Poverty and Social Exclusion in the New Russia

Nataliya Tikhonova, Nick Manning

• Publisher: Routledge
• Year: 2017
• eBook ISBN: 9781351909617
• Edition: 1
• Topic: Sozialwissenschaften
• Subtopic: Russische Geschichte

Presenting the findings of a major research project funded by the EU (INTAS), this key volume investigates the regional, ethnic and socio-cultural aspects of poverty and social exclusion in Russia in recent years. In-depth household interviews and survey data allowed teams from the UK, Denmark and Russia to compare different societies and communities in Russia across several different themes: the definition of poverty in different regional, ethnic and socio-cultural settings; the reproduction and formation of poverty subcultures in different societies and communities; the ethnic/national and political values of poor people; the readiness of poor people for social protest; and a comparison of Russia with other EU countries. Offering a wealth of original data collected following a period of rapid impoverishment of the Russian population, the study considers the challenge this presents to Western European models of poverty and social exclusion.

Part I
Background

1 Russia in Context

Nick Manning and Nataliya Tikhonova

Trying isn't torture, asking isn't misfortune

One of the classic questions that the collapse of State socialism has posed for the understanding of macro-change in European societies is that of how the societies of Central and Eastern Europe have diverged in their development since 1990, and why. So far as social policy is concerned there have been three phases. Initially there were some rapidly implemented policies put in place by the new governments in the anticipation of the social consequences of the emergence of market mechanisms in the post-communist era. Quintessential amongst these was the issue of the expected explosion of unemployment, and the related loss of income that this would mean for families who had traditionally been supported by large State subsidies to consumption, with few accumulated savings to rely on. Economists had argued that there was a large overhang of underemployed people who would be released quickly by enterprises facing the chill winds of the global economic marketplace (Ellman, 1989; Standing, 1991). New schemes for fairly generous unemployment benefits were enacted in most countries, including Russia. Otherwise little social policy changed prior to the round of new elections that had taken place by the early 1990s.

With the new governments, most of which were characterised more by their distance from the communist parties than internal coherence or social rootedness, new social policy debates began to emerge in phase two, Here, a more complex picture of change emerges. First, unemployment benefits were cut back, as an unsustainable expense. An extended debate emerged about what actually was developing in the region's labour markets, especially marked in relation to Russia, where predictions ranged from dangerous collapse, to sustained boom (Manning, Shkaratan, and Tikhonova, 2000). Second the key policy actors who were involved in thinking about policy changes were involved in rather different policy networks. For some, such as the Visegrad countries (named after the royal summit of the Kings of Poland, Bohemia and Hungary at the Castle of Visegrad in 1335, and emulated in a meeting of the Heads of State in 1991), the prospect of emulating the EU, both in terms of living standards, and political and economic security, led to discussions about devising either social democratic or corporatist welfare systems. For others, and in particular Russia, the heavy hand of the International Monetary Fund made loans and credits dependent on following a liberal ideology in which an American style residual Welfare State was paramount. In the event the collapse of industrial production in the Russian case, together with a chaotic transition to the political management of routine domestic mechanisms such as the collection of taxes with which to fund social expenditures, meant that residualism in welfare was inevitable.

The third phase was marked m 1998 by two key turning points - the return of five Central European countries to levels of economic production that they had enjoyed in 1989, and, in marked contrast, the further lurching collapse of the Russian currency, with a related and sudden jump in rates of poverty, inequality, inflation and unemployment. Divergence was here revealed in all its clarity. However there are further divergences concealed beneath this major bifurcation. Within Russia regional inequality has grown to the point at which the most advantaged areas, such as Moscow and its environs, have per capita incomes four or five times those of the least advantaged areas, such as the Northern Caucasus, with very contrasting patterns of unemployment, poverty and social exclusion. Within Central Europe we find that for example Poland's spectacular economic recovery to 129 per cent of 1989 GDP contrasts with the Czech Republic's more modest 106 per cent. The cost is that Polish inequality is far higher (at a Gini of 0.34 compared to 0.24, and with double the rate of Czech unemployment) (2001 figures from UNICEF, 2003, pp.89-92).

