Clinton and Yeltsin, 1995
To cite this work: Katy Ling. (2019). “Was the growth of corruption in Russian after 1991 really unavoidable?”, katyling.com
P.S - Please don't plagiarise this essay... Turnitin will flag it if you do!
Was the growth of corruption in Russian after 1991 really unavoidable?
Shlapentokh’s claim that “the growth of corruption in Russia after 1991 was probably unavoidable” implies the inevitability of Russia’s rapid increase in corruption levels after the dissolution of the Soviet Union. A rise in corruption in the short-term was probably unavoidable, owing to Soviet-era structures meeting transition-era market and political reforms. However, what could have been avoided was the massive scale of corruption and its permanence in Russia. The mismanagement and lack of planning during the post-Soviet transition led to the entrenched high-level corruption in Russia today. To evaluate Shlapentokh’s claim, what is meant by corruption, and the levels on which it operates will first be unpacked. Next, Soviet legacies’ influence on Russian corruption is examined to find that immediate increases probably were unavoidable when met with the political and economic confusion during transition. Next, Russian society’s predisposition to and historical experience with corruption is assessed to find that Russia has a higher tolerance of corrupt activities which also contributed to its growth in 1991. Finally, the west’s role in the increase in corruption is explored, particularly the US state’s influence in the 1996 Russian election and the role of foreign businesses in post-Soviet Russia. Ultimately, the growth of corruption in Russia after 1991 was probably unavoidable. However, a myriad of factors have exacerbated corruption levels in Russia, and the extent of corruption to present day levels was preventable.
Corruption can most generally be defined as the abuse of power for personal gain. It can come in many forms, including bribery, extortion, fraud, embezzlement and nepotism and exist on various levels from government to local and everything in between. The commonality between these levels lies in “having a monopoly on power that provides even a modicum of control over “others” and gives the holder the ability to extract additional benefits, or “rent””.[1] The clandestine nature of corruption makes it difficult to measure and impossible to do so with complete accuracy. However, measures from organisations such as Transparency International, although not perfect, offer some indication of corruption levels and there is no doubt that corruption in Russia grew massively after the dissolution of the Soviet Union in 1991.
The growth of corruption in Russia after 1991 can be seen in the context of the new opportunities available to corrupt individuals and groups after the collapse of the Soviet Union. Political-economy scholars have noted that opportunities and constraints act as basic determinants on levels of corruption.[2] After the collapse of the Soviet Union, pervasive political and economic confusion in Russia provided a conducive environment for organised crime and corruption to flourish. Under Gorbachev, perestroika worsened the already stagnant Russian economy and led to rapid inflation and goods shortages. These problems continued into the 1990s and were exacerbated by the lack of plan or consensus in transforming the Soviet command economy into a market-based one. Other economic aggravators included a confusing tax system which resulted in every person becoming an infringer, mixed property ownership and the general weakness of the financial system based on haggling.[3] The destitute economy that the newly independent state inherited in 1991 was not easy to fix and left a power and legal vacuum for opportunistic individuals to fill. A feudalistic order emerged as an oligarchical class filled this vacuum.[4] Therefore, prime conditions in the Russian economy in 1991 created vast opportunity for corruption and in this sense its growth was unavoidable.
Further to this, the growth of corruption in Russia can be seen as the direct consequence of Soviet legacies. Indeed, Obydenkova and Libman found that stronger CPSU legacies – regions that had large CPSU membership – are associated with both higher approval of and higher demand for corruption.[5] The communist-era practice of clientelism persisted in independent Russia, bred from the existing networks of the nomenklatura.[6] The complex system of relationships between law-enforcement, government and the judiciary became “embedded in the social fabric” during the final decade of the Soviet Union and under the policy of the “continuity of professionalism” many officials retained high positions.[7] For example, the process of privatisation was devised and manged by officials from the former regime, many whom had recognised the opportunity for personal enrichment earlier in 1989-90 when they began to take control of private property.[8] Thus, corruption was an integral component of Soviet society, economy and politics, yet it typically had a non-monetary character and consisted of using personal contacts to access state-controlled goods and privileges in short-supply.[9] Upon the shift to a market-economy, real material and economic gains were to be made from corrupt practices. Therefore, the Soviet legacy of institutionalised corruption married with the massive increase in rent from illegal transactions can explain why corruption grew at such a rate.
