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Opposition and dissent in petro-states : international oil markets and political mobilization in Russia Kniazeva, Olga 2013

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  OPPOSITION AND DISSENT IN PETRO-STATES: INTERNATIONAL OIL MARKETS AND POLITICAL MOBILIZATION IN RUSSIA   by   Olga Kniazeva  B.Sc. Novosibirsk State University, 1996 M.P.P.M., The University of Pittsburgh, 2000   A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF   DOCTOR OF PHILOSOPHY   in   THE FACULTY OF GRADUATE STUDIES (Political Science) THE UNIVERSITY OF BRITISH COLUMBIA  (Vancouver)  April 2013   © Olga Kniazeva, 2013   iiAbstract Using Russia as the main case study over a number of historical periods and Venezuela as a secondary case for comparison, this dissertation proposes an argument which links oil rents to political contestation in petro-regimes and suggests that this, along with the elites’ actions, is the key factor that helps to explain the regime type and the direction of the change in times of external economic shocks.  When oil prices are high, petro-states have overwhelming incentives to expand social spending in order to ensure obedience and calm down potential political opponents, which appears to be an easy means of securing legitimacy. The state has more freedom to advance its policies and is less vulnerable to societal demands because it has access to external rents. However, the society is also affected: social groups demand the redistribution of oil wealth and engage in rent-seeking instead of establishing formal channels of interest representation. Consequently, the social contract that emerges is based on the shared understanding of the role of the state as a re-distributor of oil rents and guarantor of societal welfare. When oil prices drop, the state can no longer meet the expectations associated with its legitimacy, becomes more vulnerable to internal and external pressures; social forces tend to mobilize in response to cuts in social spending, and the social contract may break down. The pre-oil features of social organization and state-society relations shape the configuration of the resulting social contract and its disintegration. The main contribution of this dissertation is to create a compelling theory that convincingly explains the empirical observations with respect to one case, by identifying the mechanisms of how oil rent fluctuations translate into regime fluctuations and testing the hypotheses on the effect of external economic shocks on the state’s behavior and popular contentious claims, as well as the choices made by contenders to voice their political demands. Beyond that, I add another shadow case study for a substantially different polity, and demonstrate that the mechanisms I identified work very similarly in different sociopolitical systems, although the specific outcome depends on pre-existing sociopolitical features of the state.      iii Preface  This dissertation is an original intellectual product of the author, O. Beznosova. The fieldwork reported in Chapters 3-6 was covered by UBC Ethics Certificate number H09-00540 of March 29, 2011.      iv  Table of Contents  Abstract .................................................................................................................................... ii Preface ..................................................................................................................................... iii Table of Contents ................................................................................................................... iv List of Tables ......................................................................................................................... vii List of Figures ....................................................................................................................... viii Acknowledgements ................................................................................................................ xi Chapter 1: Introduction ......................................................................................................... 1 1.1 Russia’s Regime Transitions ................................................................................................. 8 1.2 Explaining the Democratic Deficit ..................................................................................... 15 1.2.1 Political Culture and Mass Attitudes: Trust and Tolerance ............................................ 16 1.2.2 Weak Civil Society ......................................................................................................... 18 1.2.3 The Process of Transition ............................................................................................... 19 1.2.4 Organized Economic Interests ........................................................................................ 22 1.2.5 Reemergence of the State ............................................................................................... 23 1.2.6 Agency: Leadership of Great Men.................................................................................. 25 1.3 Some Preliminary Conclusions: What Explains Russia’s Regime Transitions? ................. 27 1.4 Russia as a Case Study of Regime Transitions in the Petro-State ...................................... 32 Chapter 2: Explanatory Framework .................................................................................. 39 2.1 Political Contestation and Regime Transitions ................................................................... 39 2.2 The Study of Contestation ................................................................................................... 42 2.3 Defining Contestation: Components and Measurement...................................................... 46 2.4 Political Opportunity Structure: Interaction with Political Regime .................................... 55 2.5 Ideas, Ideology, Cultural Symbols, and Identities .............................................................. 57 2.6 The Model of Contentious Politics ..................................................................................... 59 2.7 Hydrocarbon Resources and the Possibility of Political Contestation ................................ 61 2.8 Structural and Institutional Factors ..................................................................................... 67 2.9 Impact of Oil Revenues on the Supply Side of Political Contestation ................................ 72 2.9.1 Repression ...................................................................................................................... 72 2.9.2 Manipulation ................................................................................................................... 75 2.10 Impact of Oil Revenues on the Demand Side ..................................................................... 78 2.10.1 Social Contract ........................................................................................................... 78 2.10.2 Co-optation and Patronage ......................................................................................... 84 2.11 Timing and Path Dependency in the Argument .................................................................. 88 2.12 Method: Case Study, Within-Case Analysis, and Process Tracing ..................................... 90 2.13 Comparing Russia and Venezuela: Mill’s Method of Agreement ...................................... 92 Chapter 3: The Late Soviet Period and the Emergence of Oil Dependency ................... 95 3.1 Oil Industry and the Soviet Economy ................................................................................. 97 3.2 State Autonomy................................................................................................................. 110 3.3 Contention in the USSR .................................................................................................... 117 3.4 Impact of Hydrocarbon Rents on the Supply Side of the Opposition ............................... 126 3.4.1 Repression and Oil Rents .............................................................................................. 127   v3.4.2 Manipulation of Society ............................................................................................... 132 3.4.3 Cooptation .................................................................................................................... 134 3.5 Impact of Oil Rents on the Demand Side of the Opposition ............................................. 135 3.5.1 Patronage, Rent-seeking, and Corruption ..................................................................... 137 3.5.2 Soviet Social Contract .................................................................................................. 141 3.5.3 Two-Level Ideology ..................................................................................................... 147 3.6 Conclusion ........................................................................................................................ 150 Chapter 4: Gorbachev’s Perestroika and the Collapse of the Regime, 1985 – 1991 .... 153 4.1 Political Economy of Oil and Structural Features of the State ......................................... 156 4.1.1 Decline in Oil Prices and Looming Scarcity ................................................................ 157 4.2 Gorbachev: A New Hope? ................................................................................................ 164 4.3 State Autonomy Reduced, Both Internally and Externally ............................................... 172 4.4 Coercive Capacity and Military Expenditures Reduced ................................................... 177 4.5 Growing Political Contention ........................................................................................... 181 4.6 Changing State-Society Relations ..................................................................................... 183 4.7 Impact of the Oil Bust on the Supply Side of the Opposition ........................................... 197 4.7.1 Repression, Disruption, and Manipulation ................................................................... 197 4.8 Impact of Oil on the Demand Side of the Opposition ....................................................... 207 4.8.1 State Attempts to Change the Social Contract and Patronage System ......................... 207 4.8.2 Societal Reaction: The Social Contract Erodes ............................................................ 215 4.9 Conclusion ........................................................................................................................ 230 Chapter 5: Yeltsin and Democratization, 1993-1999 ....................................................... 233 5.1 Political Economy of the New Russia: Low Oil Rents and Economic Collapse .............. 235 5.2 Transition from Communism and Establishing the New Russian State, 1991-93 ............ 239 5.2.1 Political Crisis and Constitutional Reform ................................................................... 243 5.3 State Autonomy Low: Susceptible to Internal and External Pressure .............................. 247 5.3.1 The 1998 Financial Crisis and the Change of the Economic and Political Landscape . 257 5.3.2 Summary: State Autonomy Reduced ............................................................................ 