The Moral of the Tale of Soviet Reform

According to the Moscow Times,

The Communist Party of China has compelled its officials to watch a documentary about the Soviet Union’s collapse to draw lessons on how not to govern, and to ensure that they remain disciplined amid economic reforms.

The film “has been shown at dozens of political meetings during the past few months” as part of a larger push to shore up party discipline during a period of economic reform, a process that carries significant political risks.

So what’s the takeaway those party functionaries are supposed to glean? According to social scientist Yakov Berger:

Market reforms are one thing, and political reforms are a completely different thing.

So…”Just say no”? Now I’m curious to see the film. After all, it’s not like the CPSU under Gorbachev set out in 1986 with a plan to allow free speech and multiparty democracy.

Glasnost’ is now widely used as shorthand for sweeping political reform, a throwing open of the gates (or tearing down of the walls?) impeding civil liberties in authoritarian regimes. In fact, as Joseph Gibbs and others have argued, glasnost’ actually got its start in the early 1980s as a limited blurring of the lines on permissible speech that was explicitly intended to work in service to the Communist Party’s larger agenda of economic restructuring, or perestroika. By that time, some party leaders recognized that inefficiency was stifling the Soviet economy, that planners would need better information to combat these ills, and that many bureaucrats would try to resist any changes. Glasnost’ was the solution those party leaders hit on. Under this new policy, citizens were allowed to speak more openly about certain aspects of their work or the economy in an effort to help ferret out the waste and corruption that was dragging the USSR down. In essence, glasnost’ was a whip the party leadership could employ against its own bureaucracy in pursuit of greater efficiency. This was decidedly not freedom of speech, however, and it certainly did not entail any larger ideas about ending the Party’s monopoly on power, an eventuality that many national party leaders bitterly contested until pretty late in the game.

Well, what happened? Unintended consequences, that’s what. People responded strategically to these new developments and began to probe the openings glasnost’ created. Like China, the USSR was a large country ostensibly governed by a massive and variegated political machine. Party officials at the local and regional and national level argued among themselves about how to respond to attempts to probe the limits of glasnost’, and the results of those arguments varied. Those variations suggested further openings that reformists and activists then explored further, a process that led eventually but hardly directly to wider political change.

Chinese officials seem to believe, or at least to hope, that they can avoid this path by responding firmly to attempts to convert economic reforms into political challenges, by sharply distinguishing between the two and only doing the one. Maybe they’re right, but I don’t think so. It’s worth recalling that the Soviets sometimes tried to draw clear lines, too—in Tbilisi in April 1989, for example—but those harsh responses didn’t always have the desired effect.

So, yes, market reforms are one thing and political change another, but my summation of the Soviet experience would be a bit different. As I see it, reform of any significant scope or scale is a process that you can try to guide, but it is not something that you can control. Have fun trying to ride the tiger, President Xi.

N.B. This is a slightly edited version of a post that I wrote on Tumbling Chimp yesterday morning.

Hugo Chavez’s Death and Prospects for Political Liberalization in Cuba

You’ve heard of the butterfly effect, right? Well, what about the Chávez effect?

Venezuelan president Hugo Chávez died early this week, and his absence will probably have ripple effects on the stability of political regimes in several other countries with which Chávez’s was closely tied. Chávez’s international influence had waned in recent years with the exit from the global political stage of his foil, George W. Bush; the re-emergence of Brazil as a regional economic heavyweight; profound stresses on Venezuela’s own economy, wrought in part by evident flaws in Chávez’s “Bolivarian revolution”; and, of course, the decline in Chávez’s health as he struggled with the cancer that eventually killed him.

Even in poor health and diminished political stature, though, Chávez loomed large in the politics of several other countries, and none more so than Cuba. At least in part, that interdependence stemmed from the close personal relationship between Chávez and Cuba’s Fidel Castro. As Victoria Burnett wrote about yesterday for the New York Times, however, there was also a very practical aspect to the close relationship between Cuba and Venezuela under Chavez as well.

