How Russia Really Works

How Russia Really Works: The Informal Practices That Shaped Post-Soviet Politics and Business

Alena V. Ledeneva
Copyright Date: 2006
Edition: 1
Published by: Cornell University Press
Pages: 288
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  • Book Info
    How Russia Really Works
    Book Description:

    During the Soviet era, blat-the use of personal networks for obtaining goods and services in short supply and for circumventing formal procedures-was necessary to compensate for the inefficiencies of socialism. The collapse of the Soviet Union produced a new generation of informal practices. In How Russia Really Works, Alena V. Ledeneva explores practices in politics, business, media, and the legal sphere in Russia in the 1990s-from the hiring of firms to create negative publicity about one's competitors, to inventing novel schemes of tax evasion and engaging in "alternative" techniques of contract and law enforcement.

    Ledeneva discovers ingenuity, wit, and vigor in these activities and argues that they simultaneously support and subvert formal institutions. They enable corporations, the media, politicians, and businessmen to operate in the post-Soviet labyrinth of legal and practical constraints but consistently undermine the spirit, if not the letter, of the law. The "know-how" Ledeneva describes in this book continues to operate today and is crucial to understanding contemporary Russia.

    eISBN: 978-0-8014-6168-2
    Subjects: Political Science

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. List of Illustrations
    (pp. ix-x)
  4. Acknowledgments
    (pp. xi-xiv)
  5. Introduction
    (pp. 1-9)

    The Soviet system was not a planned economy. It was meant to be, but those living within its borders found that they had to counteract its overcentralization and its ideological limitations through intricate schemes of informal exchange, regional and industrial lobbying, and a variety of practices for cheating the system.¹ In much the same way, the post-Soviet system rarely operates according to its proclaimed principles of market democracy. Just as before, informal practices must regularly be used to compensate for its defects. These practices are essential if the system is to continue functioning, but they are also the enactment of...

  6. Chapter One Why Are Informal Practices Still Prevalent in Russia?
    (pp. 10-27)

    There is a certain mythology that Russia is a land of irregularities and paradoxes, to a large extent impenetrable to outsiders. At the level of cliché, the “Russian soul” and “Russian chaos” claim some implicit explanatory power. References to Russian history (“traumatic past”), geography (“size matters” and the “natural resource curse”), and the national psyche (“kleptomania”) frequently appear in this type of discussion. A common assumption behind these ideas is that Russia is somehow different from other, more transparent economies. A similar conclusion could be drawn from post-1998 analyses of the macroeconomic reforms—also known as “too much shock, too...

  7. Chapter Two Chernyi Piar: Manipulative Campaigning and the Workings of Russian Democracy
    (pp. 28-57)

    If one has to decide on the most significant political change in Russia brought about by the end of communism, it is the fact of competitive elections. This change is fundamental not only because it reflects a breakthrough in the formal political framework codified in the Constitution and electoral legislation but also because it has reached the grassroots level: people’s attitudes to and behavior during the elections have indeed transformed. Despite the variety of republican constitutions, regional political regimes, and patterns of electoral behavior across the eighty-nine federal subjects of Russia that have been well documented (Gel'man, Ryzhenkov, and Brie...

  8. Chapter Three Kompromat: The Use of Compromising Information in Informal Politics
    (pp. 58-90)

    The word kompromat has no direct equivalent in English. Its literal translation—“compromising material”—refers to discrediting information that can be collected, stored, traded, or used strategically across all domains: political, electoral, legal, professional, judicial, media, or business.² A recent dictionary of contemporary terminology defines kompromat as an abbreviated term for disparaging documents on a person subject to investigation, suspicion, or blackmail, derived from 1930s secret police jargon (Kratkii slovar' sovremennykh poniatii i terminov 2002, 254). In its contemporary context, the term is strongly associated with kompromat wars—intrigues exercised through the release of often unsubstantiated or unproven information (documents,...

  9. Chapter Four Krugovaia Poruka: Sustaining the Ties of Joint Responsibility
    (pp. 91-114)

    Various dictionaries translate krugovaia poruka into English as “solidarity,” “surety,” “collective responsibility,” “circular control,” or “cover-up.” Krugovaia poruka describes a situation in which all the members of a particular group or circle are held jointly responsible for the actions and obligations of its individual members, and each individual member in turn can be held responsible for the actions and obligations of the group as a whole. Under the conditions of krugovaia poruka, the lives and fates of the members of a group are inextricably linked: if one member of the group is harmed, falls victim to misfortune, or is for...

  10. Chapter Five Tenevoi Barter: Shadow Barter, Barter Chains, and Nonmonetary Markets
    (pp. 115-141)

    While the previous chapters have explored why the Russian political order might be not as much of a democracy as its leaders have declared, this chapter presents the case of the market along similar lines. As one of the players in the economy in the 1990s put it, “A few people know how the system operates. Those who are successful know but do not tell . . .” [3.16]. In what follows I explore the informal workings of the post-Soviet economy with help from my respondents, all experienced and successful players. I identify the informal practices that compensate for defects...

  11. Chapter Six Dvoinaia Bukhgalteriia: Double Accountancy and Financial Scheming
    (pp. 142-163)

    Few claim to understand fully either the origins of the August 1998 financial crisis in Russia or the postcrisis recovery. Post-1998 analyses suggest that reforms did not work as expected because the institutional environment required of a market democracy was not in place. This in turn was explained by sociohistorical and cultural factors responsible for the lack of civil society, civic responsibility, and business ethics. As the Economist put it in 1999, a healthy banking system requires

    honest administrators backed by determined politicians, a legal system in which loans make sense and a financial climate in which people want to...

  12. Chapter Seven Post-Soviet Tolkachi: Alternative Enforcement and the Use of Law
    (pp. 164-188)

    Before analyzing informal practices in the domain of enforcement, I would like to offer insight into the environment of the mid-1990s—the early days of democracy and the market—in which criminal groups played a significant role, alongside emerging private security services and reformed law enforcement institutions. It is difficult to explain the complexity of this emerging system in the span of a chapter, but it is possible to convey the atmosphere with the help of an eyewitness who has been on “the barricades” of the market and who is frank about what it meant at the time.

    Tatiana is...

  13. Conclusion
    (pp. 189-196)

    In this book, I offer an interdisciplinary alternative to the mainstream accounts of post-Soviet Russian politics and the economy, focusing specifically on the nature and implications of informal practices. The book builds upon my previous book, Russia’s Economy of Favours, moving the discussion into the post-Soviet period and accounting for a wider set of economic and political practices. With blat having lost its central significance, other informal practices have gained prominence in the context of market and democratic reforms. The reforms of the Soviet system have resulted in the spread of black and gray PR and krugovaia poruka in elections,...

  14. Appendix 1. Pravda versus Istina
    (pp. 197-198)
  15. Appendix 2. Profile of the Leading National Media Outlets in the 1990s
    (pp. 199-201)
  16. Appendix 3. “Bound by One Chain”
    (pp. 202-203)
  17. Appendix 4. List of Legal Documents Related to Barter Transactions in the Russian Federation, 1990–1997
    (pp. 204-205)
  18. Appendix 5. List of Respondents
    (pp. 206-207)
  19. Appendix 6. List of Questions
    (pp. 208-212)
  20. Notes
    (pp. 213-236)
  21. Glossary
    (pp. 237-240)
  22. Bibliography
    (pp. 241-262)
  23. Index
    (pp. 263-270)