Lessons from Russia: Clinton and US Democracy Promotion 9780815390213, 9781351126588, 9781351154048

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LESSONS FROM RUSSIA

In fond memory of Margaret Hathaway, 1944-2004

Lessons from Russia Clinton and US Democracy Promotion

LEE MARSDEN University of East Anglia, UK

First published 2005 by Ashgate Publishing Reissued 2018 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN 711 Third Avenue, New York, NY 10017, USA Routledge is an imprint of the Taylor & Francis Group, an informa business © Lee Marsden 2005 Lee Marsden has asserted his right under the Copyright, Designs and Patents Act, 1988, to be identified as the author of this work. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. A Library of Congress record exists under LC control number: 2005018457 Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. Publisher’s Note The publisher has gone to great lengths to ensure the quality of this reprint but points out that some imperfections in the original copies may be apparent. Disclaimer The publisher has made every effort to trace copyright holders and welcomes correspondence from those they have been unable to contact. ISBN 13: 978-0-815-39021-3 (hbk) ISBN 13: 978-1-351-12658-8 (ebk)

Contents List of Tables Acknowledgements Acronyms and Abbreviations Introduction

vii ix xi 1

1 A Policy for Russia

25

2 Clinton’s Russia Policy

41

3 Promoting Democracy or Backing Yeltsin?

61

4 Whither Democracy?

101

5 Implementing the Strategy

131

6 An Analysis of Paralysis

157

7 Demoting Democracy

185

Bibliography Index

201 213

List of Tables Table I.1

Summary Outline of Frameworks and Concepts

21

Table 3.1

US-Russian Cooperation in 1993 ($ millions)

68

Table 3.2

Results (in Percentages) of April Referendum, 1993

78

Table 3.3

State Duma Election Results, 12 December 1993

84

Table 3.4

State Duma Election Results, 17 December 1995

84

Table 3.5

Russian Presidential Election Results, 1996

90

Table 4.1

State Duma Election Results, 1999

120

Table 5.1

FSA Funded Activities Grouped by US Objectives, 1993-2000 (in $ millions)

132

Funds Budgeted for FSA Assistance Towards Russia, 1993-2000 (in $ millions)

133

Table 5.3

The Democracy/Polyarchy Template

136

Table 5.4

Eurasia Foundation: Democracy Assistance to Russia, 1993-2000

154

Table 5.2

Acknowledgements I am grateful to colleagues for providing encouragement, correction and advice. In particular I owe my deepest gratitude to Simon Bromley, Paul Lewis and Montserrat Guibernau at the Open University, Mike Bowker and Stephanie Lawson at the University of East Anglia, and Professor John Dumbrell, University of Leicester. This is a better book because of their input, although any mistakes remain my own. The constant support and encouragement from family and friends has been amazing and deepest thanks go to Colin and Margaret Hathaway; Miriam and Isaac; Barbara, Dennis, Joel, Judy, Lou, Neil, Owen, Sarah and Zoe Marsden. I gratefully acknowledge the financial and academic support provided by the Open University and the Economic and Social Research Council (Award Number PTA026-27-0964). The assistance and advice of Sarah Horsley at Ashgate Publishing is much appreciated. Those who gave their time for interviews and conversations are also thanked and acknowledged including Leon Aron, Tom Carothers, James Millar, Peter Reddaway, Lilia Shevtsova, Strobe Talbott, Wayne Merry, Paul Saunders, Celeste Wallander, Anders Aslund, Sarah Mendelson, Nelson Ledsky, Leon Fuerth, Tony Lake, John Hewko, David Ellerman, Keith Bush, and officials at the IMF, USAID and NED who preferred to remain anonymous. My biggest debt of gratitude of course is owed to Gill for her unremitting patience and encouragement. Thank you.

Acronyms and Abbreviations ABA ABM ACILS AFL-CIO BECA CCFR CEC CEIP CIA CIPE CIS CPD CPSU CQWR DNC DPI EBRD FREEDOM FSA FSB FSU FTUI GAO GATT GCC GKI G7 G8 HIID IESD IFES IFIs IMF IRI KPRF LPD

American Bar Association Anti Ballistic Missile Treaty American Centre for International Labour Solidarity American Federation of Labour Committee for Industrial Organization Bureau of Education and Cultural Affairs Chicago Council on Foreign Relations Russian Central Election Commission Carnegie Endowment for International Peace Central Intelligence Agency Centre for International Private Enterprise Confederation of Independent States Congress of People’s Deputies Communist Party of the Soviet Union Congressional Quarterly Weekly Review Democratic National Committee Democratic Pluralism Initiative European Bank of Reconstruction and Development Freedom for Russia and Emerging Eurasian Democracies and Open Markets Freedom Support Act Federal Counterintelligence Service Former Soviet Union Free Trade Union Institute General Accounting Office General Agreement on Trade and Tariffs Gore-Chernomyrdin Commission Russian State Committee on the Management of State Property Group of 7 leading industrial nations Group of 7 leading industrial nations and Russia Harvard Institute for International Development Institute for Election Systems Development International Foundation for Election Systems International Financial Institutions International Monetary Fund International Republican Institute Communist Party of the Russian Federation Liberal Democratic Party of Russia

xii NAFTA NATO NEC NDI NED NIS NMD NSC NGO OMB OSCE PFP POTUS RAFTURE RAPIC RCB RFE RL RSSR START US USAID USDOS USIA USSR UST WTO

Lessons from Russia North American Free Trade Association North Atlantic Treaty Organisation National Economic Council National Democratic Institute for International Affairs National Endowment for Democracy Newly Independent States National Missile Defence National Security Council Non Governmental Organization Office of Management and Budget Organization for Security and Cooperation in Europe Partnership for Peace President of the United States Russia-America Foundation for Trade Union Research and Education Russian-American Press and Information Centre Russian Central Bank Radio Free Europe Radio Liberty Russian Social Science Review Strategic Arms Reduction Treaty United States United States Agency for International Development United States Department of State United States Information Agency Union of Soviet Socialist Republics United States Treasury World Trade Organization

Introduction What sort of Russia would we like to see before us, as our partner in the world community? Perhaps the first thing to get straight here is the sort of Russia there is no use looking for. And such a Russia - the kind we may not look for - is easy to describe and envisage, for it would be a capitalistic and liberal democratic one, with institutions closely resembling those of our own republic (Kennan, 1952:126-7).

The collapse of the Soviet Union in 1991 finally ended the systemic rivalry between the United States and the USSR that dominated post World War II international politics. In the new post Cold War era the United States became the sole remaining superpower leaving a question mark over the future international order. What would become of the fifteen newly independent states of the former Soviet Union (FSU)? In particular which direction would the largest of those, the Russian Federation, take having lost the Cold War and yet still a major nuclear power? Lessons from Russia seeks to examine a specific attempt, by a former adversary, to direct the future course of events in post Soviet Russia by peaceful means. The book is concerned about American democracy promotion in Russia during the Clinton administration, 1993-2001. It is an attempt to understand the reasons why US attempts to promote democracy in Russia took the course they did, by analysing both the process of foreign policy making and subsequent implementation of that policy. The influence of United States policy on the process of Russian reform has been a constant source of debate since the late 1980s. Much research and academic literature has concentrated on the Russian reform process itself involving a threefold transition from totalitarianism to democracy, from a command economy to a market economy, and from imperialism to a nation at ease within its existing borders. Different commentators have stressed the degree to which Russia has progressed, or regressed, from the supposedly desirable goals of transition to a liberal democratic, free market capitalist country. This book adds to that debate by analysing American attempts to promote democracy in Russia during the Clinton administration. As we shall discover, anecdotal and empirical evidence suggests that although the administration emphasised, and allocated resources to, democracy promotion, Russia was less democratic at the end of Clinton’s presidency than at the beginning. A number of commentators have considered the decline in Russia’s democratic progress over the 1990s, from a domestic Russian perspective, this work, however, considers the Clinton administration’s involvement in that process.

2

Lessons from Russia

From the outset the Clinton administration declared a commitment to promoting democracy in Russia as a key foreign policy objective. The book seeks to discover and explain why that commitment was not fulfilled. In order to answer this key question the decision making and implementation processes that determined the administration’s Russia policy are analysed. Graham Allison’s decision-making models in The Essence of Decision (1971) are adapted to provide a theoretical framework that can explain why democracy promotion failed in Russia. Allison’s models, which were produced to consider a crisis situation, are refined to present an analytical framework capable of increasing our understanding of non-crisis foreign policy decision making, and the implementation of those decisions. Allison’s use of three different models was intended to reflect different ways of viewing, and therefore analysing, the same event from different perspectives. In adapting these models I favour a quasi-rational actor model as the dominant influence on US foreign policy decision making towards Russia, and develop a second model to explain the implementation of those decisions. This focus on rationality is not intended to imply that the president, and his coterie, made an optimum estimation of all the possible outcomes from all the potential courses of action they could have pursued. Rather, it implies that given the information available to him, the resources available, his background and that of his closest advisors, his own personal and political imperatives, and sense of America’s role in the world, the president made decisions designed to maximise both his and the country’s utility. Such decisions are rational in the sense that he had the ability to rank them and chose the best available preference (Little, 2001:314). I suggest, however, that what Clinton perceived as rational choices were not optimal choices and what emerges is quasi-rationality, resembling but not actually being rational. This quasi rationality led to short and medium term US security and market promotion gains at the expense of the long-term benefit of promoting democracy in Russia. Over the course of the book I will examine the rationale and purpose behind Clinton’s Russia policy and its implementation. I ask what the Americans thought they could achieve by promoting democracy in Russia. How did this fit in with their overall foreign policy strategy? How was the policy implemented? Did the strategy change over time and if so why? How successful were they in achieving their aims? Was the strategy coherent, faithfully implemented and consistent? Did the Russia policy represent a genuine attempt to promote democracy or was it simply paying lip service to a grand ideal? In analyzing the decision-making and implementation process, within a theoretical framework, and applying that to Russia, as a case study for democracy promotion, the book breaks new ground and raises questions about American commitment to promoting democracy elsewhere.

Introduction

3

Theoretical Framework In seeking to devise an analytical framework that can explain and evaluate both the formulation and implementation of US foreign policy, due consideration must be given to all the various inputs that go to make up the foreign policy process. Different scholars will attach greater or lesser significance to competing actors and structures but all need to weigh the contribution from each of these sources. Sources include the presidency, the wider administration, particular departments within the administration, and within those departments, political appointees and bureaucrats. Congress, the media, academic think tanks, political parties, interest and pressure groups all have some impact on the foreign policy process. The military-industrial complex, big business, labour unions and religious organizations also have a role. Individuals, including former presidents and their advisors, campaign donors and even members of the president’s own family can and do influence foreign policy. Finally the general public themselves have an opportunity to shape policy by expressing their opinion in elections, opinion polls, through their elected representatives in Congress, public protest and the media, especially when they include diasporic communities with a vested interest in specific foreign policy decisions. American foreign policy can also be influenced by the international community, allies and opponents, and by the financial institutions. Alongside these myriad actors and influences on the foreign policy making process consideration needs to be given to further domestic concerns. These include the relative strength of the US economy, the demographic structure of the administration, the resources at the government’s disposal and the underlying traditions and ideology of American society. Geopolitical considerations including alliances, perceived spheres of influence, and geographical location also play their role. Even after all these factors have been added to the equation it is necessary to consider variable factors such as time. When looking at any specific foreign policy issue it is necessary to ask if that policy has changed over time, if so what, where, when, why and how? Are there differences between the first and second administration’s approach to ongoing policies? How significant are the actors involved in the administration? If they change does policy change too, or does a change in policy precipitate a change in personnel? The primary aim of developing a theoretical framework should be to simplify complex processes in order not just to explain a specific action but to generalise in explaining other foreign policy decisions. Graham Allison attempted to do just that in 1971. The Essence of Decision Graham Allison’s The Essence of Decision: Explaining the Cuban Missile Crisis, has become a seminal text in international relations and foreign policy analysis since it was first published in 1971. The work developed a theory of bureaucracy and foreign policy that has had a significant impact on our understanding of the

4

Lessons from Russia

foreign policy process. Allison argues that the making of government policy is not down to ‘one calculating decision maker but is rather a conglomerate of large organizations and political actors’ (Allison, 1971:3). Allison posits three models of foreign policy: the Rational Actor or ‘Classical’ Model (Model I), the Organizational Process Model (Model II), and the Governmental (Bureaucratic) Politics Model (Model III). Allison used each of the three models to provide different accounts of the decisions taken during the Cuban missile crisis. The study was intended to demonstrate how traditional accounts up until 1971 were inadequate to uncover the decision-making process involved in the crisis and to provide models that could help explain other foreign policy decisions. The Rational Actor or ‘Classical’ Model (Model I) involves a rational reconstruction of the decision making process assuming that decisions arrive from calculations made by a single actor (either government or president). In this model, decision-making results in utility maximisation based on rational choice. Firstly, the primary goal and objective of any particular policy is considered, asking ‘what are the benefits that can be derived from a particular action?’ Alternative strategies are then considered, together with the consequences each alternative is likely to produce. A rational choice is then made by selecting the alternative whose consequences ‘rank highest in the decision-maker’s payoff function’. This enables the decision-makers to maximise their utility within given restraints (Allison, 1971:29-30). Allison tends to regard Model I as the weakest of the models. He points out that a full simulation of the rational actor’s decision making process is impossible because it would only work if all the information, and only that information, that was available to the decision-maker were known. It is impossible to simulate time pressure and the model makes the assumption that states always intend the consequences of their actions. Allison does contrast different theorists’ assumptions of comprehensive rationality and limited rationality, and considers the latter which restricts claims of ‘optimal choice’ more realistic (Allison, 1971:31). Allison’s Model I is presented as just one way of looking at crisis decisionmaking and is the model he feels least comfortable with, because the rational actor paradigm had been the dominant influence in foreign policy analysis. Using the rational actor model he analyses the Cuban missile crisis covering a single time period but in this model no allowance is made for either longer or multiple time periods. The decision-maker weighs up the various options before choosing the ‘best’ one but the model does not consider how other states will react to that choice. Then how will the decision-maker react to the other state’s reaction? Model I’s decision-maker is a rational utility maximiser devoid of personality, in that decisions are made on the basis of a simple cost-benefit analysis without any emotional involvement. The model allows no discussion of psychology or behavioural analysis or indeed any elements of uncertainty in the way decisionmakers behave. Allison and Phillip Zelikow published a second edition of the book in 1999 and sought to address some of these deficiencies. The authors give more credence to Model I but still regard it as intrinsically inferior to their other models.

