One thing is clear, Putin is centralizing power.37 This is not to say that his only goal is to increase the power in Moscow. His policy of the 7 super-regions, based almost exactly on the military district divisions of old, is the main symbol of Putin=s centralization drive. The institutional affiliations of the seven officials he chose to lead these super-regions and their composition reinforces the

36 Only 15% of those polled thought his regime did more good, and only 10% remained undecided. The poll was taken mid-January 2001, of 1,600 citizens, conducted by the All-Russian Public Opinion Center (VtsIOM). See Interfax (January 31, 2001). The Yeltsin regime is greeted warmly compared to the Gorbachev-era (no surprise for Russia-watchers, who all know the West was always happier with Gorbachev than Russians). Andrei Kolesnikov, AHope as [email protected] Izvestiya, January 11, 2001, as found online through their search-engine, at:

37PONARS (Program on New Approaches to Russian Security) Policy memo series has issued many papers regarding Putin=s centralization and the meaning behind his, Adictatorship of [email protected] For two insightful papers on this topic see, Nikolai Petrov, ABroken Pendulum: Recentralization Under Putin,@ memo no. 159; and Vladimir Gel=man, AThe Dictatorship of Law in Russia: Neither Dictatorship, Nor Rule of [email protected] memo no. 146. You may find these memos online, at Harvard=s website: and

contradictory image he flaunts. There are the relative Westernizers and the Slavophiles cum statists, but it is the ratio that matters. Two of the seven are Sergei Kiryenko for the Volga-region, the most pro-market former Yeltsin regime Prime Minister (save Boris Nemstov), and Leonid Dravchevsky for Siberia, a former diplomat. The remaining five are former army and KGB/FSB officials. This duality, tipping towards the authoritarian side, is quintessential Putin..

Putin has made strong moves against corruption among the emerging elite in post-communist Russia, including those in the media. These actions have also led to limitation in the media, are cause for concern for those interested in seeing Russia become an >open society=. A large part of the governmental reigning in a few particular oligarchs is directly linked to controlling the media. After this paper was initially written (February 2001), Putin has taken moves against freedom of the press which bolster the probability that he is moving into the player-savior quadrant. First, NTV was taken over by Gazprom. When German Chancellor Schroder expressed his worries about this event, Putin explained that it was a case of property rights being enforced. NTV owed money, including to Gazprom. The creditor simply took control of the assets. Then, he sanguinely went on to compare Gazprom controlling NTV to General Electric=s control of NBC.38 There are a few major differences. First of all, the US government does not have a controlling stake in GE. Secondly, when General Electric took control of NBC, they did not shut out the journalists or immediately change the news division. Finally, NTV was one of the only sources of critical coverage on Chechnya. If NBC were to disappear, there would still be plenty of media coverage critical of whoever is in charge of the US government. Plus, if it is property rights and clearing of accounts that

38 Daniel Shore, Weekend Edition, National Public Radio, April 15, 2001, as found online at There is also extensive coverage of the closing of NTV and Segodnya at Radio Free Europe/Radio Liberty, throughout April 2001, as found online at

Gazprom is worried about, why not start with taking an account of NTV=s profits and losses, instead of cutting out a primary source of revenue.39 So, first they came for NTV, then they came for Segodnya. Segodnya was one of the best newspapers for coverage of politics, economics, and a variety of other issues in Russia. One of their last articles was on governmental corruption, an issue they covered extensively. They documented that the administrative head of the Yenesei district in Khabarovsk Kray ordered a helicopter to take him on a hunting expedition.40 This is such a simple and absurd example of corruption, but a type of story that it will be hard to find with this newspaper shutdown.

Throughout the nineteenth century, Russian intelligentsia pondered two major questions on problems that plagued the Russian empire. The first question, who=s to blame (kto vinovat=?) was posed by Aleksandr Herzen, which was asked of the problems regarding women, serfs, and what is the role of civil society and government with respect to these problems.41 Many of these dilemmas seemed intractable, no matter the measures taken by the state or civil society. The second major question was, what=s to be done (chto delat=?). This question served as a title to a novel written by Nikolai Chernyshevsky, and it applied to civil society and governments attempts at solving the aforementioned problems.42 Today, the worst answer the government may choose to, Awhat=s to be

39 Instead of shutting down the paper, the creditor=s could have taken offer from Ted Turner (CNN founder), where he attempted to purchase 30 percent of NTV in order to keep it independent. The creditor, Gazprom, prefered to shut it down. Bloomberg, AGazprom Ally Closes Segodnya Newspaper Founded by Media-MOST,@ Bloomberg, April 17, 2001.

40 Segodnya, March 23, 2001, as reported in RFE/RL Newsline, vol. 5, no. 59, March 26, 2001. This would also be available on the Segodnya website, but the site along with the paper was shut down. The official reason given was the financial losses faced by Segodnya annually. Bloomberg, AGazprom Ally Closes Segodnya Newspaper Founded by Media-MOST,@ Bloomberg, April 17, 2001.

41 Herzen (1989).

42 Chernyshevsky (1993).

done,@ is to simply look for, Awho=s to blame Rather than solve the political and economic problems inherited from the Soviets and the nineties reformers, it is easier for the government to place the blame.

Thus, the ironic turns in Russia=s attempt to move to a market economy are illuminated by our theoretical framework. Russia has been unable to move to the referee/student quadrant. Instead, the state has always been conceived of as a player, and the economic policy makers as saviors, and the consequences have been the continued frustration of the Russian people. It is our contention that unless the state is constrained in its role to that of a referee, and economists restricted to their role as students of society, Russia will continue to suffer under the yoke of its past of failed socialist and mercantlist policy. Illarionov seems intent on advising the Putin regime to get into that referee/student quadrant, but through a process where the economic policy makers serves first in the role of savior. The intuition behind the model Illarionov advocates is backed by evidence on democracy and economic growth - namely, that countries that seek democratic reforms prior to economic reform tend to get neither, while countries that seek economic reforms first tend to get political reform down the road as property owners seek political constraints on predation by public actors. However, it is our contention that the referee/savior quadrant is unstable and gravitates toward referee/student or player/savior quadrant. Against perhaps the best of intentions of Illarionov to establish a growing economy along the lines of classical liberal political economy, the logic of the situation in the Russian transition seems to be continually in the statist political economy quadrant.

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