262 5.4 Political Contention in Russia ........................................................................................... 263 5.5 Supply Side: Repression, Manipulation, Parallel Structures, and Co-optation ................. 272 5.6 Demand Side: Taxation Effect and Social Spending, Mobilization of Supporters ........... 279 5.7 Conclusion ........................................................................................................................ 290 Chapter 6: Increase in Oil Revenues and Authoritarian Revival: 1998-2008 ............... 295 6.1 Political Economy of the New Russian Regime: A Change of Fortune ........................... 297 6.1.1 The Role of the State .................................................................................................... 301 6.1.2 Rent Sharing ................................................................................................................. 302 6.2 From Yeltsin to Putin ........................................................................................................ 306 6.3 State Autonomy Increased ................................................................................................ 307 6.4 Political Contention........................................................................................................... 315 6.5 Supply Side: Repression, Manipulation, Parallel Structures, and Co-optation ................. 323 6.6 Demand Side: The Social Contract ................................................................................... 333 6.7 Conclusion ........................................................................................................................ 347 Chapter 7: Comparative Analysis ..................................................................................... 351 7.1 Comparison of the Two Cases: Venezuela and Russia ..................................................... 353 7.1.1 The Political Economy of Oil in Russia and Venezuela ............................................... 354 7.1.2 Contestation in Russia and Venezuela .......................................................................... 359 7.1.3 State Autonomy in Russia and Venezuela .................................................................... 366 7.1.4 Impact of Oil Revenues on the Supply Side of Political Contestation ......................... 376   vi7.1.4.1 Repression and Manipulation............................................................................... 376 7.1.4.2 Co-optation .......................................................................................................... 380 7.1.5 Impact of Oil Revenues on the Demand Side ............................................................... 382 7.1.5.1 Patronage and Mobilization of Supporters ........................................................... 383 7.1.5.2 Social Contract ..................................................................................................... 388 7.1.6 Impact of Oil on Political Systems in Russia and Venezuela ....................................... 398 7.2 Russia: 2008 Crisis and Beyond ....................................................................................... 401 7.2.1 Political Economy ......................................................................................................... 401 7.2.2 Contestation in Post-Crisis Russia ................................................................................ 404 7.2.3 Impact on the Supply Side of the Opposition During the Crisis .................................. 411 7.2.3.1 Repression and Manipulation............................................................................... 411 7.2.4 Impact on the Demand Side of the Opposition During the Crisis ................................ 414 7.2.4.1 Patronage.............................................................................................................. 414 7.2.4.2 Social Contract ..................................................................................................... 418 7.3 Conclusion ........................................................................................................................ 422 Chapter 8: Summary and Conclusions ............................................................................. 424 8.1 Summary of Findings ........................................................................................................ 428 8.2 Limitations of the Study and Direction for Future Research ............................................ 435 8.3 Contributions ..................................................................................................................... 436 Bibliography ........................................................................................................................ 440 Appendices ........................................................................................................................... 458 Appendix A Summary of Hypotheses and Observable Implications ............................................. 458 Appendix B Protest Events Database, 1993-2007: Data Sources and Method .............................. 460 Appendix C List of Interviews ....................................................................................................... 463 Appendix D Interview Questions ................................................................................................... 464    viiList of Tables  Table 2-1: Indicators of social inequality in Russia and Venezuela ....................................... 66 Table 2-2: Summary of hypotheses ........................................................................................ 87 Table 4-1: Selected key events that impacted political opportunity in the USSR, 1987-1991............................................................................................................................................... 171 Table 4-2: Military expenditures, GDP, and government expenditures, 1985-1990 ............ 179 Table 8-1: Summary of hypotheses ...................................................................................... 427    viii List of Figures  Figure 1-1    Causal chain of the argument ............................................................................. 31 Figure 1-2    Hydrocarbon rents and political regime transitions in Russia, 1974-2008 (Stacked) ................................................................................................................................. 33 Figure 1-3    Change in oil production and GDP change in Russia, percent, 1974-2008 ....... 33 Figure 2-1    Model of opposition emergence and success ..................................................... 60 Figure 3-1    Oil production in Western Siberia, million ton, 1965-1984 ............................. 103 Figure 3-2    Estimated oil rents, 1974-1990 (Stacked) ........................................................ 105 Figure 3-3    Export and import as percentage of Soviet GDP, 1960-1986 .......................... 106 Figure 3-4    USSR foreign trade with OECD countries, 1950-1989, mln 2000 dollars (Unstacked) ........................................................................................................................... 107 Figure 3-5    Major categories of export, 1973-1988 (Stacked)............................................ 108 Figure 3-6    Major categories of import, 1973-1988 (Stacked) ........................................... 108 Figure 3-7    Benefits paid from federal budget per capita, percent change to previous year, 1970-1980 ............................................................................................................................. 115 Figure 3-8   Number of demonstrations and participants in them, 1966-1987 (Unstacked) 122 Figure 3-9    Number of demonstrations, participants in them, and number of convictions, 1966-1987 (Unstacked) ......................................................................................................... 129 Figure 3-10    Hydrocarbon rents and number of convictions, 1975-1987 (Unstacked) ...... 132 Figure 3-11    Oil prices and Soviet federal budget deficit, 1975-1989 (Unstacked) ........... 144 Figure 3-12    Number of demonstrations and participants in them and hydrocarbon rents, 1975-1987 (Unstacked) ......................................................................................................... 151 Figure 4-1    Oil prices, 1975-1992 ....................................................................................... 157 Figure 4-2    Export and import as percent of GDP, 1975-1990 (Unstacked) ...................... 159 Figure 4-3    Various categories of Soviet export, 1980-1990 (Unstacked) ......................... 160 Figure 4-4    Various categories of Soviet import, 1980-1990 (Unstacked) ......................... 161 Figure 4-5    Soviet state budget surplus and review, 1980-1990 ......................................... 162 Figure 4-6    Number of participants in demonstrations, 1987-1991 .................................... 182 Figure 4-7    Number of participants in demonstrations and number of arrests, 1987-1991(Unstacked) ................................................................................................................... 206 Figure 4-8    Number of demonstrations per moths by demand type, 1987-1991 (Stacked) 224 Figure 4-9    Number of participants in demonstrations per month by demand type, 1987-1991  (Stacked) ..................................................................................................................... 225 Figure 4-10    Number of demonstrations, by level of support for the regime, 1987-1991  (Stacked) ............................................................................................................................... 226 Figure 4-11    Number of participants in demonstrations, by level of support for the regime, 1987-1991  (Stacked) ............................................................................................................ 227 Figure 5-1    State budget expenditures and deficit, 1994-1999 (Unstacked)....................... 260 Figure 5-2    Change in gross national product, 1993-1999.................................................. 261 Figure 5-3    Election results in the 1993 Russian Federal Duma ......................................... 265 Figure 5-4    Election results in the 1995 Russian Federal Duma ......................................... 266 Figure 5-5    Russian presidential election results, 1996 ...................................................... 267 Figure 5-6    Number of protest demonstration per month, 1993-1999 ................................ 269 Figure 5-7    Number of participants in protest demonstrations per month, 1993-1999 ....... 270 Figure 5-8    Number of arrest of demonstrators, 1993-1999 ............................................... 277   ixFigure 5-9    Real income of households as per cent of 1993 ............................................... 281 Figure 5-10    Change of real wages and real income, as per cent to previous year and world oil prices (USD/barrel) (Unstacked) ..................................................................................... 281 Figure 5-11    Rating of the President and the Prime Minister, 1994-2000 (Unstacked) ..... 285 Figure 5-12    Number of demonstrations per month by demand type, 1993-1999  (Stacked)............................................................................................................................................... 