Introduction

5

There is some discussion of rational choice theory, game theory and psychology but the model still fails to receive the authors’ full endorsement. Model II, the Organizational Process Paradigm, argues that governmental behaviour can be better understood by considering the foreign policy outputs of large organizations that function according to regular patterns of behaviour (Allison, 1971:6). Allison contends that government is not monolithic but rather consists of a group of loosely allied organizations. Government action emerges as an output of organizational processes; as a result governmental choice is limited and constrained by the existing organizational routines and outputs (Allison, 1971:78-9). The foreign policy problem is ‘cut up and parcelled out’ to various organizations, which will all perceive and process it in a different way. Allison focuses on standard repertoires, programmes, and standard operating procedures of organizations which he asserts leads to parochialism and that promotional opportunities in organizations are dependent upon mastery of predictable routines, patterns of association and information channels (Allison, 1971:79-81). He further maintains that simple rules lead to predictable outcomes (Allison, 1971:87-91) but is this necessarily the case? Organizations are in many ways better able to offer a variety of approaches and solutions to problems. Weber points to the efficiency of bureaucracy and the division of labour, which enables specialisation and the emergence of experts in particular fields. This in turn can lead to different and alternative ways of thinking. In the 1999 edition, Model II is renamed ‘organizational behaviour’ but the basic arguments have not changed. This model continues to stereotype organizational behaviour. Bendor and Hammond, in a critique of the first edition, have demonstrated that, contrary to Allison’s position, simple organizational rules do not necessarily lead to simple and predicable behaviour. Indeed, even those decisions taken by a single decisionmaker can be enormously complex (Bendor and Hammond, 1992:309). Where Allison proves most convincing, however, is in demonstrating that the left and right hands of government often operate independently. He suggests that this can lead to governments simultaneously pursuing divergent activity, as different sets of organizations formulate different policies (Allison, 1971:97). The analysis of different activity may be better utilised as an explanation of the divergence not between different policies but the difference between the intention of a policy formulated and the implementation of that policy. Model III, a Governmental (Bureaucratic) Paradigm suggests that the important issue is neither choices nor outputs but bargains. Foreign policy outcomes are derived from a bargaining process among players in national government. Policy outcomes are the result of political decisions that have already been taken and which can only be ascertained by discovering what kind of bargaining was done by whom, and how that led to action. The decisions and actions of government are not deliberately chosen but rather are the result of compromise, conflict and confusion. Governmental behaviour, Allison argues, is best understood as bargains made between hierarchical players (Allison, 1971:144). The president is obliged to bargain with members of his or her own

6

Lessons from Russia

administration to achieve policy objectives (Allison, 1971:173). The president as chief executive is but one of many players that have to enter into the haul and pull of politics before policy emerges. Approaches to policy will depend significantly on the organizational or bureaucratic perspective actors come from or represent. In Allison’s famous phrase ‘where you stand depends on where you sit’ (Allison, 1971:176). All the actors bring their own baggage in tow including sensitivities to certain issues, commitments to various projects, their reputations and responsibilities to other groups in society (Allison, 1971:166). These issues will all bear directly on actor’s desired outcomes including foreign, domestic, security interests and the health and well being of their department. Allison argues that in this bureaucratic paradigm uncertainty and hesitation means that the agenda is dominated by those who are certain and decisive, and able to secure the cooperation of others, rather than an evaluation of the intrinsic merits of the case (Allison, 1971:167, 171). The model is complex and can explain the non-optimal solutions to foreign policy problems that emerge. However, in suggesting that policy outcomes are the unintended consequences of bargaining, the preferred choice of none of the actors involved is an assertion too far. Does decision making always involve bargaining, or is there sometimes unanimity of purpose? The president, as chief executive, actually appoints and dismisses all other members of the administration. It is unrealistic to assume that the president is but one of many actors involved in the decision-making process, and has to bargain. On issues the president feels strongly about other members of the administration are likely to acquiesce. Ronald Reagan’s advocacy of the Strategic Defence Initiative, in the face of opposition from several members of his administration, is a classic example of this (Weinberger, 1990:204-33). The president may choose to enter into the haul and pull in order to achieve consensus but the ultimate choice is his/hers alone (Bernstein, 2000:159). There is a significant difference between actors influencing and actually making policy, which Allison fails to incorporate in his model. Even the famous ‘stand-sit’ mantra is unsound because it fails to account for those actors who do not sit or stand anywhere. In the second edition Allison and Zelikow amend the statement to argue that ‘where one stands is influenced, most often influenced strongly, by where one sits’ (Allison and Zelikow, 1999:307). Advisors may indeed be influenced by their organizational affiliation but are also capable of bringing their own experiences, judgement and personality to the table. Although Models II and III could be synthesised Allison and Zelikow decline to do so in the second edition, preferring to maintain a perspectivism that ultimately reveals that there is no one essence of decision. Allison’s models were designed to explain a crisis situation and are inadequate, in their present form, to explain longer-term policy decisions. There is a need to develop new models to account for both crisis and longer-term foreign policy decision making. The three models introduce an element of perspectivism that considers policy from different points of view rather than providing a coherent and usable model that can explain the foreign policy process. Essence of Decision, in

Introduction

7

failing to adequately develop the Rational Actor Model, undervalues the role of the president as the head of the executive and the final decision-maker. The presidential power of patronage constrains advisors, desirous of remaining in the administration, from challenging the president on issues of importance to him or her. In ascribing decisions to pull and haul bargaining, organizational and bureaucratic outputs, Allison offers no psychological analysis explaining the motivations and personalities of the key players who actually determine policy. The upbringing, background and character of individual actors are important factors in determining the advice they bring to the table. Allison neglects these to the detriment of the models. An actor-centric, rather than a structural approach, may actually prove more helpful in analysing foreign policy, although it is more difficult to theorise. The personalities of individual actors and their relationship with the president are neglected to the detriment of the models. Little consideration is given to outside influence on US foreign policy from allies or enemies abroad, assuming that US foreign policy works in splendid isolation. The models are time-specific, in that they were designed to explain a crisis that lasted for a few weeks rather than years and are, therefore, inadequate to explain long-term decisions such as Clinton’s Russia policy. Allison is very good at exploring the different factors influencing foreign policy decisions but has not differentiated between deciding on the policy to be pursued and the process by which that policy is carried out. Finally, Essence of Decision fails to adequately incorporate any notion of American identity, ideology or sense of mission without which it is not possible to understand US foreign policy decisions. This is sometimes known as American exceptionalism and is the sincerely held belief that the American way of life, political, economical and cultural is the highest form of human development and the envy of the rest of the world. Such thinking is a prerequisite for appointment to high office and inevitably has an impact on the conduct of foreign policy. Modelling Models serve a useful purpose in enabling us to explain and to generalise about foreign policy, in the book I put forward a framework of analysis that seeks to explain why Clinton’s attempt to promote democracy in Russia took the course it did. This framework is generalisable enabling comparisons to be made with American attempts to promote democracy elsewhere, and with other issues the president feels strongly about. Foreign policy making is not an exact science and it can be influenced by such variable factors as chance, individual personalities and their chemistry with others, trust, and other unrelated events occurring domestically and internationally. It is difficult to factor in such diversity within an overarching model. It is common for models studying international relations to incorporate an appeal to rationality. Indeed Allison’s first model is called the rational actor model and assumes that decision-makers act rationally by seeking to maximise their utility. Such a concept can be prescriptive and is falsified when

8

Lessons from Russia

empirical evidence demonstrates that non-optimal decisions have been taken. Game theory refines this approach introducing the ‘minimax’ idea that rationality means minimising potential losses and maximising potential gains in any decisionmaking process. Mixed motives in the process add an extra dimension to any discussion of rationality. The Prisoners’ Dilemma is a classic illustration of mixed motives pitching individual rationality against collective rationality. The theory posits that efficiency of choice is the criteria for rationality and yet in the Prisoners’ Dilemma the whole issue of trust introduces variables that can affect choices. Herbert Simon’s classic text Administrative Behaviour introduces two concepts that challenge utility maximisation: ‘bounded rationality’ and ‘satisficing’, arguing that problems can be so complex that decision-makers can only consider certain aspects of any particular problem. Rather than optimal rationality Simon advances a ‘bounded rationality’ where problems are processed according to already developed frameworks. These frameworks are the limits within which the decision-maker operates. The relevant information available to the rational decision-maker is never completely adequate; they are therefore obliged to decide on the basis of incomplete or inaccurate information. The likelihood of an optimal discussion being taken is undermined by time and financial pressures which obliges the decision-maker to act hastily and closes options that might otherwise be available. The decision-maker is also limited by his or her intellectual ability to deal with multiple and various variables and therefore is not capable of reaching an optimal decision (Simon, 1957). In order to deal with the realities that bind rationality, Simon argues that decision-makers do not seek the best solution but simply a satisfactory solution, enabling them to move onto the next problem. Simon calls this ‘satisficing’ and he offers a less ‘worthy’ but possibly more realistic assessment of the decision-making process (Simon, 1965). The decision-maker is more concerned with discovering and selecting satisfactory alternatives rather than optimal ones (March and Simon, 1958:140-1). The decision-maker has an idea of an acceptable outcome and once an alternative is available that achieves this objective the search for further alternatives is abandoned (Simon, 1979:503). There will, however, be occasions in foreign policy decision-making where the outcome of the decision very much matters to the president and his advisors. When it comes to issues like the future of Russia, where the president is closely involved, he/she wants an optimal outcome rather than a sub-optimal, but satisfactory, outcome. There may be multiple objectives that the actor is able to measure for desirability or undesirability of each possible outcome (Bennett and Nicholson, 1994:208). The decision-maker’s rationality need not necessarily be ‘bounded’ if he/she has a clear perspective about what they would like to achieve and are able to choose from a range of competing options. A further difficulty with satisficing occurs where a number of variables oblige the decision-maker to act in such a way that an unsatisfactory outcome may arise.

Introduction

9

Even with the criticism of bounded rationality and satisficing, together they can provide a better explanation than the Rational Actor Model in some instances. A revised Rational Actor Model, however, could still be useful in understanding decision-making. If non-crisis decision making can be seen as a process with short, mid and long-term objectives it is possible to combine the two approaches. In so doing it becomes possible to comprehend both the long-term goal of a peaceful, liberal democratic Russia fully integrated into the international system as an optimal outcome determined on the basis of a rational actor model, and the short range objectives such as market reforms and arms control, which were conditioned by a bounded rationality and satisficing. These short-range decisions may produce results in the short term but they can undermine the long-term optimal rational decision. What is produced is not a good enough outcome but only one seemingly good enough because actual damage is done and the prospects for achieving either an optimal or satisfactory outcome is ultimately undermined. When the achievement of ‘satisficing’ short range gains are at the expense of a long range rational goal then the decisions taken are quasi-rational if it produces results that are at variance or even opposition to the long term rational goal. A revised framework of analysis, unlike Allison’s Rational Actor Model, would allow for the possibility that there are more than one set of specific goals for each individual decision taken. Rather than the assumption that decision-making is reactive, in responding to specific problems, a new framework is able to accommodate a proactive response to opportunities. The framework of analysis, in order to explain the success or failure of a policy, has to consider both the formulation and implementation of foreign policy over time. I suggest that these two actions require different analyses. Rather than Allison’s formula of applying three different models to the same problem I argue that foreign policy requires separate frameworks of analysis for forming the policy and then carrying it out, which I describe as the presidential framework and the implementation framework. While Allison offered models for explaining how decisions were taken I am also interested in adopting a process approach to discover whether the decisions taken are actually carried out, and if not which factors prevented implementation. Whereas Allison presented three ways to look at foreign policy process in crisis I present two separate stages of process for non-crisis policy making over a long period. The Presidential Framework The two frameworks of analysis specifically address the Russia policy adopted by the Clinton administration 1993-2001 but are also applicable to other foreign policy measures taken by the United States. The Presidential Framework combines Simon’s bounded rationality and Allison’s value maximising rational actor model incorporating them in a new quasi-rational actor paradigm to develop our understanding of the choices leading to short, medium and long range goals. Unlike Allison I suggest that the primary figure in US foreign policy is the