Furthermore, civil society was weak in post-Soviet Russia largely due to the lack of distinction between society and state which supressed individuals’ ability to organise into groups and advance their interests. Despite attempts at societal reform under Gorbachev, in 1991 Russian civil society was largely underdeveloped and hindered by the economic crisis. Institutional economists have emphasised how strong civil society organisations are a core component in combatting corruption through their role as a watchdog and in raising public awareness of corrupt activity.[10] Additionally, civil society has been mired by the lack of independent media in Russia which the Soviet-trained leaders saw as a threat and continued to repress after independence. That being so, Soviet legacies and inherited practices suppressed any bottom-up controls on official corruption, letting it carry over into the newly independent state and in this way can be seen as unavoidable.
Moreover, the high levels of corruption in post-Soviet regimes to this day do indicate some level of a Soviet legacy in the region’s corruption. However, some former Soviet states have successfully reduced levels of corruption. Georgia, whilst highly corrupt during the Soviet era and in the decade after its collapse, has achieved remarkable improvement in its levels of corruption since 2003.[11] There were a number of reasons for this, such as strong political will, limiting the role of the state and an executive branch with new, non-Soviet leaders.[12] Whilst a myriad of factors separate Russia and Georgia’s circumstances, Georgia acts as an example that not every country is bound by their past and that corruption in the long-term was avoidable.
A common argument to explain, and at times defend, the high levels of corruption in Russia is that Russian society has a cultural predisposition to corruption, rooted in the country’s history. The historical roots of corruption can be traced back to long before the Bolshevik Revolution, and as such its pervasive and enduring nature in Russian society have awarded corruption normative value. Suhara draws on the concept of ‘legal nihilism’, a general distrust of the law and apathy towards its value as well as a unique moral consciousness to explain the Russian population’s acquiescence to corruption.[13] In this sense, as the opportunity for increased corruption presented itself in 1991, the relative tolerance from society allowed its rapid growth throughout the decade. However, to determine Russia as culturally predisposed to corruption removes the accountability of the individuals and organisations involved in corrupt activities. Moreover, it implies that any top-down efforts to combat corruption would be futile and that a grass-roots change in attitudes is needed.[14] On the contrary, research into corruption has shown that strong political will from state authorities is key to changing a society’s attitude to corruption (as can be seen in Georgia in the early 2000s).[15] Nevertheless, such cultural orientations change slowly, and lag behind regime change, especially that as abrupt as the Soviet Union’s.[16] Therefore, no immediate change occurred in attitudes to corruption and its practice on a local level which supports the argument that corruption in post-Soviet Russia was unavoidable in the short-term.
A factor often overlooked in the literature on post-Soviet corruption, is the role that Western governments, in particular the US’, played in facilitating it. After the dissolution of the Soviet Union, the global narrative immediately focused on the region’s transition to democracy and a free market. There was a political and theoretical assumption in the west that democratisation was inevitable; this shaped assistance programmes and general policy towards Russia and former Soviet states throughout the 1990s. There was pressure from multilateral institutions, such as the IMF, to demonstrate a move towards privatisation before financial support would be given, meaning that any independent regulatory, legal and judicial frameworks were not established in Russia.[17] Russia’s rapid privatisation was supported by the US, who sent technical consultants and aid: by March 1996, the US had given $3.5 billion in cumulative obligations to Russia.[18] However, the majority of this money went to fund a select group of high-up officials and not the Russian state as intended. The ‘Chubais Clan’, who styled themselves as economic reformers, controlled US aid through a variety of organisations set up to perform Russia’s economic restructuring.[19] US support for Chubais and his close circle “bolstered…the clan’s standing” both domestically and internationally, making them “favourites of the IMF” and giving them access to loans from the World Bank.[20] In reality, the ‘reformers’ were highly corrupt individuals who pocketed vast amounts of money for their personal gain and contributed heavily to the economic crisis in the late 1990s. In this way, US ‘assistance’ to Russia throughout the 1990s created the space for a group of powerful oligarchs to emerge who not only misdirected the funding for reform, but who undermined any democratic move to a free-market. In the immediate post-Cold War world order, the US had the international standing to better control their aid money and insist upon rigorous checks and safeguards for its use. Therefore, mismanagement of economic aid in the 1990s fed the growing culture of corruption in Russia. Although it is impossible to say with certainty, a better appropriation of funds to Russia during this time could have curtailed the high-levels of corruption.