288 Figure 5-13    Number of participants in demonstrations per month by demand type, 1993-1999 (Stacked) ...................................................................................................................... 288 Figure 5-14    Number of demonstrations per month by level of support for the regime, 1993-1999 (Stacked) ...................................................................................................................... 289 Figure 5-15    Number of participants in demonstrations per month by level of support for the regime, 1993-1999 (Stacked) ................................................................................................ 290 Figure 6-1    Oil and gas rents, 1992-2008 ........................................................................... 299 Figure 6-2    Hydrocarbon rents and gross domestic product, 1993-2008 ............................ 299 Figure 6-3    Russian hydrocarbon revenues, foreign reserve, and world oil prices, 1994-2007 (Unstacked) ........................................................................................................................... 300 Figure 6-4    World oil prices and Russia’s foreign debt servicing, 1996-2008 (Unstacked)............................................................................................................................................... 301 Figure 6-5    State budget expenditure and budget deficit, 1994-2006 (Unstacked) ............ 311 Figure 6-6    GDP change, percent to previous year ............................................................. 313 Figure 6-7    Russian Presidential Elections Results, 1996-2008 ......................................... 316 Figure 6-8    Seats in the 1999 Russian Federal Duma ......................................................... 317 Figure 6-9    Seats in the 2003 Russian Duma ...................................................................... 318 Figure 6-10    Russian Presidential Elections Results, 1996-2008 ....................................... 319 Figure 6-11    Total number of protests occurring anywhere in Russia, 1993-2007 ............ 320 Figure 6-12    Total number of participants protests occurring anywhere in Russia, 1993-2007............................................................................................................................................... 321 Figure 6-13    Categories of federal budget spending, 1997-2007 (Stacked) ....................... 324 Figure 6-14    Federal funding in several key budget categories, 1996-2007 (Unstacked) .. 324 Figure 6-15    National defense and security and law enforcement budget, constant 2007 rubles, 1997-2007 (Unstacked) ............................................................................................. 325 Figure 6-16    Military, FSB, MVD, and Procuracy funding as share of power ministries budget .................................................................................................................................... 326 Figure 6-17    Number of arrests of participants in public demonstrations, 1994-2007 ....... 328 Figure 6-18    Number of pro-government demonstrations, 1993-2007 (Stacked) .............. 331 Figure 6-19    Comparison of budget spending in means of coercion and social programs, 1996-2008 (Unstacked) ......................................................................................................... 334 Figure 6-20    Number of public demonstrations per month by type of demand, 1993-2007 (Stacked) ............................................................................................................................... 340 Figure 6-21    Number of participants in public demonstrations per month by type of demand (Stacked) ............................................................................................................................... 340 Figure 6-22    Number of public demonstrations per month, by level of regime support, 1993-2007 (Stacked) ...................................................................................................................... 342 Figure 6-23    Number of participants in public demonstrations per month, by level of regime support, 1993-2007 (Stacked) ............................................................................................... 343 Figure 6-24    Approval of past regime, 1993-2007 ............................................................. 345   xFigure 7-1    Political conflict and oil price in select oil exporting countries (Unstacked) .. 352 Figure 7-2    Venezuela’s GDP, oil export and government revenues and expenditures (Unstacked) ........................................................................................................................... 355 Figure 7-3    Russia’s GDP, oil export and government revenues and expenditures (Unstacked) ........................................................................................................................... 356 Figure 7-4    Number of protest in Venezuela per month, by type, 1984-1998 (Stacked) .... 363 Figure 7-5    Number of protest in Venezuela per month, by demand type, 1984-1998  (Stacked) ............................................................................................................................... 392 Figure 7-6    Gross Domestic Product and value of oil exports in Russia, Billion US$, 2000-2010 (Unstacked) .................................................................................................................. 403 Figure 7-7    Change in GDP, volume of imports and imports of goods in Russia, 2000-2010 (Unstacked) ........................................................................................................................... 403 Figure 7-8    Number of public protests in Russia, 2006-2009 ............................................. 407 Figure 7-9    Number of participants in public protest in Russia, 2006-2009....................... 407 Figure 7-10    GDP, government revenue and expenditure in Russia, 2000-2010 (Unstacked)............................................................................................................................................... 420 Figure 7-11    Government revenues and expenditures as percent of GDP in Russia, 2000-2010 (Unstacked) .................................................................................................................. 420        xiAcknowledgements  I owe my sincere thanks to the many people without whom this dissertation would not have been possible. I would like to start by thanking my research supervisor, Lisa McIntosh Sundstrom, for her constant support, unlimited patience, and countless hours of reviewing and commenting on multiple drafts of the research design and the thesis. I am also grateful to my supervisory committee: Maxwell Cameron for his generous encouragement and helpful criticism, and Mark Warren for his ability to see the bigger picture and position this project within the broader body of scientific knowledge. I am indebted to my external examiner Linda Cook for valuable feedback on my dissertation, particularly concerning the ways in which the findings are significant for the field of Russian politics. I would like to thank Alan Jacobs, Antje Ellermann, Fred Cutler, Richard Johnston, Allan Tupper, Richard Price, and Brian Job for providing much-needed encouragement and direction for my pre-dissertation and dissertation research and throughout my entire time at UBC. Kate Hecht, Shane Barter, Nathan Allen, Elena Feditchkina and many other graduate students at the department, in addition to being good companions and friends, provided invaluable comments and critique on the earlier versions of this work.  Several institutions provided financial assistance, which was instrumental to the completion of this project. The University of British Columbia provided me with a graduate fellowship that helped me to get through the years of doctoral studies. The Social Sciences and Humanities Research Council’s Doctoral Fellowship was crucial to the completion of the fieldwork, and the UBC Student International Mobility Award helped with overseas travel expenses.  Many people provided endless sources of encouragement, advice and guidance during my fieldwork in Russia. Dr. Vladimir Yazov provided invaluable assistance with local arrangements, including access to libraries and other institutions. I am indebted to my old and new Russian friends who opened their homes and hearts for me. Ekaterina Kazantseva and Vladimir Maslennikov offered their time and energy to help with a number of research tasks.  I am grateful to many people who shared their knowledge and expertise with me during the interviews and conversations. Their stories and experiences and their aspirations for the improvement of the Russian political system and society encouraged me to continue and complete this research project regardless of any challenges. Finally, this project would not have been possible without the encouragement and support of my family, who helped enormously throughout the years of my graduate studies, and especially my parents, whose life experiences became the source of inspiration for this project.    xiiDedication  To my parents, Boris and Tatiana  1Chapter 1: Introduction  This thesis analyses the impact of international oil markets on political mobilization in Russia and other petro-states. It contributes to two major theoretical debates. The first one concerns the “resource course,” a major and contentious debate on whether the resource abundance results in authoritarian politics. The thesis identifies the specific mechanisms of how fluctuation in oil prices affects political regimes and the choices made by the political actors. While most studies focus on the effects of energy rents on states and elites while societies are mainly treated as objects of state policy, this thesis looks much more closely at the societal level and links patterns of activism and passivity with theories of mobilization and resources.    The second theoretical debate that this dissertation contributes to is the new and growing body of literature on hybrid regimes, regime types, and the conditions for the regime change. Scholars have observed that democracy and authoritarianism are essentially “ideal type” political regimes rather than end points of regime transition, and that many political regimes fluctuate between these two poles (Diamond 2002, Hale 2005, Way 2005, Schedler 2006, Way 2009, Levitsky and Way 2010). The question remains what factors determine the regime outcomes in a particular setting. The dissertation proposes an argument which links oil rents to the possibility of political contestation in petro-states. It argues that the possibility of contestation (along with elites’ actions) helps to explain the regime type and the direction of the change in times of external economic shocks. More specifically, this thesis explains the causes of alternating periods of state-dominated stability and mass popular movements in Russia over several   2decades and the resulting regime outcomes. It does so by constructing a theoretically original link between the “resource curse” literature and the literature on mobilization. The key to my argument is that oil lubricates state society relations and allows for the social construction of the state as a provider and guarantor of public goods and social benefits. I argue that when states have abundant resources to distribute, societal groups have incentives to engage in rent-seeking rather than to build representative institutions that would make the state accountable. As I show below, oil wealth may motivate societal actors to voluntarily give up their bargaining power in exchange for certain benefits. When social norms and pre-existing features of social organization support this kind of a social contract, the society itself accepts and even invites state dominance. Political contestation declines and democracy deteriorates. Unfortunately, in all petro-states, except those where liberal democracy was established prior to the discovery of oil, these social construction mechanisms seem to point decisively in the authoritarian direction when the price of oil is high.   