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Lessons from Russia

president, as such the Presidential Framework’s focus is actor-centric. It is the president, after having weighed the advice of colleagues (chosen by him or her) and officials, who ultimately decides on the policy to be pursued. Psychological and behavioural analysis helps us to understand the president’s motivations for a particular action better. The personality, background and experience of the president determine his/her core values, interests, and attitudes to differing foreign policy matters. We need to know about the sort of relationship the president has with his administration. Do colleagues and officials have the confidence to bring different or alternative strategies to the table? Is the president a manager or a leader? Is he/she perceived by other members of the administration to be bold or cautious, aggressive or calming, active or passive, proactive or reactive, organised or undisciplined, involved or distant? Perhaps most important of all, in determining the priority given to any particular foreign policy issue, how committed and involved is the president to a particular course of action? When the president invests his/her time and personal commitment to a particular course of action then policy takes on a different trajectory than would be the case without that involvement. The president clearly does not act in isolation and due consideration must be given to his team of advisors and colleagues. In foreign policy decision-making there tends to be an inner circle of advisors from the president’s cabinet. This team will change depending on the specific foreign policy problem but will be drawn from the Secretaries of State, Defence and the Treasury, the National Security Advisor, Vice President, Ambassador to the United Nations, Director of the CIA, the Joint Chief of Staffs, and their deputies. The influence of this inner circle on foreign policy will be determined in larger measure by the president’s own knowledge of, and interest in, the problem under consideration. Again some knowledge of the personality and background of these advisors can help in discerning the import of their advice to the president. How strong is their relationship and influence with the president? How do they relate to other members of the team? What are their personal ambitions? Are they team players or individualists? In addition to their personal attributes they also head departments which supply them with information to bring into policy discussion. Do they lead those departments in such a way as to encourage a thorough consideration of all relevant information, or do officials simply produce information they know their departmental head wishes to receive? Are the departments selective with the information they supply to their Secretary in order to advance their own agenda? In addition to inputs from the bureaucracy and colleagues in the administration the executive (the president and cabinet) are subject to influence from other interested parties. The most significant of these is the military industrial complex that has driven the US economy since the Second World War and firmly established the United States as the most powerful nation in history. Other corporate business entities and individual campaign donors also seek to influence foreign policy to protect and advance their own interests. Congress is a significant player in the foreign policy process, holding government to account as well as

Introduction

11

influencing, instigating and changing policy. The influence Congress exerts is affected by the make up of the Senate and House. Where the president’s party enjoys a clear majority, Congress has less influence over policy, unless the policies pursued are significantly at odds with the party’s core beliefs. Where the chambers are more balanced or where the opposing party holds control, foreign policy emerges as consensus or the ruling administration seeks ways to circumvent the legislature. The media, also, plays a small part in shaping foreign policy by directing the public and politicians’ attention to issues it considers important. Through the use of opinion polls, the media are able to bring to the executive’s attention the popularity, or otherwise, of their policies. The media tend to follow, and comment on, rather than instigate foreign policy options. It is rare for the ‘CNN effect’ to prompt governments to action, and usually only when such prompting complements the administration’s existing thinking. Public opinion itself has little impact on foreign policy unless the country is at war. Although in theory the biannual electoral process should afford greater sensitivity to the public's viewpoint in reality foreign policy is seldom an issue at such a time when domestic issues set the agenda. The exception is among diasporic communities within the United States who seek to direct their representatives’ attention towards issues affecting their ancestral homeland. Other contributors to foreign policy debate are even more marginal but exercise influence as validation for existing ideas within the administration. These would include the contribution of religious leaders, political parties, non-governmental organizations, former presidents, their advisors, and academics. When ongoing foreign policy, rather than crisis decision-making, is considered, attention must be given to the time period involved. Policy can and does evolve and change over time in response to changing international and domestic circumstances, including changes in the actors involved. I argue that a significant factor in foreign policy analysis should be due consideration of the changes in policy between the first and second terms. In the first term the administration, and in particular the president, adjust to the demands of office, deal with inherited problems on an ad hoc basis, or simply maintain the previous administration’s policy, before their own policies emerge and present a clear alternative. The administration will seek distinct policy successes in order to contest an election with positive achievements, which becomes more urgent as the election approaches. Once a second term has been achieved, however, the onus then shifts to legacy-building or second-termism, in which the president gives more emphasis to foreign policy in order to build an international reputation and secure a legacy as a statesman/woman. Should the president bequeath a ‘doctrine’ like Presidents Truman, Nixon or Reagan that is even better. During the second term the president’s commitment to particular foreign policy issues either develops or deepens, and administration colleagues increasingly seek to shape the president’s policies rather than influencing them.

12

Lessons from Russia

Underpinning the Presidential Framework is due consideration for America’s fundamental values, traditions, and sense of mission. A national identity that has been described as American exceptionalism has a significant impact on foreign policy choices. The perception Americans have of themselves, and that others have about them, curtails foreign policy options. America is the most powerful nation on earth economically and militarily and almost inevitably assumes the same is true culturally. The deeply ingrained belief that America is the land of opportunity, freedom and individual liberty gives US foreign policy a missionary zeal. This finds expression in attempts to promote democracy, monetarism, and free trade and US leadership in the numerous alliances and international institutions they belong to. The final aspect of the model involves consideration of the international system. US membership of, and involvement in, the international financial institutions, military and trade alliances, also constrains unilateral action. The United States seeks, but does not require, approval from allies and the international community in general, to both reinforce its sense of mission and reduce the financial burden of acting alone. In considering US foreign policy geographical considerations determine the sort of actions contemplated. The US will act unilaterally in nearby South and Central America, but further afield it will seek to act in concert with others. American exceptionalism determines that international institutions, including the United Nations, can be used as an additional tool of US foreign policy when they are compliant or disregarded when they are not. When all these factors have been taken into consideration it is the president who will ultimately decide on the action to be taken. The president will often have several long-range goals he/she would like to achieve, and a hierarchy of goals emerges to determine the response to, or initiation of, specific acts. The president will act rationally, measuring the utility of possible outcomes by their probabilities once that outcome is chosen. The option with the greatest anticipated utility will then be chosen (Bennett and Nicholson 1994:208). Unlike the classical Rational Actor Model, however, decisions are not taken only on the basis of estimates of the potential benefits, which will accrue for the state’s foreign policy. The president is still seemingly pursuing rational choice when weighing domestic or personal priorities against foreign policy decisions. In the case of the United States, it can still be a seemingly rational choice for the president to put his own re-election, or his party’s electoral performance, ahead of controversial foreign policy decisions. The decisive issue is the perceived hierarchy of personal, domestic and foreign policy goals, which sometimes conflict. These different goals emerge from the president’s long term vision for both him/herself and the country, and from events occurring as problems to be resolved, or future political outcomes to work towards. A rational choice in the presidential framework may preference personal or domestic goals over foreign policy ones and still be rational by maximising the president’s rather than the country’s utility. In many cases the president and the country’s utility are the same but, in the second term especially, there can be a clash of interests as some presidents seek to leave a foreign policy

Introduction

13

legacy, which maximises their utility but potentially not that of US foreign policy interests. The presidential framework is a revision of Allison’s Rational Actor Model. In which the president is the primary actor. In this actor-centric framework the president maximises his or her own long term utility by making rational choices based on optimal foreign policy choices and his/her own self-interest. The president has a hierarchy of short and medium term goals, which alter over time and according to different situations. Seemingly rational choices are made that take into account the psychological and behavioural profile of the president, his/her relationship within the administration and with other leaders. An account is also taken of inputs from Congress, the media, public opinion, the bureaucracy and the military industrial complex. Underpinning the decision-making process is the idea of American exceptionalism. These ideas and concepts can be expressed by incorporating them within a quasi-rational actor paradigm.

A Quasi-Rational Actor Paradigm Allison sharpened the general characterisation of Model I by introducing a rational Actor Paradigm as a ‘systematic statement of the basic assumptions, concepts, and propositions employed by a school of analysis’. Here, I utilise Allison’s framework to produce a quasi-rational actor paradigm to advance the implicit presidential framework to an explicit paradigm (Allison, 1971:32-5). Allison’s observation that this can be no more than a caricature is apposite but, like Allison, I maintain that it can be instructive: Basic Unit of Analysis: Governmental Action as Choice The activities occurring in international relations are the result of choices taken by national governments. These choices are made on the basis of securing the maximum advantage to the country in the long term and sufficient or satisfactory advantage in the short to mid term. Organizing Concepts a) National Actor. The government conceived as a seemingly rational, unitary decision-maker is the agent. Within the government the primary figure in US foreign policy is the president. He/she will decide policy only after consulting colleagues and officials, but the ultimate decision rests with the president. The personality and background of the president and significant staff members will influence that decision. The actor has short, medium and long range goals, the choice on each having significant impact on the attainability of later goals.

14

Lessons from Russia

b) Significant Influences. Although ultimately the decision rests with the president there are significant parties in a position to influence policy. The president’s advisors and colleagues, military industrial complex, big business and corporate donors. Congress, the media, public opinion, religious leaders, and academics all exercise varying degrees of influence depending upon the foreign policy issue. c) The Problem or Opportunity. Action is taken in response to both the perceived threats and opportunities facing the nation. d) Action as Quasi-Rational Choice. The components include: i) Goals and Objectives. Goals and objectives in non-crisis decision making are short, medium and long term. National interests, including security, economic and ideological are the principal categories in which all foreign policy goals are conceived. The pursuit of short and medium term goals directly impinges on the attainment of long range goals. ii) Options. In the pursuit of any given foreign policy objective a range of policy options exist. iii) Consequences. Any action produces a series of consequences and in considering various options the potential consequences for overall national interest objectives are considered. iv) Choice. Rational choice produces an optimal outcome for foreign policy objectives. Decision-makers seek an optimal outcome over the long term. In the short and medium term decision-makers are constrained by the limited information, time constraints and political expediency, implied by bounded rationality, to satisfice. This bounded rationality in the short and medium term compromises the pursuit of optimally rational goals over the long term. Each of the choices in the shorter time frames may appear rational but being sub-optimal actually usurps long-term value maximisation. Instead of a bounded rationality producing a sufficient or satisfactory outcome, the decision making process is quasi-rational in that short-term choices produce insufficient and unsatisfactory long-term outcomes. Dominant Inference Pattern The presidential framework’s explanatory power, like Allison’s rational actor model, derives from inference. The particular actions of a nation are weighed against its purported objectives and inference is made that these actions seek either to produce a satisfactory or optimal outcome. The framework’s task is to explain the purposive link between objectives, action, and outcome. General Propositions The basic assumption of quasi-rational decision making is that there is a hierarchy of goals, which can be ascertained from the relative expenditure and emphasis

Introduction

15

government devote to them. These goals are short, medium, and long term and at each stage seemingly rational choices are made. Long range goals are determined on the basis of optimal rationality in which action is take on the basis of Allison’s four assumptions: ‘a combination of the nation’s (1) relevant values and objectives, (2) perceived alternative courses of action, (3) estimates of various sets of consequences (which will follow from each alternative), and (4) net valuation of each set of consequences’ (Allison, 1971:34). Short and medium term actions are concerned with securing an improved situation in terms of national interests, and relative advantage against other nations. Due to time pressure, incomplete information, and political expediency, such actions are characterised by bounded rationality and are intended to produce a sufficient or satisfactory outcome during this time frame. Such actions are considered as rational stepping stones to achieving long term goals but in settling for less than optimal outcomes such choices are only quasi-rational because long-term objectives are not achieved. Specific Propositions a) American Exceptionalism. All US foreign policy is underpinned by American Exceptionalism, the notion that America is destined to be the world’s leading nation with a unique mission either to bring or to represent its version of freedom and democracy to the world. All US presidents ascribe to this sense of mission and awareness of America’s pre-eminent world role. This exceptionalism affects foreign policy choices by either helping to determine them or providing the rhetoric to justify such choices. b) Presidential Involvement. The personal commitment and involvement of the president to a particular course of action has an effect on the outcome of government action. His/her ownership of the policy, including a willingness to invest time and resources does not necessarily have a positive effect on the overall outcome of the policy. The president’s choices themselves are bounded and can serve short term domestic and personal interests rather than long term optimal outcomes for the nation. Evidence Evidence is gathered from government and non-government sources, official publications, speeches, statements, analysis, testimony and interviews. The information is considered against the government’s aims and objectives and a process of ‘vicarious problem solving’ (Allison, 1971:35) occurs, with the analyst putting him or herself in the place of the government. The analyst considers what information was available, what was achievable, what was desired, and what was intended, permitting him/her to use principles of rational action. Where the choices taken in the short term appear rational but in the long-term turn out not to have been, those choices can be termed quasi-rational.

16

Lessons from Russia

Implementation Framework Once a foreign policy decision has been taken it still has to be implemented. The policy may be rigorously endorsed by the administration and yet fail to be effectively implemented. The Implementation Framework is an adaptation of Allison’s Models II and III but, rather than these processes influencing the creation of foreign policy, I concentrate on their influence in carrying the policy out (Allison, 1971:78-96; 162-81). Firstly, consideration is taken of the organizations involved in implementing particular foreign policies. An examination of organizations’ regular patterns of behaviour, repertoires, programmes and standard operating procedures provides an indication of how the organization usually deals with foreign policy implementation. This needs to be supported by evidence of their previous experience of dealing with similar issues in the past. Knowledge of the organizational culture will reveal how effectively they will seek to carry out new policies. The foreign policy analyst needs to be aware of the traditions and prejudices of organizations that may indicate antipathy to change. Is the organization/department intent on empire building? How does it relate to other departments and organizations? Do members from the same and other departments come from similar backgrounds? Do the organizations involved assume ownership of the policies they have been entrusted to carry out? The enthusiastic support and commitment to action by relevant departments is essential to the efficient implementation of policy. Even when the willingness is there to do so the resources may not be. We need to question whether there are the financial, technical and human resources available to carry out the task. Do staff assigned to particular tasks have the experience and authority to deliver? Do they have sufficient time and knowledge to give proper attention to the job at hand or are they over-stretched? In all large organizations there is the danger of bureaucratic logjam and we need to consider the reason for delays in implementing policy. With many foreign policy decisions, relevant departments delegate or contract their work to outside bodies. It is essential to consider the delegation process to determine its impact on policy implementation. Who are given contracts, on what basis and why? Are contractors employed on the basis of their proven experience, expertise and efficiency or on the strength of their relationship with those who award contracts? In over-worked, or inefficient, departments is there a tendency to award contracts to favoured parties, including non-governmental organizations (NGOs) which in turn sub-contract, in order to be seen to be dealing with the task? Whether the policy is carried out by a particular department or by others on their behalf the effectiveness of the implementation will depend to a large extent on their accountability. Who are they accountable to and for what? What information is required from the organization to determine the effectiveness of policy implementation? Is the right information being sought or could that information be misleading? What sanctions can be taken against them if they fail to deliver their aspects of the policy? US policy should be scrutinized by Congress and foreign policy analysis should take into account whether this is done and how effectively

Introduction

17

organizations and the administration are held to account. The coherent formulation of policy requires the commitment and involvement of the president, and his inner circle, just as successful policy implementation depends on the active and ongoing involvement of the administration. Is the policy clear and unambiguous? Does the bureaucracy have a clear understanding of both what is required of them and the priority the administration attaches to its implementation? When an examination has been made of the organizations involved, the organizational culture, the problems created by bureaucratic logjam, delegation and accountability we are able to trace the course of policy implementation and discover deviations from, or evolution of, the original policy decision.