Further to this, in terms of business adventurism into Russia after 1991, the US government did little to check the legitimacy of the emerging commercial relationships. The opening up of the Soviet economic space presented abundant opportunity to eager businesses and individuals in the west. However, doing business in post-Soviet Russia during the 1990s involved a number of extra-judicial requirements . For example, in 1996 an estimated 20 percent of all foreigners doing business in St Petersburg paid “protection money” to the Mafiya.[21] It became “well-known that bribing government officials” was a condition for US businesses operating in Russia,[22] a fact which surely did not escape the US authorities’ notice. Nevertheless, by 1996, the Foreign Corrupt Practices Act (FCPA) – a law prohibiting US businessmen from bribing foreign officials – had not brought any cases against US businesses in Russia.[23] As US businesses were allowed to continue cooperating in the corrupt practices required for working in Russia, these practices became normalised and accepted.
Another instance of Western influence in Russia’s post-1991 corruption surrounds the 1996 re-election of Boris Yeltsin. Despite Bill Clinton’s complicated relationship with his Russian counterpart, Yeltsin’s re-election was desirable over the possibility of his main opponent, Gennady Zyuganov. Along with nuclear proliferation, the American administration greatly feared a reversion to communism in Russia, and Zyuganov was framed as just that. It is widely accepted that the US helped Yeltsin win the election in 1996, with some commentators labelling US assistance as outright collusion.[24] Clinton’s timely endorsement of the IMF’s $10 billion loan to Russia just a few months before the election was perhaps instrumental in securing Yeltsin’s victory, improving his approval ratings by paying off long-overdue salaries.[25] Further, it has also been suggested that parts of the loan went to oligarchs and the presidential team, with revelations in 1999 that the money had been laundered through offshore accounts, which the IMF knew about.[26] Whether unpacking the technical details or not, it is clear that the US and western support for Yeltsin certainly boosted his chance of re-election, making for a remarkable comeback of an incumbent with popular approval in the single digits.[27]
Yeltsin’s re-election had been built upon the foundations of corruption and so it is not surprising that his second term saw the scale of corruption in Russia grow. Yeltsin’s support from oligarchs saw millions, or even billions, of dollars go into his campaign of which the Clinton administration “turned a blind eye.[28] This served to fortify the position of the oligarchs amongst the Russian political elite and create a situation in the late 1990s where even the US government was not entirely sure who held political power in Russia. For instance, by the time of Yeltsin’s resignation in 1999, ten percent of Russia’s population owned half of the country’s wealth.[29] Strobe Talbot insists that “Clinton worked tirelessly with Yeltsin for seven years to assist his reforms” and provide both “Western aid and encouragement”.[30] Well-meaning intentions aside, Clinton and the US government’s failure to effectively check where their aid money was going, and their negligence in ensuring a fair election in 1996 meant the US acted as an abettor in Russia’s corruption. By not immediately trying to tackle Russian corruption, it became increasingly normalised in society and “the rules of corruption among bureaucrats, businesspeople and ordinary Russians have become more explicit and better orchestrated”.[31] Whilst different US foreign policy would not likely have changed the aforementioned root causes of corruption, such as culture, it can be said with a high certainty that US actions did not help curb Russian corruption in the 1990s.
Overall, the growth of corruption in Russia after 1991 was probably unavoidable in the short-term. The introduction of neoliberalist economic principles and access to the globalised market created new opportunities for corruption and meant existing practices began to proliferate. Soviet legacies were carried forward by the old nomenklatura yet without the same strong authoritarian state, a feudal order emerged.[32] Nevertheless, the massive scale of corruption in Russia was avoidable. The mismanagement of the post-communist transition opened up the state to exploitation and organised crime. Western governments and multilateral institutions aggravated the situation and in many ways contributed to the growth of corruption. Therefore, whilst an initial increase in corruption was largely unavoidable, the present-day levels of corruption in Russia and the extent of its growth were not inevitable.