To what extent are these patterns evidence of diversity from a common origin, or path dependency from diverse origins? Path dependency has been the subject of wide-ranging multi-disciplinary reflection (Goldstone, 1998), and is generally used to explain stability in systems where relatively unique initial conditions fix developments despite changing circumstances. The 19^th Century 'querty' keyboard or the 20^th Century IBM PC keyboard (with many redundant keys) are examples. However, typically path dependency posits some kind of institutional lock-in of actors' behaviours, for example through resource dependency, cultural habits, or costly alternatives. Korpi (2000) has explored these effects on West European social policy: the survival of the 'Scandinavian model', despite the pressures of global financial flows or EU membership, suggests such path constraints, as does the recent resistance of the German policy community to substantial changes in German welfare arrangements.

There is no doubt that the regions and countries of State socialist Europe contained long-standing variations that Russification, the Warsaw Pact and COMECON had been unable to eliminate. For example, Estonia had for years had the highest standard of living and the most advantageous social policies of the USSR (George and Manning, 1980), in marked contrast to the republics of the Northern Caucasus, or Central Asia. Czechoslovakia had been on the verge of West European economic and social compatibility in the 1930s. Slovenia had been the most liberal and comfortable of the regions in Yugoslavia. Poland had continued as a deeply Catholic country throughout the 20^th Century. Examples could be multiplied. In a sense there were three path dependencies. On the one hand all of these countries were recognisably part of the same economic and social system, epitomised visually by the common pattern of State socialist urban development and infrastructure that developed in the middle of the 20^th Century. However the policy constraints that operated from the USSR for 50 years were in the end too weak to contain the second path dependency, namely the desire by local elites for autonomy and freedom to take their own developmental paths.

This they have done, despite the existence of a third set of path constraints provided by two sources: the ambition of some to join the EU club, including its social dimension, on the one hand; and the neo-liberal policy solutions proffered and often formally required in return for help from the International Monetary Fund and the World Bank (Deacon, 2000). Evidence for a third potential source of path constraint, the economic pressures of global economic forces, independent of political forces, is not widely supported empirically or theoretically (Alber and Standing, 2000).

What are the models that are emerging in Eastern Europe? Quite a variety of typologies have emerged in the literature for grouping together the various paths that these 27 countries have begun to travel. Table 1.1 summarises a selection of them, as they have emerged over time.

Table 1.1 Typologies of social policy and reform in Central and Eastern Europe, 1995-2000

World Bank (World Bank, 1996)
Most reform:	Poland, Slovenia, Hungary, Croatia, Macedonia, Czech Republic, Slovakia
Some reform:	Estonia, Lithuania, Bulgaria, Latvia, Albania, Romania
Less reform:	Kyrgyzstan, Russia, Moldova, Armenia, Georgia, Kazakhstan
Laggards (no reform):	Uzbekistan, Ukraine, Belarus, Azerbaijan, Tajikistan, Turkistan
UN Development Programme (UNDP, 1999)
Liberal approach:	Poland, Czech Republic, Hungary, Baltics
Late reformers:	Bulgaria, Romania
Non-liberal:	Belarus
Conflict over whether to liberalise:	Russia, Ukraine, Slovakia
Political breakdown:	Armenia, Albania
European Bank for Reconstruction and Development (EBRD, 1999)
“Transition Indicator”
3.4	Central Europe
3.2	Baltics
2.4	Western CIS
2.2	Central Asia
Deacon (2000)
West European Welfare State:	(mixed Bismarck Insurance (e.g., payroll taxes), and Scandinavian State finance) Czech Republic, Hungary, Poland, Estonia, Slovenia
Conserve State and workplace benefits:	(which may collapse and lead to residualisation): Russia, Bulgaria, Romania, Macedonia

How can we ourselves usefully group these countries? There is no doubt that their economic situation is highly varied. Nevertheless there is a clear pattern that has emerged (Manning, 2001). The EU accession group is marked by a return to growth, less poverty (although not necessarily low unemployment), lower rates of teenage pregnancy, and lower rates of infectious diseases. We might characterise this group as the recovery group in which economic growth has returned, governments have the capacity to tax and spend for social intervention, and social costs have been contained. At the other end of the scale are the Central Asian and Caucasus countries (and regions of Russia in Northern Caucasus). These are typically exhibiting very high rates of poverty, growing levels of infectious disease, extremely low levels of government expenditure as a proportion of GDP, a return to traditional patterns of marriage, and economies that for the most part have failed to return to a vigorous pattern of growth. This might be called the disintegrating group. In between these two extremes are a variety of countries struggling with different problems. We can separate two types. Those in which conflict has disrupted economic and social life to such an extent that it is difficult to identify a stable trend in terms of social costs and their amelioration. We might include the Balkans and Caucasus areas here. Finally there are those countries in which economic growth has only just materialised, where as a consequence a large section of the population is suffering, but in which there is every potential for a better future in terms of available raw materials and levels of education. This group is struggling and may or may not join the EU accession pattern in the fixture. The preeminent case is of course Russia, highly significant for the region as a whole because of its overwhelming size. Indeed this country is so big that it is more appropriate for us to remember the huge regional variations within it, and consider that some of its regions should perhaps more appropriately be classified with other groups: the Northern Caucasus with the rest of the Caucasus regions, for example; or Moscow with the EU accession group.