The Implementation Paradigm Basic Unit of Analysis: Government Action Conducted as an Organizational Output The implementation paradigm concentrates on the implementation of policy already determined according to the presidential framework. Various government organizations and their subcontractors then implement the policy. Government hands over the implementation of policy, but not control, to these departments and organizations, which intend to fulfil their remit. Organizing Concepts Organizational Actors. The actors are all those organizations and their agents involved in the implementation of specific foreign policies. These include organizations such as the State Department, the relevant US Embassy, USAID, NED and the NDI. Organizational Control. Organizations have their own internal hierarchy but these in turn are answerable to the presidential appointees who head the departments, and ultimately to Congress and the president. The actions of the different organizations require oversight from government leaders and coordination of the overall policy objectives. On Russia, the coordination role fell to the Deputy Secretary of State, Strobe Talbott, his coordinator of assistance to the Former Soviet Union, and the US Ambassador in Russia. Separation of Responsibilities. Foreign policy implementation involves many different organizations to carry out the policy. Different organizations or departments within organizations carry out different aspects of the policy. As Allison identifies, organizations see problems through the prism of their own experience and act with some degree of autonomy within the overarching framework of the policy (Allison, 1971:80).

18

Lessons from Russia

Organizational Priorities. Over time organizations build up considerable expertise in the areas within which they operate. The areas are narrow and specialization in them encourages organizational parochialism (Allison, 1971:81). Government organizations tend to recruit the same type of personnel, who will usually remain with the organization for a long time, securing advancement through their conformity to existing patterns of behaviour and mastery of bureaucratic procedure. The organization has its own way of doing things and its own perceptions about the methods required to deliver policy objectives. Knowledge of this organizational culture will reveal how they implement foreign policy decisions. The overwhelming priority is not necessarily the national interest but rather the health and status of their own organization (Allison, 1971:167). Organizational Constraints. The organization’s ability to act as it please is constrained by accountability to departmental heads, government leaders and Congress. Organizations are also constrained by the demands of public opinion, diasporic communities and special interest groups. They also have to deal with deadlines in producing reports, and delivering services or assistance (Allison, 1971:82, 168). Organizations are able to operate within their own sphere of activity but rarely outside it without incurring competition and opprobrium of other organizations or departments. Organizational Outputs. Organizations have their unique characteristics, which include set ways of conducting its activities. These consist of standing operating procedures, programmes and repertoires. These channels for organizational outputs enable a large number of tasks to be performed by many individuals in a standardized and predictable manner. With the standard training individuals can each perform requisite tasks to the same or similar standard, in a coordinated manner. This standardization promotes predictability at the expense or flexibility, reflexivity, and initiative, in doing so other organizations learn how to cooperate or respond to the actions or demands of one organization to another (Allison, 1971:83-4). Organizational Development. Organizations do evolve slowly over time in response to new problems and challenges. Such change is gradual and will tend to build or develop from existing procedures and routines (Allison, 1971:85). Over the first decade of Russian reforms, organizations had to adapt in response to the changing circumstances and levels of budgetary support. The pace of change is always slower than that required to deal with fluid foreign policy situations. Dominant Inference Pattern The explanatory power of the implementation framework lies in its ability to discover the impact of organizations on delivering foreign policy objectives by exploring the way organizational character and patterns of behaviour affect that

Introduction

19

process. The inference being, that if organizations deal with policy implementation in a certain way for one situation they will deal with similar situations the same way. General Propositions Organizational Routines. Organizational routines including standard operating procedures, programmes and repertoires reveal how organizations generally deal with foreign policy situations. A similar pattern will be repeated even when the features of the new problem are different to the old one (Allison, 1971:89). Organizational Culture. Knowledge of the organizational culture will reveal how effectively the organization will seek to carry out new policies. The traditions and prejudices of an organization may indicate antipathy to change. Organizational Change. When change occurs it will be limited, slow, lack flexibility and be incremental (Allison, 1971:91). Organizational Resources. In new foreign policy situations, organizations lack sufficient and adequate resources to implement new policies fully. Organizational staff will lack the time necessary to acquire the requisite experience, knowledge, skills, and authority to deliver the policy effectively. Organizational Goals and Objectives. The organization’s main priority is not necessarily delivering the foreign policy objective. Rather, the organization will seek to achieve some progress towards the objective whilst expanding its portfolio of activities and excluding other agencies from its own sphere of influence. The main priority it to receive government’s confidence, in the organization’s ability to deliver the policy, expressed in terms of increased budgets and staffing levels. Organizational Competition. Organizations compete with one another for scarce budgetary resources. Such competition makes cooperation less likely and results in different organizations seeking to convince government of the value of their contribution compared to the lesser contribution of their competitors. Such rivalry leads to a duplication of tasks, suspicion of motives, and is counterproductive in securing policy objectives. Organizational Personnel. The difference in outlook between members of different organizations will affect the coherence of policy. The bureaucrat must conform to standard patterns of behaviour to cope with ‘inevitable changes in administration and personnel’. He/she tends to be secure and relatively well paid with incremental benefits (Allison, 1971:179). Personnel in the non-governmental sector are less secure, among the NGOs tend to be less well paid and have fewer benefits. They tend to be more ideological and committed to the policy initiative they have been

20

Lessons from Russia

asked to deliver. Political appointees, on the other hand, are also anxious to see the policy delivered, or at least not prove a liability. They are governed by time constraints and pursue short-term expediency over one or two presidential terms rather than plan long-term. Accountability. An organization’s enthusiasm to deliver policy objectives depends on how closely they are held to account by the administration and Congress. The willingness to apply sanctions by the administration or Congress will have an impact on policy implementation. In seeking to satisfy government about the progress of a policy, information supplied will point to progress rather than to problems. Analytical tools will be employed that emphasise success rather than indicate unsuccessful or unsatisfactory outcomes. Specific Propositions Congress and Public Opinion. In order to hold the administration to account, Congress relies on a full and frank disclosure of relevant information pertaining to foreign policy decisions and implementation. When the president’s party controls at least one chamber of Congress then such disclosure is more forthcoming. After 1994 a Republican Congress deliberately sought to undermine Clinton’s Russia policy and the administration retaliated by seeking to circumvent Congress and offering less than full disclosure on the policy towards Russia. Congress had little incentive to emphasise democracy promotion in Russia because there was no public campaign or interest in democratizing Russia. The issue was not a votewinner or loser and therefore attracted the interest of very few congressmen and women. Russian Reformers. No matter how committed the US administration was to democracy assistance their Russian counterparts had little interest in embracing liberal democracy. Presidential Involvement. President Clinton’s interest in, and commitment to, assisting Russia was known to all parties involved and focussed attention on achieving results, either actual or hoped for. Evidence The implementation framework relies on evidence from congressional records and reports. These are supplemented by interviews with leading players and both qualitative and quantitative evaluation of democracy assistance efforts by government and non-governmental sources.

Introduction Table I.1

21

Summary Outline of Frameworks and Concepts

The Paradigm

Presidential Framework

Implementation Framework

Basic unit of analysis

Government action as choice

Government action conducted as organizational output

Organizing Concepts

President as national actor The problem or opportunity Action as quasi-rational choice Goals and objectives Options, consequences, choice Optimal rationality – bounded Rationality = quasi-rationality (O-B=Q)

Organizational actors Organizational control Separation of responsibilities Organizational priorities Organizational constraints Organizational outputs Organizational development

Dominant inference Pattern

Governmental action chosen to produce either satisfactory or optimal outcomes

Organizational behaviour and character affects foreign policy delivery

General propositions

Hierarchy of foreign policy goals Goals are short, medium and long-term Short and medium-term = Satisficing Long-term = optimal

Organizational routines Organizational culture Organizational change Organizational resources Organizational goals and objectives Organizational competition Personnel accountability

Specific propositions

American Exceptionalism Presidential involvement

Congress and public opinion Russian reformers Presidential involvement

The Book’s Main Arguments The strategic and political importance of promoting democracy in Russia provides an ideal case study to assess US commitment to promoting democracy around the world. Russia represented both the ultimate challenge and an outstanding opportunity. An erstwhile adversary and systemic rival, wanting and willing to change, prepared to allow America, and its western allies, to help shape the country’s economic and political future. The size, diversity, military and strategic importance of Russia meant that a successful transition to market democracy would have implications for the other newly independent states, China and the developing world. This book represents a unique attempt to analyse both the formation and implementation of US democracy promotion in Russia using two new frameworks of foreign policy analysis. It differs from most other analyses in

22

Lessons from Russia

favouring an actor-centric approach arguing that Clinton himself was the architect and main player in America’s Russia policy. This is supported by new evidence supplied during interviews with key actors and autobiographical evidence from the memoirs, interviews and testimonies of Strobe Talbott and Warren Christopher, among others. It also places greater emphasis on the speeches, press conferences, statements and Congressional testimony of Clinton and members of the administration than other accounts to discover why the policy of democracy promotion in Russia took the course it did. The presidential framework demonstrates that Clinton’s preference for dealing with personalities undermined attempts to promote democracy in Russia. In equating the cause of democracy with the personal fortunes of Boris Yeltsin and the reformers, Clinton overlooked alternative reform possibilities in Russia. In order to safeguard and promote the position of America’s favoured reformers, Clinton was prepared to encourage and endorse the use of non-democratic means to achieve ostensibly democratic ends. These were to include violence against the Congress of People’s Deputies, rule by decree, the introduction of an unbalanced constitution, electoral irregularities, and human rights abuses in Chechnya. The American foreign policy system itself worked against promoting democracy in Russia because the power of patronage prevented the president’s advisors challenging his unequivocal support for Yeltsin. The US Treasury emphasised economic measures over political processes in Russian reform. Meanwhile the Defence Department and National Security Council’s (NSC) insistence on changes in Russian foreign policy, in the short-term, undermined efforts to promote democracy in the long-term. The administration was able to minimise the influence of Congress over policy by working through multilateral institutions and NGOs. I make the case that policy towards Russia changed during Clinton’s second term because of the president’s desire to leave a legacy of accomplishment in US-Russian relations. The implementation framework reveals that US democracy promotion in Russia was the outworking of US missionary zeal but failed both as a policy and in the implementation of that policy. Bureaucratic ineptitude led to a mismanagement of the meagre resources and the delegation of responsibility to favoured groups such as HIID, which employed undemocratic methods in seeking to promote economic reform. The framework further exposes a lack of coordination between USAID, the State Department and international assistance. The ability of the public to influence the debate was also undermined by a campaign of media misinformation based on a positive spinning of achievements in Russia, especially by the GoreChernomyrdin Commission. The policy lacked accountability with little congressional scrutiny until the attempt to impeach Clinton. Even those implementing policy would only report back news the administration wished to hear. The administration’s continual refrain was that there was simply no alternative to the policies they actually pursued. I argue that quasi-rational choice theory demonstrates that because they made sub-optimal choices, in order to secure short-

Introduction

23

term advantage for the president and US national interests in general, they actually achieved unsatisfactory outcomes for democracy in the long-term. The administration had a hierarchy of foreign policy objectives with US national security at the top of the list. National security objectives were followed by a desire to enhance America’s position as the sole remaining superpower, a desire to end communism as an ideological challenger, increase trade, achieve specific short-term foreign policy objectives, enhance America’s reputation, and only then promote democracy as a long-term objective. Alongside these external objectives, the administration had to weigh, and often prefer, domestic objectives. These included getting re-elected, attempting to secure the 2000 presidency for Gore, and win mid-term elections for the Democratic Party, enhancing Clinton’s status as a world statesman, increasing US jobs and trade, and using foreign policy to deflect from domestic problems, including the threat of impeachment. In order to set the arguments about democracy promotion in context the next chapter considers the theoretical debate about American foreign policy that ensued at the end of the Cold War. The extent to which this debate influenced the Bush Senior administration and policy towards Russia is analysed. The US-Russian relationship bequeathed to Clinton by the outgoing Republican administration in 1993 is then assessed. Chapter Two examines Clinton’s initial policy on Russia using Presidential Framework analysis. It looks at how policy was determined during the first year in office, asking what the policy was, why it was adopted and which other options were available? In particular the relationship between Yeltsin and Clinton is considered and how this came to influence the course of future events in Russia. Chapter Three describes US involvement during the remainder of Clinton’s first term, highlighting issues of privatization, Chechnya, and the 1996 elections. The decision making process is analysed to discover why the administration chose to back Yeltsin and his ‘reformers’ rather than adopting alternative strategies. The influence of members of the administration, the shift in power within Congress, the media, and public opinion on the formation of policy is explored. In the fourth chapter a further analysis of the second Clinton administration, is undertaken. This highlights the changed priorities of the second term presidency. The partisanship of Congress and domestic hostility to the Russia policy is detailed. The impact of changing prime ministers, the second Chechen war, corruption, and the transfer of power to Putin, on policy towards Russia is assessed. It also debates how committed the Clinton administration really were to promoting democracy. The chapter following is largely an empirical description of what actually happened to the implementation of the democracy promotion policy. It considers the implementation process, the actors and organizations involved, and the resources which were available. There is a discussion of the type of democracy they were seeking to promote and how organizations set about their task. Detailed consideration is given to the major programmes pursued by the assistance providers.