References
[1] Vladimir Shlapentokh, "Corruption, The Power Of State And Big Business In Soviet And Post-Soviet Regimes", Communist And Post-Communist Studies 46, no. 1 (2013): 147
[2] Susan Rose-Ackerman, Corruption: A Study in Political Economy (New York: Academic Press, 1978); Robert Klitgaard, Controlling Corruption (Berkeley: University of California Press, 1988)
[3] Serguei Cheloukhine and M. R. Haberfeld, Russian organized corruption networks and their international trajectories. (New York: Springer, 2014) p. 61.
[4] Shlapentokh, “Corruption” (2013) p. 152
[5] Anastassia Obydenkova and Alexander Libman, "Understanding The Survival Of Post-Communist Corruption In Contemporary Russia: The Influence Of Historical Legacies", Post-Soviet Affairs 31, no. 4 (2014) p. 324.
[6]Ibid., p. 310.
[7] Cheloukhine and Haberfeld, Organized corruption, p. 67.
[8] Wayne Sandholtz and Rein Taagepera, "Corruption, Culture, And Communism", International Review Of Sociology 15, no. 1 (2005) p. 110; Vladimir Shlapentokh, Contemporary Russia As A Feudal Society (New York: Palgrave Macmillan, 2016) p. 63.
[9] Alexandra Kalinina, "Corruption In Russia As A Business", Institute Of Modern Russia (2013) https://imrussia.org/en/society/376-corruption-in-russia-as-a-business.
[10] Ben Wheatland, “The UN Convention against Corruption and the role of civil society”, U4 Anticorruption Centre (2016) https://www.u4.no/publications/the-un-convention-against-corruption-and-the-role-of-civil-society.pdf
[11] The World Bank, Fighting Corruption in Public Services Chronicling Georgia’s Reforms (Washington DC: The World Bank, 2012)
[12] Ibid., p. 10.
[13] Manabu Suhara “Corruption in Russia: A Historical Perspective”, Slavic Research Center (2004) p. 388
[14] Shlapentokh, “Corruption” (2013) p. 149.
[15] Luminta Ionescu, “Contemporary economic crime and corruption in Russia. Management, and Financial Markets, 6 no. 2 (2011)
[16] Sandholz and Taagepera, "Corruption, Culture”, p. 110.
[17] M. Celarier, “Privatization: A Case Study in Corruption”, Journal of International Affairs, 50 no. 2 (1997), pp. 531-532
[18] Janine Wedel, “U.S. Assistance for Market Reforms: Foreign Aid Failures in Russia and the Former Soviet Bloc”, The Independent Review, 4, no. 13 (2000), p. 393.
[19] Janine R Wedel, Collision And Collusion (New York: St. Martin's Press, 2001).
[20] Wedel, “US assistance”, p. 400
[21] Scott Boylan, “Organized Crime and Corruption In Russia: Implications For The United States And International Law”, Proceedings of the ASIL Annual Meeting, 90 (1996), p. 91.
[22] Ibid. p. 92
[23] Ibid., p. 92
[24]Wedel, Collusion.
[25] Alexander Lukin, "How The United States Got Russia Wrong", The National Interest (2019) https://nationalinterest.org/feature/how-united-states-got-russia-wrong-42977.
[26] Simon Pirani and Paul Farrelly “IMF knew about Russian aid scam” The Guardian (2019). https://www.theguardian.com/world/1999/oct/17/russia.business (2019)
[27] Erik Depoy, “Boris Yeltsin and the 1996 Russian Presidential Election”, Presidential Studies Quarterly, 26 no. 4 (1996) p. 1148.
[28]Lukin, "How The United States" (2019); Sean Guillory, "Dermokratiya, USA". Jacobinmag.Com (2019) https://www.jacobinmag.com/2017/03/russia-us-clinton-boris-yeltsin-elections-interference-trump/.
[29] Julia Pettengill, “Russian corruption: Domestic and international consequences”, The Henry Jackson Society (2013) http://henryjacksonsociety.org/wp-content/uploads/2013/04/HJS-Russian-corruption-Report_Low-Res-Final-A5-4-Apr-2013.pdf p. 14
[30] Michael Kruse, "It’s Already Collusion", POLITICO Magazine (2019) https://www.politico.com/magazine/story/2019/01/13/trump-russia-collusion-putin-223973.
[31] Vladimir Shlapentokh, "Russia’s Acquiescence To Corruption Makes The State Machine Inept", Communist And Post-Communist Studies 36, no. 2 (2003) p. 52.
