Publication: Russia and Eurasia Review Volume: 2 Issue: 9

By Tomila Lankina

Local government is an important but often overlooked aspect of Russia’s transition to democracy. Over the past decade, municipal authorities in Russia have been buffeted by the pressures of state budget cuts on the one side and the ambitions of regional governors and republic presidents on the other. Local authorities have been plagued by problems relating both to confusing and excessive functions and to a poorly regulated and weak financial base.

Initially, President Vladimir Putin was ambivalent with regard to local government, but over the past year it has emerged as a major plank in his broader plan for institutional reform of the federation. After a year of work conducted largely behind the scenes, a commission headed by Putin’s special appointee, Dmitry Kozak, has finally produced a comprehensive new draft law on local self-government (LSG). The draft has already gone through a first reading in the Duma, and is expected to win passage with few obstacles by the end of this spring’s legislative season. But although the president was quick to describe the law as “revolutionary,” and as a step toward “genuine” local government, the draft is open to criticism for its centralizing thrust.

Local authorities may well benefit from the reforms should they be effectively and impartially implemented. However, some aspects of the reform, the manner in which it is being carried out, and indeed, Putin’s overall statist-centralist leanings, may also work against the development of efficient and democratic local governance.

The draft law is ostensibly aimed at extricating LSG from the quagmire of jurisdictional and functional confusion fostered by the law on local self-government that was passed under then-President Boris Yeltsin in 1995. The law mandates the creation of new types of municipal formations–with a clear division of authority between them–and also a new set of scaled-down functions. The previous legislation allowed for a great deal of variety; it was assumed that some tiny villages would perform functions as complex as those of large cities.

The new law clearly distinguishes between settlements (poseleniya), municipal counties (munitsipalnyye rayony), and city districts (gorodskiye okruga), and mandates the establishment of local units at all three tiers. It details not only their internal institutional makeup, but also includes criteria for setting up new territorial and administrative boundaries. The settlement level in particular, which suffered greatly after Yeltsin ordered the disbanding of local soviets in October of 1993, is given much emphasis in the reformers’ rhetoric. They use the settlement level as an illustration of the democratic and grass roots logic of empowerment that is driving their efforts.

However, the reformers’ preoccupation with the rights of local governance for those dwelling in smaller settlements does not appear to extend to residents of larger and more economically and politically important county and city districts. Unlike the settlement level, which is entitled to a locally elected municipal head, the residents of counties and city districts will not have full control over the election or appointment of their chief executives. They may have popularly elected mayors, but the functions of these mayors will be ceremonial, akin to those of the English Queen. This is an analogy used by Kozak himself. The real power will lie in the hands of the “city manager,” whose appointment and indeed dismissal will be partly determined by regional level assemblies and governors.

The residents of Moscow and St. Petersburg are also significantly constrained in their right to local governance. In contrast to the settlements, where the establishment of an elected LSG is mandated, the draft law contains only vague references to the “possibility” of having sub-city district municipal institutions in these two cities.

The outside reader may be perplexed by the reformers’ preoccupation–one that seems almost Tolstoyan or Slavophile–with democracy in Russia’s dying villages, while they simultaneously deprive millions of inhabitants of the economically and politically more significant county and city levels of this right. The fact that these restrictive provisions crept into the law is obviously a political concession to the regional governors and to the presidents of the ethnic republics. Deprived of many of their powers in the federation as a result of Putin’s earlier center-regional reforms, the regional heads will now have significant and institutionalized prerogatives vis-a-vis the lower “third level of authority.”

Admittedly, many of the provisions in the draft law create a framework for local government that is financially more stable, and as such have been welcomed by municipal practitioners. Rather than being dependent on annually changing federal and regional tax shares, for example, LSGs will now be entitled to a fixed proportion of the relevant taxes. This, in turn, should facilitate long term local budget and developmental planning. LSGs will also be relieved of the burden of unfunded federal mandates, and of such costly functions as education and healthcare, over which they will now lose some of their authority. It will become illegal to make municipalities pay for populist federal social legislation for which no adequate funding is provided.

Currently, as many as thirty-seven types of various social subsidies or privileges (lgoty) exist, many of them covering almost the entire population of a given municipality. According to some estimates, the total amount of hypothetical social subsidies, when added together, would amount to 6 trillion rubles (US$200 billion), while the consolidated budget of the Russian Federation as a whole for the year 2002 was only 2.4 trillion rubles.

In the future, however, LSGs will have an even smaller local tax base, and much of their revenue will come from targeted regional and federal grants. Amendments made earlier to the tax code have already left LSGs with only five taxes, which togther generate very little revenue. The five are the personal income tax, inheritance, land, advertizing, and license fees. Much of the control over revenue flows will now be concentrated at the regional level. The funding that goes to municipalities will be for the fulfillment of concrete federal or regional mandates, and the localities will have little freedom in deciding how the money is to be spent.

The financial and institutional dependence of LSGs on regional authorities will likely encourage politically motivated reprisals against municipalities perceived as “disloyal” to the regional regimes. The regional chief executive and legislative organs will now have extended powers, including removing local chief executives, disbanding local councils, or setting up temporary regional administrations in the localities–albeit largely subject to the decision of an “appropriate court.” The extensive list of causes for which the LSGs may be penalized ranges from such commonly occurring situations as a local government’s indebtedness exceeding 30 percent of its own budget revenues in a given year, to a curious reference to the “mass violation of rights and freedoms of person and citizen, threat to life, health and safety of citizens.” Also listed is the even more curious possibility of a town adopting a decision that poses a “threat to territorial integrity, national security, defence potential.”

The stress on constraining local government from above goes along with a dismissal of the role of bottom-up democratic forms of accountability and control, most notably the ballot box. Such an attitude is characteristic of political discourse in Putin’s Russia in general, and of the rhetoric surrounding the Kozak reform in particular. Thus, in numerous interviews Kozak presents the elected mayor as an unwise spendthrift who will waste public money to score cheap points with the electorate by “supporting a local football team” or will seek personal enrichment by buying “volgi i mersedesy” (that is, Volga and Mercedes automobiles). This elected “politician” is then juxtaposed to the appointed city manager, who will “theoretically dispose more wisely of the money.”

The very nature of the way the reform is being carried out reflects an unquestioning faith in the wisdom of the bureaucratic state in imposing its will on a largely passive society. The secrecy with which the Kozak commission has been surrounding its work for a year would make one think a classified document concerning matters of top national security was being prepared, and not a law dealing with fundamentals of grass roots rule. The scant information made available with regard to the law has usually come from interviews that Kozak himself gave.

The first official draft of the law was made public in October 2002, after which it was hastily rushed through the Duma. Of the twenty-two members of the Kozak commission, only two were municipal practitioners, the remainder being mostly federal or regional officials. The few Russian academics who were on the commission expressed frustration over their failure to influence the reform, and some of them resigned. The most concerned party–the municipalities themselves–had very little input into the reform. No pilot projects were tested in the localities, and, aside from a few public relations events, where the LSGs felt their role was to rubber stamp the proposals, no effective mechanisms for soliciting municipal opinions on the reform were put in place.

Having been compromised in their “impartiality” from the very start, and containing many overly centralizing provisions, the formal and legal aspects of the reform package are already dampening any optimism about the reform that might have existed. The package also leaves much scope for abuse of power vis-a-vis LSGs by both state and regional levels of authority. Should the reforms falter, it is Russian society at the grass roots level–which was hardly consulted about the new legislation–that is likely to pay the price.

Tomila Lankina has a PhD Phil from the University of Oxford and is a Senior Research Fellow at the Institute for the Social Sciences, Humboldt University, Berlin.