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Lessons from Russia

Chapter Six subjects the empirical data presented in the previous chapter to critical analysis. The Implementation Framework is used to discover the extent to which organizational bureaucracy had an impact on the delivery of the Russia policy. The contribution of the main assistance agencies is critiqued, detailing and explaining their failure to meet their policy implementation objectives. The book concludes, in Chapter Seven, that the Clinton administration pursued sub-optimal choices to achieve short-term national security and market promotion gains rather than the value-maximising outcome of a liberal democratic Russia. The administration’s preference for developing relationships with individuals rather than institutions, favouring markets over democracy and using non-democratic means to promote ostensibly democratic ends all have implications for current US strategy in the Middle East. The lack of resources, Congressional intransigence, and policy implementation failings are still relevant today and the final chapter is an entreaty to learn the lessons of Russia when promoting democracy abroad.

Chapter 1

A Policy for Russia Any programme of government for a future Russia will have to adjust itself to the fact that there has been this Soviet interlude, and that it has left its positive marks as well as its negative ones. And no members of future Russian governments will be aided by doctrinaire and impatient well-wishers in the west who look to them, just because they are seeking a decent alternative to what we know today as Bolshevism, to produce in short order a replica of the western democratic dream (Kennan, 1952:130).

The collapse of the Soviet Union brought an end to bipolarity and the relative stability of the Cold War period. Old certainties disappeared as the US administration, bureaucracy, politicians, media, and international relations theorists sought to make sense of the new world and especially how to deal with a post-Communist Russia. In this chapter I begin by considering international relations theory after the Cold War and its impact in informing policy on Russia. Secondly, I discuss the first Bush administration’s approach to Russia, and the legacy it bequeathed to the incoming Clinton administration. In the first year of office, the Clinton administration developed their own strategy on Russia, and thirdly, this is detailed before being analysed using the presidential framework. Russia’s Future: International Relations Theory after the Cold War The sudden ending of the Cold War and the collapse of the Soviet Union were not predicted by politicians, the media or international relations specialists. The ideological triumph of the west, and the United States in particular, left policy planners and commentators desperately searching for new theories and predictions to accompany the changed international circumstances. People wanted to know if the world would become a safer or more dangerous place. Bi-polarity had brought stability to the international order but would that stability continue in a unipolar world? In these changed international circumstances what role would the United States play and how would that affect future US-Russian relations? Predictions for the future could largely be divided into three schools: the optimists who anticipated an improved international order, with the ex-communist states becoming democracies; the pessimists who anticipated a deteriorating international climate; and the pragmatists who advised preparation for any eventuality.

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Lessons from Russia

Optimists Understandably for most Americans the end of the Cold War and subsequent break up of the Soviet Union was a cause for tremendous satisfaction. Fukuyama captured the mood with his often quoted ‘End of History?’ article (1989) and subsequent book, The End of History and the Last Man (1992). Fukuyama posited a Hegelian argument that the west’s victory in the Cold War demonstrated the ‘total exhaustion of viable systemic alternatives to Western liberalism’ (Fukuyama, 1989:3). Future conflicts would occur but they would be conflicts over interests rather than ideology. Liberal democracy, the ‘doctrine of individual freedom and individual sovereignty’ could not be improved upon for Fukuyama and so the end of history had been reached (Fukuyama, 1992: xi, 42). Fukuyama argued that the significance of the west’s victory was neither military nor economic but ideological. His metanarrative pointed out that the eventual triumph of global capitalism and neoliberal values was inevitable. If communism could collapse so spectacularly all over central and Eastern Europe then it was imperative to fill the gap by extending western (American) core values to the second and third worlds. Samuel Huntington, who was later to argue that the postCold War would be characterised by clashes of civilizations (Huntington, 1993) summed up the prevailing mood: The United States is the premier democratic country of the modern world, and its identity as a nation is inseparable from its commitment to liberal and democratic values … Americans have a special interest in the development of a global environment congenial to democracy (Huntington, 1991:29-30).

The break up of the Soviet Union opened up opportunities to extend those ‘liberal and democratic values’ to America’s former adversary. This was an opportunity which must be seized, argued American strategists, in Russia, in particular, where an investment in democracy and economic reform would prevent any return to the Cold War (Russett, 1993:138; Simes, 1992:77-89; Schlesinger, 1992:9). McGeorge Bundy, special advisor for National Security to Presidents Kennedy and Johnson, advised the Bush administration that the best investment it could make was in Russian democracy and playing their part in Russia’s turn to freedom (Ambrose and Brinkley, 1997:375). The optimists urged a return to liberal internationalism in US foreign policy and the promotion of democracy as the key component in creating a peaceful and stable post-Cold War order. Liberal internationalists appealed to Kant’s Perpetual Peace (1970), as validation for their argument, that America should be involved in international affairs and actively promoting its ideas and values. Kant’s model suggested that republican states were less likely to go to war with one another and that a peaceful international order was only possible among republican states. Michael Doyle in an highly influential article substituted ‘democratic’ for ‘republican’ and argued that constitutionally-stable liberal democracies never fight one another, although

A Policy for Russia

27

they often go to war against non-liberal ones (Doyle, 1983). The empirical evidence appeared to support Doyle’s claims and was supported by other influential theorists including John Lewis Gaddis, Joseph Nye, Bruce Russett and Samuel Huntington (Gaddis, 1992:198; Nye, 1992:96; Russett, 1993:119; Huntington, 1991:28-9). In the post-Cold War environment they argued that normative constraints made war between democracies highly unlikely and therefore security would be enhanced if the former Soviet Union democratized. Many commentators felt that a transition from communism to capitalism, from empire to nation state, and from totalitarianism to democracy would occur in Russia with help from the west. The break up of the Soviet Union, following the collapse of communism in Eastern Europe, seemed to fit into a pattern of democratization sweeping much of the world. Samuel Huntington described a third wave of democratization beginning with the fall of the Caetano military junta in Portugal in 1974. This wave spread from southern Europe in the mid 1970s to South America by the late 1970s and early 1980s, and Asia by the late 1980s. The trend continued in Eastern Europe, the former Soviet Union and Africa (Huntington, 1991:1). This trend of partial or complete rejection of totalitarian rule inspired a new field of comparative analysis examining the characteristics of, and potential for, transitions from totalitarianism towards democracy. Transitology in the late 1980s and throughout most of the 1990s was extensively debated and criticised, especially within area studies, however within international relations theory there was widespread acceptance of the desirability and even inevitability of transition. The very term transitology, however, is valueladen implying that there is an inevitability about movement from totalitarianism (bad) to democracy (good). This movement is ongoing from a lower to a higher form of political and economic governance. Transitology, in this sense, fits into the triumphalist rubric that sees liberal democratic market capitalism as the end point of political and economic progress. The United States and, to a lesser extent, the European Union (EU) are seen as the plumb line against which all other nations are to be assessed. Transitologists have adopted an ideological approach that purports to explain a nation’s history and future as the onward march towards democratization. Unfortunately in such an analysis history, culture and tradition have little relevance (Cohen, 2000:21-27). The transition envisaged is not simply democracy, but a market economy as well. The achievements of these inextricably linked twin goals, it is argued, are worthwhile no matter what the social cost. Different commentators describe a market economy as a precursor to democracy, others that democracy leads to market economies, and others that the two can be simultaneous. What is not questioned, for the most part, is the desirability and inevitability of capitalist market democracy. Transitology is prescriptive, focussing on political elites rather than the masses. Progress towards democracy is dependent upon agency rather than structure with elites and individual actions determining the rate of that progress. Although structure has some influence and can assist in consolidating democracy a clear distinction is drawn between the initial

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Lessons from Russia

democratization and its subsequent consolidation (Potter et al, 1997:17-18). Optimists, including transitologists, had little doubt that Russia would soon join the community of liberal democracies. Such optimism, however, seemed to bear little relation to events on the ground. Economic reforms actually accelerated Russia’s economic decline, many of the former Soviet elite retained power, and the Communist Party was the only political party with nation-wide organization and support. Pessimists Not everyone was quite so optimistic about a more peaceful future and Russia’s transformation into a market democracy. Realists such as John Mearsheimer continued to insist that the new world order would be pretty much the same as the old. States, he argued, would continue to act in their own national interest and not for the common good. The post-Cold War would be multipolar with military blocs re-emerging and he, along with Cold War historian John Lewis Gaddis, envisaged a US disengagement from Europe and the Far East (Mearsheimer, 1990:5-56; Gaddis, 1992:37). Paul Kennedy, who had earlier predicted the fall of the great powers, now predicted not a new world order but a ‘troubled and fractured planet’ (Kennedy, 1993:349). Former National Security Advisor to President Carter, Zbigniew Brzezinski cautioned that the world would revert to a pre-1939 order with national rivalries and ethnic tensions (Brzezinski, 1992:5). Even Samuel Huntington who had been so positive about democracy’s advance foresaw clashes of civilizations along ancient fault lines (Huntington, 1993:22). Such thinking appealed to those theorists and politicians who refused to get caught up in triumphalism. It was pointed out that conflict with Russia predated the Cold War and even went back as far as 1917 (La Feber, 1992:18). This thinking resonates with Fukuyama’s ideological interpretation but the pessimists envisaged a very different outcome. The idealistic notion that Russia would share the same values as America and cease to be a threat was rejected by many as unduly utopian and unrealistic. The same caveats that applied to aiding the Soviet Union were raised as objections to supporting Russia; that is that any assistance could lead to the re-equipping of an old adversary (Doyle and Ikenberry, 1997:12; Artaud, 1992:193). Pessimists argued that the United States had no need to assist Russia or to cooperate with anyone in the post-Cold War era. America, they insisted, was the uncontested world leader, unable to be constrained by any other country or combination of countries. In a unipolar world America could dress up unilateral action for domestic purposes as multilateral action, but everyone understood the reality that the US gets its political policies implemented (Waltz, 1993:188; Krauthammer, 1991:25-6). The United States was under no obligation to solve every problem in the world and certainly not to invest in Russia. It could do as it pleased and less intervention would probably appeal to the American people. Indeed in a by-election, which signalled the possibility of defeat for Bush later in election year, Harris Wofford, D-Pennsylvania, won on an ‘America First’

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platform? Wofford insisted that American voters wanted their own country’s economic problems dealt with before embarking on international assistance programmes (Wofford, 1992:100). The realists were not alone in their pessimistic outlook on the future after communism. Radical theorists also predicted a bleak future but they saw an overwhelmingly powerful America as the source of potential conflict. Noam Chomsky envisaged US post-Cold War policy being essentially the same as before with some slight adjustments in its propaganda framework to account for the new circumstances (Chomsky, 1992:144). America would continue to intervene economically and militarily wherever it wanted to and prevent others from doing the same. The triumph of capitalism over actually existing socialism would herald a brave new world of neoliberal economies to the exclusion of other types, despite the historical specificity of free market capitalism (R. Cox, 1996:527). Any assistance to Russia would only be on the basis of the country becoming a western-style market economy without regard to specific Russian conditions. Radical theorists saw US hegemony and globalization as the real threat to a better and more peaceful world but, other than to rally political activists, their clarion call failed to penetrate the corridors of power. Pragmatists Whilst optimists and pessimists projected best and worst case scenarios for the new era a third group, the pragmatists, argued for the art of the possible. In international relations, their criterion was to achieve the optimal outcome for the US at minimal cost. The state of the US economy and its relative economic decline, compared to the European Union and Japan, was used to urge restraint on US foreign policy commitments. While some liberal internationalists were calling for a new Marshall plan for the former Soviet Union (FSU), sceptics like William Hyland1 argued the case for pragmatism. The US, he insisted, could not afford to provide much economic assistance to the FSU. Only Russia and the Ukraine mattered to US strategic interests anyway and there was always the possibility that a revitalised Russia could become hostile. Hyland’s advice was to do the minimum necessary to encourage Russia in the west’s direction (Hyland, 1992:38-52). Others argued that any assistance for Russia would be wasted just as it had been during the Soviet era. An investment of some kind might be necessary to encourage Russia to renounce any imperial ambitions, and to provide a degree of stability in the FSU, but what was needed was pragmatism not a neoliberal crusade to make the Russians ‘just like us’. Brzezinski warned against replacing communist dogmas with capitalist ones, and in the eagerness to promote democracy and markets to be sure that the social pain of reform was minimised (Brzezinski, 1992b:47-8). Such pragmatism appealed to all sides and increasingly

1

William Hyland was editor of Foreign Affairs at the time.

