Center Kudrin explained the failure of reforms in Russia

The previous economic strategy, developed in Russia, have failed. The reasons are administrative barriers, differences of experts and the opposition of lobbyists, says the CSR, who himself is developing a new program

Implementation of economic development strategies that were developed and adopted in Russia in previous years, was prevented by administrative barriers, lobbyists, lack of knowledge and vague powers. This is the conclusion in its report “Analysis of factors in implementation of strategic planning documents top-level” (there RBC) comes to the Center for strategic research (CSR), headed by former Finance Minister Alexei Kudrin. CSR now he is preparing the country development strategy 2018-2024 years, to submit its plan in may.

“Declaration of intent”

The experts analyzed several documents: the Strategy-2020, the may decrees of President Vladimir Putin and priority national projects. Strategy 2020 was a “Declaration of intent”, said Alexey Kudrin (his words provided in the study, but he is among the authors of the report not included), and it happened “because of the lack of involvement of authorities” and “excessive concentration on the economic agenda.” CSR, according to him, is taken into account — have involved the leadership of the ministries and heads of regions and paid attention to institutional issues such as the judicial system.

Strategy 2020 was written in 2011, its main developers were the Higher school of Economics (HSE) and the Russian Academy of national economy and public administration (Ranepa). However, on the official level, the document is not consolidated, but part of the theses “were reflected in the normative legal acts, orders and instructions of the President and the government”, says the report of the Centre. The average level of implementation of the measures described in the Strategy, only 29%, concludes the CSR on the basis of 75 questionnaires from the experts of the thematic areas of the strategy that put about 2 thousand evaluations. That is, each proposed measure on average performed less than a third. Even those that have implemented completely, in most cases, was technical and does not require changes to the institutional environment and the mechanisms of the state apparatus, experts write.

The authors of the strategy, which questioned the CSR also noted “a high level simulation or formal implementation of measures and instructions”. It almost made the proposals of the authors of the CSR related chapters on the development of public institutions, real federalism and local self-government, a new model of growth and macroeconomic stability. However, experts found a few items that the authorities managed to implement fully. Among them — the adoption of a new budget rule, government borrowing in national currency (help to avoid currency risks), the flexibility of the ruble, maintaining the key rate at a high level, changes in the pension system (including a reduced rate of contributions to the pension Fund from 26% to 22%), the ban on Smoking in public places, etc. However such activities as reduction of the public sector, adaptation of budget expenditures to modernize, preventing “brain drain” and improving tax administration, or not met at all “are implemented in the opposite direction.”

The ideologues and lobbyists

The implementation of the Strategy-2020 has prevented a few major factors. First, we are talking about “ideological differences” in the expert community, the report said. The authors cite the example program that prepares Stolypin club under the guidance of the business Ombudsman Boris Titov, and presidential adviser Sergei Glazyev. On the one hand, it promotes discussion, but disagreements often can be not technical, but ideological in nature. So, the Stolypin club insists on a manual solution to many problems, but “the whole economy can not manually work,” said one of the respondents of the CSR.

The program differs from the same CSR Strategy 2020 or the may decrees — that it “does not look uncontested,” says chief economist at Alfa Bank Natalia Orlova. In addition to the Stolypin club to propose and the Ministry may, where the head was replaced (the place Alexei Ulyukayev in November, he took the former Deputy Minister of Finance Maxim Oreshkin), she said.

The second factor is administrative barriers: the state apparatus loaded with koordiniruyutsya of the Ministry of labor, incentives to develop was weak due to high oil prices, the report said. The third reason is the opposition of lobbyists who are not guided by ideology, and “act pragmatically”. Some experts, says the CSR, I suppose, what groups can be the main reason for the failure of the strategy of CSR. To combat this it would be “through effective channels for public participation, the institutions of direct and representative democracy,” the authors write.

Orders and projects are not “hit the spot”

CSR also asked respondents how they evaluate the may decrees of President Vladimir Putin (218 orders that need to be implemented in 2020). Not all of them “hit the spot”, says the report, such as increasing the salaries of education and health. Many considered this measure important because of the backlog of public sector wages from salaries in the private sector, but it led to the imbalance of regional budgets and staff reductions, indicated in the document. This decree has also blurred the responsibility of the Executive authorities, from-for what “is still unclear what degree of responsibility for its implementation lies with the governors and at the Federal center.” Some decrees even though he was conceptually correct, “but they have not been fulfilled or performed simulation”.

Another analyzed the program of priority national projects. In 2005, four papers presented to Vladimir Putin — the national project “Education”, “Healthcare”, “Housing” and “Development of agriculture”. All of them, rather, “was focused not on institutional change, and to Finance the investment and operating costs associated with supporting the development of relevant industries,” says the CSR. Reform plans in the draft is not laid, so they generally been effective, the report said. However, some respondents have questions for the selection of priority areas — they do not change the institutional environment, moreover, in their number, for example, was not included small business, science and the environment. In addition, the allocated money is often spent inefficiently, the report says.

Instability in the economy “now generates a request for change, the government starts wanting to set strategic tasks and to solve them,” said RBC President CSR Pavel Kadochnikov. Need “tough decisions”, he said, and the demand for an adequate strategy set by the business and society. The context of the world economy is changing, and there is the temptation to take a pause in reforms, to wait for high oil prices and improved relations with the West that will have the economy to support the effect of objection to Orlov. The demand for reform in Russia is traditionally associated with the price of oil and the situation with the budget, said earlier Bank of America Merrill Lynch, which predicts a recovery in prices to $60 per barrel.

How to implement plans

Described CSR barriers “have not disappeared” indicates Orlova of Alfa Bank. The center provides several ways to improve strategic planning. Analysts point out that positions of power should be coordinated, otherwise the resulting document will be either the result of a compromise in which no one was particularly interested or “a figment of bureaucratic arm-twisting”. Due to interdepartmental conflicts, many issues have to be taken on the level of the first persons that leads to the need for manual control.

One more thing — each entity responsible for a particular measure must be appropriate resources and powers. So, the debate between the Finance Ministry and other ministries, primarily the Ministry of economic development, led to the fact that the projects were not executed. “The Prime Minister’s role in the coordination of priorities was inadequate, and in the end, a situation when there is no development of a consolidated position and overall contents of the measures and the division of money and the use of administrative resources and hardware the weight of the individual ministries for access to budget funds,” reads the report.

To solve this problem, the CSR offers to form a project team from different ministries or even to create a “new administeri center of reform”. However, its existence should not lead to new conflicts government agencies, so he should be authorized only in those areas where the “manual control is the only possible way to harmonize positions.” In addition, the CSR insisted on the application of sanctions for failure to comply with the measures from the program and “understated attitude to any KPI as a method of control of execution of decisions”.

You can create a body that would develop a compromise solution, Orlov agrees, but the problem is that “no one except the Prime Minister and the President the final decision.” To administerthe center could be appealing if there is a conflict within the government, but there are doubts that he will remain unbiased, she adds. The question is, most likely, will still be subject to the level of the first persons who have to make decisions, concludes Orlov.

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