Regionalisation:

Disadvantageous for the Development

of Sub-National Democracy?

The Case of the

Russian Federation in the 1990s

Tom Røseth

Thesis Submitted in
Partial Fulfilment of the Cand. Polit. Degree

Department of Comparative Politics

Faculty of Social Sciences
University of Bergen
September 2001
 The autonomous [formations of the RSFSR] can take as much sovereignty as
they can administer. We can agree to all of that. But they will have
independently to answer, of course, for the well-being of their people. We make
only one condition: they will have to take part in a federation treaty with Russia.
I underline: we will not let anyone pull Russia down!
– Boris Yeltsin, March 1991.

2
PREFACE

This thesis presents results from studies at MGIMO (Moscow State Institute of International
Relations) that was made possible through the signing of a memorandum on research
collaboration in 1998. Through a scholarship granted by the Norwegian Research Council I
was the first exchange student from the University of Bergen to MGIMO.

First of all I would like to thank my tutor Stein U. Larsen for always being positive and
inclusive. My thanks go to the people at MGIMO, I. Busygina, M. Ilyin, and M. Mironiouk,
for providing me with empirical data, useful contacts and in-depth understanding of Russia.
Further, I want to thank A. Titkov at Moscow Carnegie Centre for giving me survey-data on
the democratic developments in the Russian regions and helpful critique. Also, my thanks go
to Steve Solnick at Columbia University, for sending me his draft on centre-periphery
relations in Russia before publishing.

Eero Olli gave me good advise on statistical problems. Rob and Tor helped improve my
English and gave constructive critique. And, of course, thanks to fellow students that made
the study pleasant, in particular Ingrid, Jan Olav and Espen. Finally, my thanks go to Merethe
for being there for me.

Bergen, September 2001

Tom Røseth

To Mary and Aage

3
CONTENTS

PREFACE 3

CONTENTS 4

ABSTRACT 6

LIST OF MAPS, FIGURES AND TABLES 7

LIST OF ABBREVIATIONS AND RUSSIAN TERMS 8

INTRODUCTION 10

1 THEORETICAL FRAMEWORK 14

1.1 Methodological setting 15

1.2 The conceptual problem 17

1.2.1 Centre-periphery relations 17
1.2.2 Federalism 18
1.2.3 Federation 19
1.2.4 Consociationalism and other federative arrangements 21
1.2.5 Intergovernmental relations 22
1.2.6 Regionalism and regionalisation 24

1.3 Intergovernmental power-relations 27

1.3.1 State authority and power 27
1.3.2 Defining symmetry and asymmetry 29

1.4 The democratic aspect 32

1.4.1 Defining democracy 32
1.4.2 Transition and consolidation 35
1.4.3 Socio-economic development on democracy 36
1.4.4 Federal democracy 39

1.5 Specification of the hypotheses 40

2 THE CENTRE-PERIPHERY DEVELOPMENT IN RUSSIA 42

2.1 Some perspectives on pre-revolutionary history of the Russian state 43

2.2 The Soviet Union and the inheritance of territories for the nationalities 46
2.2.1 Administrative divisions in the Soviet Union 47
2.2.2 Aspects of federalism inn the Soviet state system 49

2.3 The Russian Federation in the 1990s 51

2.3.1 ‘The parade of the sovereignties’ 1990-1992 52
2.3.2 The Federation Treaty of March 1992 53
2.3.3 The Constitution of the Russian Federation, December 1993 55
2.3.4 Relations based on both treaties and the Constitution 1994-1998 57
2.3.5 The limits of bilateralism after 1998 60

4
 2.4 A discussion on the Russian case 63
2.4.1 The asymmetric federalist system 65
2.4.2 The weakness of the central and regional state apparatus 67
2.4.3 The ethnic question 72

3 METHODS AND OPERATIONALISATIONS 76

3.1 The data 77

3.1.1 Comparing through time and space 78
3.1.2 Validity and reliability 80

3.2 Operationalisations and construction of variables and indexes 81

3.2.1 Additive indexes 82
3.2.2 Operationalisation of the background variables 83
3.2.3 Operationalisation of socio-economic variables 86
3.2.4 Operationalisation of degree of autonomy 90
3.2.5 Operationalisation of democratic development 93
3.2.6 Summary 97

4 EMPIRICAL ANALYSIS 99

4.1 Bivariate analysis within the operationalised variable sets 100

4.1.1 The background variables 101
4.1.2 Socio-economic variable set 104
4.1.3 Variable set on autonomy 106
4.1.4 Complementary variables on democracy 109
4.1.5 Summary 111

4.2 A comparison of the variable sets 112

4.2.1 Background variables and socio-economic measures 112
4.2.2 Socio-economic conditions and federal elements 117
4.2.3 Federal arrangements and democracy 119
4.2.4 Summary 122

4.3 Multiple regression analysis of the main variables 124

4.3.1 Multiple regression tools 125
4.3.2 The structural preconditions and economic strength 127
4.3.3 Determining the degree of autonomy 131
4.3.4 Economic and federal impact on the democratic development 142
4.3.5 Summary 152

4.4 Summary of findings 153

CONCLUSION 158

BIBLIOGRAPHY 164

APPENDIX A: Interview with Dr. Fedossov, Federation Council 172

APPENDIX B: Descriptive statistics 176

5
ABSTRACT
My study aims to explo re, analyse and integrate selected theories concerning centre-periphery
(CP) developments that took place in the Russian Federation (RF) in the 1990s. The Russian
Federation is considered a special transitional case with its vast territory and multiethnic
composition. The study shows that we have to adjust the present theoretical tools, or invent
new ones, in order to properly capture the CP process in Russia. I contest the present theory
on regionalism and federalism that is used to conceptualise a CP rela tionship, based on the
relationship between Moscow and the federal units.

This is a study of the eighty-nine regions in the RF and their relationship with Moscow. With
statistical tools I explore the available and relevant data concerning economy, autonomy and
democracy in the regions. With the use of historical and contemporary information about the
CP development in Russia, I analyse the structural causes by which some regions are being
more autonomous than others. The power centre in Moscow perceives this as a rather negative
phenomenon. On the other hand, most regional leaders consider regional autonomy essential
to federalist ideas and positive for developing democracy in a multiethnic state. The demands
from the regions, however, are also based on other motives. Several regional leaders increase
their own power base at the cost of democratic reforms. This is especially the case with the
republics, which can play the ‘ethnic card’ and threaten with secession.

By measuring the level of democracy in the regions I am able to connect regional theory to
democratic development theory. My intuitive assumption that the degree of autonomy and
democratic development are inversely related does not hold. The tendency seems to be the
contrary, but depends on how I measure autonomy. The practice of signing bilateral treaties
that give more or less autonomy, has a positive impact on the democratic level in a region.
This is an interesting and important finding, which opposes the general official Kremlin view,
but goes well with general democracy and federal theory. My study also strengthens the
assumption that high socio-economic development has a positive effect on the degree of both
autonomy and democratisation in a region.

6
LIST OF MAPS, FIGURES AND TABLES

LIST OF MAPS
Map 1 Administrative division in the Russian Federation................................................................................................. 9
Map 2 The ethnically defined regions in Russia ................................................................................................................ 72
Map 3 The ethnic composition in the republics ................................................................................................................. 74

LIST OF FIGURES
Figure 1.1-1 Funnel of causality, explaining regional developments in the Russian Federation.............................. 16
Figure 1.2-1 Main types of state systems*.......................................................................................................................... 22
Figure 1.2-2 A conceptual map on centre-periphery relations ........................................................................................ 26
Figure 2.2-1 Main administrative divisions of the Soviet Union .................................................................................... 47
Figure 2.3-1 The administrative divisions in the Russian Federation............................................................................ 56
Figure 2.4-1 The fiscal system of the Russian Federation ............................................................................................... 70
Figure 3.2-1 The funnel of causality, from background variables to democracy......................................................... 99
Figure 4.3-1 Model B? E: The effect of background variables on “Economic strength”........................................127
Figure 4.3-3 Model B? A: The direct effect of background variables on “Autonomy” ..........................................131
Figure 4.3-4 Model B+E? A The direct effect of economic variables on “Degree of autonomy”.........................136
Figure 4.3-5 Model B+E? D: The direct effect of economy on democracy...............................................................145
Figure 4.3-6 Scatterplot: Economic strength on democracy1........................................................................................146
Figure 4.3-7 Model B+A? D: The direct effect of autonomy on the degree of democracy ....................................149

LIST OF TABLES
Table 3.2-1 List of background variables............................................................................................................................ 84
Table 3.2-2 List of economic variables ............................................................................................................................... 87
Table 3.2-3 List of autonomy variables ............................................................................................................................... 90
Table 3.2-4 List of democratic variables ............................................................................................................................. 94
Table 4.1-1 The background variables, Pearson’s correlation coefficient (r).............................................................102
Table 4.1-2 Economic variable set, Pearson’s correlation coefficient (r) ...................................................................104
Table 4.1-3 Variable set on autonomy, Pearson’s correlation coefficient (r) .............................................................107
Table 4.1-4 Variable set on democracy, Pearson’s correlation coefficient (r) ...........................................................109
Table 4.2-1 Demography and economy, Pearson’s correlation coefficient (r)...........................................................113
Table 4.2-2 Economy and autonomy, Pearson’s correlation coefficient (r) ...............................................................117
Table 4.2-3 Autonomy and democracy, Pearson’s correlation coefficient (r)............................................................120
Table 4.3-1 Regression models – background variables on economic strength.........................................................128
Table 4.3-2 Regression models - BA on Economy .........................................................................................................130
Table 4.3-3 Regression models - background variables on de facto autonomy .........................................................132
Table 4.3-4 Regression models - background variables on quasi-formal autonomy .................................................133
Table 4.3-5 Regression models - background variables on degree of quasi-formal autonomy ...............................135
Table 4.3-6 Regression models - BE on Autonomy1......................................................................................................137
Table 4.3-7 Regression models - BE on Autonomy2......................................................................................................138
Table 4.3-8 Regression models - BE on Autonomy3......................................................................................................140
Table 4.3-9 The effect of background variables on democracy1..................................................................................143
Table 4.3-10 The effect of background variables on democracy2................................................................................144
Table 4.3-11 Regression models - BE on democracy1...................................................................................................145
Table 4.3-12 Regression models - BE on democracy2...................................................................................................147
Table 4.3-13 Regression models - BA on democracy1...................................................................................................150
Table 4.3-14 Regression models - BA on democracy2...................................................................................................151

7
LIST OF ABBREVIATIONS AND RUSSIAN TERMS

ASSR Autonomous Soviet Socialist Republics

CP Centre-periphery
CPRF Communist Party of the Russian Federation
CPSU Communist Party of the Soviet Union
Goskomstat Gasodarstvenii Komitet po Statistiki (State Committee on Statistics)
Gubernia Province, unit of Tsarist administration
Krai Territory
MCC Moscow Carnegie Centre
MinFin Ministertvo Finansovich Del (Ministry of Finance)
Nomenclature The Communist system of political appointments, to designate the class
of office-holders
Oblast Region
Okrug District, region
Raion District, borough
RF Russian Federation
RSFSR Russian Soviet Federated Socialist Republic
Soviet Elected councils on every level of government in USSR
SSR Soviet Socialist Republic
Uezdu Borough, administrative unit below gubernia (Tsar-Russia)
USSR Union of Soviet Socialist Republics
Vetche The people’s assembly of a community in Kiev Rus’
Volost Principality, unit under Kiev Rus’
Zemstvo Unit of Tsarist local administration

Transcriptions of the Russian regions are done according to the Oxford Dictionary.

8
Map 1 Administrative division in the Russian Federation

9
INTRODUCTION
Sovietologists need to study the Russian
provinces today…for the future of Russia
will be determined not in Moscow, but in
the provinces and small towns. –Stepan
Sulakshin, former representative of the
Russian president in Tomsk oblast, 9
October 19921

The development of the federal structure is often seen as Russia’s most successful reform.
The unconditional success of this construction is doubtful. The relationship between Moscow
and the periphery has changed constantly throughout the 1990s, and in periods the dynamics
of the process have been beyond the centre’s control.

Today’s political system in the Russian Federation reflects the influence of a thousand- year
history of statehood. For most of the twentieth century Russia was a communist state. Since
1991 it has been an independent country in a transitional phase to democracy. The communist
regime fell along with the Soviet state, but many of the institutions and processes of
communism are still intact under different labels and functions. After the fall of the Soviet
Union, one feared that Russia would fall for the same centripetal force along national-
territorial lines as the USSR. The demographic picture is different from the Soviet Union due
to Russia’s relatively ethnic homogeneity, although the Russian Federation is considered a
special case as a multinational state with a vast territory reaching over eleven time zones.

The breakdown of the Soviet order both eroded the central government’s power to enforce its
authority in the regions and reduced the benefits it could offer regional governments to induce
their compliance with federal law (Remington 1999:58). This was in part a consequence of
the rivalry between Gorbachev and Yeltsin in 1990-91, when both made liberal offers of
autonomy to the sub- national governments of Russia. “Take as much power as you can
swallow,” Yeltsin proclaimed. Many of the regions welcomed and took advantage of the
autonomy offered, but did this process promote democracy? Conflicts between the regions
and the federal centre over the competences in terms of rights and powers have been
substantial ever since, most of all in the ethnically defined regions. Multinational democracies
are in general federalist states in form and process; this is thus argued the only democratic

1
Taken from Peter J. Stavrakis in Beyond the monolith: the emergence of regionalism in post-Soviet Russia
(Stavrakis et al. 1997:1)
10
solution to the Russian Federation. In this study I claim that Russia has a federative state
system, but as I will elaborate, the Russian Federation does not yet meet the criteria of a true
federation and the end product is doubtful. Russia has been undergoing a democratisation
process towards a federative democracy, and one of its main tasks is to normalise the
interaction between centre and periphery in law and practice. This interaction has received
some formal framework through the Federal Treaty of 1992 and the Constitution of 1993, but
the differentiations of powers are only partially defined. Therefore, from 1994, one found the
solution through bilateral treaties between the executives in the regions and the centre. These
treaties are the cornerstones of the asymmetric, quasi- federal system that exist in Russia.

The CP material produced so far, related to the political processes in the Russian regions, is
argued to raise more questions than that it gives answers according to Gelman (2000). The
existing theory appropriate to analyse the political transformation in Russia does not yet give
the possibility to express empirical substantiated concepts. The task now is “to formulate a
model for analysing the political transformation in Russia, which not only explains the causes
for the diverse political development in the Russian regions, but also appropriate for analysing
the broad influential circle in recent Russian politics” (Gelman 2000:14). I support Gelman’s
request of a new explanatory model in order to analyse the diverse political development in
the Russian regions. My study analyses the CP relationship through the framework of the
funnel strategy culminating in a model that tries to measure and explain the economic,
autonomous and democratic regional development.

Objectives of this study

The objective of this study is to explain the structure and development in centre-regional
relations from 1991 to 1999 in the Russian Federation, and identify the factors that have led to
this change. In doing this I differentiate the state structures vertically and horizontally;
examine the power distribution between the centre and the regions; and explain the growing
asymmetry between the regions. When I have explored the asymmetric federative system, I
will see if and how this development has an effect on the democratic development in the
Russian regions. This interplay between autonomy and democracy is this thesis’ essential
contribution.

11
This study deals with different parts of a B? E? A? D causal chain, where B includes
‘background control’ variables that are thought to have an impact on the remaining variables.
E includes ‘economic conditions’ that shape the degree of autonomy and democracy, A
includes ‘degree of autonomy’ that is thought to affect democracy, and D includes the
dependent variable ‘democratic development’. I will connect theories of federalist, regionalist,
nationalist and democracy in the causal chain above. For the present purposes, I assume that
the causal direction from B to the other variables is one-way. The direction of causality
between E, A and D is less certain. These variables can have an effect on each other.
Nonetheless, democracy will function as a dependent variable in the causal model. The final
aim of this work is to answer the following question: Did increased regional autonomy
promote sub-national democracy in the period from 1991 to 1999? My starting point is that
Russian regions with a higher degree of autonomy are less likely to develop democracy,
which is caused by a lack of federalist and democratic culture. Democratic development has
ironically been a main argument among regional leaders who seek more autonomy on the
basis of ‘federative ideology’. According to Stoner-Weiss (1997a, 1997b), local elites took
advantage of reforms in pursuit of their own interests in ways that undermine democratisation.
I assume that this has been the case in several regions, which raises serious questions about
the ongoing quasi- federative, democratic process in Russia: Increased economic well-being
and autonomy obtained from the centre does not necessarily improve the democratic
conditions in the regions. One can question the ideological and political maturity among
regional leaders in the regionalisation process. It would be a paradox if democratisation in the
central institutions, which opened for regionalisation in the beginning of the 1990s, actually
has hampered democratic development on the sub-national level of government. This is in
opposition to traditiona l federative, or populist democracy theory, most clearly stated by the
Jeffersonian perspective, which says that the more power that is located closer to the
individual the more democratic is the state-structure (Jefferson 1880).

By sub-national level of government, I mean the intermediate, regional level and this thesis
focuses on the centre and the regions. I will use the term centre or Moscow 2 differentiated
from the term state, the latter defined by Weber as the institution that holds a monopoly over
the right to use coercive force. 3 Authority rests in this institution. In most cases, centre and

2
Notably the central administration, including the office of the president and subordinated structures, such as the
government and Parliament.
3
Max Weber, “Politics as a Vocation,” in H.H. Gerth and C. Wright Mills, (eds.), From Max Weber: Essays in
Sociology (London: Routlegde and Kegan Paul, 1949), pp. 77-78. Taken from Bremmer & Taras (1993:12-13)
12
state are interchangeable, but use of the term ‘centre’ allows for more accurate portrayal of
the relationships between the regions and the actual state authority in question. ‘Periphery’ or
‘the regions’ are here considered the 89 ‘subjects of the federation’ 4 of Russia: 21 republics, 1
autonomous oblast, 10 autonomous okrugs, 6 krais, 49 oblasts and 2 cities of federal
significance. 5 The lower administrative units, such as raions or cities, are generally excluded
in this study although their interaction with the regional and central level is partially included.
In the RF, the federation subjects are generally stronger than local units and their relationship
with Moscow is of utmost importance to preserve the integrity of the state. 6 I aim to isolate
CP relations in order to include only centre-regional matters, all the while acknowledging that
one cannot disaggregate findings on the regional level further down to the local level. The
support of democratic ideas can be higher in isolated local units and some powerful cities that
are beyond the regional governors’ control.

Chapter outline

Chapter one outlines theories and major CP concepts necessary for the ana lysis. Related
democratic theory is also included since democracy is the dependent variable of the study, at
the end of the causal chain. Chapter two considers the Russian case, with a short review of
its historical background and an elaborate discussion of the recent CP developments after
1991 using the discussed theoretical and conceptual tools. By then I have established the
federal development the Russian Federation and to what degree there has been a
regionalisation. In chapter three, I will operationa lise the variables for testing the hypothesis
stipulated in the end of the theoretical chapter. I will explicate the data and methodology
relevant for this study. Chapter four presents the empirical analysis on interregional
relations. With bivariate correlation, the relevance of the different variables will be tested.
Regression models will identify the predictors that determine most of the effect on the
following phenomena: economic strength, autonomy, and democratic development. In the
concluding chapter of this thesis, the findings of my study will be summed up and discussed.

4
These are the first sub-national units in the administrative-territorial hierarchy, which are here frequently
referred to as regions. ‘Local’ refers to urban or rural districts, which are administratively subordinated to
regions and are called in Russian raion.
5
In some regions the regional capital city has through tax income of its citizens gained power versus the regional
centre. The centre has tried to use these strong cities to counter the power of governors, as the case with
Vladivostok in Primorskii krai and Volgograd city in Volgograd oblast .

13
1 THEORETICAL FRAMEWORK
The best frame of government is that
which is most likely to prevent the
greatest sum of evil. – James Monroe,
“Observations of the Federal
Government”, 1789

At present, Russia is in the process of developing simultaneously a federal state as well as

democracy. Defining the CP process in Russia under present concepts in the social sciences
on democracy and federalism is problematic, since the end result has yet to prevail. Lacking
proper alternatives, my first priority is to use regionalist- and federalist concepts. The choice
of concepts is explained in chapter 1.2.

In this work I have tried to eclectically connect federalist, regionalist, nationalist and
democracy theory. These spheres of research have not ignored each other, but rather
concentrated on partial issues of the other and worked out individual methodologies: Neither
Ernest Gellner nor Robert Dahl included much federalist theory in their studies. An
establishment of permanent links between these schools would be mutually beneficial. This is
especially true when we look at the Russian Federation since 1990. Russia during the
transition toward democracy and a federation has challenged the theories mentioned here and
their relevance to the Russian case.

Scholars of Russian politics and comparative politics have ignored evidence of sub- national
variation in democracy and have instead treated democratisation as a national- level
phenomenon. 7 By doing this, one ignores the impact of democratisation for most of the
population. The catalysts of political development are not just on the national level, especially
in a large and diverse country like the Russian Federation. McMann and Petrov (2000) warn
that the margin of error is likely to be enormous if a scholar attempts to understand
democratisation in Russia only from events in Moscow. My argument is that we can better
understand the dynamics of democratisation in Russia by looking at regional politics. But this
does not mean that I neglect the importance of democratisation in the central governmental
institutions.

7
Key works that aim to explain the development of democratic regimes are Dahl (1971), Huntington (1991),
Lipset (1959, 1994), and Linz & Stepan (1996).
14
1.1 Methodological setting

This study intends to explain the development in the Russian first and foremost quantitatively,
but it also contains qualitative elements. There are two main reasons for including both
methods: 1) The statistical material on the federation units has been hard to obtain and is
limited in its applicability; 2) It has proved quite difficult, if not impossible, to study these
questions by means of case studies or other qualitative techniques to cover all 89 federation
units. To obtain a more valid and reliable study I utilise elements from both. The qualitative
method will be used to explore and analyse the CP process in Russia as a whole in the first
part of the thesis. The quantitative method is used in assessing the CP process into constituent
parts of measures. In the end of this chapter the considerations of theory and methodology
will lead to the formulation of concrete hypotheses.

First, I use a comparative approach to the study of centre-periphery relations in Russia as the
major methodological framework. The comparative perspective in the CP process will be
between the federation units within the Russian Federation. However, the theory in this
chapter will be presented in general relevance to other states. Secondly, we can only
understand the Russian transformation by studying the political and social reality in the
diverse regions of the country (Gelman et al. 2000:12). Political life in the capital differs
greatly from the regions, as is the case between the regions where totally different
governments rule. This is caused by a demographic, social, and economic diversity, which
gives different solutions concerning citizens’ rights. Under the Soviet Union the political
systems in the regions did not differ substantially. The huge diversity we see today is a result
of the transformation process that took place in the 1990s. Thirdly, the historical approach is
important to deal with the CP process as a dynamic phenomenon. I will apply aspects from
the ‘funnel of causality’ that originates from electoral studies (Campbell et al. 1960) and is
recently developed in transitions studies. 8 The principle is that the closer the past events are to
the present, the more specific impact they will have on current developments between the
centre and periphery. By using the funnel strategy, I look at historical events as more
important the closer they are in time (see Figure 1.1-1). The tighter the funnel, the more
important are the events taking place, and the closer is the events to the phenomenon I want to
explain. 9 This prevents me from taking a mere picture in time, and instead analyse the whole

8
See for example Mahoney & Snyder and Melville in The Challenges of Theories on Democracy: Elaborations
over new Trends in Transitology edited by Stein U. Larsen (2000).
9
The funnel of causality includes a complex debate combining structure and actor as methods of explaining
political development. I do not make an explicit stance on the much-debated structure-actor problematic. I take it
15
process of the phenomenon in question, that is, a diachronic study. With the funnel strategy as
a guide, I will concentrate on recent CP developments from 1991 to 1999 in the Russian
Federation, and less on pre-Revolutionary and Soviet epochs. This does not mean, however,
that I do consider the Stalinist and post-Stalinist years as structural variables irrelevant for the
present CP relations.

Figure 1.1-1 Funnel of causality, explaining regional developments in the Russian Federation

This historical approach catches the dynamics of the CP process and gives an idea of which
direction the development is heading. At the end of the funnel, in Figure 1.1-1, I have placed
the phenomena in question in the assumed causal directions, in which all are subject of direct
or indirect effect from the background variables. The relationship between these phenomena
will be tested through correlation and regression analysis in the empirical analysis.

for granted that a combination of the two is necessary to explain political development. This study is, however,
mostly dependent on structural explanatory variables. My intention with the funnel is to place the methodology,
historical context and causal model within the framework of the funnel strategy.
16
1.2 The conceptual problem

The concepts involved in describing a centre-periphery process in federal systems are more or
less adequate to perform the task in this study. They aim to explain interaction between
different levels of governments, but are relatively overlapping and frequently misused.
Scholars disagree and mix concepts such as federalism and federation, or push the limits of
the concepts. Alberta M. Sbragia (1992:261) comments that an equation between federalism
and federation is common in political debates. I consider them rather distinct from one
another because the two concepts involve different phenomena. I will elaborate this below.

1.2.1 Centre-periphery relations

When dealing with centre-periphery relations, discussing the term decentralisation is
pertinent. It refers to the vertical distribution of power between large and small governmental
arenas (Fesler 1991:83). Such distribution is constitutionally inherent in a conventional
federation and is a practical feature in the American understanding of intergovernmental
relations. Ideologies such as individual liberty, a pluralistic society, grass-roots democracy,
and local self- government are often identified with decentralisation. While state integration
requires some degree of centralisation, decentralisation enhances the role of sub- national
governments that may themselves centralise power. 10 These concepts do not, in its strict
usage, cover the dynamics of a classical federal system since they presuppose a previously
existing centralised state. Then a federal state is more correctly, non-centralised according to
Daniel J. Elazar (1987:34). Federal political systems are not hierarchical systems of
decentralisation, but, rather non-centralised systems in which authority is diffused among
independent but interacting centres (Ibid.). Power is so diffused in a non-centralised system
that it cannot be legitimately centralised without breaking the structure and spirit of the
constitution. I will use the tradit ional concepts, especially since the Russian case has
developed from above, that is, has previously been a centralised state, where power relations
seem to be dependent on the presidency.

The concept devolution is similar to decentralisation, but it is generally considered to be even

more limited to unitary systems: “The handling down from a superior authority to an inferior;
the transfer to a subordinate elected body on a geographical basis of functions exercised by a

10
An extreme example of this is the Republic of Kalmykia in Russia, where the executive leader, Kirsan
Ilumzhhinov, has established strong limitations on local governments.
17
country’s legislature or ministers” (Bogdanor 1991:172). Devolution is distinguished from
federalism in that the centre confers the powers of the subordinate legislature, which retains
residual constitutional authority. Devolution has the political purpose of providing some
degree of self- government as an alternative to separation. The term constitution is also
important in studying federative systems. It refers to the institutions, practices, and principles
that define and structure a system of government as well as to the written document that
establishes or articulates such a system. Constitutionalism denotes not merely the existence of
a written or unwritten constitution, but also a commitment to limited government (Hemberger
1993). It can be argued that constitutions limit governments, by regularising the governmental
process or by establishing procedures that cannot be modified by ordinary legislative action.

1.2.2 Federalism
The concept ‘federalism’ is almost as disputed as ‘democracy’. Robert Dahl (1964) wrote a
prominent theory about criteria for democracy in “A Preface to Democratic Theory”.
Although Dahl expressed ‘self determination’ for citizens, he left the problem of intermingled
states or mixed societies unsolved. People can have a dual identity, e.g. Spanish and Catalan,
while this identity can change during a political conflict and escalate. John Stuart Mill (1861)
argued that mixed societies could not have effective democratic institutions. Ernest Gellner
(1983) has focused on mobilisation of nationalism and did not left much thought on
federalism and the problems of democracy. No other main theorists on nationalism have
seriously touched this problem. Federalism raises new questions about democratic theory.
One can wonder whether the solution to the problem of democracy in multinational states is
ethnic cleansing, as was the case with the ‘Balkanisation process’ in former Yugoslavia? All
present multinational democratic countries are federalist states. If one does not solve the
question on multinationality well, one cannot consolidate a democracy (Linz & Stepan
1996:7). This is especially important for the Russian case and the confrontation with
Chechnya.

There has been much scholarly debate over an adequate definition of federalism. The crux is
whether its essence lies in concepts of treaty and constitutionalism, in legal and political
structures involving distributed authority, in non-centralised processes, in pluralist ideology,
or in underlying social, economic and political phenomena that give pluralism a territorial
dimension. Preston King called attention to federalism as “an avowedly ideological and/or

18
philosophical position” (King 1982). 11 ‘Ideological’ in the sense that federalism takes the
form of an overtly prescriptive guide to action; ‘philosophical’ in the sense that it is a
normative judgement upon the ideal organisation of human relations and conduct. He argues
that this is the moral and normative orientation upon which the federation is built. The
dynamic change in a federation would therefore be caused by a relative change in federalism.
Daniel J. Elazar (1987:11-12) supplements:
Using the federal principles does not necessarily mean establishing a federal system in the
conventional sense of a modern federal state. The essence of federalism is not to be found in a
particular set of institutions, but in the institutionalisation of particular relationships among
the participants in political life.

A wide variety of political structures can be developed that are consistent with federal
principles, like regional representatives in the upper chamber of parliament.

Federalism is commonly perceived to be a matter of governmental structure, but although the

federative structure is in place it does not mean that the polity is a federation in practice. This
is the limit of a structural approach to federalism. Federalism therefore involves both
structures and processes of government. I will later argue that in Russia this is questionable,
while the structure seems to be in place, certain processes of government do not reflect federal
principles.

1.2.3 Federation
There is a difference between those who favour inclusive or restricted definitions of the term
‘ federation’. Duchacek (1970) and Riker (1975) have argued for a broad definition covering a
great variety of federations past and present that have possessed some element of internal
autonomy. They range from such centralised examples as the Soviet Union to non-centralised
federations with barely any central institutions at all found in the ancient world. These
federations have little in common except the name. Therefore other scholars, such as Wheare
(1963) and Sawer (1976), have advocated a more narrow definition of the term based on a
‘quality group’ of federations such as United States, Switzerland, Canada and Australia. Thus
the basic federal principle becomes that neither the central nor the regional government
should be legally or politically subordinate to the other.

11
Federalism can also be viewed as an empirical fact, in its recognition of diversity as a living reality, something
that exist independent of ideological and philosophical perceptions as expressed by Burgess (1993:8).
19
Later federation theory has become more consistent, according to Burgess. He writes that “it
is clear that a broad measure of agreement” has emerged in considering a federation to be a
specific organisational form, which includes structures, institutions and techniques. Also, he
points to that there is “widespread consensus” among scholars in viewing ‘federation’ as a
decentralised political system having full constitutional government (1993:5). Preston King’s
definition of a federation is a fit example:
An institutional arrangement, taking the form of a sovereign state, and distinguished from
other such states solely by the fact that its central government incorporates regional units in
its decision procedure on some constitutionally entrenched basis (King 1982:77).

Distinctive features are the distribution of authority between at least two levels of government
and the coexistence of unity and regional diversity. Later, in 1993, King promoted four
features in addition to the concept ‘federation’:
1. Its representation is preponderantly territorial.
2. This territorial representation is characteristically secured on at least two sub national
levels – local and regional government.
3. The regional units are incorporated electoral, or perhaps otherwise, into the decision
procedure of the national centre.
4. The incorporation of the regions into the decision procedure of the centre can only be
altered by extraordinary constitutional measures, not for example by resort to a simple
majority vote of the national legislature or by autonomous decision of the national
executive. (King 1993:94-101)

Preston King also notes that citizens hip is highly regionalised in a federation and that
representation of citizens is bound up with the federalisation of state institutional politics.
Additionally, Smith argues what is widely accepted, that “only those states whose
governments are subordinate to the constitutional law and which therefore practice democracy
are judged as true federations” (1995:8). Smith also acknowledges that federal projects take
several forms and we should not ignore this in comparative analysis. Multiethnic states whose
democratic federal credentials are imperfect may be in the process of experimenting with
more democratised forms.

A federation in its classical form is created from ‘below’, and a federal formation is
established on the basis of already independent states or territories, like USA and Switzerland.
This is in line with what rational choice theorist Riker (1975) argues, that every federation is a
result of ‘coming together’, mainly to unite for achieving common goals. In this case the
subjects delegate some of their powers to the centre, i.e., the federal structures. And a new
previous non-existent state is being built from below. But there are historically former unitary

20
states that federalise; good examples of this process are Spain, Belgium and India. Their
approach is more correctly termed ‘holding together’.

The structural character of federal theory limits its applicability. Federal theory cannot fully
explain an ongoing process, especially if a federative- like state does not have the
differentiation of power clearly entrenched in a constitution. This is especially true when this
polity defines important differentiation outside of, or under unclear mandate from, the
constitution. Also outside the scope of federation theory is the phenomena of where regional
administrative units do not respect the constitutional law, and the centre does not have the
power or will to enforce this law in problem regions. In such a system democracy is not
practised, and it cannot be judged as a true federation.

1.2.4 Consociationalism and other federative arrangements

Consociationalism is the principal alternative to the more familiar majoritarian or
Westminster-style type of democracy, and is particularly suitable for the governance of plural
societies. A consociation can be considered a ‘non-territorial federation’ in which the polity is
divided into ‘permanent’ religious, cultural, ethnic or ideological groupings known as ‘pillars’
federated together and jointly governed by coalitions of the leaders of each. Consociational
democracy can be defined in terms of eight principles. The most basic are executive power-
sharing, a high degree of autonomy for the segments of the plural society, proportional
political representation and the minority’s right to veto the majority (Lijphart 1984:23-30).

The main difference between federalism and consociationalism is the way in which they may
work within stable democracies. “Federalism requires that the various segments are
identifiable on a geographical basis, whereas consociationalism allows for degrees of overlap
in the physical location of the segments” (Lijphart 1969:216). When viewed as integration
processes, however, the two emerge as having rather different implications (Taylor 1993:90).
Federalism is by definition a single-step process relying upon a meeting of political leaders –
a constituent assembly – and the agreeing of a constitution that reconciles regional
differences. In classical federalism the product of this process, the constitution, is seen as a
political solution to the problem of diversity. Consociationalism does not require such a
conscious act of political creativity and there is no need to reconcile diversities. It can be a

21
process proceeding beyond the control of specific political actors, but depended on elite co-
operation.

The concepts federalism and federation should not be confused with federacy, which is also
within the federal family, but with a slightly different meaning. It is a system where a larger
power and a smaller polity are linked asymmetrically in a federal relationship. The latter has
substantial autonomy and has a minimal role in the governance of the larger power.
Resembling a federation, the relationship between them can be dissolved only by mutual
agreement. (Elazar 1991:xvi) Examples are Finland/Aaland and USA/Puerto Rico and
Normon Marianas. A confederation is also a federative system, but considered a looser, often
international form of organisation in contrast to a federation. It is described by several pre-
existing polities joined together to form a common government for strictly limited purposes,
usually foreign affairs, defence and economics, which remains dependent upon its constituent
polities in critical ways and must work through them (Ibid.). Examples of confederations are
the European Unio n (EU) and the Association of the South East Asian Nations (ASEAN).
Another, but even looser state system than a confederation, is an associated state, (see Figure
1.2-1). Described as an asymmetrical arrangement similar to a federacy, but like a
confederation in that it can be dissolved unilaterally by either of the parties under pre-
arranged terms (Ibid.). The case with Netherlands Antilles and the Netherlands is an example
of an associated state. There are also other federative arrangements like condominium, league
and fueracy, but they are outside the scope of this study.

Figure 1.2-1 Main types of state systems*

Associated state Confederation Federacy Federation Consociation Unitary state

Non-Central Central
*Concepts overlap and could in some examples change order, however, this can still be considered as
mainstream idea of classification.

1.2.5 Intergovernmental relations

American scholars often describe the federal interplay in the United States with the term
‘intergovernmental relations’ (IGR). William Anderson coined the concept in the 1930s, and
later defined it as follows:
An important body of activities or interaction occurring between governmental units of all
types and levels within the US federal system… Each unit is a territorial and corporate or

22
quasi-corporate entity that has a legal existence, rights, functions, powers and duties within
its territory that are distinct from those of every other such unit. (1960:3)

Reagan (1972:3) distinguished IGR from federalism and argued that it has essentially
displaced or replaced federalism. Wright (1982:26) on the other hand views IGR as a
conceptual and descriptive supplement to the political and structural relationships described
by federalism: “IGR is not, I think, a substitute for federalism; IGR includes a range of
activities and meanings that are neither explicit or implicit in federalism.” In Daniel Elazar’s
book “Exploring Federalism” from 1987 the concept is more or less restricted to USA. Elazar
argues that while IGR can be seen as a universal phenomenon, wherever two or more
governments interact in the development and execution of public policies and programs, this
is culture-bound and a product of American experience, where they understand every
governmental unit that meets certain objective criteria to be a government. In the European
tradition on the other hand, state theories hold sovereignty to be indivisible, and the state to be
the source of all political authority and power (Elazar 1987:17). Therefore in this sphere there
can be no more than one government per state, i.e. only devolution of power. Other state
bodies exercising governmental power are merely instrument s possessing powers delegated to
them, a power that can be withdrawn. This is not just an argument against IGR, but it does
also in principle attack federalism in a European context. Elazar acknowledges:
This [European and Old World state] theory creates certain problems for European federal
systems and is ‘fudged’ in various ways, but remains the basic theory of the polity
nonetheless. Thus strictly speaking, there cannot be intergovernmental relations within those
systems. (Ibid:17)

While Elazar uses traditional European state-theory to prove that there cannot be
intergovernmental relations within those systems, he does not argue the same concerning
federalism. If European theory contradicts the idea that every level has a government (like in
IGR) does it then not also denounce the understanding of non-centralism in European
federalism? For present European reality it does not hold. Europe has states that are defined as
federalist systems and that to various degrees, depending on the definition, fulfil the concept
‘federation’. 12 One could therefore question the argument of Elazar which, based on historical
European state theory, denounces the use of ‘intergovernmental relations’ in European
politics.

12
E.g.: Switzerland, Belgium and Germany.
23
But there is yet another problem with ‘intergovernmental relations’, and that is its European
usage in international relations. As an accepted term for relations among the central
governments of sovereign states it is therefore antedated the American usage. Different
conceptions of sovereignty underlie the usage, which could lead to misunderstandings.

1.2.6 Regionalism and regionalisation

In centre-periphery studies the term central-local relations is often used to describe this
process. The concept covers structural and dynamic relationships between the centre and
periphery, between the whole and its parts, which exist in any and every organisation. But the
term restricts itself primarily to relations between unitary states and the province-states of
federal polities on one hand and their political and administrative subdivisions on the other
(Mèny 1991:526). The usage then depends on whether one defines the centre-periphery
relations, as unitary or federal. But since Russia in its current stage of transition is to be
considered as none of these per se, the issue becomes more problematic. Although ‘unitary‘
would be the correct concept on Russia before 1991, recent regional studies of Russia should
also try to capture the interaction of a federative-like system.

The following administrative level of centre-periphery studies would then be central-regional

studies; the study of interaction between the intermediate and central level, which is not
limited to unitary systems. The interaction between these levels of administrations is of
interest to this thesis. An example of this is the German länder and the central government. In
such a study the concept regionalism comes to its right usage. Yves Mèny states that
“regionalism is a matter of politics which stems from the periphery; regionalisation a matter
of policies as the answer from the centre” (1991:526). It refers to the practice of demanding
redistribution on certain central government powers to territorial authorities in the
intermediate position between the central and local levels. In contrast, regionalisation refers
to the process by which central political and administrative authorities have responded to
regionalist demands. The highest degree of regionalism is Separatism, in which a province
tries to gain complete political independence by leaving the greater state (Shlapentokh, Levita
& Loiberg 1998:5). Nationalism provides regionalism and separatism with elements of
nationalistic ideology, beliefs that emphasise specific cultural and economic interests of a
region. Regionalism is always present in any society, even in a totalitarian one that suppresses
any of its manifestations. If it does not manifest itself in implemented politics, it is
nevertheless still the driving force of political actors.

24
Regionalism can be seen as a special case of particularism. Particularism is the tendency “to
oppose the specific features of a social entity that favours universalism, which is the
dominance of various patterns of material and non- material behaviour” (Shlapentokh et al.
1998:5). Examples of particularism are the insistence of a minority to preserve its native
language and cultural traditions, as for example is the case in Catalonia or Scotland. Talcott
Parsons (1967) saw this relationship between universalism and particularism as one of the
major principles of organisation. Thus, in this general sense, regionalism implies a conflict-
dimension in any society. Parsons believed that progress would slowly diminish the role of
particularism in the modern world. This turned out to be wrong. The growing complexity and
diversity of the world has advocated particularism, which has manifested its position at the
expense of universalism (Shlapentokh et al. 1998:6). Modernisation theorists associated
particularism with a drive to hold on to a fading past, and an attempt to entrench this past in
the present. Parsons labelled this resistance towards value generalisation ‘fundamentalism’
and ‘social conservatism’ (Parsons 1977:194). Historically, this is the conflict between the
capital and the provinces after state-building for preserving the integration of the state. Stein
Rokkan (1970) elaborated this process through his model with contains four phases for
developing democracy in a West-European state. The two first phases are state-building and
nation building, which are dependent upon each other, in the sense that failure to fulfil nation
building will negatively influence the state-building process. Such processes started in France,
already in the sixteenth century and in Russia in the fourteenth and fifteenth centuries. The
transformation of western and central Europe, which had five hundred independent political
units in 1500, into an arena composed only of twenty-five such units by 1900, was clearly a
strong progressive progress (Tilly 1975:15). The conceptual basis of such an approach is the
traditionalist theory, which holds that states emerge around a centre, which, over many
centuries, has been the main agent of modernisation in its fight against backward and
parochial territories (Shlapentokh, et al. 1998:10). This theory also assumes that regionalist
movements usually are supported by people in the periphery, who feel deprived economically
or culturally in contrast to people in the capital.