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Lessons from Russia

the triumphalist rhetoric was replaced by more measured hopes for a democratic, free market Russia constrained by reluctance to devote the necessary resources. The Impact of the Three Schools of Thought on Policy Formation The three schools of thought were not simply confined to academic debate. The different approaches reflected and focussed debate within the administration itself (Beschloss and Talbott, 1993). The end of the Cold War was identified by the Bush administration as the inevitable outcome of the policies pursued by Ronald Reagan and George Bush, after identifying the Soviet Union as the ‘evil empire’. The collapse of the Soviet Union had not, however, been anticipated and was more problematical. Bush had invested much political capital in his relationship with Mikhail Gorbachev, winning many foreign policy concessions and tacit support for the Gulf War. The outmanoeuvring of the Soviet president by Boris Yeltsin, and the subsequent break up of the Soviet Union, presented new challenges to the US president. Bush had little confidence in Yeltsin and members of his administration were even less impressed (Beschloss and Talbott, 1993:104-5). The Yeltsin administration was, however, offering an unprecedented opportunity for the United States to be involved in shaping Russia’s future. The Bush government was divided between those who favoured a return to relative isolationism and internationalists who urged America to play its role as world leader (Ambrose and Brinkley, 1997:378). Bush was content to allow such disagreements providing they were settled in private. He favoured a collegial executive style of leadership, emphasising personal relationships, loyalty and secrecy (W. Doyle, 1999:281). The president was largely non-ideological rejecting ‘the vision thing’ in favour of a pragmatic approach which considered each issue on its individual merits (Hill and Williams, 1994:3; Moore, 1994:162). The different schools of thought gave expression to contested views within the administration but made little impact on the president himself. He was more concerned about his fading popularity and the presidential elections in 1992. The three schools, in varying degrees, exercised influence in shaping the political debate over what to do about Russia in the post-Cold War era. The pessimists within the administration urged caution in assisting Russia, which might revert to communism and renew enmity with the United States. Mearsheimer’s pessimism, in particular, was well received by the Defence Department anxious not to see defence budgets slashed in the new post-Cold War era. The optimists within the administration, who believed in a New World Order, seized on Fukuyama’s ideas of the ideological triumph of the ‘American Way’ to advocate a continuing, assertive, international role for the United States. Secretary of State James Baker, in a statement before the Senate Foreign Relations Committee entitled ‘Democratic Peace’, urged a strong US role in promoting democracy and American values in Russia. The speech shows familiarity with the democratic peace thesis of writers such as Bruce Russett and Michael Doyle, and the clear influence of this school of thought on Baker’s thinking (Baker, 1992). It

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was the pragmatic school of thought, however, that actually came to reflect the president’s policy towards Russia. The desire to assist Russia for the sake of US national interest was tempered by the constraints of a weak American economy. Pragmatism appealed to reason rather than the cynicism of the pessimists or the romanticism of the optimists. Hyland’s caution merely confirmed the approach Bush was already adopting. The president’s main priority was to secure re-election and assistance to Russia would be of little help in achieving that aim. The three schools of thought came with their own policy prescriptions for dealing with Russia. The implications of adopting the optimistic position would be a commitment to large-scale expenditure in assisting Russia’s transformation. The expenditure would ideally involve significant bilateral grants, rather than loans, to promote democracy and markets in Russia, while helping the transition process. Defence expenditure could be reduced, transferring resources into other sections of the economy and diverting some of the ‘peace dividend’ to support democratization and market reform projects in Russia. The pessimists took the more sanguine perspective that defence budgets must be maintained to deal with worst case scenarios, including reversion in Russia to communism or antiAmericanism. Any assistance to Russia should be limited, possibly counterbalanced with assistance to Ukraine and the Baltic states. The pessimists rejected the notion of multilateralism, preferring to operate in America’s best interests without outside restraint. The pragmatists tended to be more cautious and the policy implications involved an unwillingness to commit significant resources to Russia. Multilateral assistance would leverage American influence and help move Russia towards democracy and the market, without tying up too many US resources and enabling any commitment to be reviewed if conditions changed in Russia. The pragmatists’ approach would be to slightly reduce defence expenditure to help the US economy rather than to significantly increase foreign assistance.

The Bush Administration’s Approach to Russia Before considering the Clinton administration’s policy on Russia it is first necessary to explain its predecessor’s approach towards the country. The Bush administration was caught between an American public reluctant to pledge massive assistance to their former adversary and the Russian government’s appeal for that help. The Yeltsin administration apparently offered almost complete acquiescence in foreign policy and a willingness to embrace free markets and democracy. The opportunity could hardly have been greater to exercise US influence and help shape Russia’s future. President George Bush, buoyed by his success in the Gulf War, optimistically foresaw a New World Order in which sovereign states remained the key unit in international relations. This new order would respect norms of non-aggression and non-intervention whilst upholding international law and institutions. The international community, via the auspices of

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the United Nations, would act if necessary to uphold these norms (Brown, 1997:269; Freedman, 1992:22). The New World Order was reminiscent of Woodrow Wilson’s liberal internationalist vision after the First World War, only this time the US would be involved. The US would maintain hegemony by limiting nuclear proliferation, extending market capitalism, and promoting democracy and human rights (M. Cox, 2000a: 259-60). Russia would be assisted in a transition to market democracy because the US had a responsibility to lead the world after the Cold War. Reagan's ‘evil empire’ had collapsed and it was incumbent upon the city on the hill to ‘let its light shine’ and lead the next generation into a better world. Rather than bask in a triumphalist glory and sit back, Chairman of the Joint Chiefs of Staff Colin Powell urged the United States to exercise decisive world leadership to promote American values: If the free world is to harvest the hope and fulfil the promise that our great victory in the Cold War has offered us, America must shoulder the responsibility of its power. The last best hope of earth has no other choice. We must lead! (Powell, 1992:33).

The US would show Russia the way to a ‘promised land’ of capitalist prosperity and liberal democracy by providing assistance and advice. The policy fitted in well with the optimistic school of thought and had the support not just of the Joint Chief of Staffs but of the State Department, the Director of the CIA, and the National Security Advisor as well. Brzezinski’s advice to ensure that any social pain caused by reforms be minimised was ignored. The president, caught between the competing priorities of assisting Russia, dealing with problems in Somalia and Haiti, tackling the US recession and fighting the presidential election, failed to deal satisfactorily with any of the issues. There was one large proviso to American largesse, however, and that was based on a pragmatic assessment of how much assistance the US economy could afford, without antagonising an electorate notoriously fickle about foreign assistance. Within these constraints the administration set about encouraging transition in Russia just as they had in Eastern Europe, by working with the political elites. A carrot and stick approach of praise and criticism, assistance programmes, trade benefits, and granting or withholding most favoured nation trading status was used throughout 1991-92 (Carothers, 1995). The political and economic assistance consisted of dispensing the same advice that they believed had proved effective in South America and Eastern Europe to assist in the Russian ‘transition’. The Bush Senior Administration’s Policy on Russia The collapse of the Soviet Union and emergence of fifteen new states within its former borders coincided with a keenly contested US presidential election campaign. This coincidence was significant for both the election campaign and for Russia. The dismemberment of the Soviet Union in the final days of 1991 and the transfer of power from Mikhail Gorbachev to Boris Yeltsin finally closed the Cold

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War era. Bush had ‘done no harm’ in watching the momentous events, following the fall of the Berlin Wall in 1989, unfurl. Indeed, he had positively encouraged a new era of security cooperation and arms reduction. George H. Bush had won the Soviet leader’s cooperation in the UN Security Council over war with Iraq, following the invasion of Kuwait, and won a decisive victory in the subsequent Gulf War. Americans, and indeed much of the world, saw the President as a knowledgeable and successful foreign policy practitioner. Under George H. Bush’s watch the Cold War came to an end and the US emerged as the pre-eminent world power. He received great kudos and a personal approval rating in the opinion polls of 90 percent in 1991. Remarkably though, Bush’s popularity waned dramatically in election year, as American voters became preoccupied with domestic affairs. The satisfaction of victory in the Cold and Gulf Wars also marked the close of a chapter in world history. George Bush Senior was the last Cold War president but would he be equipped to lead America into a new era? Voters, free from any perceived Soviet threat, focussed on an economy in recession. Bush had broken his 1988 election promise of ‘watch my lips - no new taxes’ and had failed to deliver prosperity. Many Americans feared relative economic decline as the economies of the European Community and Japan looked set to challenge US economic domination. Voters expressed concern about their jobs and standard of living rather than about the former Soviet Union. The first Bush administration recognised the importance of assisting Russia, in order to maintain international stability, but they were also aware of the voters’ reluctance to do so. Foreign assistance is never popular with the electorate and helping an erstwhile enemy country, run by ex-communists, whilst the US domestic economy was in recession, was certainly no exception. Bush encountered a dilemma between giving necessary support to Russia and the electorate’s unwillingness to enthusiastically endorse such a move. The new Russian state faced incredible challenges, economically and politically, as they sought to make their ‘three-fold transition’. The country was effectively bankrupt, owing billions of dollars to the west, the infrastructure based on the USSR was broken up, and traditional markets for Russian goods had been lost. In addition former Soviet troops were still stationed in Eastern Europe, the Baltics and the rest of the FSU. The emergence of fifteen new states meant that there were now four of those countries with nuclear weapons. On the positive side of the equation, as far as America was concerned, the former adversary was much weakened and its new rulers were seeking to reach out to the west. Yeltsin and his team of young reformers sought western assistance and advice to become a market economy and an electoral democracy. How would the Bush administration respond to this unprecedented opportunity? At an early stage, the United States Treasury decided that a new Marshall plan was out of the question given the misappropriation of prior assistance to the Soviet Union and domestic economic difficulties. Any major assistance would have to come via the international financial institutions that Russia joined, with US

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Lessons from Russia

assistance, in the spring of 1992. The International Monetary Fund (IMF) would have the pivotal role channelling assistance and providing advice on macroeconomic stabilisation. Bush decided at an early stage to leverage US assistance in this way. This would enable the Fund’s largest contributor to exert its influence beyond its 18.5 percent voting strength. The cost of bilateral assistance and the need to receive congressional support made the IMF a cheaper and safer option to achieve the administration’s aims. There was also the additional benefit that IMF conditionality on assistance would prove less threatening and demeaning to Russia than direct American demands (Gould-Davies and Woods, 1999:11; Rutland, 1999:189). This option, although neither brave nor particularly helpful to the Russians, was a rational decision for Bush faced with the alternatives. A large bilateral grant to the Russian Federation as advocated by Stephen Cohen (2000), among others, would have been misappropriated unless targeted towards specific, costed projects with clear lines of command and accountability. The US electorate would have resented spending money on a gamble with Russia’s future while they struggled to come out of recession. It was far better for Bush, the pragmatist, to receive the plaudits for coordinating large sums of money to assist Russia than to provide the money unilaterally. In doing so the president was able to demonstrate tacit support for the Yeltsin administration without the sort of financial commitment that would prove unpopular with American voters. The G7 nations were prepared to countenance bilateral assistance but were equally concerned for Russia to be responsible for servicing the Soviet debt of approximately $90 billion. The IMF, United States Treasury and individual economic advisors all proposed a ‘one-size-fits-all’ approach to the Russian economic problem. The broad policy approach, originally developed for use in South America, was known as the Washington Consensus and began with implementing rapid macroeconomic stabilization methods. This, it was argued, was necessary to build confidence and break inflationary pressures. Budget constraints facing enterprises were hardened, helping to redirect a larger proportion of GDP to the consumer sector. Trade and prices were liberalised to achieve a critical mass of enterprises competing with one another and with imports. Any remaining controls could lead to distortions in the market and encourage corruption and rent seeking. Privatization and de-monopolization were required with large enterprises being broken up and barriers preventing new enterprises entering the market removed. This would destroy any vestiges of the old command economy. Other measures included restrictions on the ability of governments or central banks to assist enterprises; the creation of a new tax system, and structural changes to protect property rights and contracts (OdlingSmee and Lorie, 1993; Aslund, 1994; Gustafson, 1999:2). Former chief economist at the World Bank, Joseph Stiglitz, summed up the appeal of such a policy: The success of the Washington Consensus as an intelligent doctrine rests on its simplicity: its policy recommendations could be administered by economists using little more than simple accounting frameworks. A few economic indicators - inflation, money

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supply growth, interest rates, budget and trade deficits - could serve as the basis for a set of policy recommendations (Stiglitz, 1998).

If prices were liberalised, exchange controls removed, inefficient enterprises allowed to go bankrupt, private ownership and free trade encouraged, welfare spending reduced, and money supply tightly controlled then Russia would prosper. The policy had been successful in South America and Poland, it was argued, and although the IMF’s John Odling-Smee2 acknowledged that various factors pointed to a more protracted transition in Russia than Eastern Europe, the broad policy approach should still be similar (Odling-Smee and Lorie, 1993). The US Treasury and the rest of the administration believed, along with the optimist school, that drastic economic reform in Russia was essential to transform Russia into a capitalist country. Although such a reform process may be painful, the pain would be short-lived and the benefits would convince Russians of the efficacy of capitalism. Once the market was firmly established other benefits of the American Way, including democracy, freedom and the rule of law would follow. The administration, and their partners in the IMF, failed to appreciate, however, that Russia was neither South America nor Poland. The country had little experience of markets or democracy, but a great deal of experience of state and company welfare provision, pensions, hospitals and schools. The optimists, within and without the administration, assumed that transition would be universally welcomed after the initial teething troubles. They were to be disappointed as the reform dramatically worsened conditions for the majority of Russians. George Bush’s Support for Russian Reform The optimistic school most clearly reflected the aspirations of the first Bush presidency in its relations with Russia. The optimists’ argument was essentially that the more Russians became like Americans, the less likely they would be to attack America in the future. They would also be more likely to become reliable trading and security partners. Such optimists encountered the constrained finances available to meet their high ambitions. Aspirations gave way to pragmatic calculation to provide minimal resources while exerting maximum leverage on those resources. George Bush could have taken a decision to lead public opinion and sell the benefits of a significant bilateral assistance package to Russia. Given the different views within his party, and the government itself, over increased US internationalism or retreating to relative isolationism, and his pragmatic leadership style, Bush decided to follow a cautious approach, again ‘doing no harm’, but not advancing the cause of markets or democracy in Russia much either. In January 1992 the United States hosted an International Coordinating Conference in Washington DC to coordinate assistance to Russia. US assistance 2

John Odling-Smee has been the head of the Europe II IMF department covering Eastern Europe and the NIS since its inception in 1992.

