Civic Culture and Economic Transition in Russia

In this paper we try to describe the main feature of Russian civic culture that could influence the outcome of the reform, initiated in 1992, and discuss channels through which the influence was realized. We begin with consideration of paternalism and what we call “habitual deviationism”, ordinary and routine deviation from official rules and laws. Both features were inherited from the Soviet period. Paternalism and habitual deviationism determine a system of people’s attitudes towards the state, the law, the property, and the liberal values. It will be demonstrated that this system entails an adversarial (using a Stiglitz’s term) style of governance and the opportunism and corruptibility of the ruling elite. It is argued that “shock therapy” may be destructive under this cultural environment and result in strong initial distortions since fast liberalization and privatization release a huge volume of rent and strengthen incentives for rent seeking activity. It is further argued that a good reform strategy should take civic culture into account and not put forward overly ambitious tasks. One has to build a sequence of interim institutions which would be more congruent to the initial cultural and institutional environment, facilitate the adaptation of the people, and stimulate modernization of cultural norms to reach an effective market system with time.