Alternative approaches to regionalism have later assigned more weight to current

developments and the most recent past, generally regarding historical and cultural traditions.
Shlapentokh argues that regionalisation can no longer be treated as a process of ‘harking back
to the past’, and that in many cases this process actually address to the future (Ibid:11). It is

25
more the advanced regions that win regionalisation: Catalonia, northern Italy, and the
powerful regions in Russia got the best bilateral agreements. On the other hand, some the
backward regions are politically passive, like southern Italy and the ‘Red Belt’13 in Russia,
since they have less to bargain with. It has also happened that these backward regions have
demanded interference from the centre to redistribute resources in their favour. This places
these regions in the role of advocates for centralisation rather than of fighters for autonomy.
Certainly, there are ethnic regions where traditional factors are still an important component
of regionalism, as in Corsica, Sardinia, Basque or Chechnya. So one should not consider this
approach without value, since local leaders use history to strengthen their role against the
centre. Therefore, in order to understand regionalisation in any country, one should have great
knowledge of the past. However, according to Shlapentokh (1998:12) it is not the past, but the
present political, social and economic factors that determine the character of regionalisation.
And this is particularly true for former Communist states, where regionalisation is not
determined by century long suppression of the capital, but by the developments directly
related to the authoritarian regimes that recently became extinct.

Figure 1.2-2 A conceptual map on centre-periphery relations

(Separatism)
Regionalism

Centre-regional relations

Inter- Centre-local relations

governmental
relations Federalism
“Federation”

So then, which concepts can capture central-regional relations in a federative state, in a

transition from a unitary state, that does not fulfil Preston King’s definition of a federation?
Figure 1.2-2 above is an attempt to simplify the pertaining concepts. No concept seems to

13
The term refers to a cluster of regions in a belt around, but mostly south of Moscow. Overlapping with the
‘Black Soil Belt’ from Orel and Kursk oblasts to Ulyanovsk oblast, which is generally known as the
conservative ‘Red Belt’ of Russia, with reference to the strong communist support. Known as densely populated,
agrarian areas where large parts of the population are still employed in collective farms.
26
fully capture the centre-regional process (grey circle). I claim that regionalism is the one that
explains most of it. In the figure, ‘federation’ represent the transitional state and the grey
circle is the process that I want to study within the ‘federation’. However, the concepts
federalism, IGR, separatism and central- local relations can capture parts of the central-
regional developments, but they cannot explain as much of the process as the concept on
regionalism. I will use them in their relevant context.

1.3 Intergovernmental power-relations

The most important political distinction among countries concerns not their form of
government but their degree of government. The difference between democracy and
dictatorship are less than the differences between those countries whose politics
embodies consensus, community, legitimacy organisation, effectiveness, stability, and
those countries whose politics is deficient in these qualities.
- Samuel P. Huntington, 1968.

I will now move on to discuss the theory most relevant to intergovernmental power-relations
that have developed in the present case of interest.

1.3.1 State authority and power

Linz and Stepan state that the best guarantor for democracy is a functioning state, because
without it there cannot be a consolidated modern democratic regime (1996:7). Of course, the
framework must be in place in which the state can implement new rules and see to it that they
are followed by actors and institutions. Democracy is a form of governance of the modern
state, which has been defined by Weber as the organisation having sole authority over actors
and actions taken place on its territory. 14 State-building is a central issue in transitional states
and the bottom line is to create effective and authoritative political institutions. The process of
transition, especially in the former SU, has resulted in the creation of political vacuums rather
than expanding a state’s capacity to identify and implement policy, which can invite
instability and the halting of democratic progress. Russel Bova is concerned with this
development: “While an excessively strong and intrusive state can certainly pose problems for
democrats, it is arguably the problem of excessively weak states which poses the greater

14
Max Weber, “The Fundamental Concepts of Sociology” translated by Talcott Parsons (ed.) in his book The
theory of Social and Economic Organisation (1964).
27
threat to democratic government in the contemporary world” (1999:17) 15 . He finds support in
the World Bank’s 1997 World Deve lopment Report that was entirely devoted to a re-
examination of the role and effectiveness of the state in the late-twentieth-century world.
Burgess & Gagnon state that both stability and legitimacy, which are significant in all
political systems, are particularly problematic in federations because of the very nature of the
state (1993:10). The fragile process of state-building and national integration in a transition to
a federation, allow for continuous public debate about the legitimacy of the state despite
constitutional entrenchment.

In a state with a federative structure there are further needs for delineating the competences of
power between the federal government and different tiers of sub- governments. In
intergovernmental relations it is necessary to distinguish between state ‘authority’ and state
‘power’ according to Young (1997:82). 16 Authority is the legal right or claim to power
through a constitution or legal act. Power refers not to any right or claim a governmental
institution may make to decide a particular matter, but to the ability of that institution to
actually do something. The legal rights and claim to power can be very distinct from this
ability to implement this authority. A government may have the authority to determine policy
over specific issues, but unless this institution possesses the capacity, or power, to implement
policy, then authority alone is an ineffective tool of government: “The relative autonomy of
one level of government is measured both by its control over resources sufficient to resolve
matters under its purview and by its ability to resist incursions from other tiers of
government” (Ibid:83). Among such resources are control over personnel appointments,
autonomous revenues, independence in budget formation, administrative coherence and
control over information. The degree of autonomy over such resources in a governmental unit
is difficult to determine, as there is a big difference between formal rights (treaties) and real
politics (intergovernmental financial transfers). Young stresses further that the distinction
between authority and power is critical to understanding the task of the arrangements of these
in a transitional federative state. One thing is a constitution or legal act that declares authority
over a specific issue belonging to a particular level of government. Another thing is when this
legal authority also grants that level of government the power or sufficient resources to deal
with the issue. Alternatively, if subordinate levels of government successfully resist policy
implementation from a higher level of government, then the authority of the latter is

15
In State-Building in Russia: The Yeltsin Legacy and the Challenge of the Future by Gordon B. Smith (Ed.)
(1999).
16
In Beyond the Monolith: The Emergence of Regionalism in Post-Soviet Russia by Stavrakis et al. (1997).
28
undermined significantly. The ability to implement directives and decisions over subordinate
levels of government is also critical to the determination of power. The paradox of organising
power in a transitional federative state is that while the central government must extend its
reach throughout the territory it claims to govern, regional and local governments must also
possess sufficient power to resolve issues within their responsibility. Passing on authority
without giving the necessary power to various levels of government could de-legitimise the
administrative structure of an aspiring federation.

Solnick adds an important element to theories that rely on state strength. The power or
capacity of a state does not increase or decrease uniformly across a state’s apparatus, but can
vary from institution to institution (1998:246). Institutions with stronger authority can more
effectively implement policy within the state hierarchy. For example, the military in a
transitional state, or other levels of government within a federative state that would grow too
powerful and possibly undermine democratisation. Anderson, for example, analysed
bureaucratic problems in the Middle East, and noted the importance of a functioning state
administration to affect the “transfer of resources within society” (1987:12). Powerlessness
over time can prevent the regime from developing domestic bases of legitimacy. Weak
administrative power may threaten the stability of the state when the state principals are
unable to discipline agents within the state hierarchies.

1.3.2 Defining symmetry and asymmetry

To differentiate the level of federal relationship in a federation, Charles D. Tarlton (1965)
distinguished between ‘symmetrical’ and ‘asymmetrical’ relations. In his eminent article from
1965 he advances the federalist theory from the legal/constitutional perspective of seeing a
federation as a whole, to the obvious fact that a federal system may be more or less federal
throughout its parts. By symmetry, Tarlton means “the level of conformity and commonality
in the relations of each separate political unit of the system to both the system as a whole and
to the other component units” (Tarlton 1965:867). Tarlton thus presented a theoretical
framework suitable for distinguishing areas of ‘federalism’ or ‘non-federalism’ within a single
system. The quality and level of a federal relationship may vary within the federation
subjects, and in their relationship to the central government. The ability to differentiate this
relationship throughout the whole system is crucial to evaluate a federation, and symmetry
between the units is therefore essential to understand federations. An ideal symmetrical
system would be composed of federation subjects of equal territory and population, similar
29
economic features, climatic conditions, cultural patterns, social groupings, and political
institutions. Each political unit would reflect the main aspects of the whole federal system,
and the subjects would have an equal division of power between each of them and towards the
federal centre. The same would hold for political representation in the central government and
for support for its activities. No significant social, economic or political peculiarities,
demanding special forms of representation or protection, would exist. The completeness and
the integral character of the various political sub-systems are the main justification for having
a federal constitutional arrangement (Tarlton 1965:868).

While the constituent parts of an ideal symmetrical federation should be equal, the actual
practice is quite different. None of the world's existing federations are truly symmetrical.
Symmetrical federalism is more commonly based upon the equal status of the constituent
units, with the same degree of autonomy and equal rights protected by the Constitution or
other federal arrangements. Asymmetry is often based on ethnic differentiation as seen in
Canada or Spain (Smith 1995:1). The ideal asymmetrical federal system would be one
composed of political units corresponding to differences of interest, character and makeup
that exist within the whole society (Tarlton 1965:869). The diversities in the larger society
find political expression through local governments with varying degrees of autonomy and
power. An asymmetrical federation favours giving regions different levels of status, varying
degrees of autonomy and privileges, with the consequent differentiated distribution of
benefits. The political institutions correspond more or less to the real social ‘federalism’
beneath them. The degree of symmetry on the vertical axis (between the centre and the
regions) is determined by the symmetry on the horizontal axis (between the regions). When
there is no asymmetry on the horizontal axis, one can hardly expect it on the vertical axis.
According to M. Faroukshine (1998) 17 real asymmetry comes when unequal units are given
equal rights. It is wrong to think that symmetry implies that all subjects have equal rights.
Unjust is it when the political institutions do not correspond to the realities, i.e. that there are
essential differences between the units in a federation not taken into account. David Milne has
argued that the only plausible outcome that can bridge competing nationalisms would be
certain versions of asymmetrical federalism (1993:204). Each federation subject has a unique
set of features that separate its interest from other subject or the system as a whole. Interests
that are mutual or national in scope would be difficult to distinguish. No federal arrangement

17
“Russian Federalism: The View From Tatarstan” in IEWS Russian Regional Report Vol. 3, No. 16, 23 April
1998 (Special Supplement).
30
is likely to be made up of federation subjects, which stand in exactly the same relationship to
the whole system.

Federal centre-region conflicts are more likely to take place when the relationship between
regional and central authorities corresponds to the image of the asymmetrical situation, and
where that asymmetry is characteristic only for a few of the states in their relation to the
whole. Harmony and conflict is then seen through the pattern of symmetry or asymmetry in
the system. The more diverse the subjects within a political system, the better it is suited for a
federation; the more homogeneous the political society, the clearer the need for unitary forms
(Tarlton 1965:872). If the diversity in a system is too large, not even a federation can provide
adequate basis for unification under a single political authority. Whether a state can function
harmoniously with a federal constitution will, Tarlton argues, be a result of the level of
symmetry within it. If the system is highly asymmetrical a harmonious federal system is
unlikely to develop. A unitary and centralised system would be better in overcoming
centrifugal forces where diversity of elements is the rule. The forces for unity must be
dominant for a federation to be seen as successful. Unless there are or a set of factors, which
clearly push in the direction of unity, the pressures of asymmetry will increasingly present
themselves, making continued federal existence nearly impossible without increased co-
ordination and coercion from the centre. This is the paradox of the ‘federalist idea’. Diversity
(raised by proponents of increased local autonomy in federal systems) tends really to
necessitate increased central authority if the system is to continue operating as a system.
These implications of federal process have to be evaluated before promoting ‘federation’ as a
means of organising political communities.

Diversity in a multiethnic federation is based on the need to ease ethnic tension, especially
where ethnic minorities are located within a territorially defined unit. Nationalism is often
treated as a state of mind, a national consciousness, as a political doctrine elaborated by
intellectuals that arise from some sort of national identity. Nationalism is often also regarded
as an expression of class interest, social structure or a cultural formation. I will not reject any
of these interpretations, but rather treat nationalism as a form of politics. Breuilly argues that
studies on nationalism that focus on culture, ideology, identity, class or modernisation neglect
the fundamental point that nationalism “above and beyond all else, is about politics and that
politics is about power” (1993:1). Power in the modern world, is principally about control of
the state. In a federative system this would be articulated through a unit’s relative demand of

31
self-determination over its own politics, and possibly secession. The ethnic minority would
potentially be quite easy to mobilise. According to Ernest Gellner is the mobilisation of self-
conception to political action short in contemporary politics:
Modern ethnic feeling…does not require for its emergence and political manifestation any
pre-existing institutions…it springs from shared culture and not from any structural features
and it can rapidly create its own structures…evidently capable of producing its own
organizations, almost effortlessly. (Gellner 1992:249-250)

To deliver ‘ethnic peace’ minority groups must be granted autonomy over cultural and some
political activities within their territory. Otherwise, these territorial defined interests that
represent the building blocks of a federation, could easily turn to demands of secession.

1.4 The democratic aspect

The lik elihood of democratic development
in Eastern Europe is virtually nil.
–Samuel Huntington, 1984

The federative and democratic concepts are interconnected. Former non-democratic states
aspiring to become federations do not only perform a transition to a federation, but also
simultaneously to a democracy. In a thesis preoccupied with finding a way to explain the
democratic development in a federative system, it is paramount to include a definition of the
concept ‘democracy’. As democracy can be understood in many different ways, I will first
briefly outline the problems connected with defining the concept, and explain the choice of
definition. Then I will connect modernisation theory to democracy and also go into the
democratic principles in federative theory.

1.4.1 Defining democracy

The term democracy comes from the Greek demos (people) and kratein (rule), hence ‘rule by
the people’. The definition problem directly follows these terms, for what is ‘rule’ and who is
the ‘people’? Later debate over the issue stems to a large degree whether or not democracy
should be defined normatively or empirically. Should democracy be studied according to the
ideal or as a description of how a system really works? The most important contemporary
debate is between the competitive elitist school (Weber 1971 and 1978, Schumpeter 1976)
and the pluralist school (Dahl 1971, Truman 1951). Both schools have again been criticised

32
by neo-Marxists (Miliband 1969, Poulantzas 1973) and neo-Pluralists (Lindblom 1977, Dahl
1985). And they continue being questioned by representatives of the New Right (Hayek 1960,
1976, Nozick 1974) and the New Left (Pateman 1970, 1985, Macpherson 1977). 18

The competitive elitist school wanted to break with the 18th and 19th century thought that
analysed democracy as an ideal and emphasised that it must ensure both complete and
unrestrained liberty, equality and full participation for its members. Rejecting these ideas as
unrealistic, Weber and Schumpeter suggested that democracy was a system where elites
compete for power, and where the influence and participation of the ordinary citizen in reality
is restricted to participating in elections where she could once on a while express trust or
distrust in the elites. The pluralists shared the wish for a more empirical definition. However,
they disagreed with the rather cynical and pessimistic conception of democracy as a system of
elite competition. The pluralists emphasised groups, factions and various interest associations,
and claimed that these groups are directly involved with the structuring of politics and power.
Democracy, in this view, is a system where all group interests can express themselves freely
and compete for power, and where a neutral state mediates between these interests. The
pluralist model has, however, been criticised for assuming that power and resources are more
or less evenly distributed among groups, and the state is objective in its mediating (Held
1995:204). In reality, some groups have much greater opportunities for influencing the
decision- making process, and the state is biased towards the interests of such groups.

As the Russian state is in the process of becoming a democracy, rather than being one, it is
important to emphasise the empirical as well as the ideological elements of the democracy
concept. I contend that using the pluralist definition of democracy can capture both the
ideological and empirical, actual sides of the concept.

To be able to differentiate sub-national democracies from another, one must operate with a
workable definition. In his book Polyarchy, Robert Dahl (1971) provides a definition. He
distinguishes two different dimensions of democracy, namely public contestation and
participation. Democracy thus is “a political system, one of the characteristics of which is the
quality of being completely or almost completely responsive to all its citizens,” (Dahl 1971:2-
3) Citizens must be able “to formulate” and “signify” their preferences and have them
“weighed equally in the conduct of the government.” For these opportunitie s to exist, the

18
The outline is based on David Held’s Models of Democracy (1995:186-264)).
33
following eight guarantees must be present: (1) freedom to form and join organizations; (2)
freedom of expression; (3) eligibility for public office; (4) right of political leaders to compete
for support; (5) right to vote; (6) free and fair elections; (7) alternative sources of information;
(8) and institutions for making government policies depend on voters’ preferences. Dahl
recommends the term ‘polyarchy’ since no state is wholly democratic in the ideal sense. But
his new designation won no general acceptance, and even Dahl himself often diverges from
the term ‘polyarchy’ and speaks just of democracy and non-democracy respectively in
different countries. The word democracy is so firmly established that one cannot disregard it.

Arguably, Dahl’s operational definitions cover the democratic ideal at one end of a
democratic – non-democratic continuum. Using these definitions as a tool for defining
democracy has advantages and disadvantages. Since each studied unit will have a specific
democratic value on each variable, one should be able to measure if a particular variable is
more (or less) democratic in one unit than another. It remains to be seen, however, whether
one unit is actually more democratic than another. Democracy is a multidimens ional concept
and one needs to utilise as many relevant variables as possible. Different variables have also
different impacts on measuring the degree of democracy; I will come back to this when
discussing the operationalisation of the phenomenon. But, the more variables one puts into
measuring democracy, the more one finds oneself in either conceptual stretching or with only
a few cases to study. Thus a problem arises concerning how the definition should be
delimited. The overall goal is to specify a concept that can be used in causal analyses, that is,
to study the empirical connection between democracy and a number of explanatory factors.

Jørgen Elklit has offered a detailed comparison of electoral democracy in five countries, a
model that also can be used at the regional level. 19 He emphasised the question of what kind
of measurement the different variables are amenable to. Elklit concludes that the only
comparison possible between countries is on an ordinal, multidimensional scale of
measurement. He also argues against aggregating the different factors into a single scale,
since the weights to be assigned to each are so contestable. I see the point in his concerns,
since there is a possibility of loosing information in making an index of measuring
democracy. However, there is often the need to summarise data, especially in a large data set.
Also, when one is working with units within a state at an intermediate level, the aggregation

19
In Defining and Measuring Democracy by Beetham (ed), (1994:89-111).
34
of data becomes less problematic, as there exists a central government common for all units,
which is a distinct difference from comparing sovereign states.

1.4.2 Transition and consolidation

The premise of the thesis is that Russia’s political system combines democratic and
authoritarian elements. Russia has no longer a communist, authoritarian system, nor has it
become a full democracy. A previous non-democratic state goes through several steps before
it is considered wholly democratic. To differentiate states in a democratisation process, one
found the need to define different stages of development. Dankwart Rostow (1970) created a
simple model with one background condition, national unity, which must be in place before it
is possible to implement a transition toward democracy. National unity, the building and
consolidating of the state, is an issue in the Former Republic of Yugoslavia and Russia. A
completion of democratisation in these countries must include a political solution on
Chechnya, Kosovo and Macedonia. Democratisation demands a settling of the national
question into institutions that can process compromises and consensus. The first phase in the
transition to democracy is the preparatory phase. It contains a prolonged and inconclusive
struggle in which the non-democratic rulers are challenged. The second phase is the decision
phase where there is “a deliberate decision on the part of the political leaders
to…institutionalise some crucial aspects of democratic procedure” (Rustow1970:355). An
important factor influencing the outcome is the makeup of the leading coalition behind the
transition. Has the transition been initiated from above or by mass actors, which have gained
an upper hand? The former probably leads to a stable democracy. The final phase in a
transition process is the consolidation phase. Juan J. Linz and A. Stepan have in Problems of
Democratic Transition and Consolidation (1996) defined when the transition is complete:

A democratic transition is complete when sufficient agreement has been reached about
political procedures to produce an elected government, when a government comes to power
that is the direct result of a free and popular vote, when this government de facto has the
authority to generate new policies, and when the executive, legislative and judicial power
generated by the new democracy does not have to share power with other powers de jure.
(Ibid:3)

The definition prevents the risk of falling into the ‘electoralist fallacy’ that free elections, a
necessary condition of democracy, are seen as a sufficient condition. Democracy is not only
about conducting technical correct elections, as the elected institutions must also have the

35
authority and power to implement policy. A constitution should also have been approved and
implemented within the transition process according to Pridham (1994:22). After a state has
completed the transition, is it then to be considered a democracy? The question of completion
of the transition phase is complex. Completion does not guarantee that the state does not ‘fall
back’ and it often proves difficult to reach an agreement on the specific institutional
arrangements. Disagreements among democrats over such issues as a unitary versus a federal
state or parliamentary versus presidential system can create problems about the legitimacy of
the emerging democratic government, the decision making process and the future of the
political system (Linz & Stepan 1996:4). Such institutional indeterminacy about core
procedures necessary for producing democracy, may not only leave the transition
uncompleted, but also postpone any consolidation of democracy. By consolidated democracy,
Linz and Stepan mean a political situation in which democracy has become “the only game in
town” behaviourally, attitudinally and constitutionally (Ibid:7-12). Democracy would then
become routine and present in social and institutional aspects. Further, Linz & Stepan
specifies that six interconnected and mutually reinforcing conditions must exist or be crafted
for a democracy to be consolidated. First and foremost there must exist a state. Secondly, the
conditions must exist for the development of a free and lively civil society. Thirdly, there
must be a relative autonomous and valued political society. Fourthly, there must be a rule of
the law to ensure legal guarantees for citizens’ freedoms and independent associational life.
Fifth, there must be a state bureaucracy that is useable by the new democratic government.
Sixth, there must be an institutionalised economic society. Evaluating these six conditions,
democratic consolidation is measured by several factors that avoid the ‘electoralist fallacy’.
Democracy is more than elections and change of regime; it is an interactive system consisting
more or less of each of these six conditions.

1.4.3 Socio-economic development on democracy

The American political sociologist S.M. Lipset linked modernisation theory with
democratisation. His main contributions are “The Social Requisites of Democracy” (1959)
and “Political Man” (1983). Although criticised, they are still widely referred to in more
recent democratisation theory. The reason for this is that Lipset’s work is dynamic; it does not
only give a description of the existing democracies, but also explains why democratisation
comes about. According to Lipset, the conditions for democracy as well as the foundations it
rests upon result from an evolution from the traditional to the modern state.

36
Lipset investigated whether there is a connection between democratisation and socio-
economic development. He defined this concept as ‘classical’ features that constitute a modern
society; namely relative wealth, industrialisation, urbanisation and education. 20 He also
mentions factors like international environment, political culture and extent of the distribution
of the GNP as factor with explanatory value, but the socio-economic development is the
essential one. His theory can be shortly presented as follows: The richer and more developed,
the larger is the likelihood of it being or becoming democratic. This rather simple presentation
leaves out a lot of the sophistication of Lipset’s analysis. Admittedly, he includes more and
goes further into crucial elements of modernisation theory, than merely stating that a rise in
GNP per capita explains democratisation.

Lipset’s main point is that when a country becomes relatively wealthy and modern, class
struggle and other conflicts are softened. Democracy would then come about more easily. He
supports his theory by a correlation analysis on Western Europe, North America, Australia,
and New Zealand, and on Latin America. Democracy is seen as a function of both conflict
about issues and consensus on norms of political conduct – from these two elements comes
the stability that is essential for a healthy and efficient democracy. Lipset defined democracy
in a complex society in the following way:

A political system which supplies regular constitutional opportunities for changing the
governing officials, and a social mechanism which permits the largest possible part of the
population to influence major decisions by choosing among contenders for political office
(Lipset 1983:27)

Acknowledging Max Weber, he finds that a stable democracy rests on two pillars: legitimacy
and effectiveness. During a transitional period, for instance when a system develops from
being rural and monarchic to urban, bourgeois and in the long run democratic, there will often
be a system legitimacy crisis. Legitimacy is “the capacity of a system to engender and
maintain the belief that the existing political institutions are the most appropriate for the
society” (Ibid:64). Because of this legitimacy crisis, as Lipset argues, some of the original

20
The four elements making up socio-economic development are measured by 15 factors: Wealth – per capita
income, number of persons per motor vehicle, thousands of persons per doctor, telephones per 1 000 persons,
radios per 1 000 persons, newspaper copies per 1 000 persons; Industrialisation – percentage of males in
agriculture, per capita energy consumed; Education – percentage of literates, primary education enrolment per 1
000 persons, post-primary education enrolment per 1 00 persons, higher education enrolment per 1 000 persons;
Urbanisation – percent in cities over 20 000, percent in cities over 100 000, percent in metropolitan areas.
(Lipset 1983)
37
institutions should remain functional until the more modern institutions have been stabilised
and a homogenous political culture has developed. This lack of legitimacy in a
democratisation process can be compensated for by economic effectiveness. If a state
manages to provide an acceptable living standard and stability of expectations for its citizens,
this itself will gradually provide legitimacy for the state. Lipset emphasises that these two
pillars are interconnected.

One problem with Lipset’s theory is the causal question: Does wealth lead to democracy or is
the reversed case also true? He suggested in 1959 that socio-economic development will in
the beginning lead to democracy, but once democracy is established it will in turn reinforce
the same processes that created it. Later, in his 1993 article “The Social Requisites of
Democracy Revisited: 1993 Presidential Address” he admits that some empirical examples do
not sustain his original thesis, but he finds it hard to explain the very strong correlations
between democracy and socio-economic development if his theory is rejected. He refers to
multivariate analysis where a number of different variables are included – and where the
strongest correlation is between democracy and socio-economic development. Lipset admits
that this relationship does not need to be strictly linear and opens for a more curve- linear
relationship. Under and above a certain threshold would the effect of increased socio-
economic development not be significant. In 1993 Lipset proposes that there is a threshold of
GNP per capita above which the prospect of democracy does not rise proportionately any
more, but stabilises. And he does not argue that socio-economic development is a sufficient
condition of democratisation because democracy has a multivariate character of political
culture, religious tradition, legitimacy, executive and electoral systems, the strength and
autonomy of civil society and political parties (Lipset 1993:17). A transition to and
consolidation of democracy is a piecemeal process including many interconnecting variables
having an effect and dependence on each other. However, this relationship between socio-
economic development and the probability of democracy does not tell us much about when, if
and how a transition will take place and can be successfully completed.

Another important critique is the fact that economic development in transitional states often
leads to an exacerbated income inequality, which may explain the declines in levels of
democracy. Income inequality has been proved to be a critical component of explaining a
negative impact on the stability of democracy (see Muller 1995), however, Lipset has
confronted and accepted this argument, which is also expressed in his 1993 article mentioned

38
above. In short, Lipset’s explanatory factors shape the probabilities for democracy, but they
do not determine the outcomes.

1.4.4 Federal democracy

A major contribution to federalist ideas comes from Thomas Jefferson in early American
political history. Coined Jeffersonian, his ideas have had an important impact on the
development of American democracy, most notably the states’ rights and local autonomy.
Democracy in this tradition is local self- government:

It is not by the consolidation or concentration of powers, but by their distribution, that good
government is effected. Were not this country already divided into States, that division must
be made, that each might do for itself what concerns itself directly, and what it can so much
better do than a distant authority… Our country is too large to have all its affairs directed by
a single government. - Thomas Jefferson in Charles D. Tarlton 1965:864.

Jefferson argued in essence that the more locally the centres of political authority are based,
the less likely it is that tyranny develops and flourishes. With such distances it would be
impossible to overlook public servants for good government, which increases the chances for
corruption. He proclaimed more a political view than a constitutional- legalistic one, looking
at the political base and consequences of a federation. Jefferson was concerned with the units
of government and with the democratic base in which those governments provide and protect.
He argued that the federalist idea is the fostering of local initiative and qualities of citizenship
through the maintenance of maximum governmental authority close to the people, i.e., the
democratic political superiority of local governments (Ibid.). Jefferson would probably have
viewed the regionalisation process in Russia as a positive one, since this gives increased
power to the regional level in such a large state. While regional autonomy would increase
management over the territory and bring decision- making closer to the individual, he would
also criticise the process since much power stops at the regional level and is seldom
distributed down to the raion level.

An interesting point of view in this respect comes from the famous Soviet dissident Alexander
Solzhenitsyn, who stood as the moral fundament against the communist regime, criticising the
Soviet government in the 1970s and 1980s. In 1991 he published Rebuilding Russia and
focused on the importance of local democracy in Russia. He argued that the Russian people
were unprepared for the complicated democratic life. Such institutions must be built ‘from

39
below’, and not be implemented rapidly ‘from above’. Solzhenitsyn pictured the old Zemstvo-
system as a model in which the local level was the basis. The most pressing and vital
decisions are made on the local level, hospitals, water-supply, schools apartments, etc.
“Without a strong local self- government would we never get a safe and stable life, indeed,
without self- government will the concept ‘a citizens liberty’ lose its meaning” (1991:137-38).
Solzhenitsyn acknowledged the necessity of local bodies for democracy to work effectively in
Russia, despite the people’s lack of democratic tradition. These local bodies would only
reluctantly extended power to units further up the hierarchy of governmental levels.

Robert Dahl has contributed with a short but classic discussion of democratic federalism and
the limits for democratic decisions by some citizens. In a democratic federal state, the citizens
of a subunit have influence on the decision making process in the centre through democratic
participation in the federal representative bodies. Dahl points out two necessary requirements
for a democratic federation: First, in a federal system a national majority cannot prevail over a
minority that happens to constitute a majority in one of the local units that is constitutionally
privileged. Secondly, all units in the federation must be democratic in the sense that all
political rights of individual citizens must be respected (1986:115). Canada and other western
established federations fulfil these requirements: Quebec, for instance has, through the
constitution, a veto on important issues considering the federation as a whole and all units in
the federation are democratic.

Now that I have discussed the most relevant theories for this study, I can formulate
hypotheses concerning CP relations and democratic development.

1.5 Specification of the hypotheses

My first hypothesis is that resource-rich regions tend to get more autonomy and power than
other regions in their relationship to the centre:
H1: Regions with a large amount of heavy industry and/or natural resources have developed
a higher economic strength than regions depending on light industry.

40
The second hypothe sis rests on the asymmetry concept within federalist theory, which holds
that differences escalate between the federation subjects as a result of, among other issues,
differences in economic strength:
H2: Economically stronger regions have more autonomy than weaker ones.

The third hypothesis concerns the historical federative structure in Russia. According to
federative theory republics would have more autonomy, based on their ethnic status stated
vested in the formal framework of the Russian Federation.
H3: Regions with high federal status are more autonomous than other regions.

The fourth hypothesis deals with state theory and problems of controlling territory far away
from the centre of the state. In a federative state such distinct territories would potentially
have objectives to identify and solve local problems without detailed interference from the
centre.
H4: The further away from Moscow the more autonomous the region.

A fifth hypothesis is based on Seymour Lipset’s theory on the relationship between socio-
economic levels and democratic development:
H5: The economically stronger a region, the more it is democratically developed.

In my sixth hypothesis I want to check for the assumption that regions populated by ethnic
non-Russians are less democratic than regions dominated by Russians.
H6: Regions with a high ethnic Russian population are more democratically developed than
regions with low ethnic Russian population.

The seventh hypothesis is based on the Kremlin assumption that increased autonomy leads to
less democratic development in the regions. General federalist theories suggest that a
federalisation is the only solution to the development of democracy in multiethnic societies. I
will question the federal prerogative based on a substantial number of powerful regions led by
executives with rather authoritarian tendencies.
H7: The more autonomous a region, the less democratic it is.

41
2 THE CENTRE-PERIPHERY DEVELOPMENT IN RUSSIA
The state … is the most flagrant negation,
the most cynical and complete negation of
humanity. –Michael Bakunin,
“Federalism, Socialism and Anti-
Theologism”, 1868.

The Russian Federation now finds itself in a period of consolidating democracy after a
transitional phase from the largest republic of the former USSR towards an independent,
sovereign state, and from a former unitary empire towards a democratic federative state. If it
will ever consolidate itself as a true democratic federation is questionable. Contemporary
Russia is a multiethnic state in which the Constitution of 1993 claims to be a federal state.
The centre-periphery development of Russia is characterised by a whole number of specific
traits, which makes it different from more classical examples of a federation, such as
Germany, USA or Canada. This fact is accounted for by the imperial history of Russia, as a
part of the Soviet Union and the subsequent collapse of the USSR.

In this chapter I will take a look at the most significant structural-historic variables that have
had an effect on the development of the Russian State. The Russian Empire, like the United
States, occupied relatively empty territory across a vast continent, a type of colonisation that
is harder to reverse, unlike that of Britain in India. But also unlike the US, which established
early an effective political system and stable relationship between the centre and the states,
Russia has since 1991 been confronted with uncontrolled dynamics in the process of
normalisation between centre and periphery. The historic trend of Russian imperial evolution
has been the very opposite of the British or American, tending relentlessly toward towards
centralisation and bureaucratisation.

Most political scientist and historians see ‘autocracy’ and ‘patrimonial authority’ as the
defining principles in Russia’s political history, as the interpretations of Pipes (1974) and
White (1979) shows us. 21 Nicolai N. Petro on the other hand have questioned this traditionally
Sovietologist stand in The Rebirth of Russian Democracy (1995), and advocated for a stronger
focus on the rich array of community-based and religious welfare institutions. And although
there were few formal institutions to constrain a monarch, as Petro argues, the Russian
21
Autocracy – an absolute government by one ruler. Patrimonial state - a state where political authority is
conceived and exercised as an extension of the rights of ownership, the ruler (or rulers) being both sovereigns of
the realm and its proprietors (Pipes 1974:xviii).
42
monarchy frequently confronted, and succumbed to, traditional customs and constraints – not
unlike the importance of custom in Britain. This dispute, on the degree of democratic pre-
revolutionary political culture, will not be further discussed here. What I find important to
note, from Petro’s rather positivistic interpretation, is that the Soviet period absorbed many
Tsar-Russian traditions, particularly the traditional relationship between centre and periphery.
This is important to emphasise because what the Soviet ideology directly incorporated in this
relationship, has again a direct effect on the developments after 1991. There seems to be a red
thread running through the centre-periphery tradition that the new regime inherited from the
old, from Tsar Russia to the USSR and to the RF.

In order to shed light on this red line through different regimes, I will first shortly sketch the
Tsar-Russia state-building history and its centre-periphery development. A period when
territorial expansion was promoted and lay grounds for today’s Russia with its heterogeneous
territory. Then I will turn to the influential Soviet epoch and the federal structure introduced
after the revolution in 1917. Last, and most importantly, is the centre-periphery development
after the break-up of the Soviet Union. I have identified five epochs in the centre-regiona l
relationship of the 1990s, in which the Russian Federation has experienced a dynamic
asymmetric federal system.

2.1 Some perspectives on pre -revolutionary history of the Russian state

After the fall of imperial Rome, no state managed to form an efficient empire in Western
Europe over a long time period, because of the strong city belt ranging from Italy to Holland.
In contrast, there has been a continuous change of empires in Eastern Europe, preventing a
gradual long-term state-building process (Rokkan 1987). The Russian state is born out of the
city Kiev, which today is the capital of Ukraine. Kiev Rus’ was the first state entity that
emerged to control the territories of people in several Slavic tribes, which had kept their
identity for a long time and consisted roughly of today’s Ukraine, Belarus and western Russia
(Pipes 1974:27-34). The most populous tribes inhabited the territory that today belongs to
Russia. Kiev Rus’ was ruled by princes who did not have a strict authoritarian rule over the
different tribes (Shlapentokh et al. 1998). When the Prince arrived a volost’ (principality) he
had to seek the support of the vetche (people’s assembly) community and accept vetche
decisions, which imposed certain limitations upon him (Pipes 1974:37). They made an
agreement and although the Prince was considered the ruler of these territories, he could not

43
ignore the authority of the tribes and some cities. The power struggle between the
communities and the princes lasted throughout the history of Kiev Rus’ from the ninth
century, ending with the installation of autocratic rule in Moscow at the end of the fifteenth
century. 22 The number of princes in Kiev Rus’ grew through feudal splitting, as each prince
had the right to inherit territory from his father, and it became a loose organisation of city-
states (Pipes 1974:35). Due to the fact that they were often at war with each other, they were
unable to protect themselves against foreign invaders or nomadic peoples, as for example
Mongols (The Golden Horde) and Tatars (Turkic peoples). 23

By 1400, Moscow grew as the strongest principality and soon annexed other, less autocratic,
territories such as the trade centres Novgorod (in 1474) and Tver (in 1485). In Moscow there
was a struggle between Kremlin and the boyars, Russia n minor noblemen who ruled their own
estates. They treated the Moscow prince as equal by declining his sovereignty and they often
tried to regain their earlier power. Ivan IV, alias Ivan the Terrible, crushed these tendencies.
By weakening the church and boyars he consolidated his autocratic position through the
oprichina (1564-1572), a separate administrative unit ruled directly by the tsar as his private
property, while the other half of Moskovia was that of the public kingdom (Pipes 1974:94).
The boyars never got their original powers back, although they almost made it during the
‘Time of Trouble’ (Smutnoe Vremya) 1598-1613.24 The militarised Moscow state, based on
the system of landed estates, became over-centralised, and the regions there were deprived of
their rights more than in any other monarchy in Europe (Shlapentokh et al. 1998:35-37). The
creation of the Russian Empire and the administrative changes implemented by Peter I (1689-
1725) failed essentially to change this regional structure, although there was some devolution
of power. Russia was divided into gubernii, originally eight 25 and later twenty-three units.
Within the gubernii there were sixty-six provinces, which were further divided into 130
independent uezdu. The gubernia reform united the central and local government into a single
system for close observance of the taxpayers. Still, the strong power of the governors and

22
This power struggle has been seen twice later, in 1917 and in 1991 after the fall of tsarism and communism.
23
This period is cited numerous times today by those opposing separatist tendencies as an example of what the
Russian Federation might turn into. The Tatar yoke followed the Mongol invasion in the first half of the
thirteenth century and was not shaken off before two centuries later. The price paid for the inability of the
Russian princes to put national interest above their personal ones according to Pipes (1974).
24
The intermediate time when the Riurik dynasty expires, and the Romanov dynasty starts. The boyars offered
the Russian throne to the son of the King of Poland, on condition that he consent to specific terms under which
he would exercise royal authority. The Poles agreed but the compact was annulled when they were expelled from
Russia shortly afterwards. (Pipes 1974:184)
25
Two centuries later, in the 1990’s, these eight gubernii divisions emerged once again, seen as the ideal
administrative structure for Russia by centralists: The eight interregional associations.
44
voevody, leaders of the gubernii and provinces, appeared outside the control of the central
government. The central agents enjoyed a significant degree of unofficial autonomy through
the logic of the system. This is seen through the large amount of arrears in the budget of the
time (Shlapentokh et al. 1998). A monopoly of power does not mean that the power is
effective, as shown to be true throughout the Russian history until the end of the Soviet
system.

Catherine the Great abolished the provinces in 1775, increased the gubernii to fifty, and
divided them into a number of uezdu based on number of population. She decentralised the
local government and placed local gentlefolk in the most crucial positions there – a system
somewhat similar to Brezhnev's reform 200 years later. It lasted to the reforms in 1860. This
territorial administrative division was based on tax and military consideration, and under
influence of the Pugachev uprising of 1773-1775. According to Pipes (1974:180), this
uprising convinced the Landlords that “at the slightest sign of weakening of state authority the
muzhik would take the law in his own hands and once again murder and pillage as he had
done under the Pugachev uprising”. From this point of view the influential serf-owning part of
the dvorianstvo had an interest in the maintenance of a strong autocratic regime. At various
periods, Russia had self- governing regions over which the bureaucracy exercised only
nominal control. In the reign of Alexander I (1801-25), when territorial decentralisation was
at its height, large sentiments of the empire were subject to charters which granted their
inhabitants considerably more political self-expression than was enjoyed by any part of
Russia proper. Finland, Poland, Courland, Livonia and the nomads of Siberia/Central Asia
were given different levels of self-rule. This was not due to recognition of the ‘right’ of no n-
Russians to self- government, but administrative prudence and shortages of personnel,
according to Pipes (1974:250).

Russia’s defeat in the Crimean war of 1853-56 deprived Russia of its great imperial power
gained after the victory over Napoleon’s France. This led to several reforms, such as the
elimination of serfdom (1649-1861)26 and the extension of the powers of locally elected
administrations seen through the zemstvo and city self- government (1864). Although the
ultimate control was in the hands of the tsarist bureaucracy, one accepted the idea of limited
self-government because of the desire to shift some responsibilities to local governments

26
A peasant institution, in which peasants were fixed to the land, but did not formally belong to their landlords.
Serfs, called krepostnye, were distinguished from slaves, kholopy. The latter did not pay taxes and was
inconvenient to the government (Pipes 1974:103-104).
45
(Shlapentokh et al. 1998). The zemstvo institution was in constant opposition to the central
government and their local representatives. After the murder of Alexander II by terrorists in
1881, many of the institutions created in the 1860s were eliminated. Still the zemstvo could
claim relative success on limited community matters until the Bolsheviks abolished it in 1918.
One has to keep in mind that the zemstvo was limited only to some of the Russian ethnical
territories, and not the whole territory of Russia. Before the revolution, there existed plans to
make the administrative levels more effective, but these were never implemented. Instead
Russia got the Bolshevik solution to the problem under ‘socialist construction’.

