CORRUPTION Syndromes of Corruption

Oligarchs and Clans 135
Oligarchs, Clans, and change
Russian corruption differs in kind, and not just in amount, from the
Influence Market and Elite Cartel cases discussed in previous chapters.
There is no counterpart in the latter cases to the insecurity, or the
oligarchic contention, that marks Russia’s systemic corruption problems.
Violence was part of the pre-1987 Korean Elite Cartel’s strategy for
retaining power, and organized crime is a part of the corruption story in
Italy, but Russia is a case apart.
The contrasts reflect a volatile combination of rapidly expanding political
and economic opportunities and a very weak institutional framework –
the latter including not only the bureaucracy, courts, and law enforcement,
but also political parties, the news media, and civil society (on the latter
three see McFaul, Petrov, and Ryabov, 2004: chs. 5–7). Oligarchs moved
in on the Russian economy because immense wealth was at stake and
there was little to stop them. The old Soviet state had been weak in key
respects, and the events of the 1990s undermined the successor state even
more (McFaul, 2001). Sometimes that happened through poor policy
choices and advice; sometimes it happened through official connivance
with criminals and business elements; sometimes it happened as both
Russian citizens and international investors took a look at a violent,
unpredictable situation and found it prudent not to get involved.
However such weakness came to pass, it only enhanced the power
of oligarchs while encouraging others to seek protection however they
could get it.
For those reasons, Oligarch and Clan style corruption may be more
durableandadaptablethanEliteCartels.Oligarchs–unlikeEliteCartels–
need not govern a whole country, and are less exposed to scrutiny, external
shocks, or internal competition. Indeed, to the oligarchs Russia’s troubles
often appear as new ways to profit. If private rapaciousness and public
institutional weakness are indeed central to this kind of corruption, then
further liberalization or decentralization without close attention to the
state, political, and social foundations such changes require will only
pour more gasoline on the fire. Russia needs stronger institutions first
(Popov, 2002) – credible political parties, bureaucracies, tax collection,
and law enforcement; improved banking and intermediate economic
institutions such as bond and equity markets; and a strong, active,
engaged civil society. Recent reforms in taxation, the criminal code, and
land and property laws may have borne some fruit (Cottrell, 2001; Myers,
2002b; Dettmer, 2003; Farquharson, 2003), and a new Anti-Corruption
Council headed by former Prime Minister Mikhail Kasyanov may (or
may not) be a positive step (Alyoshina, 2004). But corruption continues