[32] Shlapentokh, “Corruption” (2013) p. 152.
P.S - Please don't plagiarise this essay... Turnitin will flag it if you do!
Was the growth of corruption in Russian after 1991 really unavoidable?
Shlapentokh’s claim that “the growth of corruption in Russia after 1991 was probably unavoidable” implies the inevitability of Russia’s rapid increase in corruption levels after the dissolution of the Soviet Union. A rise in corruption in the short-term was probably unavoidable, owing to Soviet-era structures meeting transition-era market and political reforms. However, what could have been avoided was the massive scale of corruption and its permanence in Russia. The mismanagement and lack of planning during the post-Soviet transition led to the entrenched high-level corruption in Russia today. To evaluate Shlapentokh’s claim, what is meant by corruption, and the levels on which it operates will first be unpacked. Next, Soviet legacies’ influence on Russian corruption is examined to find that immediate increases probably were unavoidable when met with the political and economic confusion during transition. Next, Russian society’s predisposition to and historical experience with corruption is assessed to find that Russia has a higher tolerance of corrupt activities which also contributed to its growth in 1991. Finally, the west’s role in the increase in corruption is explored, particularly the US state’s influence in the 1996 Russian election and the role of foreign businesses in post-Soviet Russia. Ultimately, the growth of corruption in Russia after 1991 was probably unavoidable. However, a myriad of factors have exacerbated corruption levels in Russia, and the extent of corruption to present day levels was preventable.
Corruption can most generally be defined as the abuse of power for personal gain. It can come in many forms, including bribery, extortion, fraud, embezzlement and nepotism and exist on various levels from government to local and everything in between. The commonality between these levels lies in “having a monopoly on power that provides even a modicum of control over “others” and gives the holder the ability to extract additional benefits, or “rent””.[1] The clandestine nature of corruption makes it difficult to measure and impossible to do so with complete accuracy. However, measures from organisations such as Transparency International, although not perfect, offer some indication of corruption levels and there is no doubt that corruption in Russia grew massively after the dissolution of the Soviet Union in 1991.
The growth of corruption in Russia after 1991 can be seen in the context of the new opportunities available to corrupt individuals and groups after the collapse of the Soviet Union. Political-economy scholars have noted that opportunities and constraints act as basic determinants on levels of corruption.[2] After the collapse of the Soviet Union, pervasive political and economic confusion in Russia provided a conducive environment for organised crime and corruption to flourish. Under Gorbachev, perestroika worsened the already stagnant Russian economy and led to rapid inflation and goods shortages. These problems continued into the 1990s and were exacerbated by the lack of plan or consensus in transforming the Soviet command economy into a market-based one. Other economic aggravators included a confusing tax system which resulted in every person becoming an infringer, mixed property ownership and the general weakness of the financial system based on haggling.[3] The destitute economy that the newly independent state inherited in 1991 was not easy to fix and left a power and legal vacuum for opportunistic individuals to fill. A feudalistic order emerged as an oligarchical class filled this vacuum.[4] Therefore, prime conditions in the Russian economy in 1991 created vast opportunity for corruption and in this sense its growth was unavoidable.
Further to this, the growth of corruption in Russia can be seen as the direct consequence of Soviet legacies. Indeed, Obydenkova and Libman found that stronger CPSU legacies – regions that had large CPSU membership – are associated with both higher approval of and higher demand for corruption.[5] The communist-era practice of clientelism persisted in independent Russia, bred from the existing networks of the nomenklatura.[6] The complex system of relationships between law-enforcement, government and the judiciary became “embedded in the social fabric” during the final decade of the Soviet Union and under the policy of the “continuity of professionalism” many officials retained high positions.[7] For example, the process of privatisation was devised and manged by officials from the former regime, many whom had recognised the opportunity for personal enrichment earlier in 1989-90 when they began to take control of private property.[8] Thus, corruption was an integral component of Soviet society, economy and politics, yet it typically had a non-monetary character and consisted of using personal contacts to access state-controlled goods and privileges in short-supply.[9] Upon the shift to a market-economy, real material and economic gains were to be made from corrupt practices. Therefore, the Soviet legacy of institutionalised corruption married with the massive increase in rent from illegal transactions can explain why corruption grew at such a rate.
