Institutional basis of communist regimes  Communist party dominance  No party competition  Interest groups controlled by communist party  Communist party control over public policy  Economy – state-owned enterprises, central planning  Lack of efficiency, productivity, innovation  Few incentives for firms, workers, managers to be more efficient; to promote intensive growth vs. extensive growth

Russia – Politics  Political cleavages  Advocates of markets vs. state economy  Political elites vs. oligarchs  Regional leaders vs. central government  Russians vs. Chechens  Economic policy  “Shock therapy” – transition to market economy as quickly as possible Prices set by markets; privatization of state-owned firms; reducing state expenditures; foreign investment  Replaced by new accommodation; increasing state control over key sectors; markets  Conservative government under Putin (United Russia Party)  Market economy, promotion of middle class, nationalism, order and stability  Fragmented interest groups (both labor and business)  “Competitive authoritarian regime”

Russia – Policies  Economy under Putin  Markets plus significant state role in key industries (state-owned, state-directed industries in oil and gas)  Redistribution of income from poor to rich Reduction in social spending Reduction in taxes Large numbers living in poverty

Russia – Institutions  Constitution (1993) (Figure 10.1, 310)  Strong president Broad appointment powers (including premier), rule by decree, commander-in-chief  Premier Manage business of government  Bicameral legislature Lower house – State Duma (returned by PR, as of 2007); more powerful body; but still weak relative to executive Upper house – Federation Council (appointed by governors and regional legislatures)  Judiciary Not a real check on executive power; widespread corruption  Bureaucracy Ineffective; corrupt  Russia’s future?

China – Politics  Chinese Communist Party (CCP) the dominant institution; it holds a monopoly on political power  Cleavages resulting from economic reforms  Social classes Small capitalist class (highly successful business people) Middle class (small entrepreneurs, managers, white collar professionals) Urban poor Growing income inequality Challenge for CCP: to maintain support across growing divide  Urban vs. rural Increasing divide in income/wealth between urban and rural residents, as well as access to social spending, health care, etc.  CCP’s legitimacy  Socialism  economic development  Mix of co-optation and coercion  Elite-based, exclusivist ruling coalition (central and provincial party and government officials, PLA officers, wealthy capitalists, urban middle class)

China – Policies  “Socialism with Chinese characteristics”  Markets set prices; large role for privately owned firms  Small and medium-sized state-owned firms unable to function privatized  Competitive in world markets  Socialist (large state-owned enterprises, ownership of farm land)  Outcome  High growth rates; reduction in numbers in poverty  Rising unemployment, income inequality, growth in urban areas  State attempting to address dark side of markets  Problems: insufficient social welfare spending, deterioration in health care, bias toward urban areas; declining rate of poverty reduction  New policies: lower agricultural taxes; increased access to health care; tuition reductions; increased infrastructure spending

China – Institutions  Dominance by CCP (Figure 10.2, 327)  Power resides in “paramount leader” and elite party officials  All major political decisions made in Politburo and Standing Committee  Governmental institutions are administrative arm of CCP  No independent judiciary  China’s future?

Russia and China Compared  Table 10.1, 332  Russia considerably higher per capita income  Physical needs and informed decisions  Russia’s record better overall, but China catching up  Safety  China’s record is better  Civil and political rights  Nearly equally bad