Institutional basis of communist regimes Communist party dominance

No party competition Interest groups controlled by communist

party Communist party control over public policy

Economy – state-owned enterprises, central planning Lack of efficiency, productivity, innovation Few incentives for firms, workers,

managers to be more efficient; to promote intensive growth vs. extensive growth

Russia – Politics

Political cleavages Advocates of markets vs. state economy Political elites vs. oligarchs Regional leaders vs. central government Russians vs. Chechens

Economic policy “Shock therapy” – transition to market economy as quickly as possible

Prices set by markets; privatization of state-owned firms; reducing state expenditures; foreign investment

Replaced by new accommodation; increasing state control over key sectors; markets

Conservative government under Putin (United Russia Party) Market economy, promotion of middle class, nationalism, order and

stability Fragmented interest groups (both labor and business) “Competitive authoritarian regime”

Russia – Policies

Economy under Putin Markets plus significant state role in key

industries (state-owned, state-directed industries in oil and gas)

Redistribution of income from poor to rich Reduction in social spending Reduction in taxes Large numbers living in poverty

Russia – Institutions

Constitution (1993) (Figure 10.1, 310) Strong president

Broad appointment powers (including premier), rule by decree, commander-in-chief

Premier Manage business of government

Bicameral legislature Lower house – State Duma (returned by PR, as of 2007); more

powerful body; but still weak relative to executive Upper house – Federation Council (appointed by governors and

regional legislatures) Judiciary

Not a real check on executive power; widespread corruption Bureaucracy

Ineffective; corrupt Russia’s future?

China – Politics

Chinese Communist Party (CCP) the dominant institution; it holds a monopoly on political power

Cleavages resulting from economic reforms Social classes

Small capitalist class (highly successful business people) Middle class (small entrepreneurs, managers, white collar professionals) Urban poor Growing income inequality Challenge for CCP: to maintain support across growing divide

Urban vs. rural Increasing divide in income/wealth between urban and rural residents, as well

as access to social spending, health care, etc. CCP’s legitimacy

Socialism economic development Mix of co-optation and coercion Elite-based, exclusivist ruling coalition (central and provincial party and

government officials, PLA officers, wealthy capitalists, urban middle class)

China – Policies

“Socialism with Chinese characteristics” Markets set prices; large role for privately owned firms Small and medium-sized state-owned firms unable to function

privatized Competitive in world markets Socialist (large state-owned enterprises, ownership of farm land)

Outcome High growth rates; reduction in numbers in poverty Rising unemployment, income inequality, growth in urban areas

State attempting to address dark side of markets Problems: insufficient social welfare spending, deterioration in

health care, bias toward urban areas; declining rate of poverty reduction

New policies: lower agricultural taxes; increased access to health care; tuition reductions; increased infrastructure spending

China – Institutions

Dominance by CCP (Figure 10.2, 327) Power resides in “paramount leader” and

elite party officials All major political decisions made in

Politburo and Standing Committee Governmental institutions are

administrative arm of CCP No independent judiciary

China’s future?

Russia and China Compared

Table 10.1, 332 Russia considerably higher per capita income

Physical needs and informed decisions Russia’s record better overall, but China

catching up Safety

China’s record is better Civil and political rights

Nearly equally bad