Furthermore, civil society was weak in post-Soviet Russia largely due to the lack of distinction between society and state which supressed individuals’ ability to organise into groups and advance their interests. Despite attempts at societal reform under Gorbachev, in 1991 Russian civil society was largely underdeveloped and hindered by the economic crisis. Institutional economists have emphasised how strong civil society organisations are a core component in combatting corruption through their role as a watchdog and in raising public awareness of corrupt activity.[10] Additionally, civil society has been mired by the lack of independent media in Russia which the Soviet-trained leaders saw as a threat and continued to repress after independence. That being so, Soviet legacies and inherited practices suppressed any bottom-up controls on official corruption, letting it carry over into the newly independent state and in this way can be seen as unavoidable.
Moreover, the high levels of corruption in post-Soviet regimes to this day do indicate some level of a Soviet legacy in the region’s corruption. However, some former Soviet states have successfully reduced levels of corruption. Georgia, whilst highly corrupt during the Soviet era and in the decade after its collapse, has achieved remarkable improvement in its levels of corruption since 2003.[11] There were a number of reasons for this, such as strong political will, limiting the role of the state and an executive branch with new, non-Soviet leaders.[12] Whilst a myriad of factors separate Russia and Georgia’s circumstances, Georgia acts as an example that not every country is bound by their past and that corruption in the long-term was avoidable.
A common argument to explain, and at times defend, the high levels of corruption in Russia is that Russian society has a cultural predisposition to corruption, rooted in the country’s history. The historical roots of corruption can be traced back to long before the Bolshevik Revolution, and as such its pervasive and enduring nature in Russian society have awarded corruption normative value. Suhara draws on the concept of ‘legal nihilism’, a general distrust of the law and apathy towards its value as well as a unique moral consciousness to explain the Russian population’s acquiescence to corruption.[13] In this sense, as the opportunity for increased corruption presented itself in 1991, the relative tolerance from society allowed its rapid growth throughout the decade. However, to determine Russia as culturally predisposed to corruption removes the accountability of the individuals and organisations involved in corrupt activities. Moreover, it implies that any top-down efforts to combat corruption would be futile and that a grass-roots change in attitudes is needed.[14] On the contrary, research into corruption has shown that strong political will from state authorities is key to changing a society’s attitude to corruption (as can be seen in Georgia in the early 2000s).[15] Nevertheless, such cultural orientations change slowly, and lag behind regime change, especially that as abrupt as the Soviet Union’s.[16] Therefore, no immediate change occurred in attitudes to corruption and its practice on a local level which supports the argument that corruption in post-Soviet Russia was unavoidable in the short-term.
A factor often overlooked in the literature on post-Soviet corruption, is the role that Western governments, in particular the US’, played in facilitating it. After the dissolution of the Soviet Union, the global narrative immediately focused on the region’s transition to democracy and a free market. There was a political and theoretical assumption in the west that democratisation was inevitable; this shaped assistance programmes and general policy towards Russia and former Soviet states throughout the 1990s. There was pressure from multilateral institutions, such as the IMF, to demonstrate a move towards privatisation before financial support would be given, meaning that any independent regulatory, legal and judicial frameworks were not established in Russia.[17] Russia’s rapid privatisation was supported by the US, who sent technical consultants and aid: by March 1996, the US had given $3.5 billion in cumulative obligations to Russia.[18] However, the majority of this money went to fund a select group of high-up officials and not the Russian state as intended. The ‘Chubais Clan’, who styled themselves as economic reformers, controlled US aid through a variety of organisations set up to perform Russia’s economic restructuring.[19] US support for Chubais and his close circle “bolstered…the clan’s standing” both domestically and internationally, making them “favourites of the IMF” and giving them access to loans from the World Bank.[20] In reality, the ‘reformers’ were highly corrupt individuals who pocketed vast amounts of money for their personal gain and contributed heavily to the economic crisis in the late 1990s. In this way, US ‘assistance’ to Russia throughout the 1990s created the space for a group of powerful oligarchs to emerge who not only misdirected the funding for reform, but who undermined any democratic move to a free-market. In the immediate post-Cold War world order, the US had the international standing to better control their aid money and insist upon rigorous checks and safeguards for its use. Therefore, mismanagement of economic aid in the 1990s fed the growing culture of corruption in Russia. Although it is impossible to say with certainty, a better appropriation of funds to Russia during this time could have curtailed the high-levels of corruption.
