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2 Non-negotiated Liberalization Decentralizing Russia’s Welfare State and Moving It Off-Budget As the Soviet Union collapsed in the last half of 1991, a radically reformist leadership established itself at the head of the new Russia state. In the aftermath of his strong victory in the June 1991 Russian presidential election , Boris Yeltsin was granted extensive decree powers by the holdover legislature, the Supreme Soviet. He appointed a reform team headed by Deputy Prime Minister Egor Gaidar, an economist who committed the government to policies of liberalization, privatization, and fiscal stabilization that were designed to deal with the economic crisis and transform the old command system into a market economy. As part of its stabilization project, the government set out to cut federal budget expenditures and scale back the welfare state. The Finance Ministry played a key role in these reforms, and a central part of its strategy was to shift responsibility for most social expenditures away from the federal budget. Power Concentration and the Reformist Coalition The welfare state that Russia inherited was a top-down creation, established under conditions of society’s political exclusion. Except at the margins in the later Soviet period, the society had never mobilized to make claims or shape provision.1 Trade unions served mainly as administrators rather 1 There were instances of societal influence on educational policy in the Khrushchev period and on child care policies in the Brezhnev period. than demanders of welfare. The professional groups that provided social services—doctors, educators, and so forth—belonged to mandatory associations but had no experience with organizational autonomy and little with interest articulation. State administrators had controlled the professions . Within the state, social-sector ministries and other institutions had been disorganized by the collapse of the Soviet Union and the transition to a separate Russian Federation government. In sum, during the initial stage of transition, both societal constituencies and statist stakeholders were in weak positions to defend their interests in the inherited welfare system. Russian social-sector elites themselves were divided over the future of the welfare state. As noted in chapter 1, since the start of Mikhail Gorbachev’s perestroika in the mid-1980s academic social scientists and activist professionals had been developing critiques of the old system, focusing on its overcentralization, rigidities, inefficiencies, and excessive paternalism.2 This reform movement now spread within the professions, where ad hoc groups developed agendas for modernizing and democratizing the social sector. As the Soviet political system opened up, some of these professionals became politically active, winning election to the new legislature, the Supreme Soviet, and taking leadership positions on social policy committees. They also connected with global social policy networks that promoted reform models through publications, conferences , and other mechanisms. The approach of the global networks was broadly liberalizing.3 They became important sources of programmatic innovation and direction for Russian social reformers. In the early 1990s, a synergy of these three influences—economic liberalizers in the executive, reformist domestic social-sector elites, and global social policy networks—began restructuring of the Russian welfare state. Executive liberalizers were primarily interested in reducing budgetary expenditures and the welfare role of the state to achieve fiscal stabilization and market transformation. Social-sector reformers wanted to decommunize and democratize the welfare state, to make it more effective and responsive. They were influenced by models of welfare reform then being promoted by global networks and were 2 For earlier critiques of the Russian welfare state, see, for example, T. Serebrennikova , “Ekonomicheskie i Sotsialnye Funktsii Raspredeleniia,” Ekonomicheskaia Gazeta 41 (1996): 8; on the educational reform movement in the 1980s, see Stephen L. Webber, School, Reform, and Society in the New Russia (New York: Palgrave, 2000). 3 Robert R. Kaufman and Joan M. Nelson, eds., Crucial Needs, Weak Incentives: Social Sector Reform, Democratization, and Globalization in Latin America (Baltimore: Johns Hopkins University Press, 2004). 56 Postcommunist Welfare States Non-negotiated Liberalization 57 empowered because their ideas fit the agendas of powerful actors in the economic and finance ministries who drove the broader transition process. (The main actors in Russian welfare politics, and the pro- and antireform political balance during this period, are shown in table 2.1.) Constitutionally, the executive and legislature held dual power in Russia during this period, but the president effectively dominated the polity through his stronger claim to electoral legitimacy, unilateral control of ministerial appointments, and decree powers. Yeltsin and his aides “focused primarily on strengthening executive authority so that they could insulate economic policymaking...

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