Politics versus Policy: Technocratic Traps of Post-Soviet Reforms Vladimir Gel’man (European University at St.Petersburg / University of Helsinki) PONARS Annual Conference, George Washington University, September 14, 2017

Technocratic Traps of Post-Soviet Reforms

Technocratic Traps of Post-Soviet Reforms “The main question of every evolution is constraining political power: how to provide competent decision-making, which will depend upon knowledge and experience but not upon voting results, and how to achieve a “regime of non-interference” of politics in other spheres of public life” (Ulyukaev, 1995: 8). Many (if not most) of policy experts in Russia and beyond would endorse Ulyukaev’s statement – they would like to exclude or, at least, limit the influence of politics on policy-making; a “regime of non-interference” – technocratic model of governance as opposed to political model

Technocratic Traps of Post-Soviet Reforms Most of policy reforms in global history were technocratic by their nature (political model of governance is a relatively recent phenomenon); But in the modern world technocratic policy reforms rarely bring major breakthrough successes (some exceptions more or less prove the rule, especially in authoritarian political context); The promotion of technocratic model was driven by the Cold War due to political stances of international organizations (such as the World Bank) and powerful intellectuals (Easterly 2014); But how technocratic model really works in Russia and post-Soviet Eurasia? Why policy outcomes are so controversial and why technocratic reforms works in some countries / policy areas but not in others?

Technocratic Traps of Post-Soviet Reforms Argument in brief: Rent-seeking nature of governance inhibited technocratic policy changes due to resistance and/or distortions by bureaucracy and/or interest groups as formal and informal veto players; Limited opportunities for building of ”broad” pro-reform policy coalitions of various actors; The major source of policy reforms is their priority support by political leaders – this support is unsustainable and by definition related only to a limited number of policy directions

Technocratic Traps of Post-Soviet Reforms Why political leaders need technocratic reformers? Response to domestic and international challenges – they forced to hire well-qualified experts in economic policy and state governance (technocrats are similar to crisis managers in companies); Political leaders gave certain autonomy to technocrats, able to insulate some of their policies from influence of public opinion and interest groups, and keep monopoly on decision-making and policy evaluation; technocrats remains indispensable because of needs of political leaders in fool-proofing (especially in financial, tax, and banking policy areas) BUT! – principal-agent problems are inevitable (leaders are now always able to evaluate policy outcomes properly)

Technocratic Traps of Post-Soviet Reforms Resistance to policy reforms from the state bureaucracy and interest groups of rent seekers (effects of ”state capture from within”); Political isolation of technocrats – fragile ”narrow” coalitions for policy reforms, which may bring unexpected and unpredictable outcomes; ”Technocratic trap” – the role of technocrats in policy-making diminished over time but they can’t change major ”rules of the game”, and policy programs implemented partially and became less meaningful – the cases of Russian policy programs ”Strategy 2010” and ”Strategy 2020”

Technocratic Traps of Post-Soviet Reforms Dependency from ”regime cycles” – political leaders and technocrats prioritize those policy changes, which may bring quick returns at the expense of long-term developmental plans (the case of tax vs. pension reforms in Russia in the 2000s); Weakness of state apparatus – lack of control of policy reformers and poor coordination of various agencies (why financial policy is better coordinated than social policies); Privatization of gains and socialization of losses as an effect of dis-balance among interest groups and increasing influence of rent-seekers; The spiral of overregulation as a side effect of struggle of policy reformers against resistance of state bureaucracy;

Technocratic Traps of Post-Soviet Reforms Support of technocratic reforms – a necessary yet insufficient condition: Risks of revisions of policy priorities of political leaders (or of leaders themselves): ”modernization” program in Russia after Medvedev, turn from economic development to geopolitics in Russia after the annexation of Crimea; Powerful interest groups may turn down programs of policy reforms despite the good will of political leaders (the case of police reforms in Russia); … and policy reforms as such may went too far and cause certain challenges to political leaders in terms of their survival in power struggle (”saturation” effect) …

Technocratic Traps of Post-Soviet Reforms The case of Ulyukaev – accusation in bribery, resignation and home arrest (November 2016), now criminal case in the court; Privatization of stakes of Bashneft – ”decision-making… depend upon knowledge and experience but not upon voting results” (exactly as Ulyukaev suggests in 1995); … but the knowledge and expertise of rent-seekers were much more important for decision-making than knowledge and expertise of Ulyukaev and other Russian technocrats… Is technocratic medicine worse than the decease?

Technocratic Traps of Post-Soviet Reforms Thanks for your questions and comments! (vgelman@eu.spb.ru)