Further to this, in terms of business adventurism into Russia after 1991, the US government did little to check the legitimacy of the emerging commercial relationships. The opening up of the Soviet economic space presented abundant opportunity to eager businesses and individuals in the west. However, doing business in post-Soviet Russia during the 1990s involved a number of extra-judicial requirements . For example, in 1996 an estimated 20 percent of all foreigners doing business in St Petersburg paid “protection money” to the Mafiya.[21] It became “well-known that bribing government officials” was a condition for US businesses operating in Russia,[22] a fact which surely did not escape the US authorities’ notice. Nevertheless, by 1996, the Foreign Corrupt Practices Act (FCPA) – a law prohibiting US businessmen from bribing foreign officials – had not brought any cases against US businesses in Russia.[23] As US businesses were allowed to continue cooperating in the corrupt practices required for working in Russia, these practices became normalised and accepted.
Another instance of Western influence in Russia’s post-1991 corruption surrounds the 1996 re-election of Boris Yeltsin. Despite Bill Clinton’s complicated relationship with his Russian counterpart, Yeltsin’s re-election was desirable over the possibility of his main opponent, Gennady Zyuganov. Along with nuclear proliferation, the American administration greatly feared a reversion to communism in Russia, and Zyuganov was framed as just that. It is widely accepted that the US helped Yeltsin win the election in 1996, with some commentators labelling US assistance as outright collusion.[24] Clinton’s timely endorsement of the IMF’s $10 billion loan to Russia just a few months before the election was perhaps instrumental in securing Yeltsin’s victory, improving his approval ratings by paying off long-overdue salaries.[25] Further, it has also been suggested that parts of the loan went to oligarchs and the presidential team, with revelations in 1999 that the money had been laundered through offshore accounts, which the IMF knew about.[26] Whether unpacking the technical details or not, it is clear that the US and western support for Yeltsin certainly boosted his chance of re-election, making for a remarkable comeback of an incumbent with popular approval in the single digits.[27]
Yeltsin’s re-election had been built upon the foundations of corruption and so it is not surprising that his second term saw the scale of corruption in Russia grow. Yeltsin’s support from oligarchs saw millions, or even billions, of dollars go into his campaign of which the Clinton administration “turned a blind eye.[28] This served to fortify the position of the oligarchs amongst the Russian political elite and create a situation in the late 1990s where even the US government was not entirely sure who held political power in Russia. For instance, by the time of Yeltsin’s resignation in 1999, ten percent of Russia’s population owned half of the country’s wealth.[29] Strobe Talbot insists that “Clinton worked tirelessly with Yeltsin for seven years to assist his reforms” and provide both “Western aid and encouragement”.[30] Well-meaning intentions aside, Clinton and the US government’s failure to effectively check where their aid money was going, and their negligence in ensuring a fair election in 1996 meant the US acted as an abettor in Russia’s corruption. By not immediately trying to tackle Russian corruption, it became increasingly normalised in society and “the rules of corruption among bureaucrats, businesspeople and ordinary Russians have become more explicit and better orchestrated”.[31] Whilst different US foreign policy would not likely have changed the aforementioned root causes of corruption, such as culture, it can be said with a high certainty that US actions did not help curb Russian corruption in the 1990s.
Overall, the growth of corruption in Russia after 1991 was probably unavoidable in the short-term. The introduction of neoliberalist economic principles and access to the globalised market created new opportunities for corruption and meant existing practices began to proliferate. Soviet legacies were carried forward by the old nomenklatura yet without the same strong authoritarian state, a feudal order emerged.[32] Nevertheless, the massive scale of corruption in Russia was avoidable. The mismanagement of the post-communist transition opened up the state to exploitation and organised crime. Western governments and multilateral institutions aggravated the situation and in many ways contributed to the growth of corruption. Therefore, whilst an initial increase in corruption was largely unavoidable, the present-day levels of corruption in Russia and the extent of its growth were not inevitable.
References
[1] Vladimir Shlapentokh, "Corruption, The Power Of State And Big Business In Soviet And Post-Soviet Regimes", Communist And Post-Communist Studies 46, no. 1 (2013): 147
[2] Susan Rose-Ackerman, Corruption: A Study in Political Economy (New York: Academic Press, 1978); Robert Klitgaard, Controlling Corruption (Berkeley: University of California Press, 1988)
[3] Serguei Cheloukhine and M. R. Haberfeld, Russian organized corruption networks and their international trajectories. (New York: Springer, 2014) p. 61.