2.2 The Soviet Union and the inheritance of territories for the nationalities
The weakening of tsarism in Russia became most clear through the regime pressure created
by losses in the war against Japan in 1905 and in the First World War, ending by the
Revolution of 1917. Poland and Finland got their independence, while the Bolsheviks
recaptured other historical territory after the victory in the Civil War (1918-1920). The Soviet
system turned out to allow less regionalism and regionalisation than the previous Russian
Empire. Stalin modified early declarations in favour of “the right of nations to self-
determination”, by Lenin’s 1916 pamphlet of the same name, in January 1918. The people’s
commissar of nationalities considered it to be a right not of the bourgeoisie, but of the
working masses of the given nation (Hosking 1985:97). National liberation was subordinated
to the class struggle. National independence movements and varieties of ‘national
communism’ were crushed from the principle of ‘socialist internationalism’. A state was
created that mirrored the Bolshevik idea of national self-determination, with the principle of
territorial autonomy for specified ethnic groups with the formal right even to secession. In
practice, with the Marxist view that economic modernisation would minimise national
identity, national aspirations were firmly subordinated under socialist construction.

In the RSFSR Constitution adopted in medio 1918, principles of federalism were only
partially implemented. The Union Treaty of 30 December 1922 later brought together four
union republics creating the USSR; RSFSR, Ukraine, Belarus and the TSFSR (Trans-
Caucasian Soviet Federative Socialist Republic). It also included 26 autonomous areas, with
22 of these located within Russia. The first Soviet Constitution came in 1924 and was a
centralised one, adapting mostly Russian institutions into the USSR body. An exemption was
the policy of korenizatsiya (indigenisation), adopted by the Twelfth Party Congress in 1923,

46
which sought to strengthen the Soviet power in the native elite’s and encouraged the use of
indigenous languages (d’Encausse 1995:21). But in the early 1930s state policy was again
Russian assimilation, the ‘Stalin Constitution’ of 1936 changed the administrative-territorial
and governing structure of Soviet power. Regional bodies of power continued to be
completely subordinated to regional party committees or the centre. By the time of Stalin’s
death, Soviet society had reached the peak of centralism: “The periphery and its leaders had
no autonomy whatsoever. The phenomena of regionalism and regionalisation were simply
absent in the country under Stalin’s mass terror” (Shlapentokh et al. 1998). Regionalism under
the Stalin regime was quite absent and the processes of devolution or centralisation of power
were fully dependent upon the ruler in Kremlin. 27

2.2.1 Administrative divisions in the Soviet Union

The administrative-politic al structure of the USSR was based on two principles: The national
principle and the territorial principle. The national principle was divided into four levels of
ethnically based administrative-political units, in which a unified Soviet nationalities policy
was implemented, see Figure 2.2-1. Identical institutions were set up in these levels
containing not only party and state apparatuses, but also cultural, scientific and educational
facilities. The economic policy was egalitarian, with state-controlled subsidies and
redistribution. The national regions possessed formally substantial control over their own
governance.

Figure 2.2-1 Main administrative divisions of the Soviet Union

USSR

1. Union Republic
(SSR)

Krai/ 2. Autonomous
Oblast Republic (ASSR)

3. Autonomous
Oblast

4. Autonomous
Okrug

27
For a good reading on Stalin’s regime and terror I recommend books by Robert Conquest like The Great
Terror: A Reassessment (1968) or The Harvest of Sorrow: Soviet Collectivization and the Terror-Famine (1986).
47
However, not all these were treated equally, only fifty-three of the over one hundred Soviet
nations were officially identified with a particular territory and entitled ‘titular nationalities’
(Bremmer 1993:5). 28 The titular nationality has a special relationship with the state, being in a
position of privilege vis-à-vis those nations not so empowered – the non-titular nationalities –
and wary of any erosion of this position. Fifteen national groups received the highest status of
Soviet Socialist Republic (SSR) or ‘union republics,’ which were the biggest entities
comprising the USSR. Directly accountable to and within the territories of the union
republics, in order of descending status, were twenty Autonomous Soviet Socialist Republics
(ASSR), eight autonomous oblasts and ten autonomous okrugs, as visualised above in Figure
2.2-1. The distinctions between these units were largely based upon the size of the national
group. The autonomous oblasts did not have the same stature as the autonomous republics,
but were proclaimed to facilitate national self-determination of the titular nationality
(DeBardeleben 1997:36). They had a status roughly equivalent to that of the territorially
defined oblast. An autonomous okrug, on the other hand, was subordinated to the larger
administrative unit under which it was located (oblast or krai). The criteria for setting the
borders of okrugs were often arbitrary, but these border have largely been maintained in the
present RF, although some border disputes still exist. Historically, the okrugs have enjoyed
some leeway in implementing cultural policy, but under the Soviet rule they were politically
and economically subordinate to the administrative region within which they lay
(DeBardeleben 1997:36).

The territorial administrative hierarchical divisions were clearer than the nationa l ones.
Parallel to this ethnic- federal structure, the Soviet Union consisted of a whole row of
territorially defined units on two levels, krai and oblast, within the union republics. These
were directly subordinated under the union republics and therefore not a part of the federal
structure. The krais and oblasts did, on the other hand, themselves include separate federative
units such as autonomous oblasts and okrugs. The oblast was the most important of the
territorial administrative units and did generally not have other than an ethnic Russian basis.
The krai was similar to the oblast, except that a part of each krai’s border was on an external
border of the state and/or the krai included a mixture of diverse ethnic territories. Most often
the krais were less industrialised, sparsely populated and geography large (DeBardeleben
28
This entity is the nation, which, for any number of demographic, cultural, economic and political reasons, has
been vested with administrative power in a given region. ‘Titular’ reflects the ethnic group or groups that gave
the name to the republic, i.e. the Karachai-Cherkess Republic, named after both the Karachai (31,2%) and
Cherkess (9,7%) nationalities. The ethnic groups obtaining the titular status did not need to be a majority in the
territory, but were subjected to the above-mentioned criteria made by Stalin. (Bremmr & Taras 1993:13)
48
1997:36). Two cities in the RSFSR, Moscow and St.Petersburg, were also given
administrative status within the USSR. These federal cities are located within the geographic
boundaries of Moscow and Leningrad oblast, but do not form parts of those oblasts. The
Soviet Constitution describes all levels in the area of dependence, guaranteed institutions,
rights of autonomy and secession. Only the union republics were given the formal right to
secede while the other entities were strictly under Soviet rule. These bordered upon a foreign
state and were larger concentrated nations.

2.2.2 Aspects of federalism inn the Soviet state system

Soviet nationality policy in the Muslim areas aimed above all at forestalling any attempt to
create either pan-Islamic or pan-Turkic unity. That is why the Bashkirs, close relatives of the
Tartars and almost assimilated by them, were given their own republic, where the Bashkir
population was initially 25 percent, and were encouraged to develop their own literary
language distinct from that of the Tatars (Hosking 1990:241-242). The Bashkortostan and
Tatarstan republics were only given autonomous status within the RSFSR. The Tatar diaspora
in other parts of the SU were deprived of their cultural rights. Tatar influence and national
feeling were to be strictly confined within the Tatar autonomous republic in itself.

The relationship between Soviet centre and its ethno-regions contained the following four
features: First, despite the claim of article 72, that “each [union] republic shall retain the right
freely to secede from the USSR”. This was weakened by article 73 which said that the highest
bodies of the USSR state authority had the right to “determination of the state boundaries of
the USSR” and “settlement of other matters of All-Union importance”. The union republics
had little self-determination, and through the appointment of higher officials Moscow ensured
loyalty to the centre. Secondly, as part of the central policy, Moscow remained committed to a
redistribute policy of federal resource allocation, which ensured flow of capital from the rich
to the poor unions. Thirdly, the upward mobility of natives within union republics was aided
by affirmative action policies through preferential access to higher education and to party
membership. This created a ‘nativisation’ of local political leadership and growth of an
indigenous intelligentsia. The federative- like structure had impact on social formations, in
which interest in the continuation of such institutions had been laid. Fourthly, ethnic republics
possessed native culture and language aided by a variety of institutions. The federal-territorial
status determined the level of institutional protection. Minor administrative ethno-regions
were less fortunate than the union republics (Smith 1995:158-159). These were the four main
49
trends of federative features in the SU, which again had an effect on the development of a
federal structure in present Russia. In addition, one should not forget to mention the cultural
pressure from the centre. An example of this is that in every city there were multiple street
names of Soviet leaders, even though they never sat their foot there.

Until the late 1980s, the Soviet ‘federation’ seemed to function as a perfect system of ethno-
regional control. Instead of initiating much needed economic and political reform, Brezhnev’s
(1964-82) prioritised social stability in the ‘stagnation period’. Before the reform period in
late 1980s, the strain of federal compromise was evident according to Smith (1995:160).
Moscow demanded more political loyalty and less economic commitments from the ethno-
regional leaders. Greater trust was given to the republics, which furnished the native
leadership with a degree of patronage and power over their own territories. Thus Moscow lost
control, step-by-step, over vital spheres of social and political life within some of the
borderland republics. A second strain was that the goal of ensuring considerable redistrib ution
of resources through the federal budget could not be maintained. The stagnating economy
could no longer afford to meet the material and welfare expectations in the republics. This
was especially true with the republics in Central Asia and their ‘demo graphic explosion’. And
finally, Moscow tried to nurture the idea of a new identity, that of the Soviet people. But this
did not work, particularly since Moscow failed to abolish the nationality-based union. During
revisions to the federal Constitution of 1978 such steps were considered both premature and
dangerous (Smith 1995:161). This reaffirmation enabled ethnic divisions to remain an integral
part and reference point of native public life, and an organisational basis for reinforcing
ethno-regional identities. What provided the necessary conditions for federalism to appear on
the political agenda was the centre’s eventual acknowledgement that socio-economic reform
could not be effectively implemented without a civil society catalysing ‘reform from above’.
In 1990 Gorbachev started decentralisation of the economy in the USSR, and soon to follow
were the declarations of sovereignty from the union republics. The Soviet Union that fell in
December 1991 was clearly a different one from that established in 1922: Union Republics
had risen to 15 by the disintegration of TSFSR (Armenia, Azerbaijan and Georgia), the
creation of five Central Asian republics (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan
and Uzbekistan), and four additions during World War II (the Baltic’s and Moldavia).

Among the more dramatic results of Gorbachev’s reforms was the nationalistic insurgence
that in the end led to the dissolution of the Soviet Union itself. The demands for increased

50
self-rule for the union republics become stronger at the end of the 1980’s, and Gorbachev
took the initiative for a new union treaty, which would replace the old one from 1922. The
first draft, presented in November 1990, did not even satisfy the most moderate of the union
republics. Additional concessions were made in the second version, which was enforced after
a referendum 17 March 1991 and received support from 76% of the electorate. Another
version was to be signed 20 August the same year and was the immediate cause for the coup
attempt 19 August that was arranged by conservative forces within the CPSU, the military,
the Ministry of Internal Affairs and the KGB. The result was the opposite of the coup- makers’
intention, namely the dissolution of the Soviet Union.

Prior to adopting the Declaration of state sovereignty on June 12, 1990 the Russian Federation
could not be regarded as a sovereign state. The union and autonomous republics, as well as
other state formations, including those that were a part of the RSFSR, were ruled directly
from Moscow. It was the centre that actually determined, in a unilateral manner, the scope of
their authorities. Therefore, ethnic peculiarities of the state formations which were a part of
the RSFSR were not taken into due account. Only 16 republics were a part of Russia
according to existing principles of federalism. Their population numbered approximately 21
million people, though about 150 peoples resided in the Russian state.

2.3 The Russian Federation in the 1990s

The Russian federal project, although more democratic than its Soviet predecessor, faced a
similar obstacle in its associational relationship with its regions, most notably the lack of a
federal culture, which is much needed in a multiethnic democracy to generate a balance of
coexistence (Elazar 1987). The question was raised how to best divide the country into
administrative units. It was tempting to reform the subjects since the RF contained so many
units - 89, which was more than any other federative system in the world - of which many are
large and are located far away from the centre. Several new non-ethnic based restructuring
solutions were debated, but were not possible or found too dangerous. Russia was much in
need of a federal reform to hold on the regions. The Russian leaders agreed to maintain the
Soviet- made federal structure in the new Russian state. The old system of both territorial and
ethnic regions units was also to make up the Russian Federation. The former were kept
unchanged, while the autonomous republics and four of the five autonomous oblasts were
upgraded to republics.

51
Next to the conflict between legislative and executive power is the power-struggle between
the centre and regional authorities. Signified by many most central features in Russian politics
since the dissolution of the Soviet Union. In this struggle for power, I have identified five
periods in the dynamic centre-periphery development in the 1990s: (1) 1990-1991, the fear of
fragmentation after the fall of the SU before a new formal agreement with the units in the
RSFSR was in place. (2) 1992-1993, signing of the Federation Treaty in 1992 and the first
step in defining a consequent relationship with the federation units and securing the new state.
The CP relationship was also strongly influenced by the struggle in the central institutions. (3)
1993-1994, the solving of the conflict in the centre and approval of the 1993 Constitution
through a slight majority of the new state’s electorate. (4) 1994-1998, a period when the
practice of signing bilateral treaties formed the RF further towards an asymmetric federal
system. These treaties settled some important issues on delineation of authority not defined by
either the Federal Treaty or the Constitution. (5) After the summer of 1998 no more treaties
have been signed and the centre has tried to enforce a more uniform policy towards its units.
Regional legislation and the treaties are by federal law supposed to conform to federal
legislation by 2002. This process will most probably stir up further tension between the centre
and the regions.

2.3.1 ‘The parade of the sovereignties’ 1990-1992

The trend towards decentralisation and expression of self-determination for nations prevailed
in the first years after the declaration of Russia's sovereignty. It coincided with the centrifugal
process in the earlier USSR, initiated by Gorbachev’s and Yeltsin’s policies. Autonomous
republics in Russia began to seek the upgrading of their status. Tatarstan and Bashkortostan
initiated this process and as a result, 21 republics replaced 16 autonomous republics in Russia.
In many of them the titular nation was not even a majority. Upgrading the political and legal
status of the former autonomies implied an upgrading of political and economic rights to the
level of former union republics, which were part of the USSR. This also involved a movement
for the right to secede from the Russian Federation and establish relations with it based upon
the principle of interstate, i.e. international relations. Two former autonomies, Tatarstan and
Chechnya, upgraded their status unilaterally to that of an independent state and did not sign
the Federate Treaty in March 1992. Thus, they challenged the territorial integrity of Russia.

52
2.3.2 The Federation Treaty of March 1992
The first step in reorganising the institutional relations between the centre and federation units
was to hammer out an agreement with the three main administrative divisions of the RF. The
Federation Treaty of 31 March 1992 was originally signed by only 86 of the existing 89
regions due to its denial by Tatarstan and Chechnya-Ingushetia, both split up later. Efforts to
negotiate a new federation treaty for Russia began well before the break-up of the Soviet
Union. It was only after Russia became independent that these plans were realised. The
central authorities, fearing the break-up of the country, gave in to the republics’ demand for
special concessions – they were described as “sovereign republics within the Russian
Federation” (Slider in Friedgut & Hahn 1994:247). In accordance with the Treaty, the
republics in the Russian Federation are in full control of their natural resources, they may act
independently on foreign policy, and enjoy considerable economic independence. The
government was not willing to give the same concessions to ordinary regions. Therefore, three
separate versions were signed according to different administrative formations, with 19
republics (group 1), 10 autonomous okrugs, one administrative oblast (group 2) and the 57
oblast, krais and the two federal cities (group 3). 29 The republics received the greatest
independence, while separate agreements offering more limited powers were negotiated with
the two other groups of subjects. One of the ways by which the treaty elevated the status of
the republics was giving them the right, along with the parliament on the national level, to
pass legislation. Other regions could adopt binding resolutions, but not laws (Ibid:248). The
treaty provided a new differentiation of authorities. The centre is in charge of most national-
universal issues like protection of citizen rights, defence, foreign policy, space, common
market, federal budget, taxation, money printing, and common infrastructure. The regions
deal in addition with all above- mentioned issues by means of their representation in the upper
chamber of the federal parliament, the Federation Council. The time span from March 31
1992 until December 1993 is the first period when the RF existed on this new legal basis. It
played the positive role of dividing authority within the Russian Federation for the first time,
though not fully. The Treaty is considered to satisfy neither unitarists nor separatists, although
the adoption of the Federation Treaty kept Russia from becoming fragmented and breaking
into many territories independent of each other.

29
The two cities, Moscow and St. Petersburg, and the 49 oblasts were not included earlier in a federal division
and received equal status as subjects of federative significance.
53
Not all republics were ready to accept the Federation Treaty in its final form. Chechnya
boycotted the talks entirely, while the Tatar delegation participated in the process only as
observers and refused to approve the document. They proclaimed themselves fully
independent states, not a part of the federation. In the case of Chechnya this was worsened by
the fact that it is border territory, whereas the secession of Tatarstan looked more problematic
due to the fact that it is located right in the centre of Russia. In 1992 neither republic
suggested any formulas for coexistence with the unified federation. In answer to this, the
federal authority did not recognise the independence of Tatarstan or Chechnya and instead
considered them inseparable parts of Russia. Unexpectedly, the delegations from
Bashkortostan, Karelia, and Sakha-Yakutia signed the treaty. It turned out that all the three
republics had successfully insisted on separate negotiations that required Yeltsin and
Khasbulatov30 to sign bilateral addenda to the treaty that gave them rights beyond those given
in the Federation Treaty (Sakwa 1996). Despite the republics’ above- mentioned formal
attributes there seems to be little difference in the units’ status vis-à-vis Moscow. Interesting
in this sphere is the division of responsibility re the management of the natural resources. In
the beginning of the Federal Treaty it is stated that the regions have the right to exploit all
resources on their territory, while it later is pointed out that all exploitation of resources must
be in accordance with federal legislation. This lack of clarity reflects more than anything else
the actual political circumstances. In the actual preparation of the treaty the central
government was under pressure to secure support from the regio ns. Partially irreconcilable
preferences are thus included in the text.

The Federation Treaty did not fully ease the separatist trends in Russia. A number of the
republics signed the Treaty, and simultaneously ensured the legal priority of their republican
constitutions on their territory. Russia entered a legal crisis, since the RF had no individual
constitution (only Brezhnev’s version of the Soviet Constitution), and the regions adopted
their own constitutions and charters without prior consent from each other or the centre. This
process had an effect not only on the republics, but in addition on oblasts and other
administrative territories in the RF, which also sought to upgrade their status and the
recognition of their rights equal to the republics. Lobbying from the regions heavily
influenced actual budgetary allocations from the federal government and parliament to
particular regions. As a rule, the autonomous oblast and okrugs were most successful in
obtaining federal funds, and republics within the federation did significant better than krais

30
Ruslan Khasbulatov, chair of the Supreme Soviet until October 1993.
54
and oblasts (Slider 1994:250). Statutes or charters in the oblasts began to appear, and there
were attempts to proclaim independent states, such as seen in the Ural region. 31 The resource
rich regions were first of all the ones that proclaimed greater autonomy (Solnick 1995). In
contrast to the republics, the oblasts did not use ethnic slogans in their movement for greater
autonomy from the centre. Nonetheless there emerged a threat of Russia's disintegration, a
division into regions.

2.3.3 The Constitution of the Russian Federation, December 1993

Dating back to the Treaty of Union signed by Russia, Ukraine, Byelorussia and Trans-
Caucasus on 30 December 1922, federalism had always been a central element of the Russian
constitutional order. Elements of federalism are seen both in Russia’s Declaration of
Sovereignty of 12 June 1990 and the adoption of the Federation Treaty in 1992 (Theen
1999:66-67). The final draft of Russia’s present Constitution, which was later approved by the
Russian population through a national referendum on 12 December 1993, 32 can be seen as a
compromise between the unitarists and the separatists. It did not abolish the national
republics, but neither did it not state the term ‘sovereignty’ for the republics. This implied an
equalisation of the republics with the other regions compared to the Federation Treaty. In
theory, no longer were any subjects ‘more equal’ than others, only through article 11 the
Federal Treaty is reflected in the Constitution:

The delineation of areas of responsibility and powers - between state power bodies of the
Russian Federation and state power bodies in the components of the Russian Federation - is
effected by the present Constitution and the Federation Treaty and other treaties concerning
the delimitation of areas of responsibility -Article 11, Constitution of the RF.

The Constitution regulated the hybrid federalism that had been emerging in Russia, based
partly on ethnic areas (like in Belgium and India) and partly on mere territorial areas (as in
Brazil, Germany and USA). This blend of ethnic and territorial federalism was intentionally
sought restrained by Article 5 on the equality of all subjects, when they in reality obtained
different rights. The republics have their own constitutions, governments, parliaments,
presidents, and other attributes of statehood that were denied the territorial regions. The

31
In 1993, the Governor of Sverdlovsk oblast, Eduard Rossel, tried to create the ‘Ural republic’. First by an
effort to reconstitute eleven oblasts of central Russia into a republic, then declaring Sverdlovsk as a republic
with its own constitution. However, Yeltsin put an immediate end to the effort. (Remington 1999:146)
32
The referendum gave only a 58,4% support from the electorate on the federal level, while eight of the
republics and eleven of the oblasts had voted against the constitutional draft. They are nonetheless incorporated
in the Russian Federation on the basis of Article 65 where they are listed. (Theen 1999:66)
55
ordinary regions only had the power to issue their own statutes or charters. Although not
specified in the Constitut ion, these rights were established with the Federation Treaty and
before the implementation of the Constitution. The bilateral treaties, also signed in accordance
with article 11, often affirm these attributes.

The framework of the new Russian Constitutio n gave very favourable conditions for self-
realisation to all subjects of the RF. It guaranteed most extended powers in dealing with their
internal issues. All rights of the state authority are ascribed to them, except for those listed as
federal prerogatives and shared jurisdiction in article 71 and 72. Nevertheless, granting broad
independence, differentiation of powers and spheres of influence between the federal bodies
of authorities and bodies of authority of certain subjects, did not fully resolve the problem of
preserving unity and integrity of the Russian state. The regional policy had to be improved,
especially since many of the republics rejected the Constitution in the referendum of 1993.
Moscow found the ad hoc solution in enshrining the principle of asymmetry in a series of
bilateral treaties. Previous federal experiences, like in Canada, Belgium, Spain and India, have
shown us that an asymmetric system is more stable when it is constitutionally recognised.
This is a problematic legal question in need to be resolved in the future to stabilise the
relationship between the centre and periphery. Therefore, the Russian Federation is in fact
asymmetrical with respect to the units’ economy, geography, politics, social and cultural
sphere. However, the Russian Federation is in principle symmetrical by law, since the
Constitution stipulates the equality of the subjects of the RF relative to the federal centre.

Figure 2.3-1 The administrative -territorial structure of the Russian Federation

56
That is, all regions have basic equal rights in their relationship with the centre so that no
subject can legally claim superiority over another. However, the Russian regions are
extremely varied, with huge interregional disproportions, and some subjects even find
themselves on another’s territory. The Constitutional Court has not been able to solve this
question of defining a differentiation of power.

2.3.4 Relations based on both treaties and the Constitution 1994-1998

The Federal Treaty of 1992 and the 1993 Constitution constitute the main formal rights or
framework defining the authority of the levels of governments. And as mentioned, these
formal rights do not wholly solve the delineation of authority between the levels of
governments. The institution with ability to implement policy in this sphere then fills the
empty space left where no authority is defined, i.e., the institution with power. The bilateral
treaties made with the centre aimed to define more of these power relations into a quasi-
formal system. 33 Although the constitution grants equal status to all ‘subjects of the
federation’, there was a widespread practice for signing bilateral treaties between the centre
and the regions from 1994 to 1998. These treaties have set some of the conditions for the flow
of capital between the centre and the regions. So, in 1994, Russia made some federative
progress, both in the sense of differentiating the rights and of delegating powers between the
centre and the regions. One found a new formula for the relations - ‘the bilateral treaties’.
These treaties deal with the political and legal problems that arise in the CP relationship, in
the sphere of differentiating the areas of responsibility and adopting the decisions of federal
bodies of the state authority and the bodies of authority in the regions. The first to be signed
were the treaties with Tatarstan, Bashkortostan, North Ossetia and Kabardino-Balkar. This
new order meant that the centre was ready to share authority with the regions. By December
1998, there existed 42 bilateral treaties between the federal centre and 46 federation subjects,
and no more treaties were signed in the 1990s. This treaty- making process can be divided into
two main periods, the treaties made in 1994-1995 and the treaties made from 1996 until 1998.
The first treaties differ greatly from the treaties made under and after the presidential
campaign in 1996 with respect to their degree of economic and political autonomy.

33
The bilateral treaties are not formal laws, since it has not been approved by the legislative power and solely
rests a signed agreement between the executive powers of the centre and the respective regions.
57
The early treaties fostered improvement of the federative relations within the RF in general.
At the same time, the degree of attained independence for the republics varies and seems to be
determined by their actual capability of social and economic development. From 1996 the
practise of signing bilateral treaties and agreements has evolved from an extreme measure to a
standard tool in the formation and development of Russian federal statehood. This implied a
shift from the negotiated bilateral agreements of the early 1990s to more uniform and stable
revenue sharing rules for all regions in budgetary relations. The first cases of signing such
treaties and agreements 34 were conceived by the centre as urgent, necessary and exceptional
arrangements both for the republics of Tatarstan and Chechnya, whose non-signing of the
Federal Treaty became a serious problem for the centre, and for Russia’s enclave, Kaliningrad
oblast. While Chechnya chose the ‘exit’ solution, the republics of Tatarstan, Bashkortostan
and, to some extent, Sakha-Yakutia attained special treatment. They operate under
arrangements that do not conform to the relative uniform conditions assigned to other regions.
These republics are entitled to keep a much larger share of taxes and responsible for a larger
share of expenditures (OECD 2000:121). However, the authority won by some regions
through such treaties are not followed up by the capacity to implement it. It is one matter for a
region to declare, with or without a treaty, the authority over a specific issue. Another is to
have the actual power to implement this authority. This quasi- legal authority represented by a
treaty is little more than a liability, unless this treaty also grants the region the resources to
deal with that issue. Receiving responsibility without the means to support the issues does not
in real politics make a region more autonomous.

These treaties seemed to be predicted by the Constitution, but the prediction had a
contradictory form. It is written that the relationship between the federal centre and the
subjects is regulated through the existing Constitution and other treaties (1993 Constitution,
Article 76). The question arises of what regulates the CP relationship, the Constitution, a
document that is obligatory for everybody and permanently prevailing, or the treaties, which
can differ from each other. Is Russia a constitutional federation or a treaty federation?
Fedossov (1998) 35 argues that the on-going negotiation process between the centre and the
regions, particularly the bilateral treaties indicate a shift from a constitutionally based
federative system to one defined by treaty. It is widely believed that the bilateral treaties in

34
Note that the treaties were supplemented by agreements on the delimitation of responsibilities in particular
spheres.
35
Based on the authors own interview with Dr. Pyotr Fedossov (adviser to the Chairman of the Federation
Council), The Federation Council, Moscow, November 25. 1998. See Appendix A.
58
this process ‘soften’ the federation. This implies that the treaties are unpredictable in scope
and consequences, and this is why they are viewed as suspicious and even dangerous. Treaty
based federalism is therefore recognised as a less stable system of federal arrangements. If
Russia is a treaty federation, then regional leaders can define their region as a sovereign state
that is an associate member of Russia, or one that aims to reach such a status. However, if
Russia is a constitutional federation, then the constitutional framework would immediately
limit negotiations about the status a region. In other words, there is a contradiction within the
constitutional principles, degree of regulative relation between the federal centre and the
subjects made by the treaties.

Another legal problem is that the treaties are not an issue between Russia and its federation
subjects, but between the state power bodies of the Russian federation and corresponding
bodies in the federation subjects. Many of these treaties have in this framework pointed out
their indefinite character. This is for example argued in the treaty between Russia and
Tatarstan of 1994. While the treaty was agreed upon between the two presidents, it is not
ratified by the parliament. Therefore it has no international legal base, which means it cannot
be indefinite (Fedossov 1998). This means that in the moment of presidential change, it might
be prolonged or cancelled. This is very essential, because these treaties concern specific
political and social-economic matters. Tatarstan did not support the referendum on the 1993
Constitution, 36 which means that RF needed another agreement with it, this was found
through the policy of signing bilateral treaties. The largest series of treaties were made under
the process of Yeltsin's presidential campaign in 1996, when it was necessary for him to get
the governor’s support.

Fedossov (1998) also argues that the treaties might stabilise the problem regions, not on the
foundation of federalism, but more on the foundation of confederalism. Furthermore, he
argues that in the federation subjects more than 2000 normative acts contradict the
Constitution and laws of the Russian Federation. When regional legislators are confronted
with this, they agree that there are contradictions according to the Constitution, but they rather
refer to the treaties, that do in fact correspond to the Constit ution (through article 11).
Tatarstan did not vote for the 1993 Constitution, therefore the centre does not influence the

36
Only twelve of the twenty-one republics voted in favour of the constitution draft in the December 1993
referendum. Chechnya decided not to participate; while in the other eight republics the draft was either rejected
or invalid (at least 50 per cent of the electorate had to vote for the referendum to be valid). In Tatarstan only 20
percent of the eligible voters turned up (Sakwa 1996:104).
59
republic by this legal act, but only through the bilateral treaty from 1994. According to
Fedossov, the Russian Constitution is not considered as an absolute document for them: “The
fact that the 1994 treaty and not the Constitution are for them the norm, means that this treaty
in reality appear as a framework for a confederate solution, if not to say separative
37
pretensions.” – Dr. Pyotr Fedossov (1998).

In defence of the treaties it is necessary to say that opponents tend to base themselves on the
study of early examples (i.e. Tatarstan and Bashkortostan), rather than later treaties, which
follow a different model. The treaty with Tatarstan was exceptional, insofar as it was drawn
up to ease a difficult political situation by calming separatist ambitions in the republic and
restoring relations with the federal centre. The practice of concluding bilateral treaties
between the centre and the regions were initially of a limited ‘experimental’ character, as in
the case with Tatarstan. But they will not cover all 89 subjects since it appears that they deal
mostly with ‘problem regions’ with sufficient resources to attain concessions from the centre.
Generally these regions are those that have demanded greater autonomy based on their
nationalistic and/or economic situation, something I will come back to in the empirical
analysis.

2.3.5 The limits of bilateralism after 1998

Beginning in 1998, the Kremlin’s reliance on bilateral bargaining with the regions became
increasingly costly. It was losing access to the policy levers it needed to maintain a strategy of
bilateral bargaining with the regions. An important element of the bilateral treaties signed
with the regions was a separate protocol of federal properties transferred to regional control.
By 1998, the federal government was already deprived of the most valuable properties in the
portfolio. In addition, regions were accepting a share in regional enterprises to settle local tax
debts, and were using this mechanism to accumulate far more valuable enterprises than the
centre could offer (Solnick 1999:2). In addition, the economic crisis in August 1998 limited
the centre’s capacity to offer fiscal benefits through bilateral treaties. As the debt crisis got
worse, the centre increasingly lost the option of allowing regions and regional enterprises to
settle debts through mutual offsets, non-cash payments, or wechsel schemes. The international
institutions’ increasing pressure to re- monetarise the tax and budget system, dramatically
limited the central government’s opportunity to discretely hand out fiscal benefits (Ibid.).

37
Adviser to the Chairman of the Federation Council, the quote is from a interview with the author November
25. 1998, see Appendix A.
60
Also, the treasury system (kaznacheistvo), put in place by 1998, further standardised the
budgetary system across the RF and curtailed the centre’s opportunities to offer rewards
through bilateral treaties. The impact of this reform should not be overestimated, since much
of the federal expenditures are channelled through non-budgetary funds. The August 1998
economic crisis only confirmed the impression that most governors had that the federal
government could offer them little help and that they would have to solve their own problems.
As a result, the governors are taking on more power and responsibility for their regions and
therefore are becoming more accountable for their successes or failures.

On 24 June 1999, Boris Yeltsin signed a new law “On the principles of dividing power
between the Russian Federation government and the regions” regulating centre-periphery
relations. 38 All new federal and regional laws must be adopted in accordance with this law.
Also, the federal government must bring all of its laws into accordance with the law by 2000.
Existing treaties and agreements should be re-examined during the following three years, and
laws adopted by the regions should be updated within a year. The law went into effect on 30
July 1999. These deadlines were unlikely to be met, given the enormity of the task. The
federal government to date has signed treaties with 46 Russian regions. The law
institutionalises the process of signing power-sharing treaties between the centre and the
regions, including the procedure of their preparation and the responsibility of both sides
(Article 3). All aspects of preparing and concluding such agreements must be done openly. In
the past, some important details of the power-sharing treaties have been kept secret. Whether
this law will end the process of signing secret treaties remains to be seen. The law also defines
a mechanism for resolving disputes (Article 4). Additionally, it requires that all state agencies
be funded at appropriate levels so they can carry out their mandates. Article 14 of this law
envisages a unilateral refusal of the national government to implement the provisions of the
bilateral treaties, which it finds to contradict the federal legislation. Hopefully, the law will
add greater transparency to the way intergovernmental relations are conducted, improving the
overall stability of the federation.

The treaties do no longer have the same value as when they were initiated, and the centre has
gained the upper hand in its relations with the regions. Tatarstan is the most prominent case.
Minitimer Shaimiev, the president of Tatarstan, is thought to overestimate the value of the
resigned agreement following its re-bargaining four years after the treaty was signed. The

38
EastWest Institute, Russian Regional Report Vol. 4, No. 25, 1 July 1999
61
principles in the treaty still holds, but the agreements appended to it were up for resigning and
bargaining after four years. Shaimiev presented his agreement with Russian Prime Minister
Yevgenii Primakov as a victory in March 1999. However, he has greatly exaggerated the
value of the deal he has reached. The Tatar president and the then current Prime Minister
Primakov prolonged for five years the framework of the “On Budgetary Relations”
agreement, signed as part of the power-sharing treaty in 1994. The 1994 agreement gave
Tatarstan a number of lucrative concessions in tax sharing between the republic and
federation that were not extended to other regions. This agreement was in effect until 15
February 1999, but was not extended in its previous form. The federal government believed
that the inter-budgetary agreement should be extended, but the previous unique liberties given
to Tatarstan were significantly reduced (Faroukshine 1999)39 .

There has been a regionalisation in Russia since the break-up of the Soviet Union. Formally
(Constitution and Federal Treaty) and quasi-formally (bilateral treaties) there has been a
significant change from the past regimes, while in practise one can argue Moscow still has a
financial control over most regions. There is no conscious wish from the central government
to increase the power of the regions, rather the contrary. The regionalisation has been a
consequence of real politics and the centre found it opportune to bargain with the regional
leaders. Yeltsin is the perfect example of this, he promised “all the power you can swallow”
and autonomy in his struggle against Gorbachev and the Supreme Soviet 1991-1993. After he
won the battle of the central institutions in October 1993, he tightened the grip again. After
the Constitution and the first bilateral treaties, he has fought hard to reduce the regions actual
autonomy, and he has partly succeeded in this. Still, he was bound by his promises of holding
elections after a temporary period of appointing the governors. This was of significant
importance for the CP development and gave increased legitimacy and power to the regional
executives.

39
EastWest Institute, Russian Regional Report Vol. 4, No. 25, 1 July 1999
62
2.4 A discussion on the Russian case
Only a strong state - or an efficient one
for those who don't like the word 'strong' -
is able to provide its citizens with
prosperity. - Vladimir Putin, 8 July 2000.

To provide the proper context for the empirical analysis it is necessary to dwell on how the
concepts on CP relations fit the Russian case and to what degree they cover the contemporary
process. Later in the empirical analysis, I will analyse the asymmetry on economy and
autonomy statistically, and study what consequences this asymmetry has on the democratic
development in the Russian regions.

When analysing the CP process in Russia one should bear in mind that the developments are
characteristic of a transitional period that have not yet consolidated its form. At the present
stage, the Russian Federation is a specific model of state system that combines traditional
Russian and Soviet unitarism with the principle of nation-statehood (Kossikov 1996a). The
Russian Federation has been formed from the centre and not from the delegation of power
from independent states, which is the case in classical federalism. It has been formed by
means of reforming the old system on the same territory prior to reforms. The decentralisation
of the power structures into an asymmetrical federal system has lead to that regions do not
achieve equal right and authority.

The term ‘intergovernmental relations’ (IGR) in the American sense can be used on Russia,
though it is problematic to apply since Europe has another understanding of IGR. One must
underscore that the concept is moved from sovereign states to different state institutions. If
Elazar (1987) is right, stating that IGR is not a concept appropriate to use on the federations in
Western Europe due to the region’s traditional centralised state theory, then Russia with an
even more historically based centralised idea would certainly be unsuitable for using IGR.
However the term in the American sense is practical in describing interaction between
different levels of government, even in the Russian Federation.

Since the Russian Federation is not a federation per se, and since the question whether it will
ever become a federation is still open, many analysts would feel that using concepts drawn
from federalism is inappropriate in analysing the Russian case. Sbragia (1992:262) argues that
the use of these concepts ignores the possibility of ‘segmented federalism’; treaty-based

63
federal arrangements in certain policy arenas without this being based in the Constitution,
which arguably is the case with the RF. It also ignores that federalism has a political as well
as a constitutional meaning: A federal type organisation could evolve without becoming a
constitutionally based federation in the traditional sense, like what the European Union might
turn into. The case with Russia is that while the Constitution involves the making a federation,
in practice this does not fully work. Bilateral treaties have instead endeavoured to create a
federative like system of an overly asymmetric character. Federation theory fails to wholly
explain this development fully in the RF, since the theory is based on structural entrenchment
in the constitution. It does not grasp the process with bilateral treaties made by the executive
branches. The federal parliament has not ratified any of these treaties into law. Although the
Constitution gives room for these treaties, many argue that they have gone further than the
given mandate, which indicates that the asymmetric system is not described in the
Constitution. Generally, the federal Constitution is not respected in the regions and as a result
contradictory regional constitutions and declarations exists. Federalism as an idea, structure,
and process is not strongly manifested in the de facto politics of the RF, and this weakens the
prospects of consolidating a true federation. Even though Russia, as mentioned, has
established federal institutions, the essence of federalism is not to be found in these, but in the
general normative judgement of an ideal organisation supported by the people. The concept
‘federation’ is problematic in its application on Russia. I claim that the concepts ‘regionalism
and regionalisation’ would be more appropriate in describing the CP process in the RF.
Although they do not express the balanced ideology inherited in federalism, they tend to
explain the Russian phenomena better in its past and present phase. The federal ideology is
stated in the Constitution, but as I argue, is not found in actual policy of the centre in Russia.
Regionalisation and regionalism can be used both in federal and unitary systems and in a
transition between these forms of government, as their usage is more universal in any form of
organisation. However, I will continue to use the term ‘federation’, but only in the sense of a
Federation defined by the Russian Constitution and not in the strict definition of the term. I
therefore prefer ‘units of the federation’ over ‘units of the state’.

There are doubts as to whether Russia can legitimately claim to be constructing a

democratically based federation. The generally strong executive based authority conducting
treaties, and willingness of the centre to again use coercion to re-secure controls over the
Chechen republic, signals a very different project to that of federative democracy. The
problem-regions’ fight for increased autonomy has also displayed a low commitment to build

64
a democratic federation. For a federation to work successfully, as experience elsewhere
shows, not only are appropriate institutional structures, procedures and conventions required,
but these must be matched by a set of socially held beliefs that value both unity and the
respect of difference. In other words, the problem is to how to consolidate a federation
without federalism - and Russian politics is increasingly becoming defined by the lack of
federalism, not by the struggle for democratic and market reform. These spheres are more or
less dependent on each other; federalist theory only judges those states that practice
democracy as true federations. Russia has not completed its transition to democracy and has
yet a long way to go, considering several authoritarian tendencies on the regional level.

Jefferson argued that a desire for local accountability automatically leads to greater local
democracy. However, there is no basis in political theory and practice for claiming that
smaller territorial units would be more willing than the centre to implement local democracy.
In Russia and its regions, where local civil society is weak and where there are almost no
traditions of pluralist democracy, this is likely to be especially problematic. In some republics
(like Mordovia and Kalmykia) where Moscow has de facto lost control over local affairs,
authoritarian trends have long been detected. Regional executives justified their actions on the
logic that it is only through a strong and united region that local interest will be safe from
interference from an unstable centre.

2.4.1 The asymmetric federalist system

Since the adoption of the Federation Treaty in 1992, Russia consists of 89 federation subjects.
These subjects of the federation do not in essence enjoy equal rights. The republics are nation-
state formations, which have the characteristics of independent states with their own
presidents, constitutions, national anthems and flags. For example, they have the right to
establish their official language together with the Russian language. The autonomous oblast40
and okrugs on the other hand do not have these features of statehood, although they also are
nation-territory formations. Another group of subjects in the Russian Federation are
administrative-territorial formations: krai, oblast, federal cities. Many of these territories in
Russia are superior to republics with respect to their size, population, and the economic
potential. Nonetheless, they do not have any state attributes and corresponding rights. This
peculiar trait of the Russian Federation brings about many disputes both between the subjects,

40
The Jewish autonomous oblast in the Far East
65
on the one hand, and the federal centre, on the other hand. Relations between the subjects are
also complicated due to the fact that some of them are ‘built into’ others, which greatly
hampers dealing with economic issues. All okrugs find themselves within the territory of an
oblast or krai, except the Chukotka autonomous okrug, which was formerly part of the
Magadan oblast in the Far Northeast and gained autonomy in 1992 when the Russian
Federation recognised its separation. For instance, two okrugs - Yamal-Nenets and Khanty-
Mansi are located on the territory of the Tyumen oblast. All three are judicially equal subjects
of the RF, but one has not managed to define to whom the natural resources belong. Is it the
federal government, the krai or the okrug that owns the oil? Neither the Constitution with its
Constitutional Court, the Federal Treaty nor the bilateral treaties have solved this question.