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Lessons from Russia

was to take the form of humanitarian and technical assistance, credit guarantees and economic agreements. Humanitarian assistance was provided under the Operation Provide Hope scheme granting Russia $48.4 million in food and $32.9 million in medical supplies. Technical assistance included sending Americans to advise on agricultural projects, health sector reforms, defence conversion through the bipartisan Nunn-Lugar programme, privatization, energy reduction and nuclear safety projects, democratic institution building, business training and tax policy. The US government provided funding for advisors to the Russia State Committee on the Management of State Property (GKI) to implement the mass privatization and voucher programmes. The HIID were funded to enable consultants like Andrei Shleifer, Jonathon Hay, Boris Jordan and Stephen Jennings to help Anatoly Chubais. HIID and Chubais’ aides wrote public relations and computer programmes, helped establish laws, trained hundreds of people and even wrote presidential decrees to implement a part of the auction system (USDOS, 1993; Brady, 1999:74). Under the Democratic Institutions Programme, assistance was provided to strengthen the rule of law, public administration and political parties. An independent media was encouraged and advice on elections given. An US Information Agency (USIA) Parliamentary Exchange Programme invited eight Russian deputies to Washington in 1992. That year also saw the opening of the National Democratic Institute for International Affairs (NDI) and International Republican Institute (IRI) offices in Moscow (USDOS, 1993). Congress approved such efforts in a bipartisan consensus that culminated in the passing of the FREEDOM Support Act, which funded US bilateral assistance. Under the Act the ‘Office of the Coordinator for US Assistance to the New Independent States’, coordinated assistance to the FSU provided by various agencies. The Office of the Coordinator complemented ‘The Assistance Coordination Group’, which managed assistance to Eastern and Central Europe, and both were under the auspices of the State Department. At the same time USAID created the Bureau for Europe and the New Independent States to manage its own programmes (Wedel, 2001:26). The Bush administration pursued a three-pronged foreign policy strategy, elevating democracy promotion alongside national security and economics as a principal element of US foreign policy (Carothers, 1995). The administration had little time for the details of democracy promotion but the experts and advisors had no doubts about the policies and structures necessary to assist Russia’s transition to democracy. If Western-style democracy were to be the Holy Grail then modelling of western socio-political institutions would hasten Russia’s progress towards it (Carothers, 1997:116). First and foremost the democracy promoters would seek to encourage regular, free and fair elections. Such elections would have to be multiparty, secret ballot, and free from fraud or intimidation. There should be an opposition capable of forming an alternative government and a ruling party willing to relinquish power in the event of electoral defeat. There should be room for freedom of assembly and expression and from the fear of arbitrary arrest. An independent judiciary should have the power to protect the rights of the individual. A written constitution should protect basic political and civil rights,

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while NGOs, independent trade unions and an independent media channel the citizen’s demands to the government (Halperin, 1993:106, Carothers, 1997:115). To achieve such changes in Russia would require a considerable political and economic commitment from the west and willingness for the Russians to embrace change. As part of their attempt to provide that assistance to Russia and the FSU George Bush and German Chancellor, Helmut Kohl, announced a $24 billion assistance package on 1st April 1992, just five days before an important session of the Congress of People’s Deputies (CPD). The IMF was to provide $9 billion, the World Bank $1.5 billion and bilateral assistance would amount to a further $13.5 billion. The $24 billion figure was, however, arrived at by ‘sleight of hand’ and consisted mainly of short-term credits at commercial interest rates. The IMF only produced $1 billion in August, which had to be held in reserve and could not be used to finance the budget deficit. The World Bank approved a $600 million rehabilitation loan the same month but this was not activated until January 1993 (Johnson and McCool, 2000). Jeffrey Sachs estimated that only $3-5 billion of the $24 billion assistance offered actually materialised (Sachs, 1994:4). Understandably even America’s friends in Moscow felt badly let down. Washington had failed to respond to Russia’s economic and political problems; they only seemed interested in defence-related projects, such as the destruction of nuclear warheads and support for nuclear scientists, where US interests were paramount (Mroz, 1993:47). US assistance was increasingly perceived as providing jobs for American consultants, markets for American farmers, and opportunities for US speculators, with little regard for Russian interests. In an election year any policy that could be seen to promote US jobs, sell US farm produce, and create opportunities for US trade and industry would attract approval from Congress, and at least have a superficial appeal to the electorate. Foreign policy rarely wins elections, however, and 1992 was not to be an exception. Bush’s Russian Legacy George H.W. Bush lost the 1992 presidential election because of domestic problems and the transfer of significant numbers of republican voters to the third candidate, Ross Perot. He bequeathed his successor, Bill Clinton, a Russian policy that largely enjoyed bipartisan support in Congress but had begun to alienate the Russian people and their government. President Bush had made significant gains for US national security since the end of the Cold War. In January 1993 Bush signed the START II arms control treaty, with Boris Yeltsin, which limited Intercontinental Ballistic Missiles (ICBMs) and banned land-based Multiple Independently Targetable Re-entry Vehicles. The treaty abolished Russian SS18s whilst leaving the core of the US naval and air force weaponry in place (Bowker, 1997:210). The Conventional Forces in Europe Treaty, signed in 1990, was amended to account for the end of the Warsaw Pact, and Russia agreed to

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Lessons from Russia

withdraw troops from Eastern Europe and the Baltic countries. The crucial issue of the control of nuclear weapons was largely dealt with when Russia, Ukraine, Belarus and Kazakhstan signed up to the Lisbon protocol agreeing to abide by the START I treaty. Article Five of the treaty allowed Russia to retain nuclear weapons but the other three countries would give them up within seven years and become non-nuclear weapon states, signing up to the Non-Proliferation Treaty.3 Clearly, Clinton would still have to ensure compliance on these issues, a task made more difficult by a hardening of Russian attitudes towards America. A combination of US triumphalism, a failure to deliver on promised assistance and Russia’s economic catastrophe led to a hardening in the pro-western foreign policy pursued by Russian foreign minister, Andrei Kozyrev. He was increasingly challenged by Russian nationalists and patriots to pursue a foreign policy in Russia’s interest rather than slavishly following US policy in return for assistance that simply did not arrive. Even Yeltsin’s own foreign policy advisor Sergei Stankevich, a pro-reformer, criticised Kozyrev’s Atlanticism and argued for the pursuit of Eurasianist policies more suited to Russia’s role as an Eurasian power.4 In January 1993 the Russian Foreign Policy Concept was published which put the Near Abroad and the protection of Russian nationals outside the Russian Federation as it main foreign policy priorities. Russia would continue to cooperate with the US on nuclear cooperation and administering regional conflicts but it would seek to retain its great power status (Bowker, 1997:208). Clinton would have to deal with an increasingly acrimonious Russia who had its own legitimate interests to advance and protect. The incoming president was also faced with a Russia still in need of considerable assistance to help change its economic and political structures. During the Bush presidency the Russian economy had deteriorated catastrophically due, in no small measure, to western advice. Shock therapy and its privatization component were encouraged, and indeed insisted upon, by the west and the international financial institutions as necessary to qualify for advice and assistance. Russian shock therapists were led to believe that if they conformed to the Washington Consensus then substantial assistance would be mobilised by the United States. The first twelve months of economic reforms proved disastrous for ordinary Russians. Inflation soared with the monthly consumer price index reaching 3218 percent in December 1992 (Reddaway and Glinski, 2001:249). Corruption and organised crime were endemic as old and young members of the nomenklatura, and the mafiya, sought to acquire control over businesses and property. Industrial and energy managers indulged in rent seeking, buying oil and metals at subsidised prices and selling them abroad at world market prices. Aslund estimated that export rents amounted to as much as $24 billion in 1992 alone (Aslund, 1999:402). Industrialists failed to reinvest in Russia preferring to send their ill-gotten gains abroad instead in a capital flight estimated at $1 billion per 3 4

Arms Control Today, June 1992, pp. 34-7. Nezavisimaya gazeta, 28 March 1992.

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month. Reddaway and Glinski estimated that 44,000 state companies were privatised by December 1992 while GDP declined by 14.5 percent over the previous year (Reddaway and Glinski, 2001:248). Shares in the privatized companies swiftly changed hands as workers sold their shares to management, or were caught out in pyramid scheme investment frauds. Certainly there were many Russians who were able to take advantage of the new opportunities opened up by the reforms. New Russian entrepreneurs were soon ostentatiously displaying their newly acquired wealth but for most of their fellow citizens life was hard. Reduced welfare spending led to falling standards of healthcare, education and housing. Non payment, or delayed payment, of wages and pensions affected workers, pensioners and middle class professionals alike. Hidden unemployment, where companies retained employees on staff but not on the payroll, led to an increase in barter and the sale of family possessions in order to survive. Homelessness, alcoholism, increased morbidity, declining mortality, the reappearance of contagious diseases, increased drug addiction and prostitution, were defining features of the new Russia (Manning, 1995:217). The income level of 90 percent of the population was below the subsistence level, and 50 percent were actually below the physiological minimum level (RSSR, 1993). Gaidar and his shock therapy team wanted to rush Russia into capitalism. He argued that ‘you cannot jump a chasm in two leaps’ but in the process, as he was later to admit, he undermined support for the government with all those political bases needed to back his policies (Gaidar and Pohl, 1995:36). The shock therapists’ tactics alienated all those sections of the population, which did not stand to gain immediately from entrepreneurial individualism. No factions in Congress, including procommunists were opposed to reforms or moving towards markets and democracy, but they did strongly object to the pace and method of reform (RSSR, 1993:7). The political situation in Russia by the time of Clinton’s inauguration was extremely volatile. Gorbachev’s glasnost and the demise of the CPSU, banned by Yeltsin in August 1991, opened the way for hundreds of political parties to operate throughout Russia (White, 1997:435-6). There was freedom to demonstrate, speak openly, to practise religion and travel abroad. The press was largely free from government control and new laws prohibited censorship and the creation of media monopolies. A constitutional court was set up in 1992 and was able to effectively challenge the president’s plan to merge the KGB [FSB] and the Interior Ministry, and ruled his ban on the Communist party unconstitutional in November 1992 (C. Cox, 2000: Chapter 2). Despite such encouraging moves towards democracy and civil society the former Soviet nomenklatura still retained their control of the new Russia. Almost all of Yeltsin’s government were former communist apparatchiks, including the architect of shock therapy, Yegor Gaidar and Viktor Chernomyrdin, director of Gazprom. Other members of the nomenklatura still occupied leading positions as heads of institutions such as Viktor Gerashchenko head of the Soviet State Bank and then the Russian Central Bank (RCB). Other youthful members of the nomenklatura

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took control of enterprises, the military, local government and social institutions. Economist and Russia expert, James Millar of George Washington University, Washington DC explained the problem: The continued presence of the nomenklatura in positions of power had a negative effect on the development of democracy in Russia. A task made more difficult by the lack of democratic tradition in the country and the legacy of communism, which prevented the organization of groups around interests and classes common in the west (Millar, 1995:12).

Conservative statists challenged Yeltsin to mitigate the worst excesses of shock therapy whilst consolidating the economic and political influence of the industrial lobby. As the effects of economic reform undermined support for the government, and the prospect of privatization threatened to weaken industrial manager’s control of the means of production so parliamentary opposition grew. This opposition culminated in a tremendous power struggle between parliament and the president at the Seventh Congress, which opened on 1st December 1992. The Congress of People’s Deputies rejected Yeltsin’s choice of Gaidar for Prime Minister and sought to shift the balance of power in its own favour. Yeltsin was obliged to make an embarrassing climb down and accept a nine-point agreement brokered by Valerii Zorkin, chair of the Constitutional Court. The agreement maintained the existing balance of power between the executive and legislature with the promise of a referendum on constitutional reform in April. Despite the uneasy truce between president and parliament, achieved by Zorkin’s agreement, the issue of who actually ran the country had not been decided. The incoming administration inherited a policy that had been largely discredited in Russian eyes. Shock therapy was a disaster, privatization appeared only to benefit the privileged or the dishonest, Russia’s international prestige was at lower ebb than any time since the tsars, and international assistance had not materialised. Anders Aslund describes George Bush the Elder as ‘the man who slept while the Soviet Union collapsed’ a president who failed to assist Russia when they needed it most.5 How would President Clinton deal with Russian relations that were less auspicious than they were just two years previously?

5

Interview with Anders Aslund at Carnegie Endowment for International Peace, Washington DC, 15 February 2002.

Chapter 2

Clinton’s Russia Policy Bill Clinton had been characterized as a foreign policy novice without a coherent strategy when he entered the White House in January 1993. Admittedly, Clinton did not possess his predecessor’s impressive diplomatic credentials but he had always held an interest in international affairs and assembled around him a formidable team of foreign policy advisors. As a young man Clinton had studied international relations at Georgetown University. From there he had gone on to Oxford University as a Rhodes scholar, where he roomed with Strobe Talbott who would later be given a prominent role in Clinton’s administration. In 1970 Talbott was recruited by Time Life magazine to secretly translate former Russian leader, Nikita Khrushchev’s memoirs. The roommates would discuss the contents of the memoir on a daily basis with the young Bill Clinton showing considerable interest (Talbott, 2002:14). Recalling their discussions as fellow students at Oxford, Talbott considered that Clinton was ‘episodically fascinated by the possibility that a totalitarian political system could become a pluralist democracy’.1 That fascination continued during the interregnum, between winning the election and assuming office, Clinton made Russia a top priority and developed ‘a passionate interest in Russian domestic politics’ spending a lot of time ‘getting intelligence reports on what had been accomplished’.2 In the 1992 campaign for the American presidency Governor Clinton enlisted the foreign policy advice of Anthony Lake, who had served in the State Department during the Carter presidency, and an old friend and fellow Rhodes scholar, Michael Mandelbaum. Although foreign policy played a minor role in the outcome of the election Clinton was able to convince the electorate that national security would not be compromised if he were elected. He presented a convincing case that the effectiveness of America’s role as world leader depended on the strength and success of its domestic economy. A dynamic economy would enable America to retain its pre-eminent role militarily, diplomatically and economically. For Clinton, the defining issue of the post-Cold War era would be geo-economics rather than simply balance of power. He argued that ‘the currency of national strength in this new era will be denominated not only in ships, tanks and planes, but also in diplomas, patents and paycheques’.3 In a major foreign policy speech before the election, Clinton enunciated a Wilsonian idealist framework for his 1 2 3

Interview with Strobe Talbott, New Haven, 14 February 2002. Interview with Strobe Talbott, New Haven, 14 February 2002. Quoted in The Washington Post, 14 August 1992.

