Pension Reform In Russia: From the Politics of Implementation to the Politics of Lawmaking?

Under President Boris Yeltsin, the politics of economic transformation was a politics of implementation, not of lawmaking. The decisions of bureaucrats, whether motivated by corruption or public spirit, counted for much more than the laws formally on paper. The roots of this weakness of the law were both economic and political. Economically, The prevalence of nonmonetary means of payment—goods offered in barter, or IOU’s that were in effect more complex forms of barter—and the closely linked phenomenon of enterprises’ chronic indebtedness to one another and to fiscal authorities marked Yeltsin’s reign. The result was that both debts and the means of payment offered to cancel them were of opaque value, enmeshing bureaucrats and businesses in case-by-case decisionmaking as to which legal abstractions were substantially irrelevant. A feeble court system, continuing conflicts over control of property and excessively high formal taxes also meant that day-to-day economic activity constantly explored the far side of legality. Politically, hostile relations between the parliament and the executive branch hindered the effort to create a law-governed economy. Even bureaucrats selflessly committed to market-building regularly relied on their own discretion in the face of absent, unhelpful, irrelevant, or contradictory laws. Implementation arbitrariness especially plagued the pension system, which saw substantial delays in payouts and complex efforts to pay pensions in kind. […]

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