The centre's current policies of asymmetrical federalism could prove effective in preserving
Russian unity. Oksana Oracheva argues, however, that an asymmetrical structure cannot
endure in the long run, as it only creates more problems (1998a) 41 . Such a system has so far
survived with Canada’s Quebec and Spain’s Catalonia, although their relationship with the
centre is continuously problematic. The difference lies in that their asymmetry is written into
the federal constitution, which is not the case for Russia. In the Russian case, asymmetrical
federalism results generally in less autonomy for non-republic regions and in more autonomy
for the republics. The bilateral treaties signed between the Kremlin and the non-republics only
reinforce the existing asymmetry between these, according to Oracheva (Ibid.). The centre has
thus had a unitary relationship with the territorial regions, while it a federal or even
confederate relationship with the republics. Oracheva argues that one cannot have both a
unitary and federal state in the same country if you want to call it a ‘federation’.

Moscow has succeeded a divide et impera strategy, intentionally or not. The first treaties with
republics were answered by a united protest from the regions, which considered them unfair.
The fact that Moscow later opened to negotiate also with ‘ordinary’ regions (meaning oblast
and krai), like Sverdlovsk, eased tension and could lead to a preservation of the system. By
making treaties with regions in numerous forms of territorial divisions, the centre has in effect
split the regional opposition by satisfying the most powerful ones. The strong regions, that is,
the republics or oblasts that have achieved treaties, are reluctant to help the weaker regions in
obtaining the same status. Irina Busygina has shown that the main differentiation of regions

41
“Russian Federalism: The View From Perm” in IEWS Russian Regional Report Vol. 3, No. 14, 09 April 1998
(Special Supplement).
66
lies not between republics, krais and oblasts, but in the “Spannungsfeld zwischen
wohlhabenden, aussichtsreichen, entwickelten, aktiven, selbständigen Regionen und armen,
perspektivlosen, passiven, abhängigen Regionen” (1998:251). 42 The ‘strong’ republics have
therefore more in common with other ‘strong’ regions than with ‘weak’ republics. This
hinders an efficient inter-regional co-operation to confront the centre, as the uniting of
republics or oblasts do not seem probable. Although Busygina focuses on the positive
functions on the bilateral treaties, she also states that the asymmetry in social and economic
spheres is dangerous for the integrity of Russia, which should still be considered a fragile
democracy.

The ethnic republics took considerable power with their declarations of sovereignty and their
constitutions, while other regions followed by adopting their own charters, also asserting a
kind of regional sovereignty. These demands show that ‘regional egoism’ is aggravated
through the federative system. And if the overall idea of federalism is generally missing,
implementing a system resembling a federation will function to channel such ‘egoist’
demands, which could damage the unity of the RF. Inequality in the status of certain ethnic
groups and regions has become one of the leading factors of social injustice, which, in turn,
fosters the growth of tension. “The problem is that asymmetry in the degree of independence,
level of autonomy and the right of the regions ultimately results in the asymmetry of the rights
of the citizens” (Oracheva 1998b) 43 . A contradiction lies in asymmetry between individual
rights and collective rights; can you give group rights that do not violate individual ones?

2.4.2 The weakness of the central and regional state apparatus

Formally, the Russian centre still enjoys great powers compared to the traditional federations,
and one argues that the re still is much room for federalisation of power, especially concerning
the mentioned fiscal system. The fact is that the centre cannot use its powers, which is another
question evident from recent experience. An example of this is the conflict between the
governor in Primorskii krai and the presidential administration. Yeltsin was unable to replace
governor Nazdratenko in the summer 1997. Since the war in Chechnya, the centre’s capacity
to impose its will by force has been hard to imagine, and at the end of the 1990s the centre
increasingly resembled a ‘paper tiger’. In the theoretical chapter I noted the important

42
“…area of conflict between wealthy, promising, developed, active, independent regions and poor, perspective-
less, passive, dependent regions” (my translation).
43
“Reply From Oksana Oracheva” in IEWS Russian Regional Report Vol. 3, No. 16, 23 April 1998 (Special
Supplement).
67
distinction between authority and power, which is necessary to understand the task of
intergovernmental relations in contemporary Russia. Oracheva supports this: “While the
centre still enjoys a lot of formal rights in terms of its decision- making authority and
enormous concentrations of resources, its enforcement [power] is rather limited” (1998a). The
fact that the centre can react to, but not necessarily shape the developments of the regions
illustrates the weakness of a federal government. Another point is that the centre’s lack of
power, or lack of willingness, to enforce federal law against regions that violate them only
causes a relative high degree of asymmetry. It is generally known that regions violate federal
laws, but the question is whether or not the federal government does anything to stop the
violators, which is the key source of asymmetry. Steven Solnick (1995) has also pointed out
the similarity to the American case, where the southern states violated constitutional rights of
whole groups of citizens, but this was often ignored by the federal government for political
reasons. This is unlike the Spanish and Canadian case, where the asymmetry is legally
defined.

The CP process in Russia has led scholars to speculate that the country could create a new
form of state formation, which could turn out to be a democratic one. There are traditionally
three main state- forms: unitary, federal and confederate systems. In addition, when looking at
the weak state in Russia, the RF has transformed toward what Alfred Stepan44 has called the
‘stateless’ system. In a stateless system the state has marginal means for determining and
implementing politics within its territory. Fragmentation is a probable outcome on the long
run, although Stepan does not think the process in Russia would lead to such a situation. More
likely is a formation that has both a federal and a confederate element. When we look at the
present asymmetric system with its bilateral agreements and the weak state, some argue that
such an outcome is already forming, although time will show if it consolidates. An interesting
trend in the parliamentary elections in 1999 was the formation of election blocks consisting of
both centralists and regional governors, like the united “Fatherland - All Russia” and “Unity”.
This indicates that many governors do not find a state-transformation leading to statelessness
to be in their interest. After the financial problems in the fall of 1998 the regional executives
learned that they are dependent on a functioning centre that can guarantee the framework for
economic stability. It also shows the influence of the regional leaders in the elections for State
Duma.

44
A. Stepan presented this at a lecture at MGIMO, Moscow, Russia, October 8. 1999.
68
Federalism is to make a government more representative of and responsive to local demands.
According to Steven Solnick, sub- national politicians must be able to respond to constituents’
demands with policy proposals and be able to be held accountable for the implementation of
that policy (forthcoming:14). 45 A strong centralisation would problematise that accountability,
as it provides local officials with a ‘scapegoat’ for local policy failures. Similarly, Solnick
points to the necessity to deliver ‘ethnic peace’, in which minority groups must be granted
autonomy over cultural and some political activities in the groups’ territories. Without such
autonomy, the ethnic defined regions that represent the basis of the Russian Federation, could
easily become the seedbeds of separatism. The Russian state-system is considered weak, and
this not only relates to the centre, but also to many regions. As the trend in the 1990s has
shown, the centre’s power was decreasing and it did not have enough resources for policy
implementation, which could be seen through the inability to pay wages across the country.
As of this, the regional power increased, but since most financial resources are still controlled
by the centre, the weaker regions lack the capital to implement their own policies. They are
given the authority to deal with issues, but not the power to implement these issues.

The power vacuum after the fall of the Communist Party allowed for an inefficient and
corrupt bureaucracy, and lack of power- monopoly by the state. The weak centre was unable to
collect taxes and was challenged by demands for sovereignty. This weakness led to no defined
power separation between the centre and periphery. In comparison, the Brazilian central
government in the 1990s did not have the power to reform an existing brutal police force,
while regional governors who have the power, did not come to it. The Russian central state is
claimed to be unable to protect people from human rights violations in all 89 regions. If the
central state system becomes truly democratic, this would probably not account for the whole
of Russia, because the regional level would still be able to ignore the centre’s right to
guarantee universal, democratic rights.

Healthy federal relations and the stability of a federation depend first and foremost on
prospects for economic growth as argued by Midkhat Faroukshine (1998)46 . The basis of the
conflict between the federal centre and the regions are economic in nature, with widespread

45
“Is the centre Too Weak or Too strong in the Russian Federation?” in Building the Russian State: Institutional
Crisis and the Quest for Democratic Governance edited by Valerie Sperling, Westview Press (forthcoming).
46
“Russian Federalism: The View From Tatarstan” in IEWS Russian Regional Report Vol. 3, No. 16, 23 April
1998 (Special Supplement).
69
poverty as primary cause. General economic growth will probably normalise federal relations.
But the asymmetric system makes equal growth among the regions in the immediate future
less probable. A strong centre could redistribute more capital from rich regions if many of the
powerful regions did not have statues/constitutions that neglect the federal redistribution
system. When looking at Russia’s economic performance during transition there is a striking
regional disparity. Considering the period of transition from 1990 to 1998, the industrial
production fell n average 78% in the ten worst performing regions, whereas it declined only
30% in the top ten (Ahrend 2000). 47 Is this discrepancy a cause of economic reform in the
regions or the initial competitiveness of the industrial structure?

In Figure 2.4-1 the main financial channels in the administrative structure are visualised. The
regions receive funds from the centre, while the local level of government has gotten no direct
transfers from the federal centre. The local level is then fully dependent on the goodwill of the
regional level and the amount of its collected taxes it is allowed to keep. Much of these
financial flows vary from region to region, depending on the relationship with the federal
centre. The bilateral treaties signed in the years 1994-98 have altered a uniform fiscal system,
because the financial system through these has been subject to negotiations. There exist also
financial transfers that are excluded in the federal budget, which make a mapping of the
transfers difficult. In the statistical analysis I have tried to measure this through an index for
budgetary and non-budgetary transfers, called de facto autonomy (see chapter 3.2.4).

Figure 2.4-1 The fiscal system of the Russian Federation

47
From The Third Annual Conference Report of EERC (2000:13). Moscow 11 December 1999. URL:
http://www.eerc.ru (06.04.2001)
70
The formation of a federative budget economy began in 1991, along with the building of the
Russian federative state. In the economic and political transformation of Russia, the
development of fiscal federalist relations between the central and regional governments is a
central element. Classical theories on fiscal federalism emphasise an efficient division of
fiscal control in a static economy (Tiebout 1956, Musgrave 1959, Oates 1972) 48 . Classical
theorists argue that a significant degree of fiscal decentralisation can enhance efficiency and
welfare in a state as big as Russia through the exploitation of informational advantages and
differences in local preferences. In the Russian Federation a fiscal federalist system that
delegates a large share of responsibility to lower levels of government has become the only
feasible option. An effective federalist system must support incentives for sub- national
governments to exercise their high degree of authority in a manner that is responsible and
conducive to progress in economic reform (OECD, RF 2000:113). Economic models of
decentralisation generally emphasise the beneficial effects of competition between regions in
attracting mobile capital. This process has gone through several stages of development, but
essential problems remain to be solved. Since 1997 relative stable and uniform rules for the
division of revenue and fiscal authority have gradually replaced the earlier chaotic bilateral
bargaining and conflicts. Still, there is a high degree of asymmetry in Federal Russia: A
contrast between the formal systems of laws and regulations that maintain a high degree of
centralisation in fiscal authority, and, at the same time a reality in which a high degree of de
facto authority rests with the regional level of government. This inconsistency has provided
regional officials with an excuse to distance themselves from responsibility for the
consequences of poor budgetary and debt management. According to OECD, it has also
encouraged regional officials to exercise de facto authority through informal means that
circumvent laws and regulation (2000:114). The Novgorod governor describes the view from
the regional executives on the rules of the game:
The main strategic financial problem which our team tried to resolve these last years was
finding a way to end our dependence on subsidies from Moscow. It's not just that dividing the
regions between donor and recipient regions hurt our pride. We have understood that there is
not power without money. This simple truth has been known to man from time immemorial,
and all attempts to ignore it have ended badly. Barely getting by on subsidies, which one must
beat out of the state by all rational and irrational means, sharply reduces a region's ability to
survive -Novgorod Governor Mikhail Prusak, 1999. 49

48
Taken from “Fiscal federalism” in OECD Economic Surveys: Russian Federation (2000:114), pp. 113-165
49
Novgorod Governor Mikhail Prusak in his book entitled Russia on the Threshold - A Strategy for the
Authorities (Rossiya na rubezhe - Strategiya vlasti). Taken from EastWest Institute Russian Regional Report
Vol. 4, No. 26, 8 July 1999.
71
The consequence of this state of affairs is that fundamental reform of the system of fiscal
federalist relations is paramount in the coming years. Powerful regions will continue to bend
the rules of the formal fiscal system as long as the centre is weak and unable to put power
behind demands.

2.4.3 The ethnic question

The concern that Russia would split up like the Soviet Union has sho wn to be exaggerated,
despite the tragic case of Chechnya. Although Russia also underwent a wave of ethnic-
national mobilisation within its national republics, separatism never reached the point where
Russia itself was at the point of dissolution. The ment ioned demographic and administrative
makeup of Russia, and Moscow’s willingness to negotiate treaties with problem regions, have
preserved Russia’s integrity and, begun the process of establishing a meaningful form of
federalism.

Map 2 The ethnically defined regions in Russia

The negative case is Chechnya, however, since 1994 no other republic of the RF has
realistically raised the issue of political self-determination. The confrontational relations
72
between the centre and Chechnya as well as the conflicts have not been resolved and entail
consequences for the whole system of federative relations. A probable solution to keep
Chechnya within the borders of Russia would be to give it a status of a federacy or a
confederate/associated status. But Russia fears giving increased autonomy. One argues that
other republics would also demand an upgrade of their status. Indeed the planned integration
of Belarus into the RF has led some republics to formulate demands for a similar status. Even
if Russian federal authorities formulate a bilateral treaty with Chechnya that secures a special
status of the Chechen republic, as has long been discussed, the consequences of prolonged
confrontation are quite obvious. The fighting started again in October 1999, and no one really
believes that the Chechens easily will give up their fight for independence. If Russia again
fails to bend the breakaway republic back to the federative structure the centre will probably
be weakened. If it succeeds, which in the long run seems difficult, Russia also fails to move
towards a federation, through a stronger and less democratic state. Dmitri Furman suggested
that Moscow's approach to Chechnya and the Chechens have left him unable to “imagine a
peaceful integration of Chechens into Russian society” (Russia Today, March 13, 2000). As a
result, Furman said, Russian democracy is likely to become impossible without Chechen
independence. Because of that, he concluded, “in the long run, … Chechen independence is
inevitable” (Ibid.). One will eventually have to choose between a democratic Russia without
Chechnya and an undemocratic Russia, which tries to hold on to the small republic in the
North Caucasus. The ongoing war and the form of the coming political agreement can prove
vital for aspirations of federalism and federalisation in Russia. The weak centre originally
feared another military conflict as a result of the Chechen conflict in 1994-6. In addition the
presidential elections were approaching and Yeltsin needed the support of the regions. In this
setting, it was easier for many regions to succeed in getting concessions, including unjustified
benefits. That is why by the end of 1995 there was an increased activity in signing bilateral
agreements. The treaty in November with the Republic of Udmurtia, which has significant oil
resources and a high military-industrial potential, started this trend. Two bordering subjects of
the federation followed the pattern, Kaliningrad oblast and Krasnodar krai, which secured
their special interests. As mentioned, these treaties are the centre’s best weapons against
separatist movements, in order to secure the territorial integrity of Russia.

Most ethnically defined regions including the republics have a majority of Russians. One
should expect that ethnic regions would mobilise more than non-ethnic regions to increase
autonomy, especially the regions with an ethnic majority. Or is it the traditional, ethnically

73
based federal structure that determined the mobilisation, and not the present day ethnic
composition? Gellner pictured the ethnic conditions for mobilisation in the former Soviet
Union as naturally generated by a double vacuum; that there was no serious rival ideology and
no serious rival institutions. There is of course a distinction between mobilising and achieving
one’s goal – I will measure only the results of mobilisation, not the mobilisation process
itself. 50

Only six of the 21 republics and two of the eleven ethnically defined okrugs and oblasts have
more than 50% titular nationality (NUPI Report Nr.199, 1996:2-3). See Map 3 for an
overview of the ethnic composition in the autonomous republics. Because of this minority in
the population, many of the ethnically defined areas do not have a strong position on serious
ethnic claims. Still, the issue of ethnicity has been used with success in the beginning of the
1990s to the frustration of non-ethnic regions. My argument is therefore that most ethnic
regions gained autonomy by utilising their titular status and played on ethnic politics, even
though there was no grass root ethnic mobilisation, but rather an ethnic card played by the
regional elite.

Map 3 The ethnic composition in the republics

50
As described well by Charles Tilly and his theory of mobilisation in From Mobilization to Revolution (1978).
74
To sum up, the case of the Russian federation is a ‘holding together’ federation as opposed to
the traditional ‘coming together’ federations defined by Riker (1975). The weak central
institutions has led to a regionalisation that gives substantial power to regions that are able to
put leverage behind their demands of ethnical, geopolitical and/or economical characters. This
lack of uniform policy by the federal centre led to an increasingly asymmetric federal system,
which mandate is vaguely vested in the 1993 Constitution. In addition, several regional
leaders have taken advantage of the autonomy given, and centralised themselves the increased
power. However, after the financial blow in august 1998, the pattern of a more uniform seems
to develop, as regional leaders see common interest in a financially stronger state that can
guarantee economic stability.

75
3 METHODS AND OPERATIONALISATIONS
Making any comparisons between
Russian regions requires a heroic
disregard for statistical difficulties
-Philip Hanson, 1996

The study has until now taken into account the dynamics in the CP development in Russia,
ending with an evaluation of the federative system. I will now turn to a more mechanical way
of assessing my discussion in the previous chapter and add the aspect of democracy. The
collected material is only at the regional level, and I will not conclude these findings to any
other level of government. In opposition to the dynamical and descriptive chapter 2.3, the
coming analysis will largely look at the 1990’s diachronically, since the data do not permit
comparisons synchronically, that is, they are not recurring or operating at exactly the same
time periods.

I intend to study regional differences concerning their relative economic strength, degree of
autonomy and democratic development. But there are important methodological issues to
consider: How to define and measure concepts like economic performance, regionalisation,
and democratisation? How to identify, compare and differentiate the Russian regions in these
spheres? Which factors should one use to measure the concepts? The 89 regions are diverse
when it comes to culture, economic development, and political practise. One factor that is
significant for measuring a phenomenon in one region could be less important in another. For
example, democratic indicators could play different roles in the various regions. It is
troublesome to conclude that independent media are more important than a democratic
leadership in measuring democracy. While this might be true for some regions, it might not be
the case in others; it depends on the specific situation in a region. The comparison between
regions becomes therefore in principle problematic. Generalisation is limited, but I have tried
to overcome this problem by my choice of method and theory in chapter 1 and by weighting
variables in the operationalisation in chapter 3.2.

With 89 units of the RF at hand, it would have been quite difficult to do a case-by-case study,
or use other qualitative techniques. That is why I use a quantitative method, with a data set
with over 50 variables. I will mainly use bivariate correlation and multivariate regression
analysis.

76
3.1 The data

Working with regional statistics is more problematic than working with Russian national
economic statistics. There are limitations connected to the interpretation of the data from
different sources and different years. Most data concerning economic strength, degree of
autonomy and democratic development are collected from different years in the 1990s. The
only statistical data set on democratic development in the Russian regions is, to my
knowledge, the one from 1997 and 1999, as used in this study. As shown in chapter 2.3, there
has been a significant transformation in the centre-periphery relationship from 1991 to 1999.
When the relationship between centre and the regions changes, the idea and content of politics
also changes: a region’s approach demanding increased self-determination over resources
towards a weak Moscow, diverges from a position when Moscow is strong. To compare over
time synchronically thus becomes problematic in the analysis of the thesis. Also, data
collected on the Russian regions are more problematic than on more stable democracies. For
example, gross regional product is considered the best economic measure here, but
underreporting of personal money income is probably uneven across regions: prices vary
enormously; subsidies for food production in households is not counted in the income figures
and vary in importance across regions; and the increasingly important service sector is poorly
reported region by region.

Statistical data on demography, economy and autonomy are mainly collected from three
major Russian works, Goskomstat (1999), Geografia Rossii (1998) and Politicheskii
Almanakh Rossii (1998/99) and from the World Bank (1999) and the EastWest Institute
(1999). The data measuring the degree of democracy in the regions is based on collected
material from two sources: The Public Expertise Project, “Evaluation of freedom of speech in
Russia”, led by the Russian Union of Journalists in 1999, and a survey made by Moscow
Carnegie Centre (MCC) in 1997. The data collected from the latter needs explication. MCC
has measured democracy on the basis of Robert Dahl’s theory on democracy. This survey
does not cover all 89 regions in the Russian Federation. The democratic variables in the
survey are based solely on the 57 administrative territories, and do not include the remaining
32 ethnically defined regions. MCC asked 40 experts on provincial politics 51 to select from a
group of 57 territorial regions (49 oblasts, 6 krais and 2 federal cities), the 10 most

51
These so-called ‘regional experts’ are scholars from universities and research centres in Moscow,
representatives from the Russian presidential administration and Federation Council, and foreign scholars
(McMann & Petrov 2000:157).
77
democratic and 10 least democratic regions, 52 26 of the experts responded to the request.
MCC excluded republics, autonomous okrugs, and the autonomous oblast in the study
because, as they argue, ethno-territorial regions differ from the 57 administrative regions in a
number of ways, such as legal status within the Russian Federation. The former were
designed as administrative-territorial units for non-Russian peoples and tend to have a smaller
proportion of ethnic Russians. On average these ethno-territorial units have fewer people and
larger areas, are less industrialised and more economically dependent on Moscow, and are
clustered in the North Caucasus and East Siberia. This is a paradox of in comparative studies -
when are cases too different or too similar to be compared? While MCC has good reasons for
excluding ethnically defined regions, I propose that a study including all federation units
could prove productive as argued in 3.1.1.

These data are adapted through analyses in SPSS53 by correlation and regression analysis.

3.1.1 Comparing through time and space

A possible objection against all forms of comparison of political and socio-economical
structures across units with vastly different demographic features is that contextual special
characteristics in a unit make a complete comparison difficult. The indicators that measure
and express the substantial content of the comparison will rarely be fully compatible, and they
limit plausible conclusions concerning the similarities or differences between the units. Such
an approach implies that political phenomena can only be understood through careful case
studies. In the Russian Federation, the ethnically defined regions have different structural
particularities, like religion, language, culture and ethnicity. Along with the diversity of socio-
economic level and political practice one could argue that a comparison is meaningless and all
study should be based on thoroughly case studies. However, all these 89 units have a lo ng
history within the same state structure, and all of them were assimilated more or less into the
Russian culture, whether the state was Tsarist or Soviet based. The socio-economic
differences levelled out to a large extent under the Soviet regime through redistribution of
revenues. On the other side, the Soviet system of nationalisation made the nationalities more
aware of their identity, and after the collapse of the Soviet Union, these nationalities aspired
52
The regions were ranked by calculating the percentage of respondents listing each region as one of the ten
most democratic in Russia and then subtracted the percentage of experts who selected that region as one of the
ten least democratic. The experts’ knowledge of the regions and conceptualisation of democracy was tested.
McMann & Titov argues that rating all 57 or, ideally, 89 regions would be too difficult to range even for the
regional experts. It would further be too time consuming and possible less reliable and valid (2000:162).
53
Statistical Package for Social Sciences 10.0
78
to realise their peculiarity within their given territory. These peculiarities along with structural
conditions have made the comparison of democracy across territorial and ethnic regions
considerably problematic. The Moscow Carnegie Centre chose to exclude the ethnically
defined regions in their stud y because “the two sets of regions differ so dramatically that we
felt that comparing levels of democracy across both groups would provide little information”
(McMann & Petrov 2000:159). McMann and Petrov control for broad socio-economic factors,
industrialisation and ethnic diversity in order to explore why ‘more or less similar’ regions
exhibit such different levels of democracy.

I think that the diversity in these three factors is also present within the territorially defined
regions. There is a clear difference between, for example, the socio-economic conditions in
the territorially defined oblasts Nizhnii Novgorod (Volga region) and Magadan (Far East) – I
would not consider the socio-economic conditions in these regions as ‘more or less similar’. I
argue that Magadan oblast is more equal to the regions that geographically surround it,
whether they are ethnically or territorially defined. I do not mean that only the geographical
proximity to each other is a better condition for comparison than a ethnically
defined/territorially defined differentiation, but that there are also other structural conditions
that do not necessarily go along the ethnic cleavage line. Nizhnii Novgorod has more in
common with the rich ethnic republics of Tatarstan and Bashkortostan than Magadan oblast.
Magadan oblast has more in common with the okrugs of Chukchi or Taymyr than the
territorial regions in Southwest Russia like Samara or Rostov. Even most ethnic regions,
especially the okrugs, have a majority of ethnic Russians. MCC points out that there is a
difference in the percentage of Russians between the ethnically defined and the territorially
defined regions. The ethnic regions have an average ethnic Russian population of 53 percent,
while the territorially defined regions have an average of 91 percent according to 1989 data
(McMann & Petrov 2000:159). While the non-Russian population in Russia accounts for only
about 18 percent of the total, the population in the ethnic regions, including the ethnic
Russians populated there, the ethnic regions accounts for approximately 38 percent of the
total population.

This is far too big a group to exclude in a study of democratic development that aspires to
take into account the democratic development in the Russian Federation as a who le. After all,
they do count about half of the Russian territory and make essential parts of the federative
system in Russia. The republics are the regions that defy the federal centre on demands

79
concerning autonomy and self-determination, which could in turn destabilise the integrity of
the Russian Federation. The degree of democratic development and stability in these units
would give us a better indicator of how advantageous or disadvantageous the federalisation
has been in Russia for the democratic deve lopment in the regions – and thus a measure of its
success. Consolidated democratic principles would again stabilise the RF. The ethnically
defined regions are generally believed to be less democratic than other regions and would thus
lower the overall indicator of democratic development in Russia.

I argue that it would be fruitful to take a step further in comparing all Russian regions,
including the ethnic regions (except Chechnya), considering their diversity in various fields.
However, a comparison mus t obviously take into account their differences. I accept that the
inclusion of all regions will result in less attributes do define democracy to avoid conceptual
stretching, thereby increasing the level of generality. The degree of democracy in all Russia n
regions will later be defined as a freedom of the press index, described in 3.2.5.

3.1.2 Validity and reliability

In operationalising the phenomena economic strength, autonomy and democracy, I may
encounter problems with validity. The theoretically derived indicators may not capture the
phenomenon as it empirically turns out to be (Hellevik 1991:159). “Validity is the degree to
which a variable’s operationalisation accurately reflects the concept it is intended to measure”
(Bohrnstedt & Knoke 1994:14). Are the selected variables reliable indicators of the intended
concept? For example, democracy according to Dahl’s definition can hardly be measured by
the degree of a significant opposition, when I add “degree of democratic elections”,
“institutionalisation of power”, “degree of openness”, and “democratic leadership” it would
better explain the concept according to his definition, which includes all these attributes.
Reliability is the extent to which different operationalisations of the same concept produce
consistent results (Ibid.). Poor reliability degrades the precision of a single measurement and
reduces the ability to track changes in measurements in the studies. Good reliability increases
the reproducibility of a measurement. In other words, it says how probable it is that a similar
relation would be found if the experiment was replicated with other values on the variables,
drawn from the same population. Reliability and validity in this study will be accounted for
below. I use the Cronbach’s alpha to test the additive indexes made of the sets of variables.
The possibilities of multi-colinearity will be dealt with in the chapters on bivariate correlation.

80
In the regression models I will identify the residuals for more reliable findings. Both
correlation and regression will be subject to significance tests.

3.2 Operationalisations and construction of variables and indexes

In this section, I outline how the concepts described in chapter 2 are transformed into
variables that can be utilised in quantitative analyses. The variables are divided into four
groups: background factors, economics, autonomy and democracy, and distinguished as
independent, dependent and control variables. The coding of most variables is found in
Appendix B. Both correlation and regression are based on squared deviations from the mean
of the variable. This means that large deviations from the central tendency will strongly
influence the result. It is therefore important to identify and exclude outliers that to a large
extent could influence the outcome in later analysis.

Aggregating the variables into respective indexes for each phenomenon better expresses the
underlying construct of the three different phenomena in question, economy, autonomy and
democracy. An index is a summoned composite of other variables that are assumed to reflect
some underlying construct (Bohrnstedt & Knoke 1994:264). In this case the indexes are
aggregated measures of each region’s performance in economy, autonomy and democracy.
This will reduce the number of variables and produce a more general picture of the concept.
But, as shown later, not all variables describing a concept can be used in the same aggregated
measure. In making indexes I am risking to loose some information, but I contend that the
findings will appear more valid and reliable than the original separate variables. The method
of dimension reduction is additive index making, and with minor application of factor
analysis the indexes are confirmed. The defining characteristics that distinguish these two
analytic models is that an additive index assumes that all variability in an variable should be
used in the analysis, while factor analysis only uses the variability in an variable that it has in
common with the other variables. An additive index is often preferred as a method for data
reduction, while factor analysis is often preferred when the goal of the analysis is to detect
structure. I have already made my theoretical assumptions concerning data reduction, and
factor analysis will here only test the quality of this structure.

81
3.2.1 Additive indexes
Additive index composition will here provide the summary measures for economy, autonomy
and democracy. I assume that the variables or indicators that make up these indexes reflect
some underlying latent characteristic. I also expect the observed underlying indicators to be
positively correlated with each other in order to express a latent unobserved theoretical
construct. An ideal index would consist of variables that are relatively related so that it is
fruitful to combine them in an index. These variables should correlate within a certain
interval, often argued to be between 0.30 and 0.80. If the correlation lies below the minimum
criteria, then the variables are too different for a meaningful combination, and if the
correlation is higher than the maximum limit, it is unnecessary to include both, since the
variable adds little more than already included. Bearing this ideal example in mind, however,
my aim is a formative measuring model, for which these rules on correlation are not strictly
necessary (Hellevik 1993:165-167, 275), since the operational variables are considered to
have an effect on the theoretical index. A theoretical assumption is very different from a
perfect correlation and far more important.

To make an index from variables with different types of values or scales, I first had to recode
the values into a common, standardised scale. The raw variables have values in billion
roubles, thousand roubles, percentage and even dichotomous. I chose to recode the variables’
values in the indexes into a score from 0 to 1.54 Further, I wanted the indexes to be
standardised according to each other, in such a way that indexes including uneven numbers of
indicators could not intervene with the outcome of the relationship. The addition composition
of variables in the indexes are therefore based on their means, rather than simply adding them
together.

The indicators in an additive index can also be weighted unevenly, based on the assumption
that some explain more than others about the property or concept measured by the index
(Hellevik 1993:269). This is also my intention with some of the following indexes, since there
obviously are indicators that theoretically would count for more explanatory value of a
phenomenon than other indicators. Another basis for weighting indicators is factor analysis, in
which one finds the variables that correlate highly with the different dimensions. These
54
By doing this I expanded the existing theoretical range to include ‘0’ in all democratic indicators in the
democratic index since they only had the scale from 1 to 10, except the “Experts’ rating” that are recoded with
an empirical range from 0 to 1 as with all the other indictors, i.e. there are no theoretical room further than the
maximum/minimum values in the index. By using only an empirical range limits the use of the coding to this
study, if the values at a later stage develops outside the range set here a new recoding becomes necessary.
82
variables would then ‘dominate’ the index and determine which theoretical concept has been
found. When this is used for selecting indicators for an index for a certain property, one could
weigh the indicators with the highest correlation more than others. I chose to base the
weighting of the ind icators first and foremost on my theoretical assumptions, but also use
factor analysis to confirm and correct the indexes.

The quality of an index is estimated by the average correlation among its indicators and the
number of indicators that comprise it. 55 The higher the correlation among the indicators in the
index, the more probable is it that the indicators are measuring the same phenomenon. “For a
given level of correlation among the measures, the greater the number of indicators, the more
confidence we can have in the index constructed from them” (Bohrnstedt/Knoke 1994:267). A
statistic that controls this reliability of the index is called Cronbach’s alpha, which measures
the internal consistency of a set of indicators. 56

3.2.2 Operationalisation of the background variables

Among the 89 federative subjects there is a large difference in demographic conditions like
geographical location, ethnicity and natural resources. The first task of the background
variables is here considered to determine different levels of resourcefulness and set conditions
for the development of the economy. Previous industrial structures initiated under the Soviet
regime and allocation of natural resources would affect the economic level. Each Russian
region’s economic structure in 1991 was partly an outcome of geography and partly history
that has influenced the choices made thereafter by entrepreneurs, workers and policymakers in
that region. The second task is to function as constant ‘control’ variables in order to test the
effect of other variables on the dependent variable in question. I will then be able to check on
their eventual spuriousness or background effect.

55
Working with an index in correlation and regression presupposes a linear relationship. I have checked the
internal linear relationship within the indexes.
56
Cronbach’s alpha ranges from zero to one, from no internal consistency to perfect internal consistency.
Scientists usually strive for an alpha at 0.70 or higher, but as mentioned, this depends on the internal correlation
and number of indicators indicating the underlying dimension. And with a theoretically based relationship
between the variables, the level of the alpha does not need to be so strict.
83
Table 3.2-1 List of background variables

Operationalisation of the background variables

Name Values Measure N Source
Main type of industry, from ‘light’ to ‘heavy’ 1-5 ordinal 76 Geografia Rossii 1998: 14-699
industry, 1993
Exploitation of oil and gas in 1000 ton, 1995 0-> metric 89 Goskomstat 1999: 296-297

Chemical and oil-tech. production in % of 0-100 metric 78 Geografia Rossii 1998: 700-704
industrial output, 1995
2
Road density in 1000 km , 1995 0-> metric 76 Geografia Rossii 1998: 14-699

Geographical proximity, ‘close’ to ‘extreme’ 1-5 ordinal 89 Geografia Rossii 1998: 8-11
distance from the federal centre
Russian ethnic population in percent, 1989 0-100 metric 87 Geografia Rossii 1998: 6-7

Majority of the titular nationality, 1989 1/0 metric 89 Geografia Rossii 1998: 14-699
Yes =1, No = 0, (dichotomous)
Ethnical defined region, 1993 1/0 metric 89 Remington 1999: xi-xiii/
Yes =1, No = 0, (dichotomous) Sakwa 1996: 178
High federal status, 1993 1/0 metric 89 The Constitution of 1993
Republic =1, Oblast, fed.cities, aut.obl, okrug The Federal Treaty of 1992
=0, (dummy1)
Medium federal status, 1993 1/0 metric 89 The Constitution of 1993
Oblast, fed. cities, aut. oblast =1, Republic, The Federal Treaty of 1992
okrug =0, (dummy2)

In Table 3.2-1 I have listed all the background variables considered relevant for the dependent
variables in the regression models. The main type of industry in production is on the nominal
level of measurement, but it will here, under a theoretical assumption of rating from light to
heavy industry, function as a metric level of measurement from light/food processing industry
to heavy/energy producing industry. The initial industrial structure set in place in the Soviet
era is supposed to shape a region’s economy heavily; having a larger initial share in ferrous
and chemical industries implies better economic performance than light industry or food
industry. I also expect that natural resource endowments play an important positive role in the
economy in addition to the processing of these resources. This is articulated through the
variables on exploitation of oil and condensed gas and chemical and oil-technical industry.
Road density is an indicator on developed infrastructure and effective logistics of services and
goods. High road density would be advantageous for a developing economy, in which the
effective transport of the products is essential.

The ethnic aspect is operationalised through three variables: 1) Percentage of Russian ethnic
population per region and 2) Majority or not of the titular nationality 3) Ethnically defined
region or not. The two latter are dichotomous. The percentage of titular population was
considered too problematic to be included, since there often are several titular nationalities or

84
other nationalities located in a region, and the first ethnic variable covers mostly the same. I
included all these three indicators in the matrix because they measure different factors
interesting to note. If a region is ethnically defined, it does not necessarily have either a
majority of the titular nationality or a low Russian population.

By federal status I mean the historical administrative system initially inherited from the
Soviet system of ‘indigenisation’ (korenizatsiya) introduced by Josef Stalin himself through
the December 1922 Treaty of Union. One can still clearly see the remnants of the historical
structure in both the Federal treaty, the Constitution and in de facto politics. In he three-type
division of administrative traditional structure were the autonomous okrugs the units with the
lowest autonomy. They were in addition located on the administrative territory of another
‘federation subject’, i.e. under oblast or krai, which had more autonomy than the okrugs, but
lacked the supreme status given to the republics. The republics were in comparison more
powerful under the Soviet ‘federal’ system and have kept many of their rights as a region with
titular status, as elaborated in chapter 2.3.2 and 2.3.3. The three original values in this variable
are replaced by two dummy variables to cover the regional levels. The low status of the
okrugs can be separated, as it has zero values on high as well as medium federal status.

Does geographical proximity matter? One should expect that regions further away from the
centre feel less attached to the centres politics and opt for more autonomy. Primorskii krai is a
perfect example of a region that has been out of Moscow’s control. Sakha-Yakutia is another
with its high degree of corruption and special deals concerning its gold reserves sales with De
Beers, excluding Moscow’s interference. In the Volga region where Tatarstan and
Bashkortostan have fought long against yielding centre control to regional revenues and
resources have a variety of laws that contradict the federal ones. In Table 3.2-1 this variable is
set on the ordinal level of measurement, but I propose that it has also an underlying metric
dimension of distance, from one to five, and can therefore be included in further correlation
and regression analysis.

The industrial preconditions in a region are thought to be the main variables having an effect
on economic strength. The remaining demographic variables on ethnicity, federal status and
proximity are also thought to have explanatory power on the degree of autonomy. These
variables will account for potential spurious causes for the hypothesised relationship between
economic strength and the level of autonomy. Thus, if economic strength still has an impact

85
on autonomy, even when adjusted for these factors, it would strengthen the conclusion that
autonomy, at least in part, is generated through economic strength. This consideration will be
undertaken in chapter 4.3 on regression analysis.

3.2.3 Operationalisation of socio-economic variables

Regional socio-economic performance varies significantly throughout the vast territory of
Russia. Some regions have handled the transition to a market economy quite well, while
others have not changed from their Soviet past. To operationalise a region’s economic
strength I have concluded an index with four indicators in order to have a more robust
measure in regressions. In addition there are three separate variables that were not possible to
include in the index; combining these I feel confident to measure a region’s economy. I chose
gross regional product (GRP) total and not GRP per capita as a measure of a region’s strength.
Whilst GRP per capita is a better indicator for overall wealth in the region, it does not as
clearly show a region’s leverage against the centre as an economic unit. I want to express the
regions economic power as a unit, in that Moscow oblast is arguably a more powerful
economic unit than Magadan. Magadan has twice as high GRP per capita than Moscow
oblast, while Moscow oblast have more than ten times higher GRP total than Magadan. My
argument is that Moscow is still considered economically stronger as a unit, even though this
does not show on the GRP per capita. 57 The fact that border regions like Magadan, Sakhalin
and Kaliningrad have signed a bilateral power-sharing treaty with the centre is more of
geopolitical and logistic reasons than economic pressure towards the centre. GRP total58 is
therefore considered a better measurement here, since I want to measure a region’s total
economic leverage against the centre.

57
Even though Norway (27.600 USD) has a higher Gross Domestic Product per capita compared to Germany
(23.000 USD) in 1999, nobody would argue that Norway is a stronger economic unit. GDP total of Germany is
1.934 billion USD, while Norway’s GDP totals 122,9 billion USD, which indicate better the difference in
economic strength. Source: Main economic Indicators, OECD, Paris, April 2000. National Accounts Division,
STD.
58
In the official statistics I obtained at Goskomstat, GRP appear unfortunately only in current prices, not taking
into account the level of inflation etc. Considering that data in constant prices is required for inter-regional
comparisons over time, the value of these data have clearly its limitations. I can therefore only compare in space,
which is also my foremost intention here.
86
Table 3.2-2 List of economic variables

Operationalisation of the economic variables

Name Values Measure N Source
Economic strength index, 1994-98 0.00-1.00 metric 88 Goskomstat 1999: 279-281
EastWest Institute 1999:33
Payback from the federal centre in %, 1996-98 0-> metric 88 EastWest Institute 1999: 163-
167
Degree of privatisation in %, 1993-1998 0-100 metric 88 Goskomstat 1999: 316-317,
328-329
Foreign investment in 1000 US$, 1998 0-> metric 76 Goskomstat 1999: 814-818

Estimated unemployment in %, 1998 0-100 metric 88 Goskomstat 1999: 97-98, 103

In the index on economic strength I have included four variables: The two first are gross
regional product for 1994 and 1997. GRP is an indicator of the total market value on final
goods and services that are produced on regions territory during a year, determined as the
difference between the production of products and the accounted expenses. 59 I consider GRP
as the most important variable in the index; it is therefore accounted for twice. The third is
income per capita in percent from federal average in 1995 (Geografia Rossii 1998:14-699),
which determines the relative wealth in a region adjusted to the number of inhabitants. The
fourth and final variable in the index is constant donor regions to the federal budget between
1996 and 1998 (EastWest Institute 1999:33). The difference between the revenue collected on
the territory of the region and the revenue included in the federal budget by the central
branches of non-budgetary funds. Also included is the sum of a) financial support provided by
the federal budget to the regional budgets, b) direct spending of the federal budget on the
territory of the region and c) financial support provided by the central branches of non-
budgetary funds for the regional branches.