[4] Shlapentokh, “Corruption” (2013) p. 152
[5] Anastassia Obydenkova and Alexander Libman, "Understanding The Survival Of Post-Communist Corruption In Contemporary Russia: The Influence Of Historical Legacies", Post-Soviet Affairs 31, no. 4 (2014) p. 324.
[6]Ibid., p. 310.
[7] Cheloukhine and Haberfeld, Organized corruption, p. 67.
[8] Wayne Sandholtz and Rein Taagepera, "Corruption, Culture, And Communism", International Review Of Sociology 15, no. 1 (2005) p. 110; Vladimir Shlapentokh, Contemporary Russia As A Feudal Society (New York: Palgrave Macmillan, 2016) p. 63.
[9] Alexandra Kalinina, "Corruption In Russia As A Business", Institute Of Modern Russia (2013) https://imrussia.org/en/society/376-corruption-in-russia-as-a-business.
[10] Ben Wheatland, “The UN Convention against Corruption and the role of civil society”, U4 Anticorruption Centre (2016) https://www.u4.no/publications/the-un-convention-against-corruption-and-the-role-of-civil-society.pdf
[11] The World Bank, Fighting Corruption in Public Services Chronicling Georgia’s Reforms (Washington DC: The World Bank, 2012)
[12] Ibid., p. 10.
[13] Manabu Suhara “Corruption in Russia: A Historical Perspective”, Slavic Research Center (2004) p. 388
[14] Shlapentokh, “Corruption” (2013) p. 149.
[15] Luminta Ionescu, “Contemporary economic crime and corruption in Russia. Management, and Financial Markets, 6 no. 2 (2011)
[16] Sandholz and Taagepera, "Corruption, Culture”, p. 110.
[17] M. Celarier, “Privatization: A Case Study in Corruption”, Journal of International Affairs, 50 no. 2 (1997), pp. 531-532
[18] Janine Wedel, “U.S. Assistance for Market Reforms: Foreign Aid Failures in Russia and the Former Soviet Bloc”, The Independent Review, 4, no. 13 (2000), p. 393.
[19] Janine R Wedel, Collision And Collusion (New York: St. Martin's Press, 2001).
[20] Wedel, “US assistance”, p. 400
[21] Scott Boylan, “Organized Crime and Corruption In Russia: Implications For The United States And International Law”, Proceedings of the ASIL Annual Meeting, 90 (1996), p. 91.
[22] Ibid. p. 92
[23] Ibid., p. 92
[24]Wedel, Collusion.
[25] Alexander Lukin, "How The United States Got Russia Wrong", The National Interest (2019) https://nationalinterest.org/feature/how-united-states-got-russia-wrong-42977.
[26] Simon Pirani and Paul Farrelly “IMF knew about Russian aid scam” The Guardian (2019). https://www.theguardian.com/world/1999/oct/17/russia.business (2019)
[27] Erik Depoy, “Boris Yeltsin and the 1996 Russian Presidential Election”, Presidential Studies Quarterly, 26 no. 4 (1996) p. 1148.
[28]Lukin, "How The United States" (2019); Sean Guillory, "Dermokratiya, USA". Jacobinmag.Com (2019) https://www.jacobinmag.com/2017/03/russia-us-clinton-boris-yeltsin-elections-interference-trump/.
[29] Julia Pettengill, “Russian corruption: Domestic and international consequences”, The Henry Jackson Society (2013) http://henryjacksonsociety.org/wp-content/uploads/2013/04/HJS-Russian-corruption-Report_Low-Res-Final-A5-4-Apr-2013.pdf p. 14
[30] Michael Kruse, "It’s Already Collusion", POLITICO Magazine (2019) https://www.politico.com/magazine/story/2019/01/13/trump-russia-collusion-putin-223973.
[31] Vladimir Shlapentokh, "Russia’s Acquiescence To Corruption Makes The State Machine Inept", Communist And Post-Communist Studies 36, no. 2 (2003) p. 52.
[32] Shlapentokh, “Corruption” (2013) p. 152.