’Neil, Cases, p. 274 and 277.
World Values Survey
Russian Federation, 1999
A165.- Generally speaking, would you say that most people
can be trusted or that you need to be very careful in dealing
with people?
1 Most people can be trusted
2 Can´t be too careful
World Values Survey
Russian Federation, 1999
A170.- All things considered, how satisfied are you with your
life as a whole these days?
1 Dissatisfied
22
33
44
55
66
77
88
99
10 Satisfied
World Values Survey
Russian Federation, 1999
E119.- If you had to choose, which would you say is the most
important responsibility of government?
A. To maintain order in society, or
B. to respect freedom of the individual.
Russia’s Political Institutions
New constitution adopted 1993
 Strong president

 Directly
elected by popular vote
 Strong executive powers

Prime minister
 Appointed

by the president
Bicameral legislature
Russia’s Political Institutions
Electoral System for Duma (lower house
of parliament) through 2003 elections
 Duma elections (450 seats)

 225
seats: single member districts by firstpast-the post/winner-take-all ballot
 225 seats: nationwide by proportional
representation (party-list) ballot
1995 Duma Elections—Major Parties
Party
Leader
%
PR
SMD Total
PR Seats Seats Seats
Vote
Communist
Party
“Russia is
Our Home”
Zyuganov
22.3
99
58
157
Chernomyrdin
10.1
45
10
55
LiberalDemocratic
Party (neofacist)
Zhirinovsky
11.2
50
1
51
Yabloko
(reformist)
Yavlinksy
6.9
31
14
45
2003 Duma Elections—Major Parties
Party
% PR
Vote
PR
Seats
SMD
Seats
Total
Seats %
United Russia
Communist Party
LiberalDemocratic Party
(neo-facist)
Motherland
Yabloko
(reformist)
Independent and
Others
37.57
12.61
11.45
120
40
36
102
12
0
49.3
11.6
8.0
9.02
4.3
29
0
8
4
8.2
0.9
0
0
99
22.0
Electoral System Changes


In September 2004, President Putin proposed
the abolition of the two ballot system, so that all
candidates would be elected on party lists
through proportional representation.
The 225 single-member districts were abolished.
In 2003 100 of these seats were won by
independents or minor party candidates.
 Ex:


Yabloko
2005 put into law
2007 in effect for 2007 Duma election
2007 Duma Elections—Major Parties
Votes
% Seats
%
United Russia
44,714,241
64.3
315
70.0
Communist Party
8,046,886
11.6
57
12.7
Liberal Democrats
5,660,823
8.2
40
8.9
Fair Russia
5,383,639
7.8
38
8.4
Parties and coalitions
United Russia
Votes
% Seats
44,714,241
64.30
315
Communist Party of the Russian Federation
8,046,886
11.57
57
Liberal Democratic Party of Russia
5,660,823
8.14
40
Fair Russia
5,383,639
7.74
38
Agrarian Party of Russia
1,600,234
2.30
—
Russian Democratic Party "Yabloko"
1,108,985
1.59
—
Civilian Power
733,604
1.05
—
Union of Right Forces
669,444
0.96
—
Patriots of Russia
615,417
0.89
—
Presidential Elections in Russia’s “Strong
President” System

Yeltsin
 1991:

first elected under Soviet election law
Won 57% of the vote
 1996:
elected in run-off against Communist
Party candidate Zyuganov

Won 35.2% of the vote in the first round
 1999:
resigned early to appoint Putin
Presidential Elections in Russia’s “Strong
President” System
 Putin
 2000:
elected with 52.5% of the vote
platform:
Strong military actions against Chechen “terrorists”
 Anti-corruption
 New nationalism—regain Russia’s international
stature

 2004:


elected with 71.3% of the vote
NY Times: January 9, 2004
Medvedev
 2008:
elected w/ Putin as PM platform
Russia's presidency
“The pseudoelection”





THE Russian presidential election on March 2nd was never going to
be a thriller.
Its outcome was clear from the moment Vladimir Putin announced
his chosen successor: Dmitry Medvedev.
Perhaps decorum might still have been observed by letting one
[viable] opposition candidate stand.
But the Kremlin has no time for niceties; it has refused to register
Mikhail Kasyanov, once Mr Putin's prime minister, and has also kept
out most foreign election observers.
The only two serious candidates besides Mr Medvedev will now be
an extreme nationalist, Vladimir Zhirinovsky, and Gennady
Zyuganov, perennial leader of the Communist Party.
2004 Presidential Election
NUMBER OF
VOTES
Putin,Vladimir
PERCENTAGE
49,565,238
71.31
Kharitonov,Nikolai
9,513,313
13.69
Glazev,Sergei
2,850,063
4.10
Khakamada,Irina
2,671,313
3.84
Malyshkin,Oleg
1,405,315
2.02
Mironov,Sergei
524,324
0.75
2,396,219
3.45
Against all candidates
Putin’s Russia
1998 economic crisis (Yeltsin legacy)
 Since 1998, economy buoyed by

 Oil
prices
From $11/barrel to $30/barrel
 By 2007-08 $90-100/barrel
 Note vulnerabilities, however

Putin’s Russia
1998 economic crisis (Yeltsin legacy)
 Since 1998, economy buoyed by

 Devaluation

Makes imports more expensive


of ruble
Opportunity for local manufacturers
From 6 rubles to the dollar
To 24 rubles to the dollar

Imports dropped ~50%