Cuba receives more than 100,000 barrels of oil a day from Venezuela, purchased on favorable terms as part of an exchange that has tens of thousands of Cubans working in Venezuelan clinics, schools and ministries. The subsidized oil accounts for about two-thirds of Cuba’s consumption and is credited by many Cubans with keeping the lights on and the air-conditioners running during the brutal summer heat.

It’s possible that Chávez’s successors will indefinitely sustain this generosity, but I doubt it. Venezuela was already struggling to get its own economic house in order. Meanwhile, Venezuela’s oil production has declined in recent years and its domestic consumption has steadily risen, leaving less of the surplus that bankrolled Chavez’s largesse. Even if Chávez’s successors come from the Bolivarian movement he built, it’s hard to see how they will be able to keep subsidizing other regimes when their own has fallen on hard times. And, of course, absent Chávez, Venezuela’s opposition parties stand a much better chance of clawing its way back into government—if not in next month’s special election, then certainly in the ones to follow.


As Venezuelan largesse dries up, the pressure on the Communist regime in Cuba to search out new sources of revenue will sharply increase. It’s possible that Castro & co. will find another great foreign patron, just as they did when Venezuela stepped into the shoes the Soviet Union had filled for so long before its collapse left Cuba in the lurch. Possible, but, I think, unlikely. Following a similar “the enemy of my enemy is my friend” logic, the Islamic Republic of Iran also has an affinity with Cuba, but Iran’s got serious financial troubles of its own. China seems a more capable future patron, but it’s hard to imagine the Chinese government doing something as provocative to the U.S. as flat-out bankrolling the Cuban regime with so little to gain from it. What China is already doing is helping to finance the hunt for oil in Cuban waters. A major oil strike would throw the Cuban government a new lifeline, but as John Sullivan noted in a September 2012 piece for the New York Times Magazine, “So far, though, the wells have come up dry or disappointing.”

If the Cuban regime can’t find a new foreign patron or strike oil, it will be increasingly tempted to try political liberalization as an alternative strategy. I laid out the logic behind this choice in a conference paper I wrote in 2007 and summarized it again in a recent article on North Korea for Foreign Policy‘s Democracy Lab. Quoting at length from the latter:

To understand why a seemingly stable dictatorship would ever give its political opponents an opening, it helps to consider the political economy of authoritarianism. Dictators repress their citizens because it helps them stay in power. Political rivals can’t beat you if they can’t get organized, and they’ll find it very hard to organize if they can’t meet, talk, or reach out for support. Following this logic, we usually think of political liberalization as something that dictators resort to only when forced by restive mobs threatening to end their rule, if not their lives.

What that conventional view misses, though, are the financial and economic trade-offs that harsh repression entails. First, the machinery of monitoring and repression can be expensive, and the information it produces isn’t always reliable, so shrewd autocrats will always be looking to cut costs and improve outputs in these areas. Second, and less obviously, repression indirectly imposes drag on an economy by inhibiting productive exchanges among citizens. These market frictions can create a gap between an economy’s actual growth rate and the growth it might achieve with a freer citizenry.

When a dictator’s revenues depend on the performance of his country’s economy, these trade-offs give him some incentive to loosen restrictions on civil liberties. The question is when that incentive becomes strong enough to outweigh the political risks of reform.

The conventional view of political liberalization tells us this shift only occurs when dictators face an imminent threat of revolution. If the end already seems nigh, rulers might try to prolong their tenure by meeting their opponents halfway and hoping that compromise satisfies the mobs at the gates. This process is sometimes described as liberalization “from below,” because it’s driven by popular unrest.

Careful consideration of the political and economic trade-offs involved, however, suggests another possibility: Dictators might also pursue “liberalization from above,” gambling on reform when the economy is stagnating and political opposition is especially weak. Under these circumstances, expanded freedoms of speech and movement can open new avenues for economic growth without immediately producing a serious political challenge. There might be plenty of pent-up demand for political change, but revolutions require organization, and organization takes time, so shrewd rulers might attempt to shoot those rapids in search of calmer waters on the other side.