Income per capita captures some of the wealth measurement not weighed in the GRP total
indicators, levelling out some of the disproportion disadvantaging to the small wealthy
regions. Even though these are different variables than measured by Lipset in his broad index
on socio-economic development, I will argue that this index is based on his main principles,
even though it does not emphasise the per capita perspective. When using economic strength
in analyses on democratic development I intend to parallel this measure to that of socio-

59
For the autonomous okrugs, which are located inside the territory of the krais and oblasts, the shown indicator
is not worked out.
87
economic development. The internal consistency of the index was moderate and indicates
acceptable reliability. 60

Percentage of payback is the percentage of a region’s expenditures to the federal budget it

received back through different channels from 1996 to 1998, as seen in Table 3.2-2. This
variable is based on three types of transfers from the federal centre: 1) financial support
provided by the federal budget to the regional budgets, 2) direct spending of the federal
budget on the territory of the region and 3) financial support provided by the central branches
of non-budgetary funds for the regional branches. 61 I accounted the average for the years
1996-98. Some regions receive more from the federal budget, while others keep more of the
revenues. Even though a region contributes a lot to the federal budget, the total amount might
be low in reality, since it in principle could receive it all back. 62

The level of privatisation in the Russian regions between 1993 and 1998 is a measure of
economic reform. Privatisation is an economic indicator that can give us an impression of a
regions willingness to reform the economy. Transforming state-enterprises to private ones is
thought to be one of the most important steps towards a marked economy and democratic
values. 63 Degree of privatisation is measured through: 1) the total number of enterprises and
organisations for each region as of January 1, 1999. I counted only the state, regional and
local enterprises, thereby not including voluntary organisations, private business or simple
forms of private ownership. The result is governmental enterprises as of January 1999, but I
needed to know the total number of government enterprises from 1993-98 to figure out how
many of these have been privatised. 2) So I added the total number of enterprises already
privatised between 1993 and 1998, and came up with the percentage of privatisation of

60
A factor analysis of the 14 variables on economic performance extracted 4 factors with Eigenvalues above 1.0.
By comparing the correlation coefficients I found that the first factor containing GRP total of 1994 and 1997
could also include “Income per capita 1995”, and “Constant donor region 1996-98” (all had r2 above .55). The
reliability test of internal consistency as a whole (seen through Cronbach’s alpha) is based on the average inter-
indicator correlation. The four indicators in the index produce an alpha at .35, which is low, but considered
sufficient for further analysis.
61
Contradictory to its accounting similarities with the donor variable in the economic strength index, their
internal correlation was low (r2 = .35) and thereof no danger of possible multi-colinearity.
62
While Novosibirsk is considered a donor region 1996-98, it received on average back 1008 percent from the
federal budget through different channels in the same period (EastWest 1999:163-67).
63
A quite disputable topic in the Russian case; privatisation was performed without a legal framework in place in
a corrupted bureaucratic system, in which the old nomenclature and others obtained most assets. The idea was to
quickly build an independent power base, which could counterweight the state if undemocratic forces came to
power. See among others: Anders Åslund, Economic Transformation in Russia (1993) and Alan Smith (ed.),
Challenges for Russian Economic Reform (1995).
88
governmentally owned enterprises, hence the percentage of privatisation in the region. 64 The
ethnically defined regions have generally privatised far less than the territorial regions. The
average percentage of privatisation for the ethnic regions was 13 percent compared to 21
percent in the territorial regions.

The amount of foreign investment in the Russian economy per region in 1998 is measured
through all forms of investment in property and intellectual value, also in foreign branches of
Russian legal offices in the objective of business, and other types of activity on the Russian
territory by means of receiving income. The amount of foreign capital invested in a region is
thought to relate to its relative economic strength. High economic strength allegedly
influences the attractiveness of a region for foreign capital, and vice versa. The inflow of
foreign capital would positively influence the domestic economy that shrank substantially in
the 1990’s. Foreign investment is also thought to relate to the degree of privatisation. I
presume that high degree of foreign investment is found in the regions that have higher
privatisation. Most of the Russian regions, 76 out of 89, have been subject to the investment
of foreign capital. The amount of investment vary greatly around a mean of 157 million US$
per region. Most of this capital is, however, placed in Moscow city, where most of the head
offices of the enterprises are located (almost 5,86 billion US$). Moscow city is an extreme
exception; excluding Moscow from this variable lowers the mean of this variable to 80
million US$ per region. I will exclude Moscow city in correlation and regression analysis.

Unemployment in percentage in 1998 is previously considered a troublesome socio-economic

indicator in Russia. Poor regions are initially expected to have a higher degree of
unemployment. However, in a transition period from state to private enterprises, reformist
regions would presumably have a larger share of unemployed, since restructuring and
modernising of the previous unproductive production methods would result in layoffs.
Unemployment is an unreliable variable in the Russian regions, since people often are
reluctant to register for unemployment and officials often ‘hide’ real figures. There are few
benefits available for those who are registered as unemployed, which makes the incentives for
registration few. These figures are therefore not solely based on the official numbers, but in
addition based on statistical research by statistical branches of the Russian Federation. The

64
For example: Magadan had in January 1999 1229 governmental enterprises. I then added the total number of
privatised enterprises 1993-98: 688. From the total sum of 1917 governmental enterprises 1993-98 I accounted
the percentage of privatisation of these, 35,88%, by dividing 688 to 1917 multiplied by 100.
89
unemployment rates in the krais and oblasts, which have okrugs on their territory, include the
figures, while separate numbers are accounted for in the okrugs.

3.2.4 Operationalisation of degree of autonomy

The proposed model of causality involves three types of autonomy. The first is the strictly
formal autonomy given by legal acts through the Constitution and the Federal Treaty defining
the federation units. It is operationalised as ‘federal status’, a structure variable already
mentioned in 3.2.2 and therefore not discussed any further. The second is the quasi-formal
autonomy set by the signing of bilateral treaties between many regions and the centre. The
third type is the de facto autonomy seen through the actual transfers of finances between the
different levels of government. I will account for the two latter here.

The quasi- formal autonomy is measured through the variables on the signing of bilateral
treaties, and to what degree these treaties have given increased autonomy. The de facto
autonomy is measured by a region’s economic independence and its ability to maintain
control over resources at the cost of the local level. This is operationalised through an index,
consisting of the flow of capital between the centre, region and the local level of governments.
The share of taxes a region receives from the total amount collected on its territory, could also
indicate a region’s degree of de facto autonomy. This, however, seems not to be a stable
measurement. These variables are listed in Table 3.2-3 and constitute the measure of
autonomy.

Table 3.2-3 List of autonomy variables

Operationalisation of the autonomy variables

Name Values Measure N Source
a
Signed bilateral treaty with Moscow, 1994-98 1/0 metric 89 Various
Yes =1, No = 0, (dichotomous)
a
Degree of autonomy obtained through treaty, from 1-4 ordinal 46 Various
‘little’ to ‘extensive’ autonomy, 1994-98
De facto autonomy index, 1994-98 0.00-1.00 metric 88 World Bank 1999b

Regional share of total taxes collected in %, 1994 0-100 metric 88 World Bank 1999b
b
Regional share of total taxes collected in %, 1997 0-100 metric 88 World Bank 1999

NOTES: a) Izvestia 21 November (1998), Politicheskii Almanakh Rossii (1998:62-109, 152-153, 639-641 and 1999:49-
56), Federalism vlasti i vlast federalisma (1997:853-877), URL: http://www.cityline.ru/politika/reg/dogovory.html#i
(18.02.2001), RAND Conference Report Conflict and Consensus in Ethno-Political and Center-Periphery Relations in
Russia by Jeremy R. Azrael and Emil A. Payin, eds. (1998:25-32) b) World Bank Technical Paper No. 452 Subnational
Budgeting in Russia: Preemting a Potential Crisis by Freinkman, Treisman & Titov (1999:88-90, 94-95, 111-112).

90
The treaties delineate in principle the authority between the centre and a region that are not
defined by the constitution. However, some of the early treaties also contradict the
Constitutio n on several issues, while others are not able to delineate this authority. If a region
has achieved an agreement with the centre, it is an indicator of the level of quasi- formal
autonomy. I assume that all regions have an interest in signing a treaty and that the regions
that the centre found important have obtained a treaty. However, there are three exceptions,
namely Dagestan, Kalmykia and Chechnya, which have refused or not accepted a power
sharing treaty. In July 29th 1998, 42 individual treaties have been signed with 46 federation
subjects. 65 Four of the traditionally weaker autonomous okrugs have obtained treaties, but
these are not bilateral. The okrugs are included in the treaties made with the respective
administrative territory on which they are located. These are Evenk and Taymyr in
Krasnoyarsk krai, Ust-Orda Buryatia in Irkutsk oblast, and Komi-Permyak in Perm oblast.

The treaties vary with respect to what degree of autonomy a region has obtained through the
bargaining process. Unfortunately, no exact data exist on the differentiation of quasi- formal
autonomy for all the 46 bilateral treaties that have been signed on dividing competences
between the federal executive and the regions. If the content of these treaties, along with their
respective agreements, were differentiated by the degree of quasi- formal autonomy, one could
still not use that as a basis of real studies of politics. The mere fact that treaties and
agreements are signed does not indicate that these treaties are actually implemented, as is the
case with St. Petersburg, Sverdlovsk and Krasnodar. 66 The degree of autonomy obtained
through a treaty is based on the year the treaty was signed since early treaties gave more
power than later ones. 67 The degree of autonomy is founded partly on the change of the
centres strength throughout the 1990s and the critical demands expressed in several federation
subjects. I have through a rough case study ranged some regions that clearly alter this pattern.
Tatarstan, Bashkortostan and Sakha-Yakutia are basic examples of regions that early signed
treaties that gave significant autonomy when the central institutions were considered weaker.
The later treaties signed in 1997 and 1998 were generally of far less importance when the
centre was stronger, such as the treaties with Yaroslavl and Chelyabinsk. This variable resides

65
Four of the bilateral treaties are strictly speaking trilateral, in which they also include the okrug that is located
inside the territory of an oblast, hence there are three actors in the bargaining process – the centre, oblast/krai
and okrug. This explains why there are fewer treaties than regions affected by these. I will use the term bilateral
for all treaties, also the trilateral ones.
66
According to a OECD analysis based on MinFin, OECD Economic Surveys: Russian Federation (2000:122-
123)
67
Others that support this assumption based on selective research on the bilateral treaties are among others Irina
Busygina (1998) and Pål Kolstø (2000).
91
on the ordinal scale, but I included it in the correlations, since it has an underlying theoretical
scale on how much autonomy a region has gained through signing a bilateral treaty, from no
significance to significant autonomy.

The de facto autonomy index consists of four indicators that are weighted equally in this
index. 68 They are based on the flow of capital between the centre, region and municipality
level of governments. The closer to 1, the higher is the de facto autonomy of the region. The
indicators in the index include: 1) & 2) Federal transfers in 1992 and 1997 (included budget
loans) as percentage of expenditures indicates how much of the expenditures that are covered
through the federal budget. Poor regions are the ones that get more federal transfers to cover
their deficits, and are thus more dependent on Moscow. Regions that are dependent on the
centre for financial flows have a ‘weakened’ position as they do not have a capacity of their
own to implement policy. 3) & 4) The municipalities’ share of regional revenues in 1992 and
1996 are indicators of how centrally planned the economy is on the regional level. The less
that is left to the municipalities, the more power is maintained at the regional level. A low
degree of municipalities’ share added with a low degree of federal transfers indicates a higher
de facto autonomy.

Regional share of total taxes collected on their territory in 1994 and 1997. Some regions
receive more of their tax revenues collected on their territory than others, and this asymmetry
has changed considerably between 1994 and 1997. In 1994, there seemed to be no uniform
revenue-sharing rules for the regions and especially the powerful republics and the oil & gas
producing okrugs 69 that have obtained this privilege through separate agreements or a
unilateral decision when the centre was relatively weak. It is especially among the republics
and okrugs we find regions with almost to 100% regional share of total taxes collected in
1994. While the non-ethnic regions have kept a lower percentage of the taxes collected in
1994, with the exception of some regions in the extreme North East. Although Sakha-Yakutia
decided to keep all revenues to itself in 1994, by 1997 the regional share had declined to 74%,
which is also the general pattern for all ethnic-defined regions. The non-ethnic regions have
either kept their regional tax share or increased it. Thereby these levelled out the high
percentage previously belonged to the ethnic regions, and as a result no regional
68
The Cronbach’s alpha for the index is .80, which signals a very strong degree of internal consistency among
the four indicators in the index and gives high reliability. Considering also the regional share of collected taxes,
another extracted factor dimension was dominant, and this variable is therefore excluded from the de facto
autonomy index, since it has another underlying dimension.
69
Khanty-Mansi and Yamal-Nenets autonomous okrugs
92
administrative level appear significantly more advantageous by 1997. If the regional share of
taxes collected is high, this could indicate a high degree of control over its own revenues.
However, it could also indicate that a region is poor and therefore gets to keep most of its
relative low amount of collected taxes. When I correlate this variable against the index of de
facto autonomy, I will test its consistency to measure autonomy.

3.2.5 Operationalisation of democratic development

The degree of democratic development is the final dependent variable in this work. As
stipulated in the theoretical chapter, Robert Dahl’s perceptions of democracy are the basis for
the operationalisation. However, I cannot emphasise strongly enough that this measure of
regional democracy in Russia is a very relative one. Few regions, if any, fulfil Dahl’s
definition of democracy comparable to a West European level. This measure therefore tells
more about how far a region has moved from its Soviet past, than on how democratic it has
become. The democratic indicators are based on three indices:

• Whether or not there have been one or two elective leadership changes in the 1990s.
• “Evaluation of freedom of speech in Russia” a project led by Russian Union of
Journalists in 1999.
• A survey on democratic development by Moscow Carnegie Centre in 1997.

My approach to democracy is evaluative and practically oriented for comparing one region
with another. On the national level comparing democracie s has earlier been aggregated into
an overall quantitative scale, as in the Freedom House surveys. The two latter indexes listed
above are considered such quantitative scales with their respective aggregated variables, albeit
in a smaller measure. The variables are listed in Table 3.2-4.

93
Table 3.2-4 List of democratic variables

Operationalisation of the democratic variables

Name Values Measure N Source
a
Executive change, 1991-2000 1/0 metric 89 Various
Yes =1, No = 0, (dichotomous)
a
Two or more executive changes, 1991-2000 1/0 metric 89 Various
Yes =1, No = 0, (dichotomous)
Freedom of the press index, 1999 1-100 metric 87 Russian Union of Journalists 2001b
c
Democracy index based on Robert Dahl’s 0.00 -1.00 metric 57 Moscow Carnegie Centre, (MCC)
definition, 1997

NOTES: a) Politicheskii Almanakh Rossii (1998: 62-109, 152-153, 639-641), (1999: 49-56) and Tsentralnaya Izberatelnaya
Komissia Rossiskoi Federatsii (The Central Election Committee of the Russian Federation). URL:
http://www.fci.ru/default.htm (25. 01.2001). b) The Global Public Expertise Project started in May 1999. The first stage of the
research - evaluation of freedom of speech in Russia- was conducted by the Russian Union of Journalists, the Glasnost
Defence Foundation, the National Institute for Socio-psychological Studies, The Mass Media Law and Policy Center and
ANO Internews. URL: http://www.freepress.ru/win/index1.html (04.04.2001) c) Raw data of survey sent from MCC,
published in Politicheskii Almanakh Rossii (1998/1999) Tom 1, pp. 139-146, and “A Survey of Democracy in Russia’s
Regions” by Kelly M. McMann and Nikolai V. Petrov, Post-Soviet Geography and Economics, 2000, 41, No. 3, pp. 155-182.

Actual executive change through elections is based on Juan J. Linz’ condition of regime
change through free elections as an indicator of consolidated democracy (Linz & Stepan
1996). According to Linz this is a necessary but not sufficient democratic condition, as
democracy is more than technically free elections. Executive change in Russian regions does
not in principle mean that they have been through the process of elections, as the president
also appointed regional leaders. If there has been a change of the executive power through
elections then I consider it as a sign of democratic development. In the variable executive
change I included only changes that were made through elections and not through
appointment by the President of the Russian Federation, although these appointees were
generally reformist and more democratic than their predecessors. 70 President Yeltsin
proclaimed the power to appoint and remove regional governors until 1996-97, after the
overthrow of the parliament in October 1993. The leaders in the republics were the only ones
not affected by his decree. 71 In some of these elections the incumbent had no genuine
opponents or opposition, as these were barred from participating or lacked the means to
organise, like the case of Kalmykia. I would in general terms argue that this variable could
indicate authoritative tendencies and lack of democratic processes. History has proven that
holding powerful positions over a longer time period could corrupt the beholder as stated by

70
Since this study intend only to include the political process’ of the 1990’s I had to make one exception to the
rule here. Several elections took place in the year 2000 and I therefore included these for a more solid result.
71
Only the republic of Karachai-Cherkess got its executive head appointed in 1992 and 1995.
94
Michels’ Iron law of oligarchy. 72 Most regions have been subject to the process of executive
elections two times since then, and some republics have held elections even three times,
which leads me to the next variable: Two leadership changes through elections 1991-2000.
Some regions have had two or more actual executive changes in this period. This would, on
the basis of the above-mentioned principle, indicate a more democratic region since there
have been several changes of leadership. But it could also indicate a region in economic crisis
in which the electorate is constantly changing leadership disappointed with social conditions.

Democracy is further measured through two indexes of democratic development that

complement each other. The first is based on a project on freedom of the media in all Russian
regions. The second is operationalised on the basis of Robert Dahl’s still standing definition
and his eight conditions of polyarchy (1971:3). But according to the restrictions in the
previously mentioned survey, this does only cover the non-ethnic regions in Russia, oblasts,
krais and federal cities. Which means that the ethnic dimension is not included. To measure
the independent media in the Russian Federation I use the result from Freedom of speech in
Russia in 1999, an evaluation as a part of the Public Expertise Project. The media in the
Russian regions were in the 1990s under tighter control than the Moscow-based outlets. In
1999, some 80% of regional media was controlled by the local authorities, which use them as
their main way of maintaining support. 73

The media project evaluated freedom of speech according to Article 10 in the European
Convention on Human Rights: “Everyone has the right to freedom of expression. This right
shall include freedom to hold opinions and to receive and impart information and ideas
without interference by public authority and regardless of frontiers.”74 The data was thereof
collected in accordance with three operationalised rights: freedom of access to information,
freedom of production of information, and freedom of distribution of information in a given
region. By combining these three factors, the index of press freedom in the regions was
constructed, dealing with 87 of the 89 Russian regions. The scale in the index ranges from 1-
100 points, in which the higher points denote a freer media in the region. All the 89 regions
have a different degree of freedom for the media, and the media plays various roles in each

72
“Who says organization says oligarchy” was a famous phrase of Roberto Michels. The incumbent’s increased
power by continuity in office makes available the manipulation of information and events (Edmund Ions in
Bogdanor 1991:391)
73
The Russia Journal, URL: http://www.russiajournal.com (29.05.2000)
74
Council of Europe, The European Convention on Human Rights, Section I, Article 10 - Rome 4 November
1950. URL: http://www.coe.int/ (10.05.2001)
95
region’s civil society. Local practice has often nothing in common with federal legislation.
Thus, the role of the media in any particular region often does not correspond to the
framework or the autonomy defined by federal legislation. Regional authorities have exerted
pressure on independent media companies, turning them into compliant, self-censoring state-
run companies. This has led to a situation where given information is either unreliable or
difficult to evaluate. As a result, the public would rather consider mass media as a tool for
settling scores in the battles between those in power, rather than writing about the everyday
needs of ordinary readers. The press would then lose its role as a mediator between society
and the authorities and a catalyst for change in society. This could be a major problem,
particularly in the run-up to elections. The press shapes public opinion and can often
determine a candidate's fate. In addition, local legislation sometimes restricts press freedom
and limits the right to freedom of speech. No region was found fully to promote a favourable
climate for a free and pluralistic press. The cities of Moscow and St. Petersburg gained the
highest score with 63.1 and 50.5 points, far away from the theoretical possibility of 100. The
regions with the lowest score were the republics of Bashkortostan (10.1) and Sakha-Yakutia
(13.7).

In the democracy index I combined and standardised six variables that the Moscow Carnegie
Centre made available for me. 75 The variables are derived from Robert Dahl’s theory. The
indicators are 1) the requested experts’ general ranking of democracy according to Dahl’s
definition; 2) degree of democratic elections, that is, to what extent the election process is
‘free and fair’, 76 and people have the right to vote and that everyone is eligible for public
office; 3) institutionalisation of power, measured by the congruence of significant power-
centres and mechanisms, which make decisions that are preconditioned by the framework of
the institutional law, and that the government’s policies on institution making depends on
votes and other expressions of preference; 4) degree of openness, i.e., that the political
process is transparent and that there exists alternative sources of information; 5) degree of
significant opposition, i.e., to what degree there exists an opposition and under what
conditions it operates; 6) democratic leadership, whether or not the regional executive
leadership is based on and promotes democratic principles. 77

75
The internal consistency is moderate with a Cronbach’s alpha of .38, which indicate a fairly good reliability.
76
The term ‘free and fair’ is a problematic description of an ideal demo cratic election process, often connected
to the seven universal OSCE commitments: Universal, Equal, fair, Secret, Free, Transparent and Accountable
(The ODIHR Election Observation Handbook , April 1999, Warsaw).
77
Regional leadership has followed the central presidential model of governance, in which the executive leader
won the battle against parliament. A consequence of this allocation of power is the centralisation on the regional
96
The first obvious finding is that of the six-seven regions in the ‘Red Belt,’ none of these were
placed among the ten most democratic by any of the respondents. This could be caused by the
composition of the respondents and their being influenced by the results of federal elections in
which these regions voted for communists. In fact, these regions have not answered the
demands for democracy any lesser than in the reform regions - rather the opposite according
to McFaul and Petrov (1998:140). They had the first governor elections in 1993 in which the
executive power found strong counterbalance in the regional parliaments, because of
continuous influence of the former CPSU soviet 78 leaders. This led to regional laws getting a
more ‘checks and balances’ type of model without the obvious dominance of the executive
branch. This region also performed the earlier elections on the local level of governments. An
exception is the case in Saratov oblast, where governor D. Ayakov persistently, and with
some luck, has created a picture of himself as progressive and reform- friendly. But his
leadership style is described as brutal and has in reality led to the submission of regional
parliament and local governments (Ibid.).

3.2.6 Summary
The indicators chosen to measure the dimensions of economy, ethnicity, autonomy and
democracy are either derived from the theories in question or from relevant theoretical
speculations. Federal theory, among others advocated by Tarlton, allows different degrees of
autonomy as the alternative to secession for units that differ greatly in a state-building
process. These differences may lie in the ethnic and economic spheres that are emphasised
above. Federalism theory also assumes that increased regional autonomy positively affects the
democratic level, as stated early by Jefferson. One must differentiate between formal
autonomy and de facto autonomy to implement policies, as noted by Young. The economic
strength index is based on Lipset’s theory on socio-economic development and claimed to be
advantageous for democratisation. Both democracy indexes have a basis in Dahl’s definition
and his conditions of democracy; the variable of executive change is based on Linz and
Stepan.

level around the administration of the executive leader. Few powers have descended to the local level and
governance at that level have little means to implement significant changes without the consensus of the regional
administration.
78
Elected councils serving as representative and law-making bodies, but guided by the CPSU. In every territorial
subdivision of the state, from the village to the SSR there was a corresponding soviet (=council, eng.)
(Remington 1999:98-99).
97
Furthermore, the indicators above comply with the logic of federalisation and democratisation
concepts in measuring potentials or resources and not end products. I therefore conclude that
the definitional validity of the indicators is high, and a good point of departure for the
empirical exploration of the development of federalism and democracy in the Russian regions.

98
4 EMPIRICAL ANALYSIS
A democracy exists whenever those who
are free and are not well off, being in the
majority, are in sovereign control of
government, an oligarchy when control
lies with the rich and better born, these
being few. – Aristotle, The Politics, 343
B.C.

The main direction of causality is given in the causal chain earlier described, namely
B? E? A? D. I consider the background variables such as geographical and structural-
historical features to determine the economic strength of a region. The most prominent
preconditions for economic development are thought to be industrial infrastructure and natural
resources. A high level of economic resources could potentially be used for pressuring the
centre for increased self-determination. The economic position of a region would ha ve an
effect on the degree of autonomy a region can gain. In addition, I assume that the degree of
autonomy is determined by the historical administrative status of a region, its geographical
position and the ethnic composition, described as background variables in Figure 3.2-1. In
turn, which is my main argument, the degree of autonomy would have a negative effect on the
development of democracy in a region. This is in opposition to the federal principles of local
self-government, which would argue that autonomy would positively influence democratic
development. In other words: What causes the asymmetry in autonomy, and how has this
affected the democratic development?

Figure 3.2-1 The funnel of causality, from background variables to democracy

99
Having operationalised the variables and indexes in this study, the floor is set for the
empirical analysis. In the first part I intend to explore the bivariate relationships within the
various sets of variables. The bilateral comparison will give me an indication of the strength
and direction (positive/negative) of the relationship between the variables within each
phenomenon for further use in the hypothesis of this work. Strong relationships between
independent variables (multi-colinearity) are excluded before regression analysis. In the
second part I study the bivariate relationship between the different phenomena, or different
sets of indicators and variables for the same purpose. The bivariate relationship will give a
preliminary impression of the data before the regression analysis. Variables that are in danger
of causing colinearity or that are not expected to have further relevance will be identified and
excluded from further analysis. In the third part on multiple regression analysis I will continue
with the ‘approved’ independent and dependent variables. The goal is to measure the
explanatory power of the independent variables on the dependent variables. To find an
independent variable’s direct effect on the dependent variable I will control for other variables
and exclude the possibility for spuriousness or intervening processes. How I have solved this
is explained in chapter 4.3.

4.1 Bivariate analysis within the operationalised variable sets

The following bivariate analysis concerns the relationship within the variable sets
operationalised above: between the background variables (B), economy (E), autonomy (A)
and democracy (D). These variable sets or phenomena may function interchangeably as
independent and dependent variables. However, I base my theoretical assumption on the
earlier expressed causal chain, B? E? A? D. The bivariate correlation is limited to follow
this chain, as it is thought to inhabit the main direction of relationship. I want to identify the
relationship between the variable sets, i.e., the direction (positive/negative) and strength and
whether or not it is significant. I will use the product- moment-correlation coefficient,
Pearson’s r, to determine the bivariate relationship between the variables within each set of
variables. Bivariate correlations give “a standardised measure of association between two
continuous variables that estimates the direction and strength of linear relationship”
(Bohrnstedt & Knoke 1994:209). 79 Correlations of these types give us information on the

79
Pearson’s r (r) rests on the assumption on a linear relationship between two variables. The correlation
coefficient vary between –1 and +1, where the extreme values indicates respectively a perfect negative and
positive relationship. r can also be used on dichotomous variables, i.e. variables with only two values, also
100
strength of the tendency for certain values on two variables to fall systematically together
(Hellevik 1991:232). High correlations, with positive or negative signs, will here determine
the degree of relationship between the background variables, economy, autonomy and
democracy.

The correlation matrixes will give me an indication of the relationship between the variables
and their relevance for further analysis. I will not interpret all correlations in the following
bivariate analysis, as apparently not all findings are of interest to this study. This is only
meant as a preparation, in order to map the internal relationships within the variable sets
before further analysis between the variable sets and the more important regression analysis.
A major function is to identify the possibility of colinearity, caused by high correlation
between independent variables. In case of colinearity, it will then be the task in the bivariate
analysis to single out the variable best measuring a phenomenon when the other variables are
excluded.

4.1.1 The background variables

The background variables consist of a diversity of structural factors. I will identify the strong
correlations that potentially indicate of multi-colinearity.

(1) Not surprisingly, the ethnic condition variables (percentage of ethnic Russians, majority of
titular nationality, and ethnically defined region) correlate strongly with each other as shown
in Table 4.1-1. Obviously, there is a circular relationship and these variables measure, with
opposite signs, much of the same phenomenon. Even though there are informative nuances in
each of these variables, the strong internal correlation holds me to exclude all but one in
further analysis. The high degree of overlap between these variables causes a risk of multi-
colinearity in later regression analysis. I choose to keep ethnic Russian population in
percentage since it correlates stronger with the other variables, and it is a good measure of the
ethnic condition in the regions.

known as dummy variables. The minimum value 0 indicates that a phenomenon is not present, while 1 indicates
the presence of the phenomenon. The variable can then be used as a metric one and be included in correlation
and regression analysis. (Hellevik 1991:158-159).
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Table 4.1-1 The background variables, Pearson’s correlation coefficient (r)

Perc. of Majority Ethnic High Medium Geog- Main Chem./ Exploit.

Russians of titular defined federal federal raphical industry oil-tech. of oil/gas
1989 nat. region status status proximity in prod. industry 1000 t.
Percentage of ethnic
Russians 1989
Majority of titular -.62**
nationality 1989 N 87
Ethnically defined -.82** .42**
region N 87 N 89
High federal status -.72** .38** .74**
1993 (dummy1) N 87 N 89 N 89
Medium federal status .83** -.43** -.97** -.76**
1993 (dummy2) N 87 N 89 N 89 N 89
Geographical proximity -.31** .10 .31** .11 -.27**
to federal centre N 87 N 89 N 89 N 89 N 89
Main industry in .11 -.08 -.09 -.09 .05 .17
production 1993 N 76 N 76 N 76 N 76 N 76 N 76
Chemical and oil-tech. .06 -.07 -.11 -.06 .09 -.25* .01
production in % 1995 N 77 N 78 N 78 N 78 N 78 N 78 N 76
Exploitation of oil/gas -.09 .06 -.07 -.06 -.07 .16 .08 -.02
in 1000 ton 1995 N 87 N 89 N 89 N 89 N 89 N 89 N 76 N 78
Road density in 1000 .14 -.04 -.14 -.08 .12 -.64** -.41** .21(* -.15
2
km 1995 N 76 N 76 N 76 N 76 N 76 N 76 N 76 N 75 N 76

NOTES: Significance: ** p =/< 0.01, * p =/< 0.05, (* =/< 0.10, two-tailed test. Missing values: cases excluded pairwise. Total N= 89.

(2) As expected, both high and medium federal status correlate significantly with the three
ethnic condition variables listed on top in Table 4.1-1. Regions with high federal status (the
21 republics) have a lesser percentage of ethnic Russians, while regions with a medium
federal status (okrug, aut. okrug and federal cities) have a high percentage. Medium status
regions are also less probable of having a majority of titular nationality, which is natural
because only the Jewish autonomous oblast is ethnically defined with a titular population at
the medium level, and even here 83% are ethnic Russians. In the ten okrugs, which have a
low federal status, the percentage of Russians is higher compared to the republics. Of the
same reason medium federal status correlates almost perfectly negative with “Ethnically
defined region”, which confirms the necessity of excluding this variable in danger of
colinearity.

(3) There is a negative correlation between geographical proximity and “Percentage of

Russians”, as seen in Table 4.1-1. The further away from the centre, the lower the percentage
of Russians in the regions. Geographical proximity has a positive relationship with ethnically
defined regions which indicates that these are located further away, while the negative
correlation with medium federal status indicate that oblasts and krais are generally located
closer to the centre.

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(4) The industrial preconditions (main type of industry in production, chemical & oil-
technical production and exploitation of oil & gas) have insignificant correlations with each
other. As we can see of Table 4.1-1 there is no clear relationship between these variables.
Therefore it seems to be no immediate danger of colinearity since these variables measure
different phenomena. Regions that exploit oil and gas do not themselves process the raw
materials in chemical or oil-technical industry. These industrial preconditions do not correlate
significantly with any of the other background variables, except that chemical and oil
technical industry correlates negatively with “Geographical proximity”; the further away from
the centre, the higher percentage of industrial output of this industry in the regions. Not
surprisingly, since most processing plants are generally located close to the resources far
away from Moscow. No index was made of the industrial precond itions in the absence of a
common underlying dimension. I will return to the industrial preconditions variables later to
study their effect on the economy.

(5) Road density correlates weakly and insignificantly with background factors on ethnicity
and federal status but has a clear relationship with “Geographical proximity”, as seen in Table
4.1-1. To no surprise, the road density is lower the longer away a region is from the centre.
The strong correlation between these two variables indicates a possible colinearity. Road
density correlates negatively also with ”Main type of industry”, the further away from
Moscow the larger is the degree of light industry in a region. Road density correlates
positively with “Chemical and oil-technical production”, in which the higher percentage of
chemical and oil technical production, the higher the road density in the regions. A road
infrastructure is needed to transport the processed products from this industry to the
consumers. On the other hand, the road density has a non-significant negative correlation with
exploitation of oil and gas in a region as these raw materials are often transported by pipeline,
ship or railroad and not in much need of a high road density in the regio n performing the
exploitation.

The study of the relationships between the operationalised background variables has resulted
in these interesting findings: The ethnic variables measures most of the same phenomenon
and are also connected to the traditional federal status of a region. There is a high probability
of colinearity, and only “Percentage of ethnic Russians” will perform in regression analysis,
as it measures best the ethnic conditions in the regions. The ethnic condition variables also
have a strong relationship with the two dummy variables on federal status, which utterly

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confirms the decision of excluding all but one ethnic variable. High or low federal status is
originally based on the ethnical conditions in the Soviet ‘federal’ state, I will emphasise the
explanatory power of the regional status as a more administrative matter in this variable,
regardless of its additional ethnical character. Ethnic regions are generally located further
away from the centre than regions with medium federal status that have a majority of ethnic
Russians. Regions with high chemical and oil technical production are on average located
further away from the federal centre. Road density has no significant relationship with the
other demographic variables, except the obvious variable on geographical proximity. This
relationship risks colinearity and road density is consequently excluded in further analysis.

4.1.2 Socio-economic variable set

In the operationalisation of the economic variables I made an index on what I call the
‘economic strength’ of a region. Not all economic variables in my original matrix were
suitable to be included in the index. Some of these, however, are still interesting to use in
further analysis and I have therefore included them in this bivariate analysis to consider their
relationship with the economic strength index, preparatory for further analysis. The variables
are listed with their internal correlation in Table 4.1-2.

Table 4.1-2 Economic variable set, Pearson’s correlation coefficient (r)

Economic Payback from Degree of Foreign

strength index the federal privatisation investments in
1994-97 centre 1996-98 1993-1998 1000 US$ 1998
Economic strength index
1994-98
Payback from the federal -.37**
centre 1996-98 N 88
Degree of privatisation .32** -.38**
1993-1998 N 88 N 88
Foreign investments in .39** -.17 -.02
a
1000 US$ in 1998 N 75 N 75 N 75
Estimated unemployment -.36** .02 -.14 -.22*
in percent 1998 N 88 N 88 N 88 N 75

NOTES: Significance: ** p =/< 0.01, * p =/< 0.05, (* =/< 0.10, two-tailed test. Missing values:
cases excluded pairwise. Total N= 89. a) Moscow city is excluded.

The economic strength index correlates significantly with all the other measures on socio-
economic development.

(1) Average payback from the federal centre correlates negatively with the “Economic
strength” index as seen in Table 4.1-2. The higher the percentage of payback a region

104
received from the federal centre, the lower is the economic strength. Poorer regions are in
need of higher percentage of payback than rich regions. Average payback is therefore more a
measure of economic weakness than economic strength. The weakness of the federal financial
system and its central institutions, and how unfair it in reality works for some regions, is
sketched in chapter 2.4.

(2) Degree of privatisation correlates positively with the index on economic strength as listed
in Table 4.1-2. The higher percentage of privatisation in a region, the higher is also the
economic strength. If one considers the degree of privatisation as a measure of economic
reform, then regions with high economic strength are also the ones that have carried through a
high degree of reform of their economy, while poor regions seems to be more reluctant to
privatise state/regional enterprises. The percentage of privatisation correlates negatively with
the percentage of payback from the federal centre. This relationship indicates that regions that
privatise are generally receiving less payback from the federal centre. It seems that regions
that receive more of their expenditures to the federal budget back through different channels,
are the ones that to a lower degree have followed up the instructions on privatisation from the
federal authorities. Federal subsidies seem therefore not to be used, or cannot pressure, the
poor regions to follow federal instructions on economic reforms.

(3) The amount of foreign investment correlates positively with a region’s economic strength,
see again Table 4.1-2. The more foreign investment in thousand US$, the stronger is the
economy of the region. This strong relationship informs us that both a large amount of foreign
investment and high economic strength operates generally simultaneously in the regions.
Foreign investment does not correlate significantly with the degree of privatisation in a
region, and there seems therefore not to be any relationship between these variables giving a
possibility of colinearity. Regions obtaining a large amount of foreign investment have not
privatised more than other regions.

(4) The level of estimated unemployment correlates negatively with the economic strength
index, which indicates that the higher the unemployment rate in a region in 1998, the lower
was the economic strength from 1994-97. As expected, a high degree of unemployment
appears generally together with low economic strength. There seems, however, to be no
relationship between the percentage of unemployment and the percentage of payback from the
federal centre. And lastly, the percentage of unemployment correlates negatively with the

105
amount of foreign investment. Regions with a high amount of foreign investment have
generally a lower unemployment rate.

To sum up, the bivariate analysis among the economic variables has shown that all socio-
economic have a relatively strong relationship with the economic strength index: Average
payback in percentage of total expenditures to the federal budget has a negative relationship
with the economic strength in a region, and is therefore an indicator of weakness of a region.
There is a positive rela tionship between the percentage of privatisation and economic
strength, as high privatisation and high economic strength operate generally together. The fact
that foreign investment correlates strongly positively with the economic strength in a region
indicates that these phenomena associate. The rate of unemployment is inversely related to
economic strength and foreign investment, and has no relationship with the percentage of
payback from the centre. The quite strong correlations between economic strength and the
other variables, indicates that economic strength is a good measure of the variables in
question. It will therefore function as the only dependent variable among the socio-economic
variables. The other variables will still be used as independent variables explaining degree of
autonomy and democracy, but I see no obvious danger of colinearity, because: firstly, they do
not correlate sufficiently to be included in the index by a low factor score, and secondly, I
have no explicit theoretical assumptions of overlapping phenomena.

4.1.3 Variable set on autonomy

In the operationalisation of the variables I distinguished de facto autonomy from quasi- formal
autonomy. De facto autonomy is represented through the index with the same name, while
quasi- formal autonomy is found in the variables concerning a bilateral treaty. These variables
and “Regional share of taxes” are, together with their correlations, listed in Table 4.1-3.

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Table 4.1-3 Variable set on autonomy, Pearson’s correlation coefficient (r)

Signed bilateral Degree of De facto Regional share of

treaty with autonomy obtained autonomy index total taxes
Moscow 1994-98 through treaty 1994-97 collected 1994
Signed bilateral treaty
with Moscow 1994-98
Degree of autonomy a
obtained through treaty
De facto autonomy index .23* .22(*
1994-97 N 88 N 46
Regional share of total -.22 .38** -.53**
taxes collected 1994 N 88 N 46 N 88
Regional share of total .10 .01 .12 .14
taxes collected 1997 N 88 N 46 N 88 N 88

NOTE: Significance: ** p =/< 0.01, * p =/< 0.05, (* =/< 0.10, two-tailed test. Missing values: cases excluded
pairwise. Total N= 89. a) Cannot be computed because the dichotomous “Signed bilateral treaty with Moscow
1994-1998” is constant in its relationship with “Degree of autonomy obtained through treaty” i.e. only the regions
that have signed a treaty can be measured on the degree of autonomy that they have obtained through a treaty.

”Signed bilateral treaty with Moscow” correlates significantly only with the de facto
autonomy index, while the degree of autonomy obtained through treaty correlates positively
with both the de facto autonomy index and the regional tax share in 1994. The de facto index
correlates negatively with the regional tax share in 1994. The regional tax share in 1997 does
not correlate significantly with any other of the variables measuring degree of autonomy. The
fact that de facto autonomy has a negative relationship with regional tax share 1994 and no
relationship with regional tax share 1997 confirms my suspicion that regional tax share
cannot be a good measure of the degree of autonomy.

(1) The de facto autonomy index correlates positively with a regions signing of a bilateral
treaty. The higher the de facto autonomy, the more probable is it that the region has signed a
treaty with Moscow. This supports my initial assumption that regions that have obtained a
bilateral treaty would generally also have more de facto autonomy than regions without a
treaty. The index also correlates positively with the degree of autonomy in treaty, thus the
more de facto autonomy, the more quasi- formal autonomy has the region.

2) Regional share of total taxes collected in 1994 correlates negatively with “Signed bilateral
treaty with Moscow by 1994-1998”, as seen in Table 4.1-3. The higher regional share of taxes
collected in the region’s territory, the less probable is it that the region has signed a bilateral
treaty. This could be due to the mere fact that only three regions had signed a treaty in 1994
(Tatarstan, Kabardino-Balkar and Bashkortostan). These were the early treaties that gave the
most autonomy and are the reason why degree of autonomy in treaty has a positive
relationship with regional tax share in 1994. The higher regional share of taxes in 1994, the

107
higher is the autonomy given by the bilateral treaty. On the other hand, “Regional share of
taxes in 1994” correlates negatively with the de facto autonomy index. This strong negative
relationship indicates that these variables might measure the same phenomenon, but with
opposite signs. The higher the de facto autonomy, the lower is the regional share of taxes in
1994, however, the relative high correlation indicates there is a risk of colinearity.