The argument will be explained in more detail below, but as a brief preview it can be summarized as follows: High energy prices increase the autonomy and the capacity of the state to pacify the population by expanding social spending, to repress and co-opt the opposition, and to undermine the potential support base for the opposition by selectively responding to specific social demands. Consequently, political opponents have little support and demand for their collective claim-making in society, are demobilized by ‘hard’ and (even more significantly) ‘soft’ coercion methods, and the regime tends toward authoritarianism. When energy prices and rents are low, the state loses its autonomy and is forced to bargain   3with societal forces; therefore the opportunities for popular mobilization expand, producing pressures towards democracy.  The remaining part of this chapter provides an overview of the state of the current literature on oil wealth and regime types and offers a justification of the proposed research question and approach. As the price of crude continues to fluctuate, the political economy of oil is playing an increasingly important role in shaping political regimes. Many countries that once seemed to be on a democratic course (e.g. Russia and Venezuela), with the increase in oil prices, have regressed and instead have demonstrated similar (although not identical) populist-authoritarian tendencies. However, the effect of mineral wealth on regime types is not completely understood. Some studies suggest there is a strong correlation between oil wealth and the lack of democracy (Ross 2001), while others find a less robust relationship (Herb 2005). Mineral exports appear to obstruct democracies, as they generate social classes, interest groups and patterns of collective actions that are linked directly to the state and benefit from oil rents, creating a social contract that is based on state redistribution of oil wealth and encouraging rent seeking between public and private interests (Karl 1997). Yet, oil rents may be expected to have pro-democratic effect under certain conditions; by allowing the elites to use oil rents to satisfy the poor democratic majority without imposing extensive taxation on the wealthy (Dunning 2008). Karl shows that oil booms have a profound effect on state evolution and institutions, expanding state jurisdiction while weakening its capacity (Karl 1997). Resource booms tend to prolong the survival of these regimes (Smith 2004). The effects of resource busts are more uncertain. Busts often trigger political instability or important political shifts (Karl 1997), but we hardly know what determines the direction of such change: whether one would expect a   4revolution as in Iran, political liberalization as in Mexico, military coup as in Nigeria, crisis of democracy as in Venezuela (Karl 1997) or dissolution of the regime as in the Soviet Union (Goldman 2008).  To help clarify these issues my dissertation makes a link between the petro-state and regime transitions literatures. There is a growing body of literature that explores the conditions under which regime transitions happen. In a move to find a better paradigm than the transitology approach that dominated the study of political regimes, scholars recently have repeatedly argued that while democracy and authoritarianism are the ideal type political regimes, neither of them should be considered an ultimate end point of regime transition in any given country. There is a continuum of political regimes between these two poles and many states tend to move in one direction or the other (Tilly 2007). Recent scholarly work focused on defining and classifying political regimes, including competitive authoritarian and hybrid regimes and the conditions under which they are stable or experience a regime type change (Diamond 2002; Hale 2005; Way 2005; Schedler 2006; Way 2009; Levitsky and Way 2010). How and why these transitions happen is an important question that affects the lives of millions of people that currently populate these countries.   While most studies focus on the political elites and state institutions, this dissertation proposes an argument which links oil rents to the possibility of political contestation in petro-regimes and suggests that this, along with the elites’ actions, is the key factor that helps to explain the regime type and the direction of the change in times of external economic shocks. Most authors do not explicitly include societal actors as agents in their models. For example Dunning (2008), by operationalizing democracy in narrow Schumpeterian terms (Schumpeter 1950), implies that once democratic institutions and elections are in place they provide   5meaningful means for public participation to influence the policy making and there are powerful groups representing public interests. However, these assumptions may not hold true in many petro-states. Unlike authoritarianism, democracy can be seen as a “radial” category (Collier and Mahon 1993; Collier and Levitsky 1997), in which most regimes would be assessed in comparison with the ideal type but are not likely to fully meet all the criteria. Thus, it is more meaningful to speak of the degree or quality of democracy, which depends on whether citizens have real and protected rights and freedoms that allow them to participate in the public life (Diamond and Morlino 2004). Citizens in a democracy must have a right, an opportunity, and a desire to voice their concerns, and these concerns should, at a minimum, be heard and acknowledged by the rulers. This, I argue, is the essential quality of the relations between a democratic state and the society. My position is in alignment with that of Charles Tilly, who suggests that democracy is a class of state-society relations that feature broad, equal, protected and mutually binding consultation between them (Tilly 2007). I argue that it is imperative to focus on state-society relations and the possibility of political contestation to explore the impact of resource wealth on the political regime. Therefore, this study is concerned with a possibility of political contestation in a particular socio-economic setting as well as with changes and fluctuations in patterns of political contestation associated with changes in external economic conditions. One of the key questions I seek to address is: why does political contention take the form of massive popular movements in some cases, but fails to sustain support for alternative views represented by the opposition in others? Although the external economic situation likely affects social dynamics in most states, petro-states are likely going to be different because the standard of living of their entire populations depends on one commodity with relatively   6stable production cost but highly volatile market price. My research suggests that a political economy model of political contestation explains changing state-society relations in petro-states, which result in alternating periods of state domination and rising political contestation. The external economic conditions of high oil prices coupled with internal socio-political features skew state-society relations, inhibit political contestation, and encourage authoritarianism. In very broad terms, this thesis argues that high oil prices inhibit opportunities for political contestation, while reduced oil rents tend to encourage public upheaval and increased contestation. This appears to be the main dynamic that affects the regime transitions in petro-states. Although the specific outcome will depend on the type of existing social structures and interest groups. In a sense oil dependence creates surprising similarities between regimes of different types and is likely to over-run other democratization drivers. Thus, regime type may become epiphenomenal in the presence of more powerful factors that are rooted in the economic, political and social structures that have developed alongside long-term, abundant energy rents. More specifically, fluctuation in oil prices alters a regime’s structural characteristics, including domestic economy, state autonomy, and vulnerability to internal and external pressure, as well as its coercive capacity. When oil prices are high, petro-states have overwhelming incentives to expand social spending in order to ensure obedience and calm potential political opponents, which appears to be an easy means of securing legitimacy.1 The state has more freedom to advance its policies without consulting with societal actors because it has the resources to suppress opponents. It is less vulnerable to societal demands                                                  1 Although my research is primarily concerned with the emergence of petro-authoritarian regimes, I expect that democratic states (e.g., Norway, arguably Alberta as part of Canada) may have somewhat similar patterns with variations in contestation   7because it is not solely dependent on taxes and does not require broad societal support for its policies.  However, this scenario would not be viable if the population demanded political participation and accountability. It is therefore perpetuated not only by the state, as social groups may also demand the redistribution of oil wealth and engage in rent-seeking practices instead of establishing formal institutions that represent interest groups.  Consequently, the social contract that emerges is based on the shared understanding of the role of the state as a redistributor of oil rents and guarantor of societal welfare. The pre-oil features of social organization and state-society relations ultimately determine the configuration of the resulting social contract.  When oil prices drop, the state can no longer meet the expectations associated with its legitimacy, and becomes more vulnerable to internal and external pressures. Moreover, retrenchment of social benefits is a notoriously difficult process which tends to mobilize affected social groups (Pierson 1994). Citizens become increasingly dissatisfied and the social contract may break down. Once gain, pre-existing social structures will affect the opportunities for mobilization and choices made by state and societal actors. In some cases, the regime’s loss of legitimacy may precipitate its disintegration. The goals of this study are twofold. First, it seeks to test the precise mechanisms on empirics through a detailed focus on the political contestation and opposition as opposed to the more macro-level arguments about the regime's characteristics. Second, I will explore the legacy factors that interact with oil revenues and shape the qualities of state-society relations, such as pre-existing social interest groups and norms. My level of analysis is choices made by state and societal actors within the framework imposed by the oil-based political   8economy. I explore how both sets of actors respond to the changing economic conditions and interact with each other. 