Who Really Runs Russia?

How the country's informal power networks undermine formal institutions.
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Russian President Vladimir Putin (center) chairs a meeting of the new cabinet team in Moscow's Kremlin on May 21, 2012. (Reuters)

In her 2006 book "How Russia Really Works" and its sequel "Can Russia Modernize?" political scientist Alena Ledeneva of University College London looks at the informal governing system that characterizes Vladimir Putin's Russia.

Robert Coalson spoke with Ledeneva about how this method of governance works and what it means for Russia's development.

In your books you describe Russia as governed by informal rules you call "sistema." What does this term mean?

Alena Ledeneva: I picked on the term "sistema" (meaning "system" in Russian) because it was the third most-used word in Russia when they did a content analysis of elite interviews. It turned out sistema is a very commonly used word.

I went to meet with President [Vladimir] Putin in 2005 as part of the Valdai Discussion Club and there was an opportunity for everyone to ask a question. And I asked a question about corruption. I asked whether he could tell us about his anticorruption business plan against corruption in the Kremlin. And he smiled and said there is no corruption in the Kremlin and why should there be when the budget is distributed elsewhere.
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And then he was detailed in his answer and he said an interesting thing. He said, "You know, it is no good to punish people individually. You need a whole change of sistema in order to get rid of corruption."

And that is where I picked it up and I thought it was fascinating to learn what that sistema actually is. And when I started to study, I realized it is a very elusive term. It is a shorthand term for a system of governance that usually refers to things that are not to be named. It is like the open secrets of governance. That's where we talk about "the sistema way of doing things" or "sistema pressure" on people. We never explicitly refer to what they are, but we assume we all understand what we are talking about.

Can you tell us more specifically how the term applies in Putin's Russia?

Ledeneva: I call it in the book "methods of informal governance." It is a situation when institutions do not work and the leadership has to do something. And what they do then, they use things that do work in that region: networks, relationships, informal power, informal negotiations, and bargaining. That's what works. And that is exactly what's been used as these forms of informal governance to achieve targets that otherwise could have been achieved through formal channels, but those do not work.

So, Putin always steps in and personally makes sure there is a Sochi Olympic village that is built on time. If he needs to get something, he puts his best friend in charge. He always makes sure he uses reliable people in different positions. And that is a kind of -- [as] I call it in the book - "the modernization trap." Because you do use informal networks to get things done and you think you are pursuing the targets of modernization through the use of the tools which seem to you, as a leader, effective. But you cannot escape the long-term consequences.

Those informal-governance instruments actually come back and hit you by undermining the workings of formal institutions, which remain weak [and] unoperational. And you then suck yourself into the whirl of informality that is very much personalized and cannot be used in a controlled way.

Checks and balances become a problem, although they exist in informal governance as well. But it is that the scale of it is really not manageable, and that is a danger. That's what I call "the modernization trap" of informality. That you do use the potential of informal networks, but you cannot escape from the long-term detrimental consequences.

If this leads to the "modernization trap," isn't it a dead end? Where is the attraction of sistema?

Ledeneva: In the book, I call that "the ambivalence of sistema." In the sense that sistema is not something very simple. It is an outcome of complex, anonymous, unpredictable, seemingly irrational forces. But it also glues society together. It distributes resources. It mobilizes people. It contributes to stability in people's minds. It ensures its own reproduction.

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