(3) Most regions that obtained a bilateral treaty from 1994 to 1998 had signed them by 1997,
however, there is no significant relationship between the regional tax share and “Signed
bilateral treaty with Moscow”. The 1994 figures suggest that immediately after the powerful
regions had signed a treaty, they kept a larger share of their regional taxes. But in 1997 there
is no difference between those with a treaty and those without. Also, there is no relationship
between the regional share of taxes and the degree of autonomy obtained through treaty.
There could be two main reasons for this lack of relationship: first, the powerful regions have
in practice agreed to ease some of the tax related privileges stipulated in the earlier treaties;
secondly, later treaties have not given regions increased regional control over taxation. 80
These treaties include of course other spheres of autonomy in addition to regional taxation,
and powerful regions still have a relatively strong control over regional tax revenues, like
Tatarstan and Bashkortostan. As opposed to the regional tax share in 1994, the regional tax
share in 1997 does not correlate significantly either with the de facto autonomy index or the
regional tax share in 1994.

The uncertainty of what regional share of total taxes collected variable measures, whether it
indicates strong or weak autonomy of a region, forces me to exclude this variable in further
analysis as a measure of autonomy. First, the factor analysis in the index- making excluded
that regional share of taxes in 1994 and 1997 could be used in the de facto autonomy index
that indicate another underlying dimension, secondly, the 1994 figures correlate negatively
with the de facto autonomy index as opposed to the main assumption in the operationalisation,
and thirdly, the 1997 figures have no significant relationship with any of the other variables
on autonomy, not even regional tax share in 1994. Regional share of taxes is therefore not
considered a valid measure for degree of autonomy.

80
Regions might be given the authority in the treaty, but some have still not been able to implement this in
practice, as the case is with Sverdlovsk and St. Petersburg
108
I found a relationship between de facto autonomy and quasi- formal autonomy. This
relationship was positive with a low correlation, which indicates that the relationship is weak.
The positive relationship strengthens the validity of these variables by measuring autonomy in
different aspects. The variables on regional tax share in 1994 and 1997 are excluded from
further analysis, as they are considered unreliable measures of autonomy.

4.1.4 Complementary variables on democracy

In the operationalisation of the democratic variables, I aggregated the data from Moscow
Carnegie Centre into a democracy index. In addition, there is a second complementary
democracy index from the Russian Union of Journalists measuring freedom of the press.
Lastly, there are two dichotomous variables on executive change, collected on the basis of
Linz’ theory of leadership-change and democratic development. I will here study the
relationship between these measures on democracy, in order to end up with a good measure.

Table 4.1-4 Variable set on democracy, Pearson’s correlation coefficient (r)

Democracy index Freedom of the Executive change

based on R. Dahl press index 1991-2000
(democracy1) 1997 (democracy2) 1999
Democracy index based on
R. Dahl (democracy1) 1997
Freedom of the press index .44**
(democracy2) 1999 N 57
Executive change -.16 -.11
1991-2000 N 57 N 87
Two or more executive -.34** .10 .35**
changes 1991-2000 N 57 N 87 N 88

NOTES: Significance: ** p =/< 0.01, * p =/< 0.05, (* =/< 0.10, two-tailed test. Missing values: cases
excluded pairwise. Total N= 89.

(1) The press freedom index (democracy2) correlates positively with the democracy index
based on Robert Dahl’s definition (democracy1), as seen in Table 4.1-4. This strong
relationship indicates that the higher a region’s score on the democracy1 in 1997, the higher is
also the score on the press freedom index in 1999. Democracy2 seems to measure generally
the same phenomena as the democracy1. I am aware of the strong possibility of colinearity,
which is, however, the point here. These two va riables on democratic development in the
Russian regions are supposed to reinforce each other in my effort to measure democracy.
They function complimentarily in two important aspects. First, democracy2 covers both
territorially and ethnically defined regions, while democracy1 only covers only the former;
secondly, democracy1 contains more factors explaining democracy than democracy2, as seen

109
in the operationalisation of the variables - where democracy1 is based on Dahl’s eight
democratic conditions, while democracy2 covers freedom of speech.

(2) Both variables on executive change correlate negatively with democracy1. This is quite
unexpected, since I assumed a positive relationship between these democratic indicators that
are supposed to measure democracy. Between the two or more changes of leadership and
democracy1 there is a strong negative correlation that is significant. The obvious reason for
this non-relationship is that this measure of leadership change does not function as a measure
of democracy in the Russian regions. The regional leaders that Yeltsin appointed from 1993 to
1996/97 were mostly representatives of the new liberal democratic elite that were as of the
appointment more responsible to the president. The appointees often took over the leadership
in regions considered most oppositionist and conservative, for example in the mentioned ‘Red
Belt’. Lacking general popular support, many of these lost their posts when they became
subject to elections. The former conservatives were most often re-elected, which led to fewer
democratic leaders despite being subjects to elections. In these cases, new elections with
change of leadership stalled reforms and democratic development. In addition, to confirm the
validity problem in the variables on executive change, they do not correlate significantly with
the freedom of the press index either, as seen in Table 4.1-4. There is no relationship between
leadership change in the 1990s and press freedom in 1999. Regime change, which was
thought to be a measure of democracy, does not handle this task in the regions of the Russian
Federation.

Considering the democracy variables, there is a positive relationship between the freedom of
the press index and the democracy1 index, and both are thus considered good measures of the
degree of democracy. The complementary strength of democracy1 and democracy2 is crucial
in order to measure democracy in all Russian regions. The two indexes on democracy are
considered valid measures of democracy, while the executive change variables are not
considered as correct measures. The risk of falling into the ‘electoral fallacy’ as pointed out
by Linz (1996:3-4), is when executive change is considered a sufficient condition of
measuring democracy. If this had been my only democratic measure, I would probably study
technical elections rather than democracy. I will therefore exclude executive change as a
measure of democracy based on its validity problem.

110
4.1.5 Summary
In the correlation within the variable sets, I have found that an exclusion of variables was
necessary as there is a risk of multi- colinearity or validity problems. However, for the indexes
on democracy, the positive relationship has an important complementary value. Among the
background variables I decided to exclude ‘Majority of titular nationality, Road density, and
Ethnically defined region’ from further study because of possible colinearity with the
remaining variables. In the variable set on autonomy I excluded the variables on regional tax
share, since they have a validity problem and were incompatible to measure autonomy. Also,
in the variable set on democracy I excluded the ‘Executive change’ due to problems of
validity and incompatibility. Otherwise, the internal correlation confirmed the fit of the
variables in measuring their respective phenomenon in a consistent and diverse manner.

The operationalisation of the variables, making of indexes and the analysis of their bivariate
correlation within the variable sets have set the ground for further analysis between the
variable sets. The next step is to look at the relationship between the independent variables
and their respective dependent variables. As with the previous chapter, I will identify possible
cases of multi-colinearity. I consider the indexes as more reliable measures of the respective
phenomena, and they function as my main tools for studying the relationships. I also include
additional variables that were improper to include in the indexes, but too important to exclude
from further study.

111
4.2 A comparison of the variable sets

The indexes outlined in chapter 3.2 were created on the basis of both a theoretical assumption
and internal correlation corrected by factor scores. 81 I will here look closer at the correlation
between these indexes supported by other variables in order to determine the relationships in
the causal chain, B? E? A? D. This chapter is divided into three parts where I examine the
following relationships between: 1) the background variables and economy, 2) the socio-
economic variables and autonomy, and 3) the variables concerning autonomy and democracy.
I argue that there is generally a significant relationship between these phenomena. I will
continue to use the Pearson’s r correlation coefficient to determine the degree of relationship
between the variables. However, the relationships are more complex than what r can explain,
so I will also study the explanatory power through regression analysis and check for
spuriousness in chapter 4.3.

4.2.1 Background variables and socio-economic measures

The background conditions are believed to have a relationship with the socio-economic level
in a given region. Industrial infrastructure and the existence of natural resources like oil and
gas and the processing of these products are believed to coexist with a higher development of
a region’s economic strength. Proximity to the centre is also considered to have a positive
relationship with economic strength. Regions with low ethnic Russian population, (republics
and okrugs) are traditionally Muslim and Buddhist societies, which are generally less
successful in economic development. 82 Also, the historical federal status on the degree of
formal autonomy is assumed to set preferable preconditions for a region’s economic strength.
In such a context the republics would be better off than the oblasts and okrugs, because they
control initially more of their own resources.

I will comment on significant relationships between variables, as this highlights the variables
of possible explanatory power in the regression analysis. I will also identify variables with
insignificant relationships for the possible exclusion of irrelevant variables without significant
explanatory power in regressions.

81
The internal reliability of the indexes was confirmed by Cronbach’s alpha in the operationalisation.
82
A majority of the 21 republics are Muslim, while the republics of Buryatia, Kalmykia and Tuva are historically
Buddhist centres.
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Table 4.2-1 Demography and economy, Pearson’s correlation coefficient (r)

Economic Payback in % Degree of Foreign Estimated

strength index from centre privatisation investments in unemployment in
a
1994-97 1996-98 1993-1998 1000 US$ 1998 percentage 1998
Percentage of ethnic .18(* -.32** .48** .00 -.47**
Russian 1989 N 87 N 87 N 87 N 75 N 87
High federal status -.21* .08 -.30** -.00 .40**
1993 N 88 N 88 N 88 N 75 N 88
Medium federal status .19(* -.38** .50** .04 -.28**
1993 N 88 N 88 88 N 75 N 88
Geographical proximity to .04 .37** -.04 -.01 .23*
federal centre N 88 N 88 N 88 N 75 N 88
Main industry in production .36** .09 .19 .12 -.30**
1993 N 76 N 76 N 76 N 70 N 76
Exploitation of oil and gas .52** -.13 .09 .13 -.05
in 1000 ton 1995 N 88 N 88 N 88 N 75 N 88
Chemical and oil-technical .00 .22* .17 .11 -.07
production in % 1995 N 78 N 78 N 78 N 75 N 78

NOTES: Significance: ** p =/< 0.01, * p =/< 0.05, (* =/< 0.10, two-tailed test. Missing values: cases excluded pairwise.
Total N= 89. a) Moscow city is excluded

Table 4.2-1 indicates relationships between the economic strength and ethnicity, federal
status, type of industry and exploitation of oil and gas in a region. On the other hand, the
economic strength index does no have a relationship with a region’s proximity to the centre or
the chemical and oil-technical production. I will comment the relevant relationships in the
table according to the left column downwards:

(1) The percentage of ethnic Russians 1989

Percentage of ethnic Russians correlates weakly, but significantly, with the economic strength
index (see Table 4.2-1). The higher the percentage of Russians in a region, the higher is the
economic strength and thereof also the potential of economic leverage against the centre. The
percentage of ethnic Russians correlates correspondingly negatively with average payback,
the percentage of a region’s expenditures it receives back from the federal centre. The higher
percentage of ethnic Russians, the less the regions receive back of its expenditures through
federal transfers. The percentage of Russians correlates positively with the percentage of
privatisation, which indicates that the larger the ethnic Russian population the higher
percentage of privatisation in the region. The amount of foreign investment does not appear to
differ with change in the ethnic composition of a region. Then again, this seems to be the case
with the degree of unemployment figures from 1998, as the percentage of unemployment is
generally lower in regions with a higher percentage of ethnic Russians.

113
(3) High and medium federal status
The two dummy variables representing the three regional levels of federal status are based on
the Soviet ‘federal’ system, which is also vested in the 1992 Federal Treaty and 1993
Constitution. This variable represents the strictly formal autonomy. While the republics
enjoyed the most liberties in this traditional system, the okrugs were located within other
territories and are here considered weaker than oblasts and krais. High federal status correlate
negative with the economic strength index, because a majority of the republics are relatively
poor (see Table 4.2-1). Medium federal status correlates positively with economic strength, on
average the oblasts, federal cities and krais are economically stronger than the republics and
okrugs. The historical federal status of the federation subjects does therefore seem to connect
to the degree of economic strength. There is no relationship between historical federal status
and the amount of foreign investment in a region as with the previous variable, ethnicity
seems therefore not to be relevant to attaining foreign investment. Regions with a high federal
status are also the ones with higher unemployment, while oblasts have a lesser amount of
unemployed than republics and okrugs. The general trend is that the ethnic regions have less
economic strength, are more economically dependent on the centre, have privatised less and
have higher une mployment. They must therefore find other resources than economy in order
to win concessions from the centre. There are of course exceptions, like Tatarstan,
Bashkortostan, Sakha-Yakutia and the oil and gas producing okrugs, which have considerable
economic strength.

(4) Geographical proximity

Geographical proximity does not correlate significantly with the economic strength index, as
seen in Table 4.2-1. There is no general pattern indicating that distance from the federal centre
relates to the economic strength of a region. Regions closer to Moscow do not have a more
favourable position on gaining economic strength than regions far away from the centre, as
there was no relationship between these variables. The probable reason is that there are many
poor regions south of Moscow along the proclaimed ‘Red Belt’ and several rich regions with
natural resources in Siberia. On the other hand, geographical proximity to the centre correlates
with percentages of payback from the expenditures to the federal centre. The further away the
region is located from Moscow, the more of its expenditures to the centre it receives back.
Most regions located in the distant Northeast are dependent on subsidies from Moscow and
are dependent on a certain degree on a redistributing fiscal system. There is no relationship
between the percentage of privatisation and proximity to the centre. The low correlation

114
contradicts earlier expectations, as I assumed that regions closer to Moscow would potentially
be more pressured to reform than distant ones. Lastly, the percentage of unemployment
correlates positively with proximity to the centre. The further away from Moscow, the higher
is generally the percentage of unemployed.

(5) Main type of industry in production 1993

The initial main industrial infrastructure in a region has a relationship with the economic
strength with a relative strong correlation of .36 according to Table 4.2-1. The more heavy
industry, the stronger is the economy. Regions with light industry or producers of foodstuff
products have generally less economic strength than regions with heavy energy or water
plants industry. Philip Hanson (1996:5) has found the same result in a study on economic
development in the Russian regions. He argues that the initial lack of an effective market
network in the farm- food processing and distribution system prompted many local leaders to
control local food prices and, also to control exports of food from their own region to others.
This option was only available to regions that could feed themselves and also have a source of
funds to subsidise food prices. Lenin’s home region, Ulyanovsk, on the Volga, is the best-
known example of this ‘export control’ policy. Generally, there is no difference between light
or heavy industry when it comes to the amount a region gets back from its expenditures to the
federal centre. Main type of industry correlates negatively with estimated unemployment rate,
the higher the unemployment the larger the amount of light industry in the region. Regions
with light industry (like food processing) as their main type of industry have generally a
higher degree of unemployment than regions with heavy industry.

(6) Exploitation of oil and gas in 1000 ton 1995

As expected, the amount of exploitation of oil and gas correlates positively with the economic
strength index as shown in Table 4.2-1. The more exploitation of oil and gas, the higher is the
economic strength of the region. On the other hand, exploitation of oil and gas has no
relationship with the percentage of privatisation. Regions that exploit oil and gas do not
privatise more or attain more foreign investment than other regions. Much of the oil and gas
industry are still controlled by major state controlled enterprises like Gasprom. Foreign
investment in the oil industry in Russia has generally been a tough lesson for foreign
enterprises, a good example is the then Norwegian state owned Statoil, which gave up all its
planned investment in Nenets and Yamal Nenets in the latter half of the 1990s. The low

115
correlation between exploitation of oil & gas and the percentage of unemployment also
indicates that there is no relationship between these variables.

(7) Chemical and oil-technical production in percentage of industrial output 1995

Most noteworthy is the fact that chemical and oil-technical production does not at all correlate
with the economic strength index in Table 4.2-1. Regions with a high percentage of
processing industry are not economically stronger than other regions. A high percentage of
processing industry does, however, relate to a high percentage of payback from the federal
centre 1996-98 with a significant correlation. In other words, regions with a high chemical
and oil-technical production depend more on the centre’s willingness of payback than other
regions. Like with the variable on exploitation of oil and gas, there seems to be no apparent
relationship with the level of privatisation or the amount of foreign investment. Also, like the
previous variable, there is no relationship with the percentage of unemployment. Regions with
high oil and gas exploitation or processing are not able to sustain lower unemployment
compared to other regions. Altogether, the chemical and oil- technical production seems to be
of lesser relevance to the economic variables and its value in further study seems limited.

I have found that several background conditions have a relationship with the economic
strength of a region. A variety of structural conditions set by the Soviet system are related to
present socio-economic development of a region. The structural conditions are here
represented by the ethnic condition, federal status and the industrial structure. Regions with a
high ethnic Russian population are in general economically stronger, while the republics and
okrugs are mostly economically weaker. Reform economics represented by degree of
privatisation is related to the ethnic and federal conditions in a region. None of the
background variables correlated significantly with the amount of foreign investment in a
region. Regions with a high amount of heavy industry are on average economically stronger
than regions with dependent on light industry. There is also a strong relationship between the
exploitation of oil and gas with the economic strength of a region. On the other side, there was
no relationship between the geographical proximity to the federal centre and the economic
strength, and there was no relationship between the chemical and oil-technical industry with
economic strength. The variable ‘Chemical and oil-technical production’ lacks relevant
relationship with the economy measured here, and is thereof excluded in further analysis. I
will now look at the economic variables relationship with the two types of autonomy.

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4.2.2 Socio-economic conditions and federal elements
A high degree of economic strength is thought to have a positive relationship with autonomy
as it could put more potential pressure on the federal cent re for gaining more self-
determination over ones own resources and politics. Autonomy operationalised by three
measures: formal autonomy seen through historical federal status; quasi- formal autonomy
seen through the signing of bilateral agreements; and de facto autonomy seen through
intergovernmental financial transfers. The latter two are discuss below.

Table 4.2-2 Economy and autonomy, Pearson’s correlation coefficient (r)

De facto autonomy Signed bilateral treaty Degree of autonomy

index 1994-97 with Moscow 1994-98 obtained trough treaty
Economic strength index .63** .10 .34*
1994-98 N 88 N 88 N 46
Payback from the federal -.56** -.11 -.16
centre 1996-98 N 88 N 88 N 46
Degree of privatisation .36** .02 -.19
1993-1998 N 88 N 88 N 46
Foreign investments in . 42** .11 .47**
a
1000 US$ in 1998 N 75 N 75 N 40
Estimated unemployment in -.63** -.16 .14
% 1998 N 88 N 88 N 46

NOTE: Significance: ** p =/< 0.01, * p =/< 0.05, (* =/< 0.10, two-tailed test. Missing values: cases
excluded pairwise. Total N= 89. a) Moscow city is excluded

In Table 4.2-2 we find that there is a clear positive relationship between the economic
strength and the de facto autonomy of a region. This also corresponds to the degree of quasi-
formal autonomy through the bilateral treaties signed with the centre. And, quite surprisingly,
there is no significant relationship between economic strength and ‘Signed bilateral treaty
with Moscow’:

(1) Economic strength index 1994-97

The economic strength index correlates positively with the de facto autonomy of a region as
shown in Table 4.2-2. The strong relationship indicates that regions with high potential
economic leverage also have utilised their possibilities in de facto autonomy, by controlling a
larger share of the intergovernmental transfers. However, it could also be the case that they to
a certain degree measure the same phenomena, that there is a possibility of multi-colinearity.
Although the de facto autonomy index is based on financial transfers, the economic strength
index is measuring economic factors that are relatively different. Correlations with the quasi-
formal autonomy variables are not as strong as economic strength, since the relationship with

117
whether or not these regions have signed a bilateral treaty is insignificant. The degree of
economic strength in a region has thus no relationship with whether or not it has signed a
bilateral treaty. On the other hand, among the regions that have signed a treaty, there is a
positive relationship between economic strength and the degree of authority in treaty. When a
region first has started the process of signing a treaty with the centre, then the economic
strength plays a role in obtaining a higher or lower degree of authoritative autonomy. Regions
with a high score on the economic strength index have generally obtained a higher degree of
autonomy in the bilateral treaty.

(2) Percentage of payback of a region’s total expenditures to the federal budget 1996-98
The percentage of payback correlates negatively with both de facto autonomy and quasi-
formal autonomy, but only the relationship with the former is significant (see Table 4.2-2).
The strong, negative relationship with de facto autonomy indicates that the higher a region’s
percentage of payback from the federal centre is, the lower its de facto autonomy is. A finding
that fits well with my assumptio ns of ‘payback’ as more or less a sign of financial dependency
on the federal centre. The weak, negative correlation with the quasi- formal autonomy
indicates that a high percentage of payback gives also a lesser chance of receiving a treaty and
if a treaty is obtained, this treaty will imply less autonomy.

(3) Privatisation in percentage 1993-98

Privatisation correlates positively with the index on de facto autonomy as seen in Table 4.2-2.
A higher degree of de facto autonomy corresponds therefore to higher privatisation of
enterprises in the federation units. The percentage of privatisation seems to have no
relationship with whether or not a region has obtained a bilateral treaty; the correlation is not
statistically significant. The degree of privatisation correlates, on the other hand, negatively
with the degree of authority in the bilateral treaty, but it is quite weak and not significant. The
correlation indicates, however, that the higher the autonomy in treaty, the lower is the
percentage of privatisation in a region.

(4) Foreign investment in thousand US$ 1998

The amount of foreign investment correlates positively with the economic strength index as
seen in Table 4.2-2. The higher the amount of foreign capital invested in a region, the higher
is its economic strength. However, the foreign investment variable correlates significantly
only with the second quasi- formal autonomy variable “Degree of autonomy obtained through

118
bilateral treaty”. Regions with a high amount of foreign investment have also obtained a high
degree of autonomy through the signing of a treaty.

(5) Estimated unemployment in percentage 1998

The percentage of unemployment correlates negatively with the score of de facto autonomy as
listed in Table 4.2-2. The strong negative relationship implies that the lower the percentage of
unemployment the higher is the de facto autonomy of a region. The level of unemployment
has no significantly relationship with either variable on quasi- formal autonomy.

In short summary, here is the relationship between the variables on socio-economy and
autonomy: there is a strong positive relationship between a region’s economic strength and
the de facto economic autonomy, which runs a possible risk of colinearity; there is also a
positive relationship between economic strength and the degree of autonomy in treaty, but no
relationship with whether or not a region has signed a bilateral treaty. Economic strength
cannot explain why regions have obtained a treaty and I will in the regression analysis look at
other factors, i.e. geopolitics, ethnicity and federal status that might explain the reasons for
obtaining a bilateral treaty. There is a strong positive relationship between privatisation and
de facto autonomy. There is no relationship between privatisation and whether or not a
bilateral treaty has been signed. But when it comes to the degree of autonomy obtained
through treaty, there is a weak negative relationship. The other economic reform variable, the
amount of foreign investment, has also a strong relationship with the economic strength of a
region, and in addition a strong relationship with the degree of autonomy obtained through
treaty. Last, there was a strong negative relationship between the percentage of
unemployment and the de facto autonomy. In sum, the degree of economic strength and
economic reform operates positively together with the degree of autonomy, whether it is de
facto or obtained through treaty, but none of the socio-economic variables have a relationship
to whether or not a region has signed a treaty. The next step is to analyse the relationship
between autonomy and democracy.

4.2.3 Federal arrangements and democracy

I initially expected that a higher degree of regional autonomy would have a negative
relationship with the score on the democracy index and freedom of the media index. During
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the 1990s, Moscow officials have issued continuous warnings on authoritative tendencies in
Russian regions outside the control of the federal centre. In fact, there are numerous examples
of this proclaimed tendency, especially among ethnically defined regions. That is why I
included the second index on democratic development, since democracy1 is insufficient only
covering the territorial regions and not the ethnically defined regions. Since the ethnically
defined regions are only included in democracy2, I will not be able to give an adequate
quantitative measure of the regions as a whole according to all of Robert Dahl eight indicators
of democracy, but only according to freedom of the media. Democracy2 will therefore
function as my only indicator of democratic development in the ethnically defined regions.
The variables on executive change also covered all the units of the Russian Federation, but
were proven to be a rather unreliable measure of democracy (as discussed in 4.1.4) and
therefore excluded from further study.

Table 4.2-3 Autonomy and democracy, Pearson’s correlation coefficient (r)

Democracy index Freedom of

based on R. Dahl the press index
(democracy1) 1997 (democracy2) 1999
De facto autonomy index .36** .37**
1994-97 N 57 N 87
Signed bilateral treaty with .33** .15
Moscow 1994-98 N 57 N 87
Degree of autonomy .37* -.01
obtained through treaty N 32 N 46

NOTES: Significance: ** p =/< 0.01, * p =/< 0.05, (* =/< 0.10, two-tailed test. Missing
values: cases excluded pairwise. Total N= 89.

In contrast to my point of departure that regions with a high degree of autonomy were less
democratically developed because of authoritative tendencies, the correlations in Table 4.2-3
indicate that autonomy, both de facto and quasi- formal, has a positive relationship with the
democracy indexes.

(1) De facto autonomy index 1994-97

The de facto autonomy correlates positively both indexes of democracy, as seen in Table
4.2-3. The higher de facto autonomy the higher, in general, is also the democratically
developed is the region. This accounts for both the territorially defined regions and the
regions as a whole. Regions with low de facto autonomy have also moved less away from
their Soviet past. This finding is opposed to my initial assumption that the relationship

120
between autonomy and democracy was negative. As it turns out, the contrary is the case as the
relationships are positive and significant.

(2) Signed bilateral treaty with Moscow 1994-98

The obtained quasi- formal autonomy represented by the signing of a bilateral treaty correlates
positively with the democracy1 index. Territorially defined regions that have signed a treaty
with Moscow are generally considered more democratic than those that have not. This
contradicts my assumption that regions with more autonomy are less democratic than other
regions. On the other hand, “Signed bilateral treaty with Moscow” has no significant
correlation with the press freedom index, which includes all signed treaties and regions.

(3) Degree of autonomy obtained through treaty

Quite identical to the other ‘treaty’ variable, the degree of autonomy obtained through treaty
has a strong relationship with democracy in the territorial regions, while there is no pattern
considering all Russian regions. The number of cases in these bivariate relationships consists
of a rather small sample, only 32 and 46 regions respectively. This kept in mind there are still
meaningful interpretations to extract: The degree of autonomy in the treaty correlates
positively with the democracy index. Among the 32 territorial regions that have signed a
treaty, the ones that have obtained a higher degree of autonomy through treaty, also have a
higher score of democratic development. However, the degree of autonomy obtained through
treaty does not correlate significantly with the press freedom index, and there seems to be no
relationship between the variables. In Table 4.2-3 we see that the sample is relatively small
with 46 regions, which is the total number of regions that have signed a bilateral treaty.

To sum up the relationship between the degree of autonomy (both de facto and quasi- formal)
and democracy, they operate positively together in the territorially defined regions, while
considering all regions only de facto autonomy has a significant, positive relationship. The
relationship between de facto autonomy and the democracy index is quite strong among the
territorial regions. There is also a strong relationship between de facto autonomy and the press
freedom index in all Russian regions. The quasi- formal indicators of autonomy also have a
positive relationship with the democracy1 index among the territorial regions; “Signed
bilateral treaty with Moscow” and “Degree of autonomy obtained through treaty” were
positively related. This is in opposition to the view of the central institutions in Moscow,

121
which argue that centralisation is necessary in order to implement and secure democratic
development. Autonomy seems to be healthy for democracy in the territorial regions, while a
possible relationship is not seen considering quasi- formal autonomy in all Russian regions.

The bivariate correlation between indicators of autonomy and democracy has brought
especially one important finding: High degree of autonomy has a positive relationship with
democracy. Regions with much autonomy are generally the ones with more developed
democracy - contrary to my initial expectation. Unfortunately it was not possible to measure
the democracy index in all Russian regions based on Robert Dahl’s criteria. The ethnic
republics, okrugs and autonomous oblasts, are generally considered less democratic than the
territorial regions. It would therefore be even more problematic to use Robert Dahl’s
democratic measure. Fortunately the press freedom index that covers all regions has a higher
level of generality. I measure thus the degree of democracy also in ethnically defined regions
in the Russian Federation, although some would consider it troublesome to use the term
‘democracy’ for these regions, as the danger of conceptual stretching is obviously present. 83

4.2.4 Summary
I have now analysed the correlation between the variable sets and indexes and identified the
variables that have significant relationships through the B? E? A? D chain: The industrial
preconditions, ethnic composition and federal status of a region are related to economic
strength. Furthermore, the economic strength and economic reform variables have a positive
relationship with the de facto autonomy. The findings were more diverse between economic
strength and quasi- formal autonomy; there is no relationship with whether or not a region has
signed a treaty, but a positive relationship with the degree of autonomy obtained through the
signing of a treaty. Autonomy, both de facto and quasi-formal, in turn correlates positively
with the democracy1 index in the territorial regions. De facto autonomy has also a positive
relationship with the democracy2 index for all regions in the RF. This gives a good indication
that a high degree of autonomy operates generally together with high degree of democracy.
Only one variable, “Chemical and oil-technical production” was excluded as it indicated no
relevant relationship with the socio-economic variables.

83
A term conceived by Giovanni Sartori, see the discussion in “Conceptual stretching revisited: Adapting
Categories in Comparative Analysis” by Collier and Mahon in American Political Science Review – Vol. 87, No.
4, December 1993.
122
The relations hips between these above-mentioned correlations are, however, more complex
than what can be explained through mere bivariate correlation - which variables have an
effect on the others and what about the direction of causality? The existing relationship may
be due to spurious effects or background variables that can have explanatory value.

123
4.3 Multiple regression analysis of the main variables

To analyse the relationship between the variables in my model, I will perform multiple
84
regression analysis. The value of this technique lies in its capacity to estimate the relative
importance of several hypothesised predictors on the dependent variable. I found it useful to
build up the models by entering variables one by one. Because there are relatively few
independent variables to the models I can study the variance of each of them on the dependent
variable.

The multiple regression analysis is based on the variables confirmed in the bivariate analysis.
An important question is which variables I should include in a final regression model. I will
include the theoretically important variables and exclude variables of low correlation. All
variables are chosen for theoretical testing. The test implies ascribing explained variance and
deciding whether the theory is adequate or not. As with the previous bivariate correlation
procedures, linear regression analysis assumes that the form of the relationship between y and
x is linear and that the dependent variable is distributed normally at every level of the
independent variable. Even when data may violate this, the method is still quite robust in
which we can make a conclusion if the results are significant or not.

Various background variables are considered to have an indirect as well as a direct effect on
all dependent variables: economy, autonomy, and democracy. Therefore it is my first priority
to identify these before entering them in the regression models, and use those background
variables that have explanatory power on the actual dependent variable. These background
variables will then function as constant explanatory factors in the following regression
analyses. ‘Constant’ in the sense that background variables with significant effect will be
included as continuous factors in all regression models in order to identify the added
explanatory power of other independent variables. This process will be repeated preparatory
for all regression models: First, I extract the background variables that have an effect on
84
I use the Ordinary Least Square (OLS) procedure to adjust for the impact the control variables. This technique
is based on the assumption that one unit increase on the value of the dependent variable will be equal for each
added value on the independent variables. When the dependent variable is a dichotomy, this statement is in
principle meaningless, as the value of a dichotomy is either 0 or 1. The assumption that the error terms are
normally distributed is not met. Furthermore, the equation resulting from regressing a dichotomy may give way
to results exceeding the boundary of its upper and lower values. Therefore many scholars prefer to use non-linear
models when the dependent variable is a dichotomy (Bohrnstedt & Knoke 1994:332-334). However, the
coefficients produced by non-linear models are less comprehensible than those of the linear regression, and the
results are more difficult to interpret. Linear regression is therefore here the preferred technique even if the
dependent variable is dichotomised. And in most cases, both techniques produce similar results, provided that
the distribution of the values on the dependent variable is not extremely skewed (Franklin & Rüdig 1995).
124
economic strength. These selected background variables will then be held constant to see the
relative strength of each autonomy variable on the economic strength. I have then found
whether or not, and to what degree, the background and autonomy variables have explanatory
power on economic strength. Secondly, I identify the background variables that have impact
on de facto autonomy. These, when held constant in the regression models, will help single
out the economic variables that have an impact on de facto autonomy, one by one. This
process will be repeated for what I identified as two measures of quasi-formal autonomy
phenomena, that is, whether or not regions have obtained a treaty and increased their
autonomy through treaty. Thirdly, the background variables that have an effect on democracy
are singled out. These are held constant throughout the regression models, and I will test the
explanatory power of each of the variables on economy and afterwards test the variables on
autonomy. Having singled out the variables with effect on democracy, I can judge for
economy and autonomy their relative importance for explaining democratic development in
the regions. As mentioned earlier, I have two complementary indexes on democracy and both
of these will be accounted for compared separately. But before I turn to these three stages for
explaining democratic development, I shall first shortly present the multiple regression tools I
have chosen in my analysis.

4.3.1 Multiple regression tools

I will use the multiple correlation coefficient (R2 ) to measure the independent variables’
shared variance with the dependent variable. 85 R2 is the total explained variance, i.e., the
additive cumulative effect of all the indicators in the regression model. Adjusted R2 on the
other hand, reflects better the fit of the model in the population, by also accounting for the
number of independent variables in the equation. In presenting the adjusted version of
variance I will compare it to the ordinary total explained variance R in cases where there are
interesting discrepancies. However, the explained variance first and foremost has a value for
explaining the independent variables’ explanatory power and should not be used to determine
86
the quality of a model. I will use residual analysis instead to look at the quality and
reliability of each regression model.

85
A measure for linear regression that expresses the amount of variation in the dependent variable explained or
accounted for by the independent variables in a regression equation (Bohrnstedt/Knoke 1994:207).
86
The residual is the amount that remains after subtracting the prediction equation from the linear regression
model, also called the regression error term (Bohrnstedt/Knoke 1994:196).
125
In the social sciences, one controls for influence on the dependent variables through explicit
models. From my initial theoretical assumption of causality and the results from the previous
bivariate analysis, I have chosen the variables the selected theory says will have an effect on
the dependent variables. I intend rather to describe the causality between the independent and
dependent variables, and not elaborate on the descriptive effect of each independent variable.
However, when this effect is discussed, I will use the Beta coefficient (ß), which is a
standardised regression coefficient. 87 The beta coefficient allows a precise interpretation of
the relationship between the variables. It is a standardised measure in order to give an
interpretive meaning between the independent variables when the units of measurement are
different, that is, the independent variables are then in the same metric. I can then determine
their relative ability to predict the dependent variable by examining which of the variables is
larger in absolute value (Bohrnstedt & Knoke 1994:273-275). I will in addition use the non-
standardised regression coefficient (B) to make possible an accurate numeric interpretation of
the independent variables’ effect on the dependent variable. Interpreting standardised
deviations, as is the case with the Beta coefficient, is less informative when evaluating an
independent variable’s effect on the dependent controlled for the effect the other independent
variables. However, in some of the indexes the values are from zero to one, which make
interpretations of non-standardised scores below one percent difficult. The regression
coefficients (ß and B) have, like Pearson’s r, the weakness that they take extreme values too
much into account. This is especially the case in relatively small samples, as with this case
study of the 89 Russian regions. However, it is noteworthy to stress that here it concern not a
sample, but the whole population! Nonetheless, I intend to identify the outliers and test for the
effect of their exclusion whenever relevant. These will be identified through residual analysis,
(if not already excluded in the operationalisation).

With adjusted R2 , ß, B, significance test and residuals I can interpret the explanatory power of
each of the independent variables for the dependent variable, their relative comparable
strength and direction in the linear relationships, whether or not these relationships are
significant, and state the overall reliability of the regression model. In addition, I will
determine the individual importance of each independent variable more accurately than
87
The same regression coefficients I would have obtained if the variables were converted to Z scores prior to
estimating the regression model. A standardised bivariate regression coefficient involves rescaling both the
independent and dependent variables in terms of their standard deviations. The regression coefficient is equal to
the correlation coeffic ient, but only in bivariate regression. The beta coefficient measures the amount of net
change. When the independent variable changes with 1 standard deviation unit, changes the dependent variable
with ‘beta’ units in the sample. Zero means no relationship between the variables. Strength is determined in
relationship to the units’ size and scatterplot pattern.
126
through the mentioned regression coefficients. Another way of assessing the importance of
the independent variables is to consider the increase in the expla ined variance (R2 ) when a
variable is entered into an equation that already contains other independent variables. I will
then account simultaneously for the explained variance and for the strength of association
between the independent variables and the dependent variable.

4.3.2 The structural preconditions and economic strength

In my first model, I want to study the effect of background variables on the economic strength
as visualised in the Figure 4.3-1. The economic strength index is my main economic measure
and it functions as the only dependent variable on economy in my model.

Figure 4.3-1 Model B? E: The effect of background variables on “Economic strength”

I continue with the independent background variables from the bivariate correlation presented
earlier that were relevant for regression without running obvious risks of multi-colinearity.
The background variables excluded through colinearity are ethnically defined region, majority
of the titular nationality, road density and chemical and oil- technical production. The
remaining variables are listed in Table 4.3-1 below. The order of entering of variables is made
to see the change of explanatory power of the model when a new independent variable is
included. I will generally refer to adjusted R2 as the measure of total explained variance as
opposed to the ordinary R2 unless mentioned otherwise.

127
Table 4.3-1 Regression models – background variables on economic strength

Regression analysis of socio-economy (Ordinary Least Squares)

Dependent variable Economic strength
index (0,00-1,00)
Model B1 B2 B3 B4 B5 B6
Standardised/Unstandardised r.c. ß B ß B ß B ß B ß B ß B
Background variables
Ethnic Russian Population (%) .18(* .00 .09 .00 .07 .00 .07 -.00 -.14 -.00 -.00 -.00
High federal status (=1) -.12 -.07 -.11 -.06 -.11 -.06 -.11 -.04 -.13 -.05
Medium federal status (=1) .04 .02 .04 .02 .23 .07 .05 .02
Geographical proximity (1-5) .00 .01 .07 -.01 -.10 -.01
Main industry (1-5) .37** .05 .32** .04
Exploitation of oil/gas (1000 ton) .44** .00
R2 .03 .04 .04 .04 .18 .37
Adjusted R2 .02 .02 .01 .01 .12 .31
Residuals > 1.5 standard deviation 4 4 4 4 6 6
Number of regions 87 87 87 87 76 76

NOTE: Total N=88, listwise deletion of cases. Significance: ** p =/< 0.01, * p =/< 0.05, (* p =/< 0.10

Models B1-B3 show that the ethnic composition and federal status of a region do not have
much explanatory power on economic strength. Ethnic composition only explains two percent
of a region’s economic strengt h, while the two dummy variables on federal status add no
explained variance in model B2 and B3. In model B4 with the inclusion of geographical
proximity, the explanatory value of the model remains unchanged at one percent. The
explanatory power increased substantially, however, when the main industry of a region was
added in model B5, as it explains 14 percent of the variance on the dependent variable. Also
in model B6 the explanatory power increases when the amount of exploitation of oil and gas
is included.

The background variables achieved a total adjusted R2 of .31 in regression model B6. This
means that they together account for 31 percent of the variance on “Economic strength”.
Interesting to note is the relatively large discrepancy to the ordinary R2 (.37) that is
inaccurately affected by the number of independent variables put into the regression model.
Among the background variables, it is clearly the main industry and exploitation of oil & gas
that matter most to determine a region’s relative economic strength. These two variables
increased the explanatory strength significantly when included into the regression models.
The fact that the other structural variables on demographic and geopolitical variables have no
significant effect on economic strength was not surprising. As mentioned earlier, these
variables are thought to have more effect on the degree of autonomy than on economic
strength. Most of these variables do not correlate significantly with economic strength earlier
in the bivariate analysis. This is verified here, in which none of them have significant beta
128
score and thus have little importance in explaining variance on economic strength compared
to the industrial preconditions.

By identifying the cases through residuals, I measure the reliability and quality of the
regression model. 88 There are identified six outliers with high residuals in model B6; Tomsk
and Tula scored lower than predicted, while Sakhalin, Komi, Samara and Moscow oblast
scored higher. 89 The unexpected values of these three cases on “Economic strength” cannot be
explained sufficiently by the independent variables enlisted in model B6. I could speculate on
what other variables might explain the variance on these cases’ value on economic strength
through careful case studies, but this is outside the scope of this thesis, since such data are not
included in this study.

The next regression model in Table 4.3-2 below includes the autonomy variables for testing
their explanatory power on economic strength. As listed, I have kept the two background
variables that have significant effect on economic strength in the previous model. “Main
industry” and “Exploitation of oil and gas” will be held constant in all regression models. The
aim is to test the rela tive explanatory power each variable on autonomy adds to the regression
model. An increase in explained variance strengthens the model, while no-change or decrease
does not – which leads to the finding that the added variable has no explanatory effect.

88
A residual is the amount that remains after subtracting the prediction equation from the linear regression
model (Bohrnstedt/Knoke 1994:196). I will here define outliers as residuals with a score above 1.5 standard
deviations from predicted value determined by the regression line. If a regression model has many high scoring
residuals, it is a sign of weakness in the model in which a lot of cases are located far away from the predicted
regression line. A negative score indicates an outlier below the regression line and a positive score is above the
regression line.
89
For example: Tomsk has a score of 12 percent on economic strength, but should according to the regression
line determined by the independent variables have a predicted value of 36 percent. This gives an error of -.24
below the regression line, which indicate a 24% error in determine this regions value on economic strength.
129
Table 4.3-2 Regression models - BA on Economy

Regression analysis on economy (Ordinary Least Squares)

Dependent variable Economic strength
index (0,00-1,00)
Model B A BA A1 A2 A3
Standardised/Unstandardised r.c. ß B ß B ß B ß B ß B ß B
Background variables
Main industry (1-5) .33** .04 .13 .02 .12 .02 .32** .04 .43** .06
Exploitation of oil/gas (1000 ton) .43** .00 .40** .00 .38** .00 .45** .00 .24(* .00
Variables on autonomy
De facto autonomy index (0.00-1.00) .64** .88 .46** .62 .49** .67
Treaty with Moscow (=1) -.04 -.02 .12 .04 .23* .07
Degree of autonomy in treaty (1-4)a b b b b .23 .04
2
R .32 .40 .55 .53 .37 .38
2
Adjusted R .30 .38 .50 .50 .34 .33
Residuals > 1.5 standard deviations 7 7 5 6 5 3
Number of regions 76 88 76 76 76 40

NOTE: Total N=88, listwise deletion of cases. Significance: ** p =/< 0.01, * p =/< 0.05.
a) Moscow city is excluded as an extreme outlier b) Cannot be computed since it is constant with “Treaty with Moscow”.