1.1 Russia’s Regime Transitions  Before we progress on this journey, what is it exactly that I am trying to explain? The following section provides empirical facts, a brief description of the events in Russian history that are important to keep in mind for further development of the argument and identifies the puzzle that this dissertation seeks to explain.  After the collapse of the Soviet Union, Russia seemed to be transitioning to some form of a democracy. Indeed, after 70 years of the communist rule as early as 1992 elections for various level of government were in place, where representatives of various political parties competed for electoral office. Civil society began to emerge and new independent media were created. Similar processes were simultaneously taking place in other post-communist countries as well.  Did Russia become a democracy? By the electoral criterion, (Schumpeter 1950; Collier and Mahon 1993; O'Donnell 1994; Linz and Stepan 1996) Russia from 1992 to approximately 2001 could qualify as an imperfect but reasonably functioning democracy, and this could even be seen as true in recent years. Though it is more difficult to make this argument given the increased use of administrative resources to influence electoral outcomes. Not too long ago some observers argued that Russia "has changed from a communist dictatorship to a multiparty democracy in which officials are chosen in regular elections" and where "political leaders were being chosen in generally free – if flawed - elections, citizens   9could express their views without fear, and more than 700 had been registered" (Shleifer and Treisman 2004: 22).  If the criteria of a liberal democracy (Dahl 1966; Dahl 1971; Dahl 1989; Diamond 1999) are applied, the picture becomes more complex. Importantly, there appears to be a significant deterioration of liberal democratic freedoms in Russia in recent years. McFaul et al provide an assessment of Russia’s democracy (McFaul, Petrov et al. 2004: 4-7). They observe that while some criteria are met reasonably well, others present considerable challenges.   Diamond (1999) suggests a number of criteria for a polity to qualify as a liberal democracy. One of Diamond’s conditions is uncertain and inclusive elections, which was somewhat met in 1990s and early 2000s, albeit not without flaws. In 2003, Valerie Bunce stated: "Since independence, Russia has held five elections at the national level – and hundreds more at the local and regional levels. These elections have by and large been free and fair" (Bunce 2000: 182-3). But the situation is deteriorating. Freedom House’s score for electoral freedom for Russia had deteriorated from mid-range to almost the worst over the ten-year period from 1999 to 2009 (as well as the scores for the other two oil producing countries, Azerbaijan and Kazakhstan, while Georgia and Ukraine fluctuate around roughly the same level).2    McFaul et al find that generally speaking individuals and political groups that adhere to constitution were allowed to participate in elections, although some parties were not allowed to participate in the 1993 elections, one group was denied access to the ballot in the 1999                                                  2 Source: Freedom House, www.freedomhouse.org    10parliamentary elections and others have been removed from regional contests (McFaul, Petrov et al. 2004). In the 2008 presidential elections, however, one of the few real opposition figures, Mikhail Kasyanov, was disqualified from elections based on allegation that signatures that he submitted in his support were forged (Lowe and Balmforth 2008). Opposition leader Garry Kasparov alleged that his United Civil Front group was repeatedly turned down in its attempts to rent halls for a meeting to nominate him as its candidate. Boris Nemtsov from the Union of Right Forces Party received approval from the Central Electoral Commission on December 22, 2007 to gather signatures, but ended his campaign four days later stating that the government had predetermined who would be president. It is worth noting that none of the opposition candidates would be considered a real competition to pro-Putin’s candidate (Nichol 2008).  The more significant violation of this criterion has been the increasingly predictable electoral outcomes. Steven Fish observed that various means of ‘soft coercion’ were used by the regional elites to make voters cast their ballots in the way they favoured the pro-incumbent candidate. Some hard coercion was also used (Fish 2005). This trend has only increased over the years. The popular Russian President Vladimir Putin, who was in his second and constitutionally-limited final term in office, faced in 2007 the decision of either stepping down at the expiration of his second term or  abolishing constitutional term limits. With his announcement in April 2005 that he would not change the constitution, a period of political uncertainty set in that lasted until December 10, 2007, when Putin publically endorsed his First Deputy Prime Minister, Dmitriy Medvedev, as his choice to be the next president.  Both Putin and Medvedev reassured Russians that Putin’s course would continue and Russians received further assurances a few days later when Putin accepted Medvedev’s   11request to serve as prime minister under a Medvedev presidency. Both Putin and Medvedev juxtaposed the economic and political disorder of the 1990s to stability and prosperity, and called for further health, education, and other reforms through the year 2020.  The popularity of the president, who won reelection in 2004 with more that 70% of votes and whose rating remained above 60% throughout his term, determined the election results. Nevertheless, the governing elites did not take any chances with electoral outcomes and employed a great deal of administrative resource available to them to influence the outcomes. Putin’s nominee Medvedev refused debates with other candidates while receiving the overwhelming majority of the television coverage (Nichol 2008).   Diamond’s other criterion – constrained executive power - is also violated in Russia as the executive power is only weakly constrained. Similarly, in the Russian polity citizens do not have multiples channels for representation of their interests, mainly because pluralist institutions of interest intermediation are weak and mass-based interest groups are marginal: alternative source of information exist in theory but in practice are insignificant for the majority of the population. Individual and group liberties are only weakly protected and citizens, especially in Chechnya, can be unjustly detained, exiled or even tortured (McFaul, Petrov et al. 2004: 5).3 In a report, Amnesty International accused the Russian government of increasing restrictions on the freedom of expression and association and claimed that the government regards human rights groups as a threat to its authority (Amnesty International 2008).                                                  3 See also Report by Thomas Hammarberg, Commissioner for Human Rights of the Council of Europe, following his visit to the Russian Federation from 12 to 21 May 2011, 6 September 2011, retrieved from https://wcd.coe.int/ViewDoc.jsp?id=1825257 on January 10, 2013   12There is no question that Russia now has a very different regime from that of the Soviet Union; more open, with considerably more social and economic freedoms. It established institutions of an electoral democracy, such as the constitution, executive, the legislature and the electoral system. Most Russian people believe in the democratic process in that the government should be elected through a majority vote and there is no real threat to the constitutional order. Yet, Russia did not consolidate into a democracy, as the polity, it lacks democracy-supporting norms.  Therefore, Russia does not qualify as a liberal democracy, and even the application of the electoral criterion by itself is problematic. Then what kind of a regime is it? More recently a number of scholars returned to the study of undemocratic regimes. Competitive non-democratic regimes are a reasonably new phenomenon in the political world. Linz’s classic work “Totalitarian and Authoritarian Regimes” (Linz 2000), originally published in 1975, makes almost no mention of multi-party electoral competition within authoritarian regimes. Since then scholars have focused more on understanding hybrid regimes. For example, Diamond provides a typology of political regimes (Diamond 2002) and admits that defining and measuring the specific criteria to classify the regimes is not an easy task. He suggests that a number of indicators can be used to classify the regimes; Freedom House scores, percent of legislation seats by the ruling party, percent of votes won by the ruling party and the number of years the incumbent is in power. The Freedom House scores offer a quantitative basis for comparative analysis. The other three indicators define a reasonable framework for assessing the degree to which the ruling regime dominates the political landscape Diamond (2002) suggests the following categorization: • Electoral democracy, characterized by free and fair elections;   13• Ambiguous regimes, which resemble democracy and where some form of competition exists but it cannot be defined as free and fair; • Competitive authoritarianism, where opposition forces may sometimes challenge, weaken and occasionally even defeat the ruling party, but overall the playing field is heavily skewed in favor of the ruling regime; • Hegemonic authoritarianism, where no meaningful competition is possible; and • Politically closed regimes McFaul et al observe that while formal institutions of electoral democracy have been remarkably stable, the democratic content of those institutions has eroded. Although the meta-rules of the constitution have been preserved, the informal, smaller rules of the polity are changing; budget revenues were centralized and federal districts created without violation of the constitutions, Federal Council deformed and defanged, the new law allows Moscow to dismiss elected regional leaders and legislatures. The term that has been used to describe this kind of a political order in Russia is “managed democracy” (McFaul, Petrov et al. 2004).  For example, popular voting procedures increasingly resembled the former Soviet-type rubber stamp elections, when opposition had very little weight compared to the incumbents and public vote merely served to legitimize the ruling regime. Freedom House’s report notes: “While the Russian Constitution enshrines the principles of democracy, the trend line for practices has drifted in an authoritarian direction… The Russian political system seems stable in the short term, with no obvious extra-systemic opposition groups poised to make trouble… The Russian legislature remains a reliable handmaiden of the executive branch.”4                                                   4 Freedom House, Nations in Transit 2007, retrieved on October 2, 2009 from   http://www.freedomhouse.org/template.cfm?page=47&nit=434&year=2007   14Therefore, while in some countries democratic transitions of 1990s led to democratic consolidation, in Russia this trend slowly came to an end with the close of the millennium, when media and analysts started to acknowledge the signs of the reversal of political freedoms in Russia. Based on Diamond’s typology, Russia can be said to have degraded from an ambiguous regime under Yeltsin, to competitive authoritarianism under Putin, and is likely now entered the full or hegemonic authoritarianism (Levitsky and Way 2010).  