Russian Privitization

Russian Privatization

As with most major changes, the liberalization of the Russian economy has suffered setbacks in its continued course toward privatization. It is worthwhile to note that the path toward capitalism from a controlled economy has been rapid given the size of the economy and accompanying political and legal changes. This paper discusses the changes in the legal, political, and economic systems that culminated in the privatization of the oil industry and the subsequent Khodorkovsky and Yukos scandals. While similar case studies can be conducted in other industries or companies within Russia, Yukos provides a well documented and commentated upon.

The Development of Democracy in Russia

While the transformation from the communist system to a capital system, to couch the change in economic terms, was largely bloodless. However, the changes that took place to create the communist system was not so humane. The transformation from autocratic to democratic, when viewed from the perspective of Russia's origins, is awesome.

Russia's Political Origins

Until the early twentieth century Russians had very little experience of parliamentary institutions, having lived under a more or less autocratic monarchy for most of their history. Medieval Novgorod had a citizens' assembly and "assemblies of the lands" were occasionally summoned until the seventeenth century. The last of these brought the "time of troubles" to a close by selecting Mikhail Romanov to be tsar, but his successors in the Romanov dynasty showed little interest in consulting the wider populace thereafter. The development of a multi-ethnic and often unruly Russian Empire during the eighteenth and nineteenth centuries further reinforced the habit of autocracy.

After the limited reforms of the 1860's a system of elected regional assemblies with a very limited franchise was introduced to supervise schools and other local institutions in the mainly Russian-speaking parts of the Empire. Liberal intellectuals hoped that the reforms of the 1860s and 1870s might be crowned by the introduction of a constitution with democratic features, but the growth of radical opposition to the tsarist system and the assassination of Alexander II in 1881 led instead to a period of even more autocratic rule by his son, Alexander III.

In any case, the parliamentary institutions of Western Europe tended to be held in low esteem in Russia by intellectuals of both the right and left and few believed that anything similar could or should be introduced in the Russian Empire. One of Alexander III's leading ministers, Konstantin Pobedonostsev, described parliaments in general as "the great lie of our times".

The Russian Constitution of 1905

A constitutional parliament was introduced for the first time in Russia in 1905 in response to the widespread unrest which followed the defeat of Russia in its brief war with Japan. Like the lower chamber created under the 1993 constitution, it was known as the Duma, which in Russian suggests a body devoted to reflection and advice, and was conceived by reformist ministers as a modernizing institution in the framework of a constitutionally limited monarchy. The first and second Dumas were dissolved because it seemed impossible for them to find common ground with the tsar and his advisors. The third Duma, elected in 1907, had been manipulated to produce a reliable "moderate" majority, but again the constitutional experiment failed as the tsar became impatient with having to seek the views of parliament and even