The variables on autonomy have a comparably larger explanatory power on economic

strength than the extracted background variables: Model B explains 30 percent of the variance
on economic strength, while model A explains 38 percent. Combined in model BA they have
a quite large explanatory power at 50 percent. I will now compare model B with A1, A2, and
A3 to express the relative strength of the autonomy variables. The de facto autonomy index
increases the adjusted explained variance from 30 percent to 50 percent in model A1. This is
the same as in model BA, which indicates that de facto autonomy index is by far the most
significant autonomy variable in the present regression model. In model A2, on whether or
not a region has a treaty with Moscow, the explanatory power of the model increases to 34
percent. “Signed bilateral treaty with Moscow” has a minor additional impact in the model by
adding four percent; the effect is nonetheless significant.

To look further at the regions that have a treaty, the degree of autonomy obtained through the
bilateral treaty adds little explanatory power. Whereas model A3 increases moderately with
three percent, one has to keep in mind the low number of cases involved in the model A3
(N=40). The residuals were quite few and not very high, which indicates that the quality of
the model is high.

The explanatory variables in regression models on economic strength have substantial

explanatory power. In sum, all variables on autonomy have significant effect on the economic
strength in a region, but only the de facto autonomy index has considerable explanatory

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power. Still, the variable “Signed bilateral treaty with Moscow” turned out to be significant in
its mutual relationship with the background variables. And the autonomy variables explain
somewhat more than the extracted background variables on economic strength. The constant
background variables do determine some of the economic strength of a region.

4.3.3 Determining the degree of autonomy

I earlier differentiated three types of autonomy in my model. Formal autonomy determined by
historical structures, which is reflected through the legal acts in the Constitution and the
Federal Treaty. The formal autonomy is covered in the background variables, namely through
“Federal status”. Quasi-formal autonomy is covered by the signing and content of the bilateral
treaties. De facto autonomy is covered by federal transfers between the levels of government.
I will here use the two latter as dependent variables in the following regression models. In
chapter 4.2 there was a fair significant correlation between de facto and quasi-formal
autonomy, and I will here look for differences of effect from the independent variables on
these two types of autonomy. It is especially interesting to see if economic strength matters
equally for both.

Figure 4.3-2 Model B? A: The direct effect of background variables on “Autonomy”

As visualised in the model (Figure 4.3-2), some of the background variables are also thought
to have a direct effect on a region’s degree of autonomy, and not merely indirectly through its
economic strength. The causal problem is to determine what came first, economic strength or
the degree of autonomy, and which had an effect on the other. I do not intend to dwell on this
chicken-egg dilemma, and just accept that the economy and autonomy have an effect on each
other. As a consequence of this, I am also forced to look at the background variables’ effect
on the degree of autonomy in the region in order to separate the economic variables that have
an impact. I have earlier expressed my assumption that the structural variables on ethnicity,
federal status and geographical proximity would matter on a regions degree of autonomy –
especially since the Russian Federation aspires to be defined as a ‘federation’.

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Table 4.3-3 Regression models - background variables on de facto autonomy

Regression analysis of autonomy1 (Ordinary Least Squares)

Dependent variable De facto autonomy
index (0,00-1,00)
Model B1 B2 B3 B4 B5 B6
Standardised/Unstandardised r.c. ß B ß B ß B ß B ß B ß B
Background variables
Ethnic Russian Population (%) .47** .00 .61** .00 .44** .00 .35* .00 .21 .00 .26 .00
High federal status (=1) .20 .07 -.28(* .10 .20 .07 .46 .13 .45 .13
Medium federal status (=1) .27 .08 .22 .07 .55 .16 .50 .14
Geographical proximity (1-5) -.27** -.03 -.34** -.03 -.35** -.03
Main industry (1-5) .47** .05 .46** .04
Exploitation of oil/gas (1000 ton) .16(* .00
2
R .22 .24 .26 .32 .46 .49
Adjusted R2 .21 .22 .23 .29 .42 .44
Residuals > 1.5 standard deviation 9 10 11 11 8 10
Number of regions 87 87 87 87 76 76

NOTE: Total N=88, listwise deletion of cases. Significance: ** p =/< 0.01, * p =/< 0.05, (* p =/< 0.10.

The regression model starts quite strongly in model B1 with the percentage of ethnic Russian
population, see Table 4.3-3. Model B1 exp lains 21 percent of the variance in de facto
autonomy. The higher percentage of ethnic Russians, the higher score in the de facto
autonomy index. The inclusion of federal status in model B2 and B3 does not add much
explanatory power, only 2 percent to 23 percent. A distinctive change of explanatory power
follows the inclusion of geographical proximity in model B4, as it explains 29 percent of the
de facto autonomy. The further away from Moscow, the lower is the de facto autonomy.
While the main type of industry matters, this seems not to be the case with the amount of
exploitation of oil and gas. In model B5 the explained variance adds up to 42 percent, a strong
increase. A larger degree of heavy industry leads to more de facto autonomy. Lastly, in model
B6 the exploitation of oil and gas is included, which does not increase the strength of the
model much.

In regression model B6, listed in Table 4.3-3, all background variables score an adjusted R2 of
.44, that is, they explain 44 percent of the de facto autonomy index. As with the model on
economic strength, the more heavy main type of industry the higher the degree of de facto
autonomy. But, while the percentage of ethnic Russians and geographical proximity from
Moscow has no significant effect in the previous model, they are important for determining
the degree of de facto autonomy. As seen in the model above, the significance level of
“Ethnic Russian population” varies depending on the combination of variables. Still, a

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generally higher percentage of ethnic Russians results in more de facto autonomy, while
regions far away from the federal centre have less autonomy. I identified ten outsiders in this
model, most of them were republics gaining a higher score than predicted (Bashkortostan,
Tatarstan and Sakha-Yakutia), or a lower score (Dagestan, Altai, Kalmykia and Tuva). Three
other special cases are Primorskii krai, Kaliningrad and Pskov. I consider this a quite large
number of outsiders, which indicates that the quality of the model is moderate.

My assumptions on the impact of ethnicity and geographical proximity are verified, they both
have a significant effect on the autonomy index. In addition, the type of industry a region is
dependent upon is very important for determining the degree of de facto autonomy. More
surprising is it that the federal status has no significant effect on the de facto autonomy in the
model. According to federalist theories in asymmetric federative states, this variable is
believed to have an effect on the degree of autonomy. The asymmetry vested in a constitution
or other legal acts are supposed to be reflected in real politics. I will now check their effect on
the quasi-formal autonomy seen through the bilateral treaties signed with the federal centre.

In Table 4.3-4 below I have tested the background variables against whether or not a region
has signed a treaty with Moscow. The explanatory power is low and the variable on ethnicity
is the only one that seems to have significant effect.

Table 4.3-4 Regression models - background variables on quasi-formal autonomy

Regression analysis of autonomy2 (Ordinary Least Squares)

Dependent variable Signed bilateral treaty
with Moscow 1994-98 (=1)
Model B1 B2 B3 B4 B5 B6
Standardised/Unstandardised r.c. ß B ß B ß B ß B ß B ß B
Background variables
Ethnic Russian Population (%) .07 .00 -.16 .00 -.42* -.01 -.45* -.01 -.48* -.01 -.53* -.01
High federal status (=1) -.11 -.14 .02 .02 -.01 -.01 .30 .34 .30 .35
Medium federal status (=1) .42* .45 .41(* .43 .71 .80 .75 .85
Geographical proximity (1-5) -.09 -.03 -.05 -.02 -.04 -.01
Main industry (1-5) .09 .04 -10 .04
Exploitation of oil/gas (1000 ton) -.14 -.00
R2 .01 .01 .06 .07 .08 .10
Adjusted R2 .01 .01 .02 .02 .02 .02
Residuals > 1.5 standard deviations 0 0 1 2 3 3
Number of regions 87 87 87 87 76 76

NOTE: Total N=88, listwise deletion of cases. Significance: ** p =/< 0.01, * p =/< 0.05, (* p =/< 0.10.

In model B1 the percentage of ethnic Russians has no explanatory value for whether a region
has obtained a treaty. Federal status is included in model B2 and B3, but adds little impact -

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although in the combination in model B3 both ethnicity and medium federal status have
significant effect. The higher the ethnic Russian population, the less probable is it that the
region has obtained a treaty, while regions with a medium federal status are more probable of
having a treaty. All regions except some republics have a high percentage of ethnic Russians.
The ‘ethnic card’ of the titular nationalities seems therefore not to be a general advantage for
the ethnically defined regions, but rather a card played in the early treaties signed in 1994.
Regions with a medium federal status have obtained more treaties than republics and okrugs
that constitute the high and low federal status respectively. None of the other background
variables strengthen the explanatory power of the model significantly. Worth to note is the
high discrepancy between the ordinary and the adjusted explained variance seen in model B6.
The adding of variables gives an artificially high ordinary explanatory power at ten percent,
when in fact the model only explains two percent adjusted to the variables entered into the
regression model. The number of residuals is low, caused by the fact that the dependent
variable is dichotomous, and does not necessarily mean that the quality of the model is ideal,
especially considering the low explanatory power of the independent variables. Still, the
republics of Dagestan and Tuva were predicted to have a treaty, but they do not, while the
opposite was the case with Buryatia.

Let me go further into the case of quasi-formal autonomy by studying the content in these
treaties. As told earlier, these treaties contain asymmetric levels of authority, delineating
competences between the centre and the respective regions. The earlier treaties gave
significant competences to some ethnic republics, while later treaties contain more or less a
general framework for dividing competences within the framework of the Constitution. The
variable “Degree of autonomy obtained through treaty” has four values, ranging from little to
extensive autonomy. In Table 4.3-5 below, the background variables have a stronger
explanatory power on autonomy obtained through treaty, than what was the case with de facto
autonomy in the previous model.

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Table 4.3-5 Regression models - background variables on degree of quasi-formal autonomy

Regression analysis of autonomy3 (Ordinary Least Squares)

Dependent variable Degree of autonomy obtained
through treaty 1994-98 (1-4)
Model B1 B2 B3 B4 B5 B6
Standardised/Unstandardised r.c. ß B ß B ß B ß B ß B ß B
Background variables
Ethnic Russian population (%) -.39** -.02 .23 .01 .17 .01 .22 .01 .26 .01 .34 .02
High federal status (=1) .79** 1.9 .82** 1.9 .85** 2.0 a a a a
Medium federal status (=1) .09 .18 .10 .22 -.82** -1.9 -.76** -1.8
Geographical proximity (1-5) .21(* .16 .23(* .17 .30* .23
Main industry (1-5) .03 .03 -.03 -.03
Exploitation of oil & gas (1000 ton) .33* .00
2
R .15 .40 .40 .45 .44 .52
2
Adjusted R .13 .37 .36 .39 .37 .45
Residuals > 1.5 standard deviations 6 6 6 4 4 5
Number of regions 46 46 46 46 40 40

NOTE: Total N=88, listwise deletion of cases. Significance: ** p =/< 0.01, * p =/< 0.05, (* p =/< 0.10.
a) Cannot be computed because of multi-colinearity with “Medium federal status”.

Like with autonomy2, the percentage of ethnic Russian population has a relationship with the
degree of autonomy obtained through bilateral treaty, as model B1 indicates a 13 percent
explanatory power. The higher the percentage of ethnic Russian, the less autonomy is
obtained through the treaty. However, the effect of ethnicity loses its significant effect as the
variable works in combination with other explanatory factors. The federal status of a region
increases the strength of the model significantly, from 13 percent to 36 percent. High federal
status has a strong impact on the quasi-formal autonomy obtained through treaty. The
republics that have signed a bilateral treaty have gained significant autonomy through treaty.

This is in opposition to the symmetric character in the 1993 Constitution, in which all units of
the federation are considered equal in their relationship to the federal centre. We see that this
is not true when it comes to the federal arrangement of signing bilateral treaties and the
increased autonomy these treaties provide. It is especially the economically powerful
republics of Tatarstan, Bashkortostan and Sakha-Yakutia that proves this tendency as they
were among the first to sign treaties and received exceptional regional autonomy. The
geographical proximity also increases the explanatory power to 39 percent. Regions far away
from the centre and borderline regions have generally received more autonomy through the
treaties than regions closer to the centre. This factor of proximity is not surprising in a state as
large as the Russian Federation. The Republics in the Far East (Sakha-Yakutia, Buryatia), the
border republics in the Caucasus (Kabardino-Balkar, North Ossetia) and the republics in the
Urals (Tatarstan Bashkortostan) are all located far away from Moscow and have significant

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autonomy in their treaty. While the main type of industry does not seem to matter, the amount
of exploitation of oil and gas increases the explanatory power to a total of 45 percent. An
increase in the exploitation of oil and gas, relates to a higher the degree of autonomy through
a bilateral treaty. The number of residuals in the model B6 is quite low, which indicates that
the quality of the regression model is fair, although the low number is credited to the
dependent variable’s few values. Mari El got less autonomy than predicted in the model,
while Irkutsk and Kaliningrad fared better than predicted. In sum, the federal status,
exploitation of resources and distance from Moscow matters on the degree of autonomy
obtained in the treaties signed between 1994 and 1998. Ethnicity does not seem to matter
much, while the main industry has no effect.

Now that the background variables with explanatory power are identified, I want to hold these
constant while I test for the effect of each of the economic variables, as visualised in Figure
4.3-3. This principle of manually entering independent variables gives a better interpretation
of the explanatory power of each variable that I want to test among the economic variables.
First I will test the effect on de facto autonomy and afterwards the two variables on quasi-
formal autonomy.

Figure 4.3-3 Model B+E? A The direct effect of economic variables on “Degree of autonomy”

To explain the economic variables effect on de facto autonomy I first extract the background
variables that have explanatory power on de facto autonomy. These variables are “Ethnic
Russian population”, “Main industry” and “Geographical proximity”.

The combined economic variables (model E) have more explanatory power than the extracted
background variables (model B), with 42 and 62 percent respectively (see Table 4.3-6).
Together they cover much of the variance on de facto autonomy in model BE, as they account
for 71 percent. When comparing model B with the inclusion of each separate economic
variable, I may verify the tendency seen in Model E and BE, in which the economic strength
index, average payback and estimated unemployment have significant beta scores. When the
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economic index is included in model E1 the adjusted R2 increases from 42 to 59 percent, a
strong improvement in explanatory power.

Table 4.3-6 Regression models - BE on Autonomy1

Regression analysis of autonomy1 (Ordinary Least Squares)

Dependent variable De factoautonomy
index (0,00-1,00)
Model B E BE E1 E2 E3 E4 E5
Standardised/Unstandardised r.c. ß B ß B ß B ß B ß B ß B ß B ß B
Background variables
Ethnic Russian Population (%) .29** .00 .12 .00 .23** .00 .20* .00 .28** .00 .26* .00 .09 .00
Geographical proximity (1-5) -.35** .04 -.09 .00 -.33** -.03 -.25** -.02 -.36** -.03 -.32** -.02 -.23** -.02
Main industry (1-5) .45** -.03 .30** .03 .29** .03 .48** .05 .45** .04 .40** .04 .31** .03
Economic variables
Economic strength index (0.00-1.00) .20* .11 .17* .11 .44** .33
Average payback (%) -.33** -.01 -.28** -.00 -.39** -.00
Privatisation (%) .09 .00 -.01 -.00 .02 .00
a
Foreign investments (1000 US$) .19* .00 .10 .00 .34** .00
Estimated unemployment (%) -.42** -.01 -.44** -.01 -.47** -.01
2
R .44 .64 .75 .61 .57 .44 .47 .58
2
Adjusted R .42 .62 .71 .59 .54 .41 .43 .55
Residuals > 1.5 standard deviations 10 11 7 10 10 10 8 8
Number of regions 76 75 70 76 76 76 70 76

NOTE: Total N=88, listwise deletion of cases. Significance: ** p =/< 0.01, * p =/< 0.05, (* p =/< 0.10. a) Moscow city is excludes as an extreme outlier.

When the percentage of average payback is included in model E3, the explanatory power rises
from 12 percent to 54 percent. The higher the percentage of payback from the federal centre,
the lower is the de facto autonomy. In model E4 on the other side, privatisation actua lly
lowers the strength of the model from 42 to 41 percent. The percentage of privatisation in a
region seems thus to have no impact on the de facto autonomy. However, the amount of
foreign investment adds significant effect, although weakly, to the explanatory power of the
model. Model E5 has only one percentage more explanatory power than the background
variables in model B. The last model with the percentage of estimated unemployment; model
E6, which adds 12 percent to the explanatory power to a total of 55 percent. Interesting to
note is that the reform related economic variables on privatisation and foreign investment
have no or weak significant effect on the degree of de facto autonomy in the regions. The
economic strength index has the most notable impact, adding 18 percent to the explanatory
power. The higher the economic strength, the higher is also the de facto autonomy. A notable
effect has also “Average payback” and “Estimated unemployment”, but this effect was
negative – the higher percentage of payback or level of unemployment, the lower is the de
facto autonomy in a region. The outliers with 1.5 standardised deviations from predicted value
determined by the regression line consist mostly of ethnic regions. The poorer republics of
Altai, Dagestan, Tuva and Kalmykia along with Chukchi got a far lower score on economic

137
autonomy than predicted by the regression line. On the other side, some other rich regions
fared better than predicted; Bashkortostan, Tatarstan and Sakha-Yakutia got a score from 16
to 20 percent better than predicted, which is quite high. Other regions with high residuals are
the relatively poor Ulyanovsk, Pskov, Kaliningrad and Primorskii krai that received a higher
score than predicted in the models on de facto autonomy.

The next step is to test the explanatory power of the economic variables on the degree of
quasi-formal autonomy, namely whether or not a region has signed a bilateral treaty and to
what degree it has increased its autonomy. I will start with the former. Can the economic
variables explain why a region has obtained bilateral treaty with Moscow? In Table 4.3-7 are
the two significant background variables held constant for testing the explanatory power of
the economic variables. I mentioned earlier that I do not intend to use other than linear
regression analysis even when the dependent variable is dichotomous, because non- linear
models are less comprehensive and generally produce the same results.

Table 4.3-7 Regression models - BE on Autonomy2

Regression analysis of autonomy2 (Ordinary Least Squares)

Dependent variable Signed bilateral treaty
withMoscow1994-98 (=1)
Model B E BE E1 E2 E3 E4 E5
Standardised/Unstandardised r.c. ß B ß B ß B ß B ß B ß B ß B ß B
Background variables
Ethnic Russian Population (%) -.42* -.01 -.64** -.02 -.43* -.01 -.42* -.01 -.43* -.01 -.47* -.01 -.69** -.02
Medium federal status (=1) .42* .44 .43* .49 .41* .43 .38(* .40 .41* .43 .46* .53 .56** .59
Economic variables
Economic strength index(0.00-1.00) -.05 -.13 -.10 -.24 .10 .22
Payback from fed. centre (%) -.25* -.00 -.27* -.00 -.10 -.00
Degree of ivatisation (%) .08 .00 .16 .01 .02 .00
Foreign investments (1000 US$) .10 .00 .06 .00 .09 .00
Estimated unemployment (%) .04 .00 -.15 -.02 -.30* -.03
2
R .06 .08 . 18 .07 .07 .06 .08 .12
2
Adjusted R .04 .02 .10 .03 .03 .02 .05 .09
Residuals > 1.5 standard deviations 1 1 4 2 3 1 3 5
Number of regions 87 75 75 87 87 87 75 87

NOTE: Total N=88, listwise deletion of cases. Significance: ** p =/< 0.01, * p =/< 0.05, (* p =/< 0.10. a) Moscow city is excludes as an extreme outlier.

In model B the background variables account for a mere four percent of the variance on
autonomy2, while the economic variables in model E explain only two percent. Neither of
them has a strong explanatory value to explain why a region has obtained a bilateral treaty.
Combined in model BE they explain ten percent. The economic variables from model E1 to
E3 do not increase the explanatory power at all compared to the background variables alone.
The amount of foreign investment adds one percent to the explanatory power, but the effect is

138
not significant. Only the percentage of estimated unemployment adds significant value to the
model from four to nine percent. The higher the percentage of unemployment in a region, the
less probable is it that it has obtained a treaty with Moscow. It is quite surprising that
unemployment is the only economic measure that has any explanatory power on “Signed
bilateral treaty with Moscow”.

Economic strength was assumed in my model to effect autonomy positively, both de facto and
quasi-formal. This is the case with the former, but more problematic with the latter, as it is
here represented by two variables – for the first of these, the economic effect is not affirmed.
Other factors for obtaining a treaty must be found, but they are not included in this study. The
explanatory factors in my model cannot account for more than ten percent, and most of this
strength is explained by the effect of the background variables of ethnicity and federal status.
However, the amount of foreign investment and level of unemployment have also some
impact, despite the controlling of the background variables. Regions with a higher amount of
foreign investment and low unemployment were generally the ones to obtain a bilateral treaty.
There is a quite large discrepancy between ordinary and adjusted explained variance in the
model when variables are added. This indicates that the adding of low-explaining variables
influence the ordinary R2 to an artificial level by not taking into account the number of
independent variables. As with the previous model on de facto autonomy, the dependent
variable is dichotomous and number of residuals is low. Dagestan and Tyumen were predicted
to have a treaty, but they do not. While Buryatia, Ust-Orda Buryatia and Evenk were thought
to be without a treaty, when in fact they possess one.

Lastly, the economic variables will be tested on the degree of autonomy obtained through the
signing of treaties. The lack of economic explanatory value of whether or not a region has a
treaty does not mean that I cannot explain why the treaties differ on the degree of autonomy.
From the regression model with only the background variables, three variables have
significant explanatory power; namely federal status, exploitation of oil & gas and
geographical proximity. I will now again test each economic variable on autonomy3, the
degree of autonomy obtained through treaty, as listed in Table 4.3-8.

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Table 4.3-8 Regression models - BE on Autonomy3

Regression analysis of autonomy3 (Ordinary Least Squares)

Dependent variable Degreeofautonomyobtained
through treaty 1994-98 (1-4)
Model B E BE E1 E2 E3 E4 E5
Standardised/Unstandardised r.c. ß B ß B ß B ß B ß B ß B ß B ß B
Background variables
High federal status (=1) .48** 1.19 .43** 1.04 .54** 1.27 .47** 1.13 .51** 1.21 .49** 1.17 .50** 1.19
Geographical proximity (1-5) .22* .16 .26(* .19 .25* .19 .27* .20 .23* .17 .21(* .15 .23* .17
Exploitation of oil & gas (1000 ton) .29* .00 -.01 -.00 .17 .00 .26* .00 .29* .00 .11 .00 .27* .00
Economic variables
Economic strength index (0.00-1.00) .61** 2.54 .23 1.45 .34** 1.65
Payback from fed. centre (%) -.26 -.00 -.31(* -.00 -.15 -.00
Degree of privatisation (%) -.46** -.06 -.13 -.02 .08 .00
a
Foreign investments (1000 US$) -.21 .00 .19 .00 .15 .00
Estimated unemployment (%) .43** .11 .17 .05 -.04 -.01
2
R .48 .51 .67 .58 .50 .48 .55 .48
2
Adjusted R .44 .44 .58 .54 .45 .43 .50 .43
Residuals > 1.5 standard deviations 6 4 4 6 7 6 4 7
Number of regions 46 40 40 46 46 .46 40 46

NOTE: Total N=88, listwise deletion of cases. Significance: ** p =/< 0.01, * p =/< 0.05, (* p =/< 0.10. a) Moscow city is excludes as an extreme outlier.

The background variables account for a strong 44 percent on the degree of autonomy obtained
through treaty, as seen in model B. The economic variables’ explanatory power in model E is
equal compared to the background variables. Combined they explain 58 percent of the
variance on autonomy3. The economic strength in model E1 increases the effect of the model
to 54 percent and is the economic variable with the most effect on autonmy3. The amount of
foreign investment adds also effect to the explanatory value of the model, compared to the
background variables. The effect is, however not significant, but increases the explained
variance to 50 percent in model E4. Tested against the background variables, none of the
other economic variables added any significant strength to explain autonomy3. To explain the
degree of autonomy obtained through bilateral treaties, one must therefore rely much on the
structural factors of federal status, natural resources and distance from Moscow. The
economic variables have an effect, but this was more or less entitled to the economic strength
index. The number of residuals is acceptable throughout this model, considering the relatively
low number of cases included, as about half of the regions have obtained a treaty with
Moscow.

I will now sum up the effect of the background and economic variables on the three variables
on autonomy, “De facto autonomy”, “Signed bilateral treaty with Moscow”, and “Degree of
autonomy obtained through treaty”. The background variables with a significant effect on de
facto autonomy are the percentage of ethnic Russians, a region’s main type of industry, and

140
geographical proximity. Even though these variables combined have a strong explanatory
power, the economic variables have comparably a stronger impact on de facto autonomy. A
region’s economic strength has the most effect, compared to the percentage of payback from
the federal centre, the rate of unemployment, and the amount of foreign investment. It was
harder to assess the explanatory power of the economic variables on whether or not a region
has obtained a treaty with Moscow. The background variables, ethnic Russians in percentage
and medium federal status, have weak explanatory power. This is also the case with the
economic variables, which also merely add any explanatory power as only the percentage of
unemployment gave a significant, negative effect. Unexpectedly, the economic strength index
has no significant impact. On the other hand, among the signed treaties, the enlisted variables
can predict much of the degree of autonomy obtained through the treaty. Especially a region’s
high federal status among the background variables has a strong effect, as republics are more
probable of obtaining a larger degree of autonomy in the treaty. As I pointed out earlier,
federal status is a variable representing the formal autonomy, legally vested in the federal
arrangements in the Constitution of 1993 and the Federal Treaty of 1992. The effect of a
region’s exploitation of resources and its distance from Moscow gives in addition the
background factors strong explanatory power in explaining autonomy3. However, the
economic strength also adds explanatory power to the degree of autonomy in treaty, as their
impact seem to be equal compared to the background variables in the regression model. The
economic strength index has significant effect and adds strong explanatory power in
determining autonomy3. The amount of foreign investment strengthens also the explanatory
power, albeit not significantly.

In short, economic indicators matter for de facto autonomy, while they have a divided
explanatory power on quasi-formal autonomy. The economic variables seem unable to
explain whether or not a region has signed a bilateral treaty. Neither the background nor
economic variables have much explanatory power on whether or not a region has obtained a
treaty - the effect of a few variables were significant, but the impact was weak. On the other
hand, the background and economic variables have equal explanatory value in determining
the degree of autonomy obtained through a treaty. Having determined the importance of
economy on the degree of autonomy, the next challenge is to test the impact of both the
economic and autonomy variables on democracy.

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4.3.4 Economic and federal impact on the democratic development
The development of democracy in the regions is measured through two complementary
indexes, democracy1, based on Robert Dahl’s theory, and democracy2, based on an extensive
case study on the freedom of the press in the regions. The two variables on leadership change
are excluded as a measure of democracy. They do not correlate positively or negatively with
the democracy indexes and are therefore not adequate as a democratic measure. Like in the
previous regression models, I will first look at the effect of the background variables to check
for possible strong explanatory power. The background variables with a significantly strong
effect will then be held constant while I enter the variables on economy and autonomy
separately to test for their separate explanatory power. In this process, I will identify the
variables having explanatory power on the degree of democracy. This will be done
simultaneously for democracy1 and democracy2 to allow for a better comparison.

Because the data on ethnically defined regions is missing in the democracy1 index, I am not
able to measure the effect and impact of the related background variables on ethnicity and
federal status. Ethnicity becomes irrelevant, as only the ethnic regions have significant non-
Russian inhabitants. The dummy variables on federal status are also excluded, because only
the medium federal status is represented in the democracy1 index, excluding both the high
and low federal status that are ethnically defined. This limits the number of cases from 89
federation units to the remaining 57 non-ethnically defined regions in democracy1, namely 6
krais, 49 oblasts, and the cities of St. Petersburg and Moscow. The reduction of cases
diminishes the generality of the model, but I will still be able to make meaningful
interpretations of the present results, and I will later find support in the complementary
democracy2 index that considers all regions.

In Table 4.3-9, the background variables are tested through their effect on democracy based
on Robert Dahl’s definition. After the exclusion of the irrelevant variables I am thus left with
three background variables, and their explanatory power on democracy is moderate. This is
also expected, as the direct effect of the background variables on democracy is not high in my
causal model. Among the background variables, only a region’s main type of indus try has a
significant effect and strong explanatory power on democracy1.

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Table 4.3-9 The effect of background variables on democracy1

Regression analysis of democracy1 (Ordinary Least Squares)

Dependent variable Democracy based on
Robert Dahl 1997 (0.00-1.00)
Model B1 B2 B3
Standardised/Unstandardised r.c. ß B ß B ß B
Background variables
Geographical proximity (1-5) .09 .01 .08 .01 .06 .00
Main industry (1-5) .36** .06 .35** .06
Exploitation of oil & gas (1000 ton) .16 .00
2
R .01 .15 .17
Adjusted R2 .01 .11 .12
Residuals > 1.5 standard deviations 10 9 8
Number of regions 57 55 55

NOTE: Total N=88, listwise deletion of cases. Significance: ** p =/< 0.01, * p =/< 0.05.

Geographical proximity has virtually no explanatory power, as model B1 explains only one
percent of democracy1. In model B2 the main type of industry increases the impact of the
model strongly with a significant effect. The larger amount of heavy industry, the more
democratically developed is the region. This is not surprising, since the regions with heavy
industry also are the most economically developed (with the highest economic strength).
Model B2 explains eleven percent of democracy1, but the inclusion of exploitation of oil &
gas adds virtually no strength to the model. The number of residuals is quite high considering
the low number of cases; the reliability of the model is thus moderate. Primorskii krai, Amur,
Lipetsk, Tula and Ulyanovsk receives a lower democratic score than the regression line
predicted. While Nizhnii Novgorod, Sakhalin, Samara, Tver and Yaroslavl are more
democratic than predicted.

The background variables were also quite weak in determining the variance on democracy2,
which is measured through a freedom of the press index. But like democracy1, this regression
analysis is only a measure to find background variables that can be held constant to test the
impact of the variables on economy and autonomy. In Table 4.3-10 there is only the ethnic
Russian population that has a significant effect on democracy2.

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Table 4.3-10 The effect of background variables on democracy2

Regression analysis of democracy2 (Ordinary Least Squares)

Dependent variable Democracy measured through
freedom of the press 1999 (0-100)
Model B1 B2 B3 B4 B5 B6
Standardised/Unstandardised r.c. ß B ß B ß B ß B ß B ß B
Background variables
Ethnic Russian population (%) .54** .26 .56** .27 .48** .23 .48** .23 .53** .24 .57** .26
High federal status (=1) .02 .45 .06 1.34 .05 1.29 .51 10.89 .51 10.77
Medium federal status (=1) .12 2.50 .12 2.47 .54 11.36 .50 10.39
Geographical proximity (1-5) -.01 -.04 .04 .26 .03 .20
Main industry (1-5) -.07 -.55 -.08 -.64
Exploitation of oil/gas (1000 ton) .14 .00
R2 .29 .29 .30 .30 .31 .33
Adjusted R2 .29 .28 .27 .26 .26 .27
Residuals > 1.5 standard deviations 13 13 11 10 11 10
Number of regions 87 87 87 87 76 76

NOTE: Total N=89, listwise deletion of cases. Significance: ** p =/< 0.01, * p =/< 0.05.

One important sphere the other democracy variable does not cover is the ethnic dimension. To
consider all regions, it is essential to include ethnicity in order to understand the differences
on the development of democracy. There is a clear relationship between ethnicity and the
democracy2 index. The higher the ethnic Russian population, the higher is also the score on
the freedom of the press index. In model B1, this variable explains 29 percent of democracy2.
The inclusion of all the other variables in the regression model does not increase the
explanatory power. Regions that are ethnically defined have a tendency to allow less freedom
of the press, but this finding is not significant. Thus, only the ethnic variable will function
further as a constant variable for determining the explanatory value of the economic and
autonomy variables. The number of residuals is quite high, which indicates that the quality of
the regression model is fair.

Economic implications

According to the principle of Lipset’s theory, the level of socio-economic development has an
effect on the level of democracy. I assume that reform-economic variables, privatisation and
foreign investment, have a positive impact on the democratic development. I will first account
for democracy1 and then continue with democracy2, the model is visualised in Figure 4.3-4.

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Figure 4.3-4 Model B+E? D: The direct effect of economy on democracy

In the regression model on democracy based on Robert Dahl’s definition, only the
background variable “Main type of industry” was used as a constant control variable to
democracy1. In model B listed in Table 4.3-11 a region’s main type of industry accounts for
twelve percent of the variance on democracy1. The economic variables on the other hand,
have a stronger explanatory power as they explain 48 percent on democracy1 in model E.
However, these two models in combination explain one percent less than model E alone,
down to still a good 47 percent. Each of the economic variables increases the explanatory
value, except the percentage of unemployment that seems to have no impact on democracy1.

Table 4.3-11 Regression models - BE on democracy1

Regression analysis on democracy1 (Ordinary Least Squares)

Dependent variable Democracy based on
Robert Dahl 1997 (0.00-1.00)
Model B E BE E1 E2 E3 E4 E5
Standardised/Unstandardised r.c. ß B ß B ß B ß B ß B ß B ß B ß B
Background variable
Main industry (1-5) .37** .06 .18(* .03 .21(* .03 .38** .06 .33** .05 .37** .06 .38** .06
Economic variables
Economic strength index (0.00-1.00) .63** .80 .59** .73 .56** .69
Payback from fed. centre (%) -.05 -.00 -.06 -.00 -.16 -.00
Degree of privatisation (%) .27** .00 .23* .00 .37** .01
a
Foreign investments (1000 US$) -.01 -.00 -.03 -.00 .16 .00
Estimated unemployment (%) .19(* .01 .20(* .01 .04 .00
2
R .14 .53 .53 .42 .17 .27 .17 .14
2
Adjusted R .12 .48 .47 .40 .13 .25 .13 .11
Residuals > 1.5 standard deviations 10 5 4 5 8 10 8 9
Number of regions 55 56 55 55 55 55 55 55

NOTE: Total N=88, listwise deletion of cases. Significance: ** p =/< 0.01, * p =/< 0.05, (* p =/< 0.10. a) Moscow city is excluded as an extreme outlier.

The economic strength index increases the explanatory power significantly from twelve
percent in model B to 40 percent in Model E1. Thus, the higher the economic strength in a
territorially defined region, the higher is also the democratic development. In model B3 the
percentage of privatisation also strengthens the explanatory power significantly. In
combination with the constant background variable, it accounts for 25 percent on
democracy2. The more privatisation from 1993 to 1998 the more democratic is the territorial
region. The rest of the economic variables in models E3 and E4 have minor impact on
democracy1. The percentage of payback from federal centre and the amount of foreign
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investment add each only one percent to the explanatory value set by the background variable,
in addition the increase has no significant effect.

Supporting Lipset’s theory, the economic strength index is an indicator of socio-economic

development that explains most of the variance on the democracy1 in a region compared to
the other independent variables. Both compared to the background variables and the economic
variables. The partial regression plot in Figure 4.3-5 visually confirms the clear relationship
between these two variables in the territorial regions. High economic strength has led to a
high degree of democracy. The eastern regions of Kamchatka, Sakhalin and Tyumen score
high on democracy and economy, while Ulyanovsk, Primorskii and Tula are the least
developed regions economically and democratically

Figure 4.3-5 Scatterplot: Economic strength on democracy1

The scatterplot in the regression model indicates that the cases are plotted in a curve linear
shape. The slope of the relationship ascends sharply from low to intermediate levels of
economic strength and then flattens out for regions at high levels of economic strength. This
function implies that a given increase in level of economic strength produces a greater
increase in level of democracy among countries in the low to intermediate range of economic
strength than among highly developed regions. The rapid acceleration of the slope from low
to intermediate levels of economic strength means that most regions reach a relatively high
level of democracy after they have moved into over the ‘threshold’ of intermediate economic
strength. But their democratic development flattens out from intermediate to high economic
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strength. This is in accordance with later writings of Lipset, in which he proposes a N-curve
relationship after critiques from O’Donnel, Jackman, Kurth and others (Lipset, Seong and
Torres 1993). He moderated the model to an upper threshold of economic development where
an increasing level of economics development does not affect an increase in the level of
political democracy. To sum up the explanatory power of the economic variables on
democracy1, both the economic strength index and the degree of privatisation have a strong
explanatory power in the territorial regions. In addition, the regression plot above indicates
through a slight s-shape that democratic development does not continue indefinitely with
increased economic strength.

Because the ethnically defined regions were excluded in democracy1, there was no point in
controlling for the effect of ethnicity or federal status. However, in my complementary
variable on democracy measured through freedom of the press, this is possible since all
regions are included (except Chechnya). As shown earlier, only one background variable was
found significant for functioning as a constant variable, namely the percentage of ethnic
Russians.

Table 4.3-12 Regression models - BE on democracy2

Regression analysis on democracy2 (Ordinary Least Squares)

Dependent variable Democracy measured through
freedom of the press 1999 (0.00-1.00)
Model B E BE E1 E2 E3 E4 E5
Standardised/Unstandardised r.c. ß B ß B ß B ß B ß B ß B ß B ß B
Background variable
Ethnic Russian Population (%) .54** .26 .47** .22 .49** .24 .53** .25 .45** .22 .48** .22 .53** .26
Economic variables
Economic strength index (0.00-1.00) -.03 -1.49 .08 3.58 .26** 11.63
Payback from fed. centre (%) .03 .00 .08 .00 -.05 -.00
Degree of privatisation (%) .39** .50 .19(* .25 .18(* .23
Foreign investments (1000 US$)a .23(* .00 .24* .00 .22* .00
Estimated unemployment (%) -.10 -.24 .13 .29 -.02 -.04
2
R .29 .20 .34 .36 .30 .32 .28 .29
2
Adjusted R .29 .14 .27 .35 .28 .30 .26 .28
Residuals > 1.5 standard deviations 13 10 8 11 12 9 10 12
Number of regions 87 75 75 87 87 87 75 87

NOTE: Total N=88, listwise deletion of cases. Significance: ** p =/< 0.01, * p =/< 0.05, (* =/< 0.10. a) Moscow city is excluded as an extreme outlier.

In Table 4.3-12 the ethnic Russian population has a strong explanatory power at 29 percent, as
seen in model B. In comparison, the economic variables have here less explanatory power
than what was the case on democracy1. Model E explains a moderate 14 percent, thus a lower
explanatory power than the background variable on ethnicity. Combined they have an
explanatory power on democracy2 of 27 percent. As with democracy1, the economic strength

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index is the economic variable with the strongest impact on democracy2. In combinatio n with
the constant background variable, the economic strength index increases the explanatory
value from 29 to 35 percent in model E1. Higher economic strength leads to generally more
freedom of the press in the Russian regions. The level of privatisation does also matter
somewhat, as the addition is barely significant and model E3 increases the explained variance
with one percent. The percentage of privatisation seems therefore to have an effect on the
freedom of the press. The second measure indicating economic reform, the amount of foreign
investment, has a significant effect to the regression model E4, but there is no increase in the
explanatory strength compared to the background model. The remaining economic variables,
the percentage of payback and rate of unemployment, have no significant effect in the models
and give no additional strength in explaining democracy2. The ethnic question, excluded in
democracy1, has an important impact on the explanatory power in democracy2. When I
compare the beta scores in the model (see Table 4.3-12), ethnicity explains more than the
economic variables both separated and combined. Still, the added impact of economic
strength and level of privatisation is noteworthy, whilst the amount of foreign investment also
has a significant effect. The number of residuals in the regression model on democracy2 is
quite high, but not more than what one must expect, dealing with such a divided material.

I have shown that high economic strengt h and reform economics have led to a higher degree
of democratic development in both models of democracy. This is conditioned, however, under
the presumption that I consider democracy1 and democracy2 as relatively equal measures of
democracy. The bivariate correlation affirmed such a relationship in 4.1.4. While economic
strength and privatisation is important in the territorial regions, they are somewhat less
explanatory considering the Russian regions as a who le. Another point is that the amount of
foreign investment has a significant effect in explaining democracy2 on all regions, but has no
effect on the territorial ones on democracy1. The ethnic factor is important in determining the
degree of democratic development, which is an aspect democracy1 is unable to measure.
Democracy2 covers both ethnically and territorially defined regions, and the percentage of
Russians adds strong explanatory power to the models, comparing to the effect of the
economic variables. Regions dominated by ethnic Russians are more democratic than those
with a lower percentage. In other words, regions with a high ethnic non-Russian population
are less democratic.

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Federal implications

In the remaining part of regression models on democracy, I will study whether or not
autonomy has an effect on the democratic development. I will use the same background
variables as with the previous models, testing the economic effect on the respective
democratic variable. The variables on autonomy represent the implications of regionalisation
on democracy. Noteworthy, there is a difference, dependent on whether one speaks of de facto
or quasi-formal autonomy. The former is based on actual intergovernmental financial
transfers and does not necessarily reflect a federative system, as it is generally not based on
legal acts. The latter is covered by the asymmetric principles in federative theory, and
supported by a formal or quasi- formal legal framework. The regionalisation process was
thought to have a negative impact on democratic development. The increased autonomy
obtained by the regions in the 1990s was assumed to lead to authoritative tendencies.
However, as it turned out in the bivariate correlation, this relationship was indeed positive.