Viewing Chavez’s departure through the lens of this theory, I think the prospects for significant political liberalization in Cuba in the next few years just improved markedly. In fact, there were many signs that the Cuban regime was already leaning in this direction, including moves since 2010 to allow more private enterprise, loosen restrictions on property rights, and, most recently, the decision to end the exit visa requirement for travel abroad. I think those modest reforms reflect the very pressures noted above, and the departure of the Cuban regime’s greatest patron and ally will only turn the screws tighter. Late last month, Raul Castro announced that he would retire when his second term as president ends in 2018. In light of this week’s news from Venezuela, I would be surprised to see Castro’s tenure last that long, and I suspect that transition will go much deeper than a simple change of leadership.

Is Burma Democratizing?

Burma is getting a lot of credit for its recent reforms, something I wrote about on this blog in early October. President Obama recently announced that Hillary Clinton will travel there in December, a trip that would make her the first Secretary of State ever to visit Burma and the highest-ranking U.S. official to go there in half a century. Now comes word that longtime dissident Aung San Suu Kyi will probably seek a seat in the country’s parliament when the  political party she leads, the National League for Democracy (NLD), runs candidates in the next elections, which haven’t yet been scheduled.

Amid this flurry of activity, it’s easy to lose sight of the fact that what’s happened so far in Burma is only liberalization, not democratization, and just a partial liberalization at that. In their seminal work on transitions from authoritarian rule, political scientists Guillermo O’Donnell and Philippe Schmitter make a helpful distinction between the two. In their view, liberalization is about the expansion of civil rights, while democratization is about the extension and deepening of political participation and accountability. Quoting at length, with emphasis added:

By liberalization we mean the process of making effective certain rights that protect both individuals and social groups from arbitrary and illegal acts committed by the state or third parties. On the level of individuals, these guarantees include the classical elements of the liberal tradition: habeas corpus; sanctity of private home and correspondence; the right to be defended in a fair trial according to preestablished laws; freedom of movement, speech, and petition; and so forth. On the level of groups, these rights cover such things as freedom of punishment for expressions of collective dissent from government policy, freedom from censorship of the means of communication, and freedom to associate voluntarily with other citizens…

Democratization, thus, refers to the processes whereby the rules and procedures of citizenship are either applied to political institutions previously governed by other principles (e.g., coercive control, social tradition, expert judgment, or administrative practice) or expanded to include persons not previously enjoying such rights (e.g., nontaxpayers, illiterates, women, youth, ethnic minorities, foreign residents), or extended to cover issues and institutions not previously subject to citizen participation (e.g., state agencies military establishments, partisan organizations, interest associations, productive enterprises…)

By those definitions, all of the reforms undertaken so far this year–the release of political prisoners, the (marginal) expansion of freedom of information, plans to register opposition parties and to allow the formation of independent labor unions–clearly land in the liberalization bin. The first major test of whether or not this liberalization is going to be paired with democratization will come with the arrival of election campaigning. For Burma to democratize, the regime will need to register parties and candidates fairly, to eschew backing favored candidates with state resources, and to protect freedom of speech and assembly throughout the campaign. As recent events in Egypt show, the authoritarian habits that run counter to those ends are often hard to break, especially when electoral politics is accompanied by social disorder.

Equally important, even if it holds competitive elections, Burma won’t really become a democracy unless and until it changes its constitution. That’s because the current version, adopted in 2008, reserves one-quarter of the seats in the country’s legislature for members of the military. That reserve domain guarantees the unelected military a strong hand in the country’s politics, a situation that’s fundamentally incompatible with the principle of popular accountability underscored by O’Donnell and Schmitter.

The only way to remove the military from politics is by constitutional amendment. And, as it happens, the constitution requires more than three-quarters of legislators vote in favor of amendment before an amendment can be put to a nationwide referendum (at which point it only needs to win more than half the votes). Because the military fills one-quarter of the seats in parliament, the current constitution ensures that full democratization cannot happen by legal means without the military’s support. In drafting the 2008 constitution, military leaders craftily gave themselves a veto over constitutional change without saying as much.