Yet, all along this path of degradation of the political institutions there was strikingly negligible opposition or any other kind of popular discontent in Russia. As a result, the regime quite obviously had incentives and opportunities to further concentrate power and limit political freedoms. The society was not demanding a more liberal democratic order (Rose and Munro 2002).  Whereas some civil society groups have tried to resist the authoritarian creep, the majority of Russians demonstrated little interest or capacity to oppose Putin’s anti-liberal transformations (McFaul, Petrov et al. 2004).  This lack of viable opposition is particularly important and it is puzzling. Why did Russian opposition to the contemporary ruling regime seem unable to organize and sustain any publicly relevant effort, whereas the citizens of some other countries were able to resist authoritarian tendencies of their governments in the beginning of the new millennium? In some countries – such as Serbia, Georgia, and Ukraine – massive oppositional political movements independent of the state helped to alter the political course. In Kyrgyzstan, opposition movements emerged but did not succeed in changing the regime. However, in Russia, where during the first decade of the 21st century we observed increasing tendency of Putin's government to centralize and consolidate its power at the expense of the broader societal interest, the opposition was weak and had minimal popular support. The situation in   15Russia might have changed as a result of the 2008-9 economic crisis. We have observed a significant increase in popular protests across the country, driven at times by real dissatisfaction of the citizens with specific policies and actions of the government as well as the presidential elections in 2012. Nevertheless, at the time of writing, these protests did not produce any sustainable changes.  1.2 Explaining the Democratic Deficit The disintegration of the Soviet Union and the subsequent democratic transition had often been explained through the lens of regime-level theories of democratic transitions. This approach focused on political institutions and elites, and generally overlooked the importance of mass political contestation, social movements, protests, and so on. Acknowledging that democratization processes are contingent on negotiation among elites and potentially reversible, regime-level theories laid out certain expectations about the process of democratic transition (Karl and Schmitter 1991, Przeworski 1991, Bunce 2000). In general terms, if functioning democratic institutions are established through elite pacts or a regime overthrow, over time these institutions encourage gradual deepening and consolidation of democratic practices. Russia presents a difficult case for these theoretical approaches. Although formal democratic institutions remained in place ever since the Soviet Union collapsed almost 20 years ago, over time they lost their substantial importance, becoming shallower. This section will review some of the existing explanations of Russia’s democratic deficit. What are the factors that may inhibit the consolidation of Russian democracy and prevented democratic consolidation? A number of possible explanations were put forward in the literature to address Russia’s democratic deficit. In this section I will review explanations found in the literature and suggest an alternative take on the problem of failed democratic   16consolidation in Russia. I argue that these explanations are not sufficient because most analysts overlooked a very important part of the story, namely, that Russia is in essence a petro-state, and hence the political economy of the democratic transition is completely different from many other cases of new democracies. In times of high oil prices, the inflow of revenues contributed to the shifting balance between the state and the fledging civil society, altered the structure of interest groups, and ultimately halted the very possibility of existence of alternative sources of power and influence. Therefore, in the absence of a real challenge from a viable opposition, the state had been able to further consolidate its power and had no reason to bargain with the society over the new terms of the democratic political system. 1.2.1 Political Culture and Mass Attitudes: Trust and Tolerance  Some analysts suggest that such factors as public attitudes, including trust, tolerance and support for democracy should be considered in evaluating the chances for democratic transition. Not all agree whether these factors are causes or consequences of democracy, however these factors will be discussed below. Intolerance is a factor that is often considered as part of the explanation.  Even though Russians rate relatively highly in expression of intolerance, for example towards homosexuals or political enemies, so do other post-communist countries such as Poland and Romania, Lithuania and Latvia. Therefore, intolerance, although it may contribute to the democratic deficit, is not likely to be its cause (Fish 2005).  Mass attitudes, such as support for authoritarianism among the population, can also create obstacles for democratization. It appears, however, that Russians are not particularly supportive of authoritarianism and that a desire for a political closure does not explain   17Russia’s de-democratization. The evidence Fish finds in public opinion data derived from the World Value Surveys does not lead to a conclusion that the size of pro-authoritarian populations determines the possibility of democratization in Russia (Fish 2005). This observation is consistent with other studies that found Russia’s public opinion is not hostile to open politics (Colton and McFaul 2002). Theorists of democracy argue that trust and belief in the legitimacy of the regime are key among values and beliefs that should be accepted in a democratic society for it to be stable and effective (Almond and Verba 1963). Trust may be expected to serve as a catalyst of public support for democratic regimes (Easton 1965; Gibson 1993).  Analysts emphasize the importance of trust for acceptance of democratic values and ideas in the society as well as the rejection of undemocratic alternatives (Rose, Mishler et al. 1998). Trust promotes political involvement (Putnam 2000) through a mechanism of positive reinforcement. The literature emphasizes the role of interpersonal trust (Uslaner 2002; Putnam 1993), suggesting that face-to-face informal interactions among individuals in groups lead to interpersonal trust that is generalized to wider impersonal groups of citizens and helps to increase civic cooperation. Therefore, one possible explanation is that Russia’s democratic deficit is due to low level of trust among people due to legacies of totalitarian and post-totalitarian regimes, which instituted widespread peer surveillance and reporting of non-conforming individuals.  However, Fish finds that interpersonal trust does not seem to be a good predictor of Russia’s lack of democracy. Russia appears to be an underachiever of democracy given its level of interpersonal trust (Fish 2005: 109). That is, levels of interpersonal trust in Russia are not as low as would be expected given the current political environment and regime type. This may mean that although trust-related variables have some effect on the dependent   18variables, their effect is only secondary to those of other factors, particularly socio-economic status, confidence in one’s economic situation, and age. There is also a possibility that some of the variables discussed in this section may be intervening or dependent variables rather than independent variables. Low trust, for example, is often an effect rather than a cause of vertical dependency relationships, which would be one consequence of a state buying support with oil revenues. 1.2.2 Weak Civil Society  At the time when Russia began its democratic transition, it was lacking organized groups, actors, and institutions that could make democracy work in other democratizing countries in Latin America, Southern Europe and even post-communist East and Central Europe. Unlike many of these countries, Russia did not have democratic constitutions, political parties, or civil society organizations to revive. Howard observes “communist regimes not only sought to repress all forms of autonomous nonstate activity but also supplanted and subverted such activity by forcing their citizens to join and participate in mandatory, state-controlled organizations” (Howard 2002). The hostility of Stalin’s totalitarian regime towards any independent organization of centers of social activity eliminated them altogether or absorbed and subsumed them into the state and the Communist Party, so that all social exchange was controlled by the party-state. Even though this system atrophied after Stalin’s death, some analysts believe it still casts a shadow on social relations in Russia even today (McFaul, Petrov et al. 2004).   Howard notes relatively lower levels of organizational membership in post-communist countries, compared against both older democracies and post-authoritarian countries.   19Weakness of civil society ensures that many post-communist citizens lack the institutional representation and political “leverage” that could be provided by active voluntary organizations (Howard 2002). Even among organizations that did exist, Russian civil society did not do very well organizationally after the collapse of the Soviet Union either. Fish observed in 1994 that even those groups that spearheaded the democratic movement during communism's twilight have not fared well in the post-Soviet setting. Instead of evolving into more coherent and better-organized formations, many have weakened and fragmented, or even disappeared altogether. He attributes this failure to the decay, corruption, and disorganization of state institutions, as well as the broader socioeconomic and political legacies of totalitarian rule. The presence of a state structure, whose offices can be bought or co-opted by private interests, inhibits patterns of interest organization that are associated with a normal democratic civil society. One crucial function of the institutions of a civil society is to advance the interests of their members by applying pressure on the state. Therefore, the organizations of civil society must be independent from the state in order to function normally.  However, state institutions also must possess a degree of autonomy to encourage pluralist competition. In post-Soviet Russia, however state agencies were not constrained by laws, and continued to function according to previously established norms which allowed for advancement of private interests over collective benefits (Fish 1994). The key here is why civil society with time did not become more organized, strong, and visible, despite all efforts of transnational actors (Sundstrom 2005). The trend may even be the reverse – a more dependent civil society (Beznosova and Sundstrom 2009).  1.2.3 The Process of Transition   20 In addition to non-democratic legacies, the process of Russia’s transition was named as a factor in the instability of Russia’s democracy.  