Figure 4.3-6 Model B+A? D: The direct effect of autonomy on the degree of democracy

In the following regression model, visualised in Figure 4.3-6, the variables on degree of
autonomy are tested on democracy according to Robert Dahl’s definition. A region’s main
type of industry gives an explanatory value of twelve percent as a starting point for testing the
effect of autonomy on democracy1, as seen in model B in Table 4.3-13. In comparison, the
two autonomy variables that could be computed accounts for 18 percent, which is the same as
the combination of all variables in model BA. Testing the de facto autonomy index in model
A1, it does not add any explanatory value on democracy for the territorially defined regions.
A region’s varying control over its own finances does not seem to have an effect on the
democratic level in combination with the background variable.

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Table 4.3-13 Regression models - BA on democracy1

Regression analysis on democracy1 (Ordinary Least Squares)

Dependent variable Democracy based on
Robert Dahl 1997 (0.00-1.00)
Model B A BA A1 A2 A3
Standardised/Unstandardised Beta ß B ß B ß B ß B ß B ß B
Background variable
Main type of industry (1-5) .37** .06 .35** .05 .35** .06 .37** .06 .33* .06
Variables on autonomy
De facto autonomy index (0.00-1.00) .32** .67 .05 .13 .06 .16
Signed treaty with Moscow (=1) .29* .12 .29* .12 .29* .12
Degree of autonomy in treaty (1-4) a a a a .39* .10
2
R .14 .21 .23 .14 .22 .24
Adjusted R2 .12 .18 .18 .11 .19 .18
Residuals > 1.5 standard deviations 10 6 4 9 5 5
Number of regions 55 57 55 55 55 30

NOTE: Total N=88, listwise deletion of cases. Significance: ** p =/< 0.01, * p =/< 0.05. a) Cannot be computed since it is constant with “Signed
treaty with Moscow”.

Political autonomy through quasi- formal agreements is another matter. I have earlier shown
that there was no significant relationship between economic strength and the signing of a
treaty. There was, however, a positive significant relationship between regions that have
signed a bilateral treaty and their democratic development. Quasi- formal authority adds strong
explanatory power in combination with the main type of industry on determining the level of
democracy. Both “Signed bilateral treaty with Moscow” and “Degree of autonomy in treaty”
almost doubles the explanatory power of model B, as seen in the models A2 and A3. If a
territorial region has signed a treaty, it is more probable to score higher on the democracy
index. Territorial regions that have signed a treaty with Moscow are generally more
developed democratically than regions that have not signed a treaty. Also, the more autonomy
it obtains through the treaty, the more democratic it is. Quasi- formal autonomy in the
territorial regions has therefore a positive effect on the democratic development. I must
specify that democracy1 only accounts for the territorially defined regions and not the
ethnically defined ones. Also, in model A3 testing the degree of autonomy in treaty, the
number of cases is as low as 30. Still, the number of residuals is moderate and the quality of
the model is acceptable.

In the next model, I test the autonomy variables on democracy2 measured through an index of
freedom of the press. The constant background variable extracted is the same as with testing
economic variables, namely the percentage of ethnic Russians. Like in Table 4.3-12, this
variable seems to have a strong effect on determining the variance in democracy2, even when
I control for the variables on autonomy.

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Table 4.3-14 Regression models - BA on democracy2

Regression analysis on democracy2 (Ordinary Least Squares)

Dependent variable Democracy measured through
freedom of the press 1999 (0-100)
Model B A BA A1 A2 A3
Standardised/Unstandardised Beta ß B ß B ß B ß B ß B ß B
Background variable
Ethnic Russian Population (%) .54** .26 .51** .24 .47** .23 .56** .27 .72** .40
Variables on autonomy
De facto autonomy index (0.00-1.00) .35** 23.09 .10 6.25 .15 9.56
Signed treaty with Moscow (=1) .08 1.53 .17(* 3.28 .19* 3.73
Degree of autonomy in treaty (1-4) a a a a .26* 2.91
2
R .29 .14 .34 .31 .33 .46
2
Adjusted R .29 .12 .31 .29 .31 .43
Residuals > 1.5 standard deviations 13 10 8 9 7 4
Number of regions 87 87 87 87 87 46

NOTE: Total N=88, listwise deletion of cases. Significance: ** p =/< 0.01, * p =/< 0.05, (* p =/< 0.10. a) Cannot be computed since it is constant
with “Signed treaty with Moscow”.

In comparing model B with the explained variance of the autonomy variables in model A, the
impact of the background variable is stronger than that of the autonomy variables, as shown in
Table 4.3-14. The explanatory power of autonomy is nonetheless noteworthy, keeping in
mind that the variable “Degree of autonomy obtained through treaty” is not accounted for in
model A or BA. To again take point of departure from the combination with the constant
background variable, de facto autonomy has also here no additional explanatory power to
model A1 on determining the level of democracy. The beta value indicates a positive
relationship, but the effect is not significant. The actual economic intergovernmental transfers
seem therefore not to have an effect on the freedom of the press in a region. The quasi- formal
autonomy on the other hand has an effect on democracy2, as it has on democracy1. In model
A2 the variable “Signed bilateral treaty with Moscow” adds some, from 29 to 31 percent,
explanatory power to the regression model. Thus, regions that have signed a bilateral treaty
have a higher score on freedom of the press index. Bilateral treaties have a positive impact on
democratic development. Lastly, in model A3 on the degree of autonomy obtained through
treaty, the explanatory power increases strongly from 29 to 43 percent. The combination of
this quasi- formal autonomy and percentage of ethnic Russians explains much of the variance
on democracy2. The more autonomy a region has obtained through a treaty, the higher is the
score on freedom of the press. Thus, quasi- formal autonomy has a positive effect on
democracy2. The variable explaining the most variance on freedom of the press, however, is
the background variable “Percentage of ethnic Russians”. While its explanatory power is
strong, the background variable also has a higher beta score compared to the autonomy

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variables in the regression model. A higher percentage of ethnic Russians have a positive
effect on the freedom of the press.

4.3.5 Summary
When summing up the independent variables’ explanatory power on democratic development,
there are three major points to note. Firstly that democracy1 deals only with the territorial
regions whereas democracy2 take both types of regions into account. I consider the
democratic indexes to have equal value on measuring democracy, secondly, that I wanted to
compare the explanatory power of economy with autonomy on democracy, and thirdly, that I
made an issue of differentiating between the three types of autonomy, de facto autonomy,
quasi- formal autonomy and formal autonomy.

Only two background variables have a significant effect on democracy, namely the main type
of industry on democracy1, and the percentage of ethnic Russians on democracy2. A larger
share of heavy industry is positive for democratic development in the territorially defined
regions. But when both territorially and ethnically defined regions are considered, the ethnic
factor has a stronger effect on explaining variance on democracy. Regions with a high
percentage of non-ethnic Russian are less democratic. This counts in other words for most
ethnically defined regions, since these are the regions with fewer ethnic Russians.

Among the economic variables, the economic strength index was important for both variables
on democracy, which supports Lipset’s theory. A high economic level leads to democratic
development. Similarly, the level of privatisation has an impact for both democracy1 and
democracy2. Privatisation has thus a positive effect on the democratic development. Also
noteworthy is the fact that the amount of foreign investment has a positive effect on
determining democracy2, but the combined explanatory power weakens. The amount of
foreign investment does not gain significant effect on democracy1 and does not strengthen the
explanatory power of the model. Regions with a high amount of foreign investment are
generally more democratic.

The de facto autonomy index has no significant effect on either index on democracy. The
level of democratic development is not determined by the actual financial sovereignty of a
region. However, the quasi- formal bilateral agreements positively affect both variables of
democracy. Regions that have obtained a treaty are more democratic than those that have not.
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Among the ones that have a treaty, the ones winning the most autonomy are generally also
more democratic.

4.4 Summary of findings

I will now summarise the empirical findings according to the hypotheses that were derived
from the theoretical chapter and comments the degree to which they are supported. The
findings will also be presented according to the main causal direction described in the
regression models.

Regions with a large amount of heavy industry and/or natural resources have developed a
higher economic strength than regions depending on light industry.

The assumption behind this variable is that the industrial preconditions set in place under the
Soviet regime still have an impact on the economic development in the regions. The goal was
to identify and explain the main reasons for the diversity in economic performance. The
priorities of the former centralised state-system of a geopolitical and military- industrial
character did not follow free market rules. Major industries were placed to populate certain
territories or strategically to protect vital industry from a possible external attack, often far
away from resources and consumers. No matter the initial policy, these industrial complexes
are still in place and are considered an advantage for the region in which they are based. In
Table 4.3-1 the type of industry and exploitation of oil and gas have a significant explanatory
value in determining the economic strength of a region. The first hypothesis is thus
confirmed. The initial competitiveness of a region’s industry is the most significant and robust
explanation of differing regional economic strength. A greater share in light industry or food
industry is a significant handicap. For example, the conservative so-called ‘Red Belt’ regions
that are dependent on food industry have low economic strength, as the case is with Voronezh
and Tambov. In addition to industrial structure I found, not surprisingly, that natural resources
endowments play an important positive role. The initial industrial situation at the start of the
transition explains a regions relative success or failure of economic strength.

Economically stronger regions have more autonomy than weaker ones

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The degree of autonomy was measured through the de facto autonomy and the two variables
on quasi- formal autonomy; whether or not there exists a bilateral treaty and the degree of
autonomy obtained through a bilateral treaty. My expectations regarding the effect of
economic strength on autonomy was not wholly supported. Firstly, the economically strong
regions were thought to be able to push forward a treaty delineating the competences between
the centre and a region. This was not the case. Economic strength has no impact on whether or
not a region obtained a treaty with Moscow. On this measure of autonomy the hypothesis is
falsified; economic strength does not determine whether or not a region obtains a bilateral
treaty. Secondly, however, on the degree of autonomy in treaty, the hypothesis is confirmed.
High economic strength leads to more autonomy obtained through treaty. Thirdly, the impact
of economic strength has a positive effect on de facto autonomy, and the hypothesis is again
confirmed. Not surprisingly, high economic strength leads to more de facto autonomy from
the centre. So, while economic strength determines much of the de facto autonomy and the
degree of autonomy obtained through treaty, other variables must be found to explain whether
or not a region gets the centre’s attention in order to sign a treaty.

Regions with high federal status are more autonomous than other regions

I assumed that the constitutional federal status of a region would influence the degree of
autonomy it could obtain. This federal status is inherited from the Soviet Union and vested in
the legal acts of the Constitution and the Federal Treaty, which are based on federal
principles. In the regional administrative level of government there are three levels; high
federal status (republics); medium federal status (oblast, krai, federal cities and the
autonomous oblast); low federal status (okrug). The empirical findings give a diverse picture
and a confirmation of the hypothesis depends on what kind of autonomy is measured. The
federal status seems to have no significant effect or added explanatory power on determining
the degree of de facto autonomy. The federal status of a region cannot either explain why a
bilateral treaty has been signed with Moscow. However, republics have obtained more
autonomy through the treaties than the other regions. High federal status leads thus not
automatically to more autonomy, unless a region obtains a treaty and wins more autonomy
during the negotiations. Except from the first treaties signed with Tatarstan, Bashkortostan,
and Sakha-Yakutia, treaties have not been an ethnical issue trying to prevent aspirations for

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secession. The centre’s policy seems to be more an issue of delineating competences of who
should be in control of major resources, except for the presidential campaign that was an
important factor in 1996.

The further away from Moscow the more autonomous the region

The Russian Federation is the largest state formation in the world, something that needs to be
considered in the state-building process. As a consequence of the territorial expansion during
pre-revolutionary Russia and Soviet Union, Russia contains over 100 nationalities. A
federalisation in such a diverse state implies the typical federal paradox: Granting too much
autonomy could lead to secession, too little would undermine local preferences and
efficiency. Has the federal centre given more autonomy to regions located far away, or has
Moscow performed a more centralised policy to keep control over these regions? First,
regions further away from Moscow have less de facto autonomy. Generally, regions in the
periphery, rich or poor, are dependent on the logistic support of the central government.
Secondly, the distance from Moscow does not influence whether or not a region has a signed
a treaty. They are more dependent on financial transfers and logistical support from Moscow.
These regions are therefore not in a stronger bargaining position in demanding more
autonomy from the centre, except in the few cases of critical geopolitical significance, like the
case with Kaliningrad. Thirdly, the only cases that the hypothesis is confirmed are with the
regions that have obtained a treaty. Regions further away from the centre are more probable
of having a higher degree of autonomy obtained through treaty. Problem regions acquiring
early and significant autonomy trough a treaty, seem partially to be based on their
geographical location, both Sakha-Yakutia and Kaliningrad are located far away from the
centre.

The findings indicate that increased autonomy obtained through treaty was only given to
special cases with no pattern, caused by one or a combination of economic strength, ethnicity,
and geographical location. The centre’s policy of selecting federation subjects to sign bilateral
treaties with does not seem to follow any obvious pattern, but rather a fire-extinguisher tactic,
except maybe for the collecting of regional votes in the presidential campaign of 1996. The
economic factors have more explanatory power than ethnicity on explaining de facto
autonomy, which is based on the financ ial intergovernmental transfers.

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The economically stronger a region, the more it is democratically developed.

I have utilised two different measures on democracy, both are important to assess since they
support each other: democracy based on the definition of Robert Dahl that considers only the
territorial regions, and democracy based on a freedom of the press index that covers all
regions. On both democratic variables the hypothesis is confirmed: economically strong
regions are also the more democratic ones. The findings confirm Lipset’s theory on economic
development and political democracy (1956) and his later modifications (1993). There is a
positive relationship between economic strength and democracy, but it is curve linear and
indicates a S- or N-shape scatterplot. An upper ‘threshold’ of economic strength indicates that
this measure does not affect democracy beyond the ‘threshold’. Noteworthy is the difference
between the democratic measures, while economic strength has a strong explanatory value on
democracy1 covering the territorial regions, economic strength has less explanatory power on
explaining democracy2 that consider all regions. Since the bivariate correlation of the two
democratic measures was good, I argue that the discrepancy is rathe r caused by the difference
found in the cases included in the respective variables; territorially defined regions
(democracy1) or all regions (democracy2). This problem is a topic in the next hypothesis.

Regions with a high ethnic Russian population are more democratically developed than
regions with low ethnic Russian population.

The hypothesis was only possible to test on the democracy2 index that measures the freedom
of the press, since the democracy1 index only dealt with the 57 territorially defined regions.
Based on this democratic measure, the hypothesis is confirmed: A low ethnic Russian
population has a negative impact on the development of democracy. Ethnicity is a stronger
explanatory factor of the democratic level compared to economic strength (see Table 4.3-12).
While in the territorial regions, economic strength is the most dominant factor. Obviously,
ethnicity does not play a role statistically when the data is not present in the regression model.
However, based on the democracy2 variable that includes both ethnically and territorially
defined regions, which is my goal here, ethnicity is an explanatory factor that has a strong
effect on the development of democracy.

156
The more autonomous a region, the less democratic it is.

This is the most important hypothesis in this study and intends to evaluate the effect of
regionalisation on the democratic development in Russia. Due to Russia’s centralised and
undemocratic past, it is argued that the regions are not yet mature for the ‘federal
responsibility’. The idea is that a more centralised structure is necessary in this transitional
stage in order to implement reform policies from the central institutions to the believed more
conservative periphery. Only when the reform policy is implemented and a regional
democracy has settled should the central government devolve power to the regions. This is a
centrist view considered by federalists as undemocratic and unjust, as the federal centre
institutions are not necessarily more democratic. Besides, would a strong state devolve power
in such a situation? In general, I found that the federalists view is supported: Regions with a
more quasi- formal autonomy are more democratic than regions without this autonomy. This
was already indicated in the bivariate correlation in chapter 4.2.3, where the correlation was
positive between quasi- formal autonomy and both variables on democracy. Later in the
regression analysis the explanatory value of quasi- formal authority confirmed the positive
impact on the democratic development. However, the de facto autonomy, which is a measure
of actual intergovernmental transfers that shows how much is left to the region after
budgetary and financial bargaining, has no explanatory value for democracy. The de facto
autonomy index has no significant effect on the democracy indexes. For de facto autonomy
the hypothesis is falsified. On the other hand, increased quasi- formal autonomy has a positive
effect on the democratic development. The quasi- formal autonomy gives increased regional
responsibility and authority, but not necessarily increased power. Thus, the hypothesis is
confirmed on quasi- formal autonomy.

The positive relationship between quasi- formal autonomy and democracy supports the
principles in federative theory, in which regionalism is considered positive for
democratisation, and opposite to the Kremlin that looks upon regionalisation as a hindrance to
economic and democratic reform. It is a question of seeing the possibilities rather than the
limitations of the present federative system in the Russian Federation.

157
CONCLUSION

I want to beg forgiveness for your dreams

that never came true. And also I would
like to beg forgiveness not to have
justified your hopes. –Yeltsin’s speech to
the nation, 31 December 1999

This thesis has examined the centre-periphery developments in the Russian Federation in the
1990s. In the first part, I assessed the contemporary CP process and discussed the vertical
power relations, while I analysed the horizontal, inter-regional aspect in the second part. The
focus was to explore the implication of regionalisation on sub-national democracy. Through
selected aspects of federalist, regionalist, and democracy theories I have focused on the level
of autonomy and extent of democracy in the Russian regions. I have considered the regional
development both qualitatively and quantitatively in order to test my hypotheses.

I have utilised the ‘funnel principle’ as a framework for explaining inter-regional democratic
development in the Russian Federation. By assessing the historical and contemporary centre-
periphery history according to this funnel, I was able better to visualise the development as a
dynamical process. The background variables on ethnicity, federal status and industrial
preconditions are a consequence of Soviet politics, but can be traced back to pre-revolutionary
Russia. These variables have an indirect effect on the development of democratisation through
the degree of economy and autonomy. Although the direction of causality is uncertain, the
economic development and the degree of autonomy have an explanatory, positive impact on
the level of autonomy.

Findings
In the title of the thesis I formulated the question of whether regionalisation has been
disadvantageous for the sub- national democratic development in Russia. The answer is not a
straight yes or no. The process of regionalisation, that is, an increase of power to the regions,
has been twofold. It is important to distinguish between obtaining the authority, and having
the actual power to implement policies. Putting aside the strictly formal autonomy vested in
the Constitution and Federal Treaty, I operationalised autonomy into de facto and quasi-
formal autonomy. I also gave all regions equal initial weight in the analysis, despite their
historical difference in administrative status and the cultural autonomy given to the republics.
The point was to explore if this newly obtained autonomy has an impact on the democratic
158
development. De facto autonomy was measured through the intergovernmental financial
transfers, which points to how much control a region has over the flow of capital and how
much it can autonomously decide on expenditures. Signed bilateral treaties dividing power
between the levels of government indicate quasi- formal autonomy. The content and
competence in these treaties vary greatly. However, the tendency in late 1990s indicates that
this authority becomes less important in the re-negotiations of the agreements that follow a
treaty. In other words, more and more regions are dependent on financial flows from the
centre to implement policies, reducing their actual power. It seems that the treaties will
somewhat lose their political position, even for the early treaties signed between the centre
and peripheral regions as, for instance, Tatarstan.

I found no support in the empirical analysis that a region’s de facto autonomy, which is based
on financial intergovernmental transfers, has a significant effect on the democracy indexes.
Nonetheless, the de facto autonomy index correlates positively with democracy. A high
degree of de facto autonomy and high level of democracy operate together. There is thus a
positive relationship, yet additional explanatory factors must be found. I have shown that
quasi- formal autonomy actually has a positive effect on both of my measures of democracy.
Regions that have obtained a treaty are more democratic than those that have not. Moreover,
the higher the degree of autonomy obtained through treaty, the more democratic is it. This
finding is supported by federal theory. According to Milne (1993) and Faroukshine (1998), an
asymmetrical federalism is considered the only plausible outcome that can bridge competing
nationalisms. The Russian case affirms this assumption through the strictly formal acts.
However, quasi- formal autonomy is not only limited to ethnically defined regions, but also to
economically stronger territorially defined regions. This is exactly the limitation of federal
theory, which is inflexibly bound to constitutional arrangements, and does not cover the
quasi- formal act as implemented in the RF through bilateral treaties. These treaties signal a
federal policy, but are so far only approved by executive branches and lack legal approval.
Nonetheless, these treaties are the legal norm for several regions, and can be preserved as a
possible federal tradition that is not entrenched in the Constitution.

Regionalism, as expressed in the demands from the Russian periphery for more autonomy, is
founded on conflicting ideas, like ethnic self-determination, pure egoism, and true federalism.
Moscow responded to these demands. Although generally with reluctance, Moscow allows
more regionalisation, arguing that centralisation is necessary for securing both uniformity in

159
applying national laws and democratic liberties. This combined set of centrifugal and anti-
centrifugal forces holds Russia in a position between the state systems of unitarism and
federalism. This is a well-known paradox in federalist theory, especially troublesome in
multiethnic federations. A federative democracy would ideally provide sufficient self-
determination to contain nationalism within the constitutional framework and thereby avoid
secession. With the exception of Chechnya, no region has called for secession in Russia.
However, many republics did not vote in favour of the 1993 Constitution, and have regarded
their quasi- formal treaties as the legal norm. It is unlikely that the most significant treaties
will lose their main political basis, because they are pivotal in ‘holding together’ the Russian
Federation.

Lipset’s (1959) theory on socio-economic development as a condition for democratic

development supports my finding that economic strength has an effect on the political
development in a region. Economic strength positively influences the democratic
development in a region. The relationship tends to be curve linear. That is to say, there is an
upper ‘threshold’ of economic strength, where an increasing level of economic strength does
not result in an increase in the level of democracy. This is also in line with later writings of
Lipset (1993) where he proposes the N-curve relationship between economic development
and political democracy. Also noteworthy, is the positive impact of economic reform on
democracy. The degree of privatisation has a positive effect on both measures of democracy.
Economic reform leads thus on average to democratic development, although one can also
here question the direction of causality, since economic reform and democratisation go often
hand in hand.

It seems that Moscow aspires to implement and guarantee universal rights like freedom of
speech and democracy, also in advanced regions. Although some leaders in backward regions
use traditional factors to oppose the centre, one cannot say that the centre is the only actor
pressing for modernisation. As mentioned, increased regionalisation does not necessarily lead
to increased democracy. That is not to say, however, that the regional policy in Russia in the
1990s has failed to develop elements of democracy in the ethnic regions. The findings in this
thesis are a strong indication that aspects of the CP process have been positive for
democratisation. But this process also bares signs of an ad hoc regionalisation in order to gain
political support for actors in the centre. The conflict among the central institutions from 1991
to 1993 as well as the presidential campaign in 1996 strengthened the influence of the regions

160
considerably. Some regional leaders were not ready for the responsibility vested in democratic
decentralisation. The lack of democratic tradition and high self- interest among regional
leaders has spoiled the federalist idea in several regions in Russia. A force of particularism
has been released, and it will take the federal centre much to tie up the loose ends and bring
about a functioning ‘federation’.

Relation to other research

Former research on the Russian regions has focused on developments in the following
spheres: economy (Kirkow 1998, Hanson 1996) 90 , autonomy (Stoner-Weiss 1997a, 1997b,
Treisman 1997,1999), and democracy (McFaul & Petrov 1998, McMann & Petrov 1999,
Gelman 1999 91 ). In the empirical part of my research I utilised this literature in order to
explain the sub-national differentiation of the democratic process. Democracy has frequently
been analysed on the level of nation-state, most commonly with use of the Freedom House
ratings. 92 Based on complementary data from the Moscow Carnegie Centre and the Russian
Union of Journalists, I measured democracy in all regions of the Russian Federation, except
for Chechnya and Ingushetia. After determining the level of regionalisation and
democratisation, I analysed to what degree the increase of autonomy has an effect on
democracy. I found that regionalisation has a positive impact on the level of democracy in the
Russian regions. I regard this as an important finding. However, the positive impact only
covers the quasi- formal treaties, the symbols of asymmetry and regionalisation in Russia, and
not actual intergovernmental financial transfers (de facto autonomy). This positive effect is
supported by the democratic principle based in federal theory (Jefferson 1880, Tarlton 1965,
Burgess & Gagnon 1993), which states that maximum governmental authority should be
based on closeness to the individual on the one side, and that ethnical minority groups should
have a saying against the majority on the other. Federalism is thus a compromise between
ethnic rights and democracy. It is important to note, however, that this study only considered
the regional level of government, and conclusions cannot be extended down to the local level
and to the individual.

90
The World Bank (1999), OECD (2000), and Bank of Austria (1998) have made substantial reports on sub-
national differentiation in the socio-economic sphere.
91
Gelman does not examine actual levels of democracy, but categorises both democratic and authoritarian
outcomes of transition from communist regimes.
92
Se recent ratings at URL: http://www.freedomhouse.org (02.09.2001)
161
Final thoughts
The problem of multi- nationality needs to be solved if the aspiring democracy is to be
consolidated (Linz & Stepan 1996). Minorities within a distinct territory must be granted
formal autonomy and veto over certain cultural and political issues in order to preserve
‘ethnic peace’ in a federation. According to Gellner (1992), ethnic groups can almost
effortlessly be mobilised for political demands. Nationalism, an expression of differentiating
between us and them, is fundamentally about politics; how to gain control over (one’s own)
resources. Regional leaders may play the potential ‘ethnic card’ in order to obtain concessions
from the federal centre. This was a prominent tendency in the signing of the first treaties that
went hand in hand with threats of secession. Demand for increased regional autonomy and
decentralisation is in fact a basic democratic idea in federalist theory. However, when these
demands are turned into increased regional autonomy, the regional leaders do not necessarily
feel obliged to install democracy. For example, Kalmykia, Bashkortostan and Sakha-Yakutia
are all supporters of the federal idea of increasing regional autonomy, but they are also among
the least democratic regions. Opposing more centralisation of the Russian Federation, they
centralise power on their own territory. Here, there is a general distinction between the
ethnically and territorially defined regions: Republics, the autonomous oblast and okrugs are
on average less democratic than the oblasts, krais, and federal cities.

I have shown that Russia has a continuous lo ng-standing tradition of being a unitary state
system on heterogeneous territory from Moskovia to the Soviet Union. The implementation of
a market economy and democratic institutions in the 1990s has, nonetheless, promoted
regionalisation. In the next few decades, the political, economic, and social issue relations
between the centre and regions will be among the most important in Russia. There has been a
development towards the principles of federal democracy, a process that would be almost
impossible to reverse. However, since the RF does not fully meet the criteria of a ‘federation’
that features in present-day theories, the concept of ‘federation’ itself has to be understood in
the proper context, and accordingly be adjusted. The polity should in my opinion therefore be
defined as an organization that has yet not consolidated its form, being, as it is, in a
transitional stage. The present concepts that best capture the Russian CP process are
‘regionalism’ and ‘regionalisation’. These are not limited to federal states and can be applied
also to describe the historic process between centre and regions in Russia, which is necessary
for explaining the dynamics of the process. My study is therefore rooted in the new tradition

162
of finding the right perspective and relevant concepts to capture the ‘newness’ of the Russian
CP development.

The development of the Russian federal system and its regions suggests that there can be no
talk of the ‘end of history’. This often used phrase, coined by Francis Fukuyama in 1989,
describes the end point of humankind’s ideological evolution and the universalisation of
Western liberal democracy as the final form of government. I disagree: There is much
unexplored space, along with a pressing need for the development of models of democracy
that fit cases like the Russian Federation. If this centre-periphery development consolidates a
new type of federal system, federal theory must find new concepts containing and integrating
elements from regionalist, nationalist, and democracy theory.

163
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Kommersant
Nezavisimaia Gazeta
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APPENDIX A: Interview with Dr. Fedossov, Federation Council

THE ASYMMETRICAL FEDERATION AND ITS PROBLEMS

Interview with Dr. Pyotr Fedossov,
Adviser to the Chairman of the Federation Council

November 25. 1998

Interview and translation

by Tom Røseth

Q: There are 42 bilateral treaties with 46 regions between the federal centre and the subjects today, starting with
the republic of Tatarstan in 1994 and latest with Moscow city. Did the Constitution of 1993 predict this issue?

A: It is possible that these treaties were predicted by the Constitution, but the prediction had a contradictory
form. In the third chapter of the Constitution there is generally many contradictions. And one of them seems to
be precisely these treaties; it is written that the relation between the federal centre and the subjects is regulated
through the existing Constitution and other treaties. It arises the question: what regulates this relationship? The
Constitution, a document that is obligatory for everybody and permanently prevailing or the treaties, which can
differ from each other. What is Russia; is it a constitutional federation or a treaty federation? The question is not
simple and in principle important. Because if Russia is a treaty federation, then can somebody probably speak
about that he find himself in a sovereign state which is an associate member of Russia or want to reach such a
status – which Kirsan Ilumzhinov recently talked about. But if Russia is a constitutional federation, which I am
sure of, then negotiations about the status as associated member will immediately be put to prison – it is a big
difference. In other words, there is a contradiction within the constitutional principles, right? The regulative
relation between the federal centre and the subjects by the help of the treaties – this is the first point.

The second legal problem, legally, are that the treaties are not a matter between Russia and its federation
subjects, but between the state power bodies of the Russian federation and corresponding federation subjects.
And at the same time in the whole row of these treaties one have for example pointed out their indefinite
character. Let us here take the treaty between Russia and Tatarstan in 1994. But if the treaties have been agreed
between the two presidents but not ratified by parliament, they have no international legal base, which means
they cannot be indefinite. This means that in the moment of presidential change, they might be prolonged or
cancelled. This is also very essential, because these treaties they have made and are making are of concrete
specific political and socio-economic terms, both reflects and concretise. Most of the earlier treaties, let us say
the treaties with Tatarstan, Bashkortostan, with the whole row of other republics and with some oblasts are
basically made in the capacity of their races small coin in solving these or those political questions. Now, let us
say that on the territory of Tatarstan there was no referendum on the 1993 Constitution, which means that there
must have been found an agreement with it, and it was found in the light of the treaty. The largest series of
treaties were made under the process of Yeltsin presidential campaign in 1996. When it was necessary for him to
get the governors support, he went into a whole row of agreements with them. This is my answer to your
question and my opinion of the questions opportunity, the most important. I think that the regulation of
connection through treaties is bad. And in this context not in accordance with Sergey Mixailovich Shaxara, who
stick to the opposite opinion.

Q: It is said that the treaties are healthy, because they stabilise the problem regions, you don’t agree with this?

A: No, that is not true. This might stabilise them, not on the foundation of federalism, but on the foundation of
confederalism. There is a big difference. I was recently in Tatarstan, now already half a year ago, but
nevertheless. I was on a smaller conference and talked about that the Tatarstan Constitution contradicts the
Russian Constitution on a whole row of cases. Generally one says, you know, that generally in the federation
subjects more than 2000 normative acts contradicts the Constitution and laws of the Russian federation. Very

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often the regional legislators refers to the treaties, and they say: ”Well yes, there is a problem generally with the
Constitution, but we have the treaty that do correspond [to the Constitution].”

But let us continue with the example Tatarstan. I went there and talked about these contradictions and said it
would not be a bad thing to remove these. Suddenly one representative beside me, from one committee of the
Tatarstan state council, stepped forward and said: ”Generally speaking, the Russian Constitution is not an
absolute document for us. We in Tatarstan did not vote for this document; therefore Russia does not influence us
by the 1993 Constitution, but only through the treaty from 1994. And that fact, that what is written in the treaty
are for us the norm, while hat is not written is not the norm.” This means that this treaty in reality appear as a
framework for a confederate solution to say the least, if not to say separative pretensions, but not little are
delegated to the politicians in the regions.

Q: After 1996 the governors are elected, instead of being appointed by the president. There are talks now about
returning to this system for strengthening the power of the centre. What is your comment on this?

A: I think this is impossible, first of all from the Constitutional view - one must radically change it. According to
Article 1 in the Constitution is a legal, democratic and federal state, which have the form of a republic, and so
forth. And if we in Russia consider us a federal state, then of course the power bodies of the federation subjects
must be formed within these subjects. And according to democratic state the power bodies must be based on
elections. But today, except Berezovskii and Zhirinovskii, nobody talk about that we have to de-federalise
Russia, and return to appointments for governors by the president.

There is also another problem, inside a federation there must be a system with constitutional functions which
allows the federal centre to force, if necessary, the federation subjects to fulfil the commitments which lies in the
Constitution. ‘Dershaba Rushinskova’ (Kirsan Ilumzhinov) said: ”I would like that Kalmykia became an
associate member.” And suddenly he … [incomprehensible] the judges. It has turn out that way, but let us
imagine. For the time being the federal centre can take no constitutional steps at all. In this situation we are
talking about separatism, the destruction of the state in its entirety, right? Generally speaking there should be a
constitutional mechanism that would allow the federal centre to interfere, not educationally, but rather
constitutionally by saying: ”Dear assembly, you interfere with the constitutional legacy, therefore we have to
remove the controversy before the court”, for example. Or, many governors passed a solution that forbids export
of products in the regions. The Constitution clearly forbids the barring of any restrictions against free trade of
goods. This means that they fight the Constitution.

The situation in the federal centre must have the ability, not by court which is tedious, but by administration by
saying: ”Dear governors, you should not restrict the Constitution, and your law ought to be changed in the
nearest future, and for you we give a warning. Such a mechanism and peaceful practice exists and is called the
mechanism of federal interplay. In Germany such a law was written 23 May 1949 called ‘Bundestvang’. In the
article on Bundestvang there is written that if the federal territory does not fulfil the vertical obligations created
by the new law, then the federal government are obligated to take appropriate steps so it continues to be a federal
territory that fulfils its commitments. Such a point is totally necessary in our Constitution. Then the problem
about elected governors becomes less controversial, rather something constructive and healthy. On the other side
they will not be independent, but be depended on the federal centre that does what’s necessary.

Q: What resources decide the federation subjects’ relationship with the centre, what steps do the regions take to
influence Moscow? And can one from this conclude that some are winners and other losers compared to their
interaction with the centre?

A: The creation of the treaties was ad hoc, not about dispute concerning natural resources, but exclusively caused
by the political crisis. The situation was such that it was very important for the centre to get guarantees of loyalty
from the regional elite’s in that or that subject. Therefore the treaties were more advantageous for the regions. I
already mentioned the examples. Of course there is a known fact in the latest years that the absence of natural
resources is a decisive reason... [phone rings]

Q: I have heard that many of the treaties are generally similar, but there are some exemptions like Kaliningrad,
Tatarstan, Yakutia and Bashkortostan. Can one classify these treaties in groups, and what are their main
differences?

A: Let us not talk about this now, I suggest that you reed the agreements yourself. You have to reed them
very carefully, letter by letter. Altogether it comes down to the degree of tax income, which the regional

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territory receives through the centre. Different treaties revise different tax income distributed by the centre,
which means that rates and taxes are not equal in the federation subjects. Kaliningrad is a special case, which
is objectively in an exceptional situation, as an enclave. It has no frontiers with the Russian Federation and all
the questions concerning the water supply, gas supply and general life support must be decided in a different
way. And this is normal. For this region the general outline is not possible, but there are general outlines
existing in the sphere of the calculating-base for the deliberation of income and expenses. To say it very
simple, the common income for the whole region in comparison with the average, one person is taken as the
base. And then you get some results. Taken into account this result, the deliberation of income depends on it.

To complete the answer, there are of course some chronically depressed regions, which have no grounds to
live independently. And that is why they have no grounds for insisting on special agreements. They can’t
allow themselves to negotiate with the centre with a firm voice. So in their stay in the relationship with the
centre is as an applicant. And of course for these regions there were not possible to conclude some favourable
agreements with the centre, and that is why it becomes clear that it does not depend on the political situation
when such an agreement is concluded, but on the power of the region. The more powerful the region, the
more resources such as oil, or there is a special case.

Q: There are today about ten donor regions to the federal budget, but this seems to be regularly changing. Is
the present relationship between donors and recipients stable, or will number of donors decrease/increase?

A: At first you should define the terms donor and recipient correctly, is it correct to use these terms? At first,
what is a donor? We say that there is about eight; Moscow, Khanty-Mansi, Yamal-Nenets, Krasnodar,
Irkutsk, Samara, Nizhnii Novgorod and Novosibirsk. Does this mean that other regions receive more than
they give? Here we have a paradox, concerning that it is not possible for these ten regions to supply seventy-
nine regions. The fact is that the federal taxes are taken from the regions by federal institutions, and they do
not take into consideration the regional payments made to the federal budget. Is this clear? It is not the region
itself that pay to the federal budget, but this is federal tax that is collected on the territory of the region. It is
not the initiative of the region itself but its duty to pay. If we take into account this fact the picture becomes
different. But I think in practice the number of donors will decrease in the future. For the specific region,
which is in the intermediate position, it’s not favourable to become a donor. Most federations have the same
problem, but not all, USA find itself in a different situation. But in Germany exists the mechanism of federal
equalisation, which also have been generally criticised. Because, this system of equalisation encourages
laziness and does not stimulate depressive regions to come out of their troubled situation. Therefore it is
better for the depressive regions to stay in an intermediate position and receive some money under the
program of federal equalisation. As far as this mechanism will be maintained within the Russian Federation
arises the same problem.

That is why I think that we should implement in the Constitution some law, or if not in the Constitution then
in federal constitutional law. On a rather high level, not on the level of the budget which is adopted every
year, but on the level of some powerful and sustainable act/law. As an example, constitutional law should
embody the mechanism of financial relationship between the centre and the regions. And to fix there what
taxes are under the jurisdiction under the centre, and which are divided between the centre and its regions.
What taxes the regions would receive. What taxes which are divided between the region and its communities.
What taxes the communities receive. When such a model is established, then it would be possible to say that
the number of recipients could decrease. And then the total number of the donors would increase, that is, the
number of self-supplied regions would increase.

Q: The position of the Kremlin is to strengthen the communities or cities, so that for example the mayors
would be a power base counterbalancing the governors. Would this be done in practice?

A: The ideal of democracy, of course, is foremost the position of the community - according to the theory but
not based on practise. The principle of subsidiary, that means first of all for the communities, then the regions
and federal level. However in practise this is quite different, different countries have different situations in
real life. And it became a costume that cities are more powerful than provinces. But in Germany they on the
other hand are historically stronger than the cities, and the same is for the Russian Federation. Therefore
nowadays more or less the complete structure of government has taken form on the regional level. And that is
why to make communities completely independent from the regions, they are not state authority, like they
were made under the constitution, where the communities are independent from the regions. And in this
sense the subjects of the federation cannot determine the politics of the cities, and that is why, from my point
of view that to favour the community self-governing as an alternative to the region would not be appropriate,
and dangerous. But on the other hand the regions should also be legally fixed under the law, which should

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support the establishment of the system of local government. Because today the system is not well developed.
There are some problems; if it was in real practice that regions were strong and communities weak, then it
would be understandable that the regions would help the communities. But as the matter of fact, in the
majority of the regions the situation is the opposite. For example in Volgograd to compare the oblast with the
city, the oblast is poor and low developed, while the city is a well developed industrial city. When the
government take taxation from the whole oblast, the most important is the oblast capital. The larger part of
taxation renovation comes from the city. That is why the mayor of the city, Chechov, an exc ellent fellow, is
de facto not significant less powerful than the governor, Makshuta. And of course they were competitors for
the post of governor in which the mayor came second. He almost took the position of governor. And that is
why the Kremlin position becomes clear, to use the mayors as a counterbalance to independent governors. It
is therefore clear from a political view, but from the strategy of state development it becomes dangerous.

Q: How do the subjects lobby against the centre to get their regions interests heard?

A: On the contrary, lobbyism works not against, but for. And works in all branches of government, how it
works in the legislative in clear. The first is lobbyism in the law making process, the upper chamber works as
an interest group of the regions. And that is why they do not have to lobby from the foyer, because lobbyism
is the protection of the interest from the foyer or from the outside. This chamber fights the interest of all the
regions, and directly insists their interests. Nonetheless they should provide some intergovernmental
conferences for exhibitions, parliamentary hearings, to clarify the situations to their colleges. The same
counts for the State Duma. If the governor is interested in some project, he acts from his regional
representatives in the State Duma and has the possibility to lobby this project. This is a very normal
parliamentary procedure.

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APPENDIX B: Descriptive statistics

In chapter 3.2 are the variables listed by year, values, measure and N. In this appendix I
additionally list the value of the cases on the most important variables. The dichotomous
variables are excluded (since they are easy to find elsewhere), except for those that function
as dependent variables. I have divided the variables into three groups:

1. Background variables
- “status”, the federal status of a region
- “russians”, the percentage of ethnic Russians
- “proximi”, the geographical proximity to the centre
- “industry”, the main type of industry in percent of indus trial production
- “chemoil”, the chemical and oil- technical production in percent of ind. prod.
- “oilgas”, the exploitation of oil and gas in 1000 ton
- “roads”, the road density in 1000 km2

2. Economic variables
- “payback”, the average payback from the federal centre of expenditures
- “for.inve”, the amount of foreign investment in 1000US$
- “privatis”, the percentage of privatisation
- “unemploy”, the percentage of unemployment

3. Dependent variables
- “econ_ind”, the economic strength index
- “treaty1”, whether or not a region has signed a bilateral treaty
- “treaty2”, the degree of autonomy obtained through treaty
- “aut_ind”, the de facto autonomy index
- “dem1_ind”, the democracy1 index based on Robert Dahl’s definition
- “dem2_ind”, the democracy2 index, based on freedom of the media

They are listed in the following nine pages of SPSS prints:

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