The changes occurring in Burma are real and significant, but we should be careful to see them for what they are and to recognize their limits. Specifically, we shouldn’t start talking about a democratic transition until we see evidence of a new approach to electoral politics, and we shouldn’t slap the “democracy” label (with or without adjectives) on the regime until the military finally and officially removes itself from government. Those are the high hurdles, and the partial liberalization occurring does not guarantee that they will soon be cleared.

Cracks in Burma’s Political Permafrost

A few days ago, the New York Times ran a story describing a hesitant liberalization underway in Burma (a.k.a. Myanmar) and the U.S. government’s equally cautious response to it. Nearly a year ago, Burma held national elections that were neither free nor competitive but did restore at least the veneer of civilian government after a long spell of rule by military junta. Despite its illiberal origins, that civilian government seems to be finding its legs and taking small steps toward political and economic liberalization. According to the Times,

The new president, U Thein Sein, a former general who was part of the military junta that ruled the country for two decades, has in six months in office signaled a sharp break from the highly centralized and erratic policies of the past. Mr. Thein Sein’s government is now rewriting laws on taxes and property ownership, loosening restrictions on the media and even discussing the release of political prisoners.

Conventional explanations for political liberalization have a hard time explaining cases like this one. According to the usual thinking, authoritarian rulers only loosen the reins as a defensive concession to political challengers who might otherwise destroy their regimes. Absent a clear and present danger, an autocrat has no incentive to expand his subjects’ freedoms, because in so doing he only stands to empower an organized opposition, the single-greatest threat to his grip on power.

This can’t explain Burma, where only a few years ago the regime violently and thoroughly quashed a popular uprising. To understand why autocrats might liberalize in the absence of an immediate threat, we have to widen our view to include the economic costs as well as the political benefits of closed dictatorship. In a conference paper I wrote a few years ago, I used game theory to explore the idea that authoritarian rulers will sometimes choose to expand civil liberties as a way to increase revenues by reducing their own transaction costs and the transaction costs of their constituents. By reducing the costs to the ruler of acquiring information and monitoring compliance, political liberalization can directly increase the state’s net income. By expanding opportunities for private exchange and facilitating coordination among constituents who control productive resources, this kind of liberalization can also indirectly increase state revenues by expanding the economy’s productive potential, and thus the regime’s tax base.

The core idea in this take on the political economy of authoritarian rule is that political and economic transactions are not neatly separable, so state-imposed constraints on political behavior are likely to interfere with economic exchange as well. The resulting friction, and the costs of maintaining the machinery that creates it, represent opportunity costs that authoritarian rulers would like to avoid, or at least to minimize. A game-theoretic representation of these trade-offs suggests that dictators are most likely to undertake political liberalization either when citizens already pose a credible and formidable threat (liberalization by concession), or when citizens appear to pose only a weak threat (liberalization by imposition).

Viewed through this wider lens, recent events in Burma make a little more sense. Like Gorbachev’s initially timid steps toward openness (glasnost) in support of economic restructuring (perestroika), the Burmese government’s recent reforms seem to identify that country as a budding case of liberalization by imposition. After the collapse of the USSR, dictators may have become more inclined to err on the side of caution and forego the potential gains from reduced economic friction. More recently, though, the Chinese government’s success (so far) in managing these trade-offs in its favor seems to have re-opened the door to liberalization from above.

Whether this process will create an opening for democratization or will reinvigorate dictatorship in Burma is impossible to know right now. Either way, though, I think it is crucial that we avoid confusing this timid expansion of civil liberties with a genuine commitment to expanded political rights. As Serge Schemmann wrote about the greatest of the twentieth century’s accidental democrats, “Though the West lionized Mikhail Gorbachev as a reformer, it is important to remember that his goal was not to destroy or even humanize Communism, but to perpetuate it.”

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