Where countries are large, internal regional differentiation is growing fast. This is most obvious in the case of the biggest country, Russia. For example the regional impact of the August 1998 financial crisis was quite varied: 30 per cent of the regions retained their industrial production levels, while 15 per cent suffered further industrial loss of around 20-30 per cent (UNDP, 1999a, p.6). It is misleading to think of social issues in relation to the country as a whole, since very sharp differences are manifest between the different regions. For example, per capita income varies between three typical levels. At the top is Moscow with seven times the income of most other regions. In between are a small number of areas, such as St. Petersburg, the North, Siberia, and the Far East that have per capita incomes which are double most of the other regions, but still only about one-third of Moscow levels. Unemployment is similarly varied - very low in Moscow at around 4 per cent, and St. Petersburg at 9 per cent, but between 10 and 20 per cent for the rest of the country (Manning, Shkaratan and Tikhonova, 2000, pp.65-66). This is compounded by the Russian government's manifest divestment of its social responsibilities from central to local government. This decentralisation was foreshadowed in the 1993 constitution, but has been driven by the inability and unwillingness of central government to raise funds and redistribute them in relation to the varying needs of the regions.

Methodological Issues

The difficulty with such general comparisons is whether they hold right across a society, or even across its welfare system. What are we comparing? To what extent does the particular welfare area that we examine affect the argument? Following the critiques that have been mounted against Esping-Andersen's 1990 regime classification, heavily based on the interests of working age men, by those who claim that it does not adequately capture the experiences of women (e.g., Lewis, 1992), it follows that it may also be unsuitable for ethnic minorities, older people, children, sick and disabled people, and so on: 'the discriminating properties of generalised models of welfare regimes are now being more and more questioned' (Lewis, 1998, p.20). Some of the interests of these groups may be located within the kind of services they need (for example health care), and some located within the characteristics of people themselves. For example Alber and Standing (2000) acknowledge that in assessing the range of national strategies that might have been influenced by 'social dumping', there are considerable differences between labour issues and social service issues. Similarly domestic politics surrounding the expansion or contraction of social provision we know is heavily affected by whether a service is widely used and supported such as health care, or targeted on a smaller section of the population, such as income support, with a smaller interest base. Antonnen and Sipila (1996) found that in considering the social care of children and older people, welfare regime types were at variance with those derived for income support. Indeed Pestoff (1996) argued that it was better to classify social policy changes in Central Eastern Europe by service than by country, suggesting for example that it made more sense to distinguish between services where change had been rapid (unemployment) and those where it was slow (pensions), or severely deteriorated (health and housing).

A further issue in tackling these questions is that of the methods that we can use, and the kind of data that each can generate. The literature gives examples of the whole range of social science methods, from deep case studies using qualitative methods of observation and unstructured interviews, to large-scale representative longitudinal household (panel) surveys. Most methodological debates have now moved beyond the quantitative versus qualitative argument to agree that different methods are suitable for different questions; none is superior, but some may be more appropriate. Unfortunately there are sharply varied costs attached to different methods. Reanalysing published national data is one of the cheapest and most readily accessible forms of data. A typical example would be the data presented by Alber and Standing (2000) to examine the question of whether there was convergence amongst Welfare States, and if so to what extent this could be identified over time as related to economic growth. However, as they acknowledge, these data are themselves highly abstracted measures of the reality of different social policies, usually confined to social security expenditures...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• List of Figures
• List of Tables
• List of Contributors
• Preface
• Acknowledgements
• Part I Background
• Part II Poverty
• Part III Social Exclusion
• Part IV Special Issues in the Study of Poverty and Social Exclusion
• Appendix 1 Project Methodology
• Appendix 2 Histories of 19 Households (A Longitudinal Study, 1996-2001)
• Bibliography
• Index