Democratization literature suggests that the mode of transition affects the kind of regime that emerges (Karl 1990) (Karl and Schmitter 1991).  The literature identifies pacted transitions as those that are most likely to produce liberal democracy.  Some analysts believe that pacted transitions occur when the power balance between the ancient regime and democratizing forces is relatively equal. In this sense “political democracy is produced by stalemate and dissensus rather than by prior unity and consensus” (O'Donnell and Schmitter 1986). In the case of post-communist transitions, one analyst observed “The more heterogeneous in objectives and the more evenly balanced in relative leverage are the participants in the bargaining process of constitutional design, the more likely is the outcome to be a democratic constitution” (Roeder 1998: 209). Moderate and evolutionary processes are expected to produce more stable outcomes than radical revolutionary processes: “Democracy cannot be dictated; it emerges from bargaining” (Przeworski 1991). Although these dynamics might have been somewhat different in the “fourth wave” of transitions. In many circumstances, democracies emerge out of mutual fear among opponents rather than a deliberate outcome of democratic political arrangements (McFaul, Petrov et al. 2004). According to McFaul, many post-communist democracies emerged where democrats had a decisive advantage over pro-authoritarian forces (McFaul 2002). Russia made a transition from communist regime by a process that did not facilitate the emergence of democratic institutions. Cooperative bargaining over a long period of time did not take place among relatively equal parties. Instead, the transition was initiated from above by Gorbachev’s liberalization policies, which eventually gave raise to new   21independent political actors with more radical political agendas. The transitional agreement was never reached among the opposing forces, and the Soviet Union collapsed soon after the unsuccessful coup attempt in 1991 (McFaul, Petrov et al. 2004).  Yeltsin chose to seize the opportunity to advance his agenda quickly instead of negotiating and designing new political institutions. The key among his objectives was destroying the remnants of the Soviet Union (McFaul, Petrov et al. 2004).  It is reasonable to assume that Yeltsin was trying to use a window of opportunity presented to him by the lack of real organized opponents after the main contender – the Soviet state – vanished.  McFaul et al, observe that opposition to Yeltsin’s policies, particularly his economic agenda, grew over time, resulting in a constitutional crisis between the President and the Parliament. The crisis ended tragically in a military confrontation in 1993; however, Yeltsin once again prevailed in the standoff and thus could again dictate the rules of the game. Essentially, despite the declared goals of promoting democracy, Yeltsin chose to act undemocratically in the face of challenges from the opposition, and succeeded in doing so (Beznosova, 2013). McFaul et al observe that concentration of power in the hands of the president did not result from a Russian cultural or historical predisposition to strong leaders. The office of the president with considerable powers assigned to it and little checks and balances emerged directly from the transition process. A different kind of transition might have produced a difference balance of power and hence different outcomes (McFaul, Petrov et al. 2004).  The process of transition, however, appear to be pre-determined by the same feature of the Russian socio-political landscape that was discussed in the previous section -- the lack of organized independent and autonomous groups with board public support capable to carry out negotiation and bargaining. When previous social structures vanished abruptly, groups   22that could aggregate and represent various interests and possess organizational capacity to advance an independent agenda through a process of reasonably formal and consistent negotiation hardly existed. Moreover, those social forces that were organized enough to have an agenda and organizational capacity unfortunately were not interested in designing a new democratic order. 1.2.4 Organized Economic Interests  Another barrier to democratic development in Russia was the structure of organized interests in the economy that emerged in response to Russia’s transition path from communist economy to capitalism. With the collapse of the Soviet Union, people and organizations that benefited from the Soviet economy did not cease to exist. Moreover, these groups organized to defend their interest: The directors of Soviet enterprises together with the trade unions organized during the soviet era moved aggressively to defend their property rights at the enterprise level. This coalition proved to be very effective during the first years of the post-Soviet period (Shleifer and Treisman 2000). Steven Solnick describes the Soviet Union collapse as the situation when middle bureaucrats were looking to steal state assets if they had access to them, particularly lootable ones. Because there were quite a few natural resources to steal it determined the type of transition whereby insiders were trying to capture the state assets rather that bargaining openly for more formal rules of sharing non-lootable assets. New property owners highly depended on the state (Solnick 1998). Later on, the new groups of powerful economic actors, the oligarchs, emerged from those with strong connections within the government as a result of the insider privatization (Hoffman 2001; McFaul, Petrov et al. 2004).    23In fact, these groups appear to be among the few relatively organized interests on the early post-soviet social landscape. No middle class emerged out of the initial Russian transition and only slowly started to develop in the 2000s. I will discuss the particularities of Russian middle class in the following chapters, but for now suffice it to say  the converge around a pro-democratic political agenda was as it would be expected. Similarly, Russian independent labour movement also failed to develop even though spontaneous strikes were common. Therefore, none of the preconditions for successful democratization seem to have existed (Moore 1966; Rueschemeyer, Huber et al. 1992). This social structure impeded the development of civil society as the middle class usually provides the bulk of funding and participation in the independent civic activities.  And because the oligarchs are highly dependent on the state they remained loyal to those in power and supported the incumbents whenever necessary (McFaul, Petrov et al. 2004).  1.2.5 Reemergence of the State  Yet another factor in Russia’s de-democratization may be the reemergence of the state as a major player in Russian politics. To be sure, a functioning state is a necessary precondition of democracy, however the sheer power of the Russian state has had negative consequences for democratic development.  Any student of the Soviet Union is well familiar with the fact that the Soviet state was perhaps one of the mightiest states in the world from the point of view of access to material and human resources. Scholars defined state strength as the ability of state to assert control over political outcomes on its territory (Mann 1984; Ikenberry 1986), in terms of extracting resources (Migdal 1987), persuading private actors to follow state policies and changing the economic structure itself (Krasner 1978).  In that sense, the Soviet state would appear as a   24strong state. Unconstrained by societal demands, Soviet leaders were in a position to distribute resources as they saw fit. Despite being inefficient and corrupt, the state dominated every aspect of life within the Soviet Union and had significant power internationally. In the Soviet Union, the reality of life was such that to have anything done the state was the only means available.  However, Ikenberry notes that equating state capacity with its ability to intervene and assert control over economy and society may be misleading. Indeed, he observes that state capacity may have more to do with flexibility of state actions and the ability of the government to provide itself with the broadest array of options in the face of the next socioeconomic crisis (Ikenberry 1986). Despite its decision-making autonomy and material strength, the Soviet state proved to have little capacity for adaptation and little resilience in the face of change.  Deutsch (1954) notes that the structural features of the totalitarian system itself created inherent contradictions and tensions that inhibited its ability to adapt and change. I will return to this discussion in more detail in Chapter 3. After the Soviet Union disintegrated, the new state appeared weak and broken, incapable of economic policy making and enforcement, unable to preserve law and order, and lacking power to deal with its ethnic movements (McFaul, Petrov et al. 2004). When the state is weak, numerous other centers of authority try to seize the opportunity to assume greater political and economic autonomy (Migdal 1988). Internal fractions and lack of institutional coherence undermined the state’s autonomy as an independent actor.   After Putin came to power he made it a priority to strengthen state authority and centralize power, strengthening the central state. Some progress has been made in improving institutional coherence and clarity with regards to the state’s authority. At the same time, the   25least reformed old structures of the government, such as the FSB, the Ministry of Internal Affairs and the Ministry of Defense, have assumed a greater role in political outcomes, through influence of state decision making or accepting senior positions in government (McFaul, Petrov et al. 2004).  An even more serious impediment is that the strengthening of the state has not been accompanied by the similar strengthening of the civil society.  Therefore, the power balance was skewed heavily towards the state. In addition, beginning 1999 the economic growth had given the state a new flow of income that officials in power could deploy. Under Putin’s presidency, the state began to play a direct role in influencing electoral outcomes, creating parties, organizing civil society, and obtaining control over the media outlets. Therefore, the state had re-penetrated the areas of social activity only recently reclaimed by the society, thus reversing the democratic development (McFaul, Petrov et al. 2004). I will pick up on the discussion of the state strength, autonomy and capacity in the following chapters. As a preview, it is important to keep in mind that the state, strong or weak, does not exist in isolation from society and its very strength is only relative and may be a socially constructed concept.   1.2.6 Agency: Leadership of Great Men   In addition to structural factors, some authors emphasize the role of individual actions of leaders in the Russian transition.  At the uncertain point of transition, individuals can play an instrumental role in determining the nature of the political institutions of the regime. In   26uncertain institutional settings the leaders can face fewer constraints and therefore the causal role of their choices is greater (O'Donnell and Schmitter 1986; McFaul, Petrov et al. 2004).  