Martin Nicholson - Towards a Russia of the Regions

Martin Nicholson

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The International Institute for Strategic Studies 1999

First published September 1999 by Oxford University Press for

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Library of Congress Cataloguing in Publication Data

ISBN 0-19-922474-9

ISSN 0567-932X

Since the collapse of the Soviet Union in 1991, Russias state system has been transformed, but the question of how the country should be governed, or indeed whether it is governable at all, remains unanswered. Russias federal system has evolved through a series of compromises between central government and regional administrations. The constitutional framework is weak and inherently flawed; the balance of political and economic power, while tilting towards the regions, is in flux.

With the exception of conflict in the North Caucasus, the new pattern of relationships between the centre and the regions has emerged through negotiation rather than bloodshed. Despite their separatist rhetoric, regional leaders remain heavily dependent on the centre for funds and political support, and seek international investment, not recognition as independent states. Russia faces no external threats to its integrity, and its security forces do not support separatism. This short-term stability has, however, been bought at the cost of Russias longterm political and economic health. In the absence of a firm constitutional framework, regional lites and the vested interests that back them have consolidated power, hampering the development of local democracy and frustrating attempts at grass-roots economic reform. The risk is not that Russia will follow the Soviet Union and fragment, but that the state will effectively cease to function as central and regional lites battle for control over the countrys dwindling assets.

Relations between the centre and the regions need to be redefined in two key areas. First, a clear and codified system of fiscal relations should be established to encourage the emergence of transparent, money-based regional economies. Second, the piecemeal devolution of political power to the regions should be rationalised within a precise constitutional framework. Little fundamental reform is likely until at least mid-2000, by which time presidential, parliamentary and regional elections will have been held. Fresh mandates should encourage the key players to see that their long-term interests are better served by placing Russias federal arrangement within a more regulated framework.

Russia, the worlds largest country, requires some kind of federal system. Foreign models of devolution in a once-centralised state, such as Germany or Spain, have specific characteristics that make them unsuited to Russian conditions. In trying to build a genuine federation, Russia has therefore embarked on a large-scale experiment. Although the relationship between the centre and the regions has stimulated only sporadic outside interest, it is as important as the other two pillars of post-Soviet reform: the creation of a multiparty electoral system in place of single-party rule; and the development of a market economy in place of state ownership and central planning. Indeed, the right form of devolution is crucial to the success of both projects.

The flawed structure of the Russian state is at the root of the difficult economic and political relationship between the centre and the regions. Unlike the US, Russia is not founded on a contract between its components, nor does it have a carefully constructed German-style constitution. It is instead an amalgam of the quasi-federal structure of the Soviet era, and a series of politically expedient compromises struck in the absence of an effective constitutional settlement.