Putin in 2012: Guest Commentary

We are pleased to welcome back Sam Greene of New Economic School with the following comments regarding Vladimir Putin’s decision yesterday to “accept” current Russian president Dmitri Medvedev’s invitation to run for president again in 2012.

Ok, so I was wrong.

I was, I think, the last analyst left in Moscow who actually thought that Dmitri Medvedev would stay on as president of Russia after next year’s elections. My argument – and it was thin, to be sure – was that Russia is governed by a regime that is highly risk averse, favors the status quo and, thus, isn’t eager to fix what ain’t broke. And the current setup was working, more or less: those who liked Vladimir Putin knew he was really the man in charge, but those who didn’t (like Barack Obama, for example) could fool themselves into believing that Medvedev mattered.

Well, as it turns out, Russia’s rulers have no interest in making me look smart. At the United Russia party conference, Medvedev nominated Putin as the ruling party’s presidential candidate, and Putin returned the favor by saying that Medvedev could head the party list heading into December’s parliamentary elections and then be prime minister. I always thought that musical chairs was only fun if you had more than two players, but I guess I was wrong about that, too.

I don’t think that I was wrong about the underlying analysis, though. Russia is a highly deinstitutionalized political system, and Putin’s switch in 2008 from being president to prime minister while remaining the most powerful man in the country only underscores that fact: power derives not from office or constitutional enfranchisement but from informal relationships of trust, leverage and fealty. That’s a formula that has worked for authoritarian regimes around the world, but in Russia – supported by the cushion of unaccountability provided by natural resources and the anomie of post-Soviet transition – deinstitutionalization has reached particular heights.

When your power is based on your ability to balance, rather than on more sturdy foundations, the risks are high. True, the flexibility such a situation provides can allow for tremendous personal enrichment (or could simply make you feel really macho, something Putin seems to enjoy). But there is no backstop once the trust, leverage and fealty evaporate, as can happen remarkably quickly. Putin is no doubt aware of these risks, which is why he goes to such great lengths to ensure that there is no viable opposition, and why he worries about even minor dips in his approval ratings. (Trust in the prime minister currently stands at 57.2%, low for Putin, even if Obama, Cameron, Merkel, Sarkozy and just about any other Western leader would kill for numbers like those.)

So why did Putin decide to up-end the status quo and return to the Kremlin? (I’m guessing it’s not because Medvedev asked nicely.) The simplest explanation is that he had always planned on coming back, stepping aside for four years only as a nod to constitutional legitimacy. Now, he can legally serve for two more consecutive terms, which in the interim have conveniently been lengthened to six years each. It’s hard to pass up the prospect of another 12 years as president.

But another possible explanation is that his evaluation of the risks – and, in particular, of the degree to which Russians of almost all socio-economic strata are fed up with corruption, a stagnant economy and do-nothing politicians – has him looking at institutions as a safety mechanism. The president, after all, is commander-in-chief, and while there was never any doubt that the army and security services were more interested in Prime Minister Putin’s orders than those of President Medvedev, it may be best not to wait until push comes to shove to figure out how much formal lines of control really matter.

But institutionalization also carries its own risks. The last three and a half years have allowed the regime to have it both ways, garnering the support of those in the political and economic elite who liked the old guard and those who wanted a new approach, by allowing them to choose between Putin and Medvedev. The permanence of Putin, then, cannot help but have a chilling effect. Indeed, Arkady Dvorkovich, one of Russia’s most liberal policymakers and a long-time economic adviser to Medvedev, tweeted his dismay immediately after the announcement was made and may be headed for the door. He will certainly not be the only one.

The question, of course, is whether dissatisfied members of the elite choose to speak out or ship out (i.e., Hirschman’s ‘exit and voice’ dichotomy, the ‘loyalty’ option being beside the point in this context). Having seen what happens to those who dissent, most will probably be pricing property in Europe (if they don’t already have it). But an exodus can be as destabilizing for the regime as an uprising, sapping the government and the economy of expertise, decreasing overall morale and spooking foreign investors.

In other words, despite what looks like more of the same in Russian politics, things may finally be beginning to get interesting. Leave it to Russia to turn the old saying on its head: the more things stay the same, the more they change.

2 Responses to Putin in 2012: Guest Commentary

  1. David September 25, 2011 at 11:27 am #

    Josh, you don’t watch enough WWF wrestling to recognize a tag team when you see one.

  2. Scott Monje September 25, 2011 at 2:01 pm #

    The key to musical chairs is having more players than chairs. Two players would be interesting enough if there were only one chair. In this case, once Putin and Medvedev switch back, it will be interesting to see if Putin eventually dumps Medvedev just to show that there’s really only one boss and everyone else is dispensable.

    There were very rare occasions when institutions mattered in the Soviet Union, primarily when the top was divided and the second echelon couldn’t be sure who the real boss was. The instance that comes immediately to mind is 1957, when the Anti-Party Group (named, of course, after the fact and by the other side) turned on Khrushchev and he refused to step down. The Central Committee, facing a divided Politburo, found itself in the unusual–and, no doubt, uncomfortable–position of having to decide who was in charge, a power it had always had on paper. For better or worse, Putin and Medvedev managed to create the appearance (or the reality) of different policy preferences without ever losing their overall united front. One might have expected a major global financial crisis to be the acid test for such a relationship. When things go really wrong, who does a president blame? Either his predecessor or his prime minister, and they were both the same guy. Putin’s power, of course, was based on “who he was,” not what office he held, but the strength of “who he was” was based on his past association with stability and an improving economy. So an economic crisis that really undermined social stability would have been the time for Medvedev to strike if he was ever going to. However, thanks to a plump sovereign wealth fund and quickly recovering oil prices, that moment never really came, so I guess we’ll never know.

    Regarding Hirschman, loyalty was always an exogenous factor influencing the choice between exit and voice. The more loyal you are to the institution, the more likely you are to select voice over exit. In the example you give here, however, maybe the question should be whether the institution is loyal to the dissenters. Those opting for exit by moving to Europe, if they are doing so out of fear, presumably don’t think so.