The question of agency vs. structural factors is a complex one and often impossible to resolve. However, any research project that looks at regimes in transition will have to address it. Gorbachev’s policies of perestroika and glastnost’ created an opening for emergence of alternative interests and centers of power that eventually weakened the regime. Yet these decisions were not taken voluntarily, as at the time the Soviet Union faced a severe economic crisis that demanded that serious measures are taken to revive the failing economy and the state. This crisis in no small part was triggered by the sharp decline in oil revenues for the Soviet Union due to unfavourable economic conditions (Gaidar 2007).   Yeltsin’s leadership style, norms and policy preferences may have had huge consequences for the trajectory of Russian democracy in the 1990s. As we will see in Chapter 5, his legacies include shortcomings as well as positive contributions. Some analysts suggest that the impact of Putin’s leadership, with his relative youth, energy and popularity, could be even more significant. McFaul et al., suggest that another individual in Kremlin who had a similar capacity to influence the regime trajectory at that time could have pushed Russia in a more democratic direction (McFaul, Petrov et al. 2004). This may be true; however one has to keep in mind that Putin’s government faced generally significantly more favourable situation in the world commodity markets, which offered them a much larger budget and greater discretion in spending. Treisman offers an interesting counterfactual analysis that seeks to illuminate the reasons for Putin’s popularity compared to his predecessor. Using time-series data, he examined the determinants of presidential approval in Russia since 1991, a period in which   27leaders’ ratings swung between extremes. He finds that Yeltsin's and Putin's ratings were, in fact, closely linked to public perceptions of economic performance, which, in turn, reflected objective economic indicators. Although media manipulation, wars, terrorist attacks and other events also mattered, Putin's unprecedented popularity and the decline in Yeltsin's are well explained by the contrasting economic circumstances over which each presided (Treisman 2011). 1.3 Some Preliminary Conclusions: What Explains Russia’s Regime Transitions? In the previous section I intended to demonstrate that existing explanations, even though illuminating, have some important shortcomings and there are gaps that they do not adequately explain. So what is the problem with these accounts and how should we approach the study of Russia’s regime transitions? Some common themes emerge out of the discussion above.  First of all, it appears that mass attitudes, such as trust and tolerance, do not seem to be a critical obstacle to democratization as people do not oppose democracy and generally speaking do not hate each other. This is good news for Russia.  It also appears that Russian people seem to pay great attention to their satisfaction with the regime performance and evaluation of their economic situation. This is perhaps to be expected, particularly in a country that had suffered a great deal of hardship in the later days of the Soviet Union and during the chaotic democratic transition in the early 1990s.  Another theme that emerged is a significant and persistent problem with autonomous and independent civic association. Groups independent of the state and capable of effective aggregation and representation of independent societal interests hardly existed during the   28Soviet era or thereafter. The picture that emerges resembles more of a synergistic, symbiotic interrelationship between the state and society, blurring the boundaries of public and private realms (Wedel 2001). Cooptation and corruption were and sadly continue to be the norm of interaction between the state and society. The only organized or capable social groups were those with strong connections to and vested interests in the state and its economic assets. Not surprisingly, such groups are not interested in advancing any independent position but rather seeking insider privileges.  This absence of organized groups that could participate in democratic bargaining as equal parties and prevalence of those with insider connections and vested interests in the existing economic structures predetermined the features of the emerging regime. Lack of organized civil society, the type of democratic transition and the resulting post-communist social order seem to be caused by the peculiar social organization that developed in Russia over a long period.  To sum up, this discussion suggests that alternative explanations in the previous section are not sufficient to account for the changing patterns of state domination and societal submission alternated with periods of social upheaval that can ultimately transform into heightened political contestation that we observed in the Soviet Union and Russia. For the most part, these explanations generate relatively static expectations that are not always in line with what we are observing. Most of the explanations offered above are at best symptoms of a much deeper disease that influences formation of social groups and relations between state and society. The changing patterns in state domination versus heightened political contestation have to be explained within a different explanatory framework.    29Elite level macro-structural theories are solid and contribute a great deal to our understanding of regime transitions. There are important contingencies and indeterminacies involved in this process. However, it is important to understand larger structural and contextual factors that shape the playing field for the actors. Indeed, the influence of economic development, inequality and economic interests on political regimes has been explored in comparative politics (Moore 1966; Rueschemeyer, Huber et al. 1992). I argue that the missing variable is the possibility for political contestation and how external economic conditions affect it over time. The key to the explanation is in state-society relations and the role of political contestation in them. Until recently, scholars studying regime transitions overlooked the importance of the masses and political contestation. However, disregarding the importance of mass participation distorts the analysis. Kopecky argues that to understand the post-communist transitions one should include contentious politics along with more traditional civil society approaches (Kopecky 2003). Hale points out that in competitive authoritarian and hybrid regimes massive street rallies are too costly to suppress, therefore public opinion plays a critical role in tipping the power balance and has an ability to topple the unpopular regime (Hale 2005). Tilly notes that democracy or autocracy are not the end points of regime transitions. Instead, a great number of political systems fluctuate along this continuum. What determines the type of regime is the kind of relationship that exists between the state and the citizens and democratization and de-democratizations are merely the changes in those relationships. In Tilly’s view, democracy is a subset of political regimes, in which the society is able to exercise effective control over the state (through mutually binding consultation) (Tilly 2007). Therefore, contestation and control are the two aspects of state-society   30relations. A higher level of contestation requires a more sophisticated political system to handle it, such as democracy. Where no possibility of contestation exists a democracy is not likely to be sustainable. Chapter 2 discusses the variable of political contestation and operationalizes it. This dissertation explores the economic factors impacting political regimes and regime transitions and suggests that external economic and political environments impact political contestation. More specifically, changes in international commodity markets modify state-society relations in oil-exporting states when there is room for re-interpretation of the social contract and the state legitimacy. At times, these changes encourage political upheaval while in other periods, on the contrary, they tend to discourage collective action. Analysts observed that the root cause of Russia’s misfortune as a democracy might be attributed to the fact that it is a petro-state. In his 2005 study of Russian regime dynamics, Fish highlights the key role of natural resources in determining the inability to Russia to democratize. He notes that natural resources play a significant role in Russia hindered political opening (2005: 138). Freedom House’s Nations in Transit report from 2007 observed the deterioration of democracies in most of the post-soviet world but attributed the most severe cases to the natural resource abundance. However, the report also holds that energy resources are a factor rather than a cause. Energy riches propelled authoritarian tendencies and enabled elites to consolidate their rule at the expense of independent voices.5 Oil in itself is neither good nor bad for any political regime. Indeed, the question is whether and how natural resources are hindering democratic development.                                                   5 Russia, Kazakhstan, Azerbaijan Criticized For Suppressing Democracy. June 23, 2008. Radio Free Europe/Radio Liberty. http://www.rferl.org/content/human_rights_Freedom_House/1144677.html   31Therefore, the political economy of natural resource rent seems to be the key in determining the nature of state society relations and power balance between the state and society. When oil prices are high, these changes in state society relations lean to the reduced political contestation. Consequently, state assumes dominating role. When oil rents are not significant, we may expect the heightened political contestation. I argue that pre-oil norms and social structures interact with the impact of oil wealth on state and societal preferences and as a result state-society relations change. The following Figure 1-1 illustrates the causal chain of my argument:   Figure 1-1    Causal chain of the argument  The elements of this causal mechanism can be directly observed and measured. The key observation is that when oil rents are high, economic forces interact with previous societal legacies and may create incentives for the state to throw money at social problems instead of Does the state have access to oil rents? State-society relations (social contract) inhibit political contestation State-society relations (social contract) allow for political contestation Pre-existing norms and interest group State domination over society  Societal challenges to the state  YesNo  32pursuing more painful reforms and for societal actors to push for redistribution and/or enter into preferential relationships with the state to obtain a larger share of natural resource wealth. This is true for both the late Soviet period and the period from 1999 onward. In the absence of high natural resources rents economic factors are no longer creating incentives for the societal actors to enter preferential relationships with the state. Rather, social actors may seek to pursue independent collective interests and thus possibly create alternative centers of power of viable political alternatives. Therefore we can observe increased contestation. 1.4 Russia as a Case Study of Regime Transitions in the Petro-State  As mentioned above, a key explanatory factor in this dissertation is the fact that Russia is a major exporter of oil and natural