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Lessons from Russia

foreign policy. He emphasised the promotion of democracy as a key foreign policy objective. In a passage of Kantian (via Michael Doyle) purple prose Clinton revealed a pro-democracy foreign policy that was to complement domestic renewal: A pro-democracy foreign policy is neither liberal nor conservative; neither Democrat nor Republican; it is a deep American tradition. And this is so for a good reason. For no foreign policy can long succeed if it does not reflect the enduring values of the American people. We do not stand behind the cause of democracy simply because of the goodness of our hearts. The fact is, democracy abroad also protects our own concrete economic and security interests here at home. Democratic nations do not go to war with one another. They don’t sponsor terrorism, or threaten one another with weapons of mass destruction. Precisely because they are more likely to respect civil liberties, property rights, and the rule of law within their own borders, democracies provide the best foundations on which to build international order. Democracies make more reliable partners in diplomacy and trade, and in protecting the global environment, something we must do more of in the years ahead … Our task then is to stand up for democracy as it remakes the world. That challenge will have its costs and its burdens. But it need not divest us from the pressing need for economic, educational, and social reconstruction here at home (Clinton, 1993c).

This theme would resound in most foreign policy speeches throughout the early years of the Clinton administration. The burden of building democracy would be shared with others as Clinton embraced multilateralism as both a principle and an economic imperative. The challenger accused the incumbent of lacking the ‘vision thing’ and being uncomfortable; ‘in a world where freedom, not tyranny, is on the march’. Such an approach reflected the President’s scriptwriters’ familiarity with the optimist school analysis of post-Cold War international relations. Anthony Lake recalls showing Clinton a campaign speech on foreign policy in Little Rock, Arkansas, full of such references. Clinton commented favourably on each reference saying ‘I agree with that’.4 Where Bush had been tardy in investing in Russian reform, Clinton would make the necessary contribution to promote democracy and markets in Russia as an investment in America’s own security (Clinton, 1993c). Such rhetoric made for impressive foreign policy speeches but the reality of power would temper such enthusiasm. Presidential Framework Analysis of the Initial Russia Policy The remainder of the chapter is concerned with analysing the key determinants of the initial policy. This is intended to establish the presidential framework as the basis for a detailed examination of democracy promotion throughout Clinton’s two terms in office explored in the following chapter. In analysing Clinton’s initial Russia policy it should be recognised that the policy would change over time. The 4

Interview with Anthony Lake, Georgetown University, 11 February 2002.

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43

optimistic aspirations of overall policy almost inevitably gave way to more pragmatic concerns. The presidential framework of analysis enables us to consider the influences on the decision to adopt the administration’s particular approach to Russia. George Bush had bequeathed Clinton a relationship with Russia that had ongoing security, economic, and political commitments from the United States. The US-Russian relationship was the most important foreign policy consideration for the first Bush administration, and because Russia remained the world’s secondstrongest military power it would be so for Clinton. The three key priorities of the policy, security, economic and political reform, were also inherited from the previous administration. The incoming Democrat administration could have adopted different policies, including isolating or ignoring Russia, but they chose to intensify the US-Russia relationship instead, but why? Governmental Action as Choice It is this element of governmental action as choice that lies at the heart of the presidential framework of analysis. The choices made about Russia were taken on the basis that they would secure maximum advantage to America in the long term. Every major policy speech on Russia at the outset of the new administration was infused with rhetoric concerning the desirability of assisting Russia in the interests of US national security and prosperity. The new approach was contrasted with the previous administration’s failure to deliver the assistance promised. As Leon Fuerth’s comments below reveal, the Clinton administration saw this engagement with Russia as a ‘once-in-a-lifetime’ opportunity. In choosing to assist Russia, the decisive factor was the possibility of it becoming a peaceful, capitalist, liberal democracy cooperating with the United States in a world order shaped by the latter’s economic, political, and strategic interests. This objective represented a rationally optimal outcome that the United States would seek to achieve through choices that would influence those short and medium term goals necessary to deal with changing events in Russia, world and domestic politics. At the very beginning of the first Clinton administration we had discussions with the President about what the moment meant. And the moment meant to us that the Russians were at a possible turning point unprecedented in their entire history. They had a government, which was telling us that they wished to preside over the transition of Russia into a law-driven democracy, running a market economy. Those words have not been pronounced by anybody who have been running Russia throughout the entire course of its history. We were aware of the possibility that we might not succeed, and in any event, were very much aware that success rested with the Russians, not with anything we could do. But we made a conscious decision to … mobilise our resources, and those of our friends, to be of as much assistance as we could, in the hope that this transition would succeed. We consciously said in our discussions that if we failed to

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Lessons from Russia make this effort then as individuals in later life we would regret having missed a oncein-a-millennium opportunity.5

Organizing Concepts Once the election had been won, Clinton appointed a transitional team to prepare for office. Warren Christopher, Deputy Secretary of State during the Carter Presidency, a Washington insider, led the transitional team. Christopher had earlier led a task force to find a suitable running mate for Clinton’s race to the White House, quickly recommending Al Gore. Clinton, Christopher and Gore met daily with their advisors to select a cabinet for the new administration. Christopher, at the age of 67, was asked by Clinton to become the Secretary of State on the basis of his previous cabinet experience, Vice-Chairmanship of the Council on Foreign Relations, and directorship of the Los Angeles World Affairs Council. Christopher recommended his former colleague and old friend Anthony Lake for the position of National Security Advisor. The other key foreign policy positions went to Les Aspin as Defence Secretary, Madeleine Albright as Ambassador to the United Nations, James Woolsey as Director of the CIA, and the Republican Colin Powell would initially remain as Joint Chief of Staffs. Unlike most administrations the Vice President Al Gore, who had impressed Clinton with his work on the environment, would also be involved in the foreign policy decision making process. Clinton chose established party insiders rather than his friends for the top foreign affairs appointments. Christopher was preferred to his rival Michael Mandelbaum at State in spite of the latter’s friendship with the president over many years. Similarly, Sandy Berger, a close personal friend and advisor for over twenty years was offered, and accepted, the deputy post to Tony Lake at the NSC.6 Clifton Wharton became Deputy Secretary of State while Clinton’s old Oxford roommate, Strobe Talbott, was appointed as Ambassador-at-large and special advisor to the Secretary of State on the new independent states of the FSU. Tony Lake was an old friend of Christopher and had served in the US Embassy in Saigon, during the Vietnam War, with Defence Secretary Les Aspin, Peter Tarnoff and Frank Wisner. Lake, Tarnoff and Wisner had also served in Cyrus Vance’s State Department and would now work together as part of Clinton’s foreign policy team.7 The incoming administration had to restore credibility to the Democrats’ tarnished foreign policy image. The removal of the Soviet threat neutralised the Republicans’ trump card of national security as an issue at the election but it could be an issue at the next election. The previous Democratic administration had ended with US humiliation in the Iranian hostage crisis. The memory of bitter infighting between Secretary of State Cyrus Vance and National Security Advisor Zbigniew 5 6 7

Interview with Leon Fuerth, Washington DC, 7 February 2002. Martin Sieff, The Washington Times, 28 December 1992. Leslie H. Gelb, The New York Times, 24 January 1993.

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Brzezinski had also badly damaged the Carter administration’s foreign affairs credibility. Tony Lake determined that such a state of affairs would not scar the new Democrat government. He encouraged a collegiate style of government in foreign affairs and worked closely with the Secretaries of State and Defence to present a united foreign policy. Warren Christopher would have the prime role, after the President, of presenting and explaining US foreign policy, even though Lake would lead foreign policy discussions.8 Lake would make a point of attending meetings with foreign representatives at Christopher’s office rather than arranging separate meetings. This style of foreign policy management involved a high degree of collective responsibility in the decision-making process, a factor often ignored by commentators on US-Russian relations in this period, who have identified Talbott and Summers as the architects of policy on Russia (C. Cox, 2000). Warren Christopher and Tony Lake have been criticised by Michael Cox, and others, for lacking vision in foreign affairs (M. Cox, 1995:13). Cox contends that as such they were ideally suited to conduct foreign policy in an era when Americans were not interested in crusades of any sort. Christopher and Lake lacked charisma but certainly not vision. The Secretary of State had clear ideas and thoughts about US involvement on human rights and Lake was passionately committed to democracy promotion as an essential component of US foreign policy and national security. For Christopher the appointment represented an opportunity to shape a coherent foreign policy for the new era, to restore Democrat foreign affairs credibility, and to vindicate President Carter’s emphasis on human rights. Christopher saw himself having a mission and responsibility every bit as important as that of his heroes George Marshall and Dean Acheson, who did so much to fashion the post World War order (Christopher, 1998). For Clinton, his election as the first post-Cold War President represented a meeting with destiny. He had firmly believed, since childhood, that he would become President and now he had the opportunity to both enhance America’s role as world leader, economically and politically, and to assist former totalitarian states, especially Russia, transform into plural democracies. The new president’s ability to shape the post-Cold War order would depend upon his capacity to transform the US economy. Clinton’s election campaign slogan ‘It’s the economy, stupid!’ reflected the electors’ concerns of job losses in the recession. The economy actually grew by 4.7 percent in the last quarter of 1992 (Walker, 1996:187) but the budget deficit was much worse than expected. On taking office the budget deficit was $290 billion and predicted to rise to $346 billion over the five-year budget cycle (Waldman, 2000:39).9 The deficit had led to relatively high long-term interest rates (just over 7 percent) and a lack of investor confidence in the economy. Clinton’s proposals for a stimulus package and middle 8

Gwen Ifill, The New York Times, 5 July 1993. Michael Waldman served as President Clinton’s chief domestic speechwriter from 1993 to 1999. 9

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class tax cuts would be insufficient to boost the economy. During the transition Clinton met with the three leading Congressional Democrats who urged him to work with Congress and to prioritise deficit reduction.10 A meeting with Alan Greenspan, Chairman of the Federal Reserve, made the same point that the key to economic prosperity lay in restoring confidence to the bond markets which would lead to a fall in interest rates (Walker, 1996:168-9). Clinton felt compelled to heed such advice even though it threatened his campaign promises of an investment programme, healthcare reform, middle class tax cuts and a stimulus package of fast-track spending (Woodward, 1994:81). Lloyd Bentsen, Treasury Secretary, and Robert Rubin, Director of the newly formed National Economic Council (NEC), made deficit reduction the centrepiece of the administration’s economic plan rather than investment (Waldman, 2000:46). Clearly, if the deficit were to be reduced government expenditure on marginal programmes would be the hardest hit. The Clinton administration’s identification with the optimist position on assisting Russia faced the same reality check that Bush had encountered. Congressmen and women, and their constituents did not regard assistance to Russia, and other states in the FSU, as a high priority. In spite of Clinton’s stated desire to assist Russia he was constrained by economic realities and the desire to be re-elected. Although defence expenditure could be cut significantly, as part of the post-Cold War peace dividend, the administration was reluctant to do so drastically. Democrats, throughout the Cold War had appeared weaker on defence than the Republicans had. The Carter administration had ended with the Iranian hostage crisis while the Republicans, under Reagan and Bush, laid claim to having brought the Cold War to an end. Clinton’s campaign had sought to win over Reagan-Democrats, and having won the election he had to maintain the US role as the unrivalled military power in the world. He had to demonstrate that he would be as committed to national security as his Republican challengers would in 1996. Clinton’s authority to govern was weakened by a far from impressive electoral mandate. He received just 43 percent of the popular vote, gaining only one million more votes than the defeated Michael Dukakis had in 1988. Although Democrats held both congressional chambers, senators and representatives felt little debt of gratitude to the new President. They had each received a stronger endorsement from their own constituents than Clinton had received. Many were traditional Democrats who struggled to empathise with Clinton’s New Democrat philosophy. Foley, Mitchell and Gephardt had promised to deliver Democrat votes but the President would require bipartisan support on his foreign policy to avoid Republican filibustering preventing legislation from being enacted. Warren Christopher sought to build this consensus, at his confirmation hearing, emphasising the importance of putting American interests first. The three pillars of the new administration’s foreign policy would be: 10 Speaker of the House Tom Foley, Senate Majority Leader George Mitchell, and House Majority Leader Richard Gephardt.

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First, we must elevate America’s economic security as a primary goal of our foreign policy. Second, we must preserve our military strength as we adapt our forces to new security challenges. Third, we must organise our foreign policy around the goal of promoting the spread of democracy and markets abroad.11

Christopher insisted that foreign policy was no longer foreign but had a direct and immediate impact on the state of America’s economy, and the prosperity and well being of its people. He promised to be sitting behind an ‘America’ desk at the State Department. American diplomacy would no longer predominately concentrate on strategic issues but rather on expanding opportunities for US business. Measures including the General Agreement on Trade and Tariffs (GATT) and the North American Free Trade Area (NAFTA) were vital components of a fusion of economics and foreign policy designed to strengthen the domestic economy and international security. Promoting democracy and markets would contribute significantly to that process and nowhere more so than in Russia. It was in Russia that the administration’s three foreign policy pillars converged. Warren Christopher echoed the sentiments of his President when he declared that ‘helping the Russian people to build a free society and market economy … is the greatest strategic challenge of our time’. He went on to explain the importance to the American people of that support: But if Russia falls into anarchy or lurches back to despotism, the price that we pay could be frightening. Nothing less is involved than the possibility of renewed nuclear threat, higher defence budgets, spreading instability, the loss of new markets, and a devastating setback for the worldwide democratic movement. This circumstance deserves the attention of each and every American.12

Under the Clinton administration, Russia was the ‘single-most important foreign policy priority’.13 Security considerations centred on removing nuclear weapons from Ukraine, Belarus and Kazakhstan, and removing Russian troops from Eastern Europe. Nuclear weapons dismantling, under the Nunn-Lugar programme, and preventing the spread of nuclear weapons and knowledge were also vital issues. A new strategic partnership with Russia was vital in order to reduce defence expenditure and offset Russian fears over NATO expansion, which both the administration and former Warsaw Pact countries wished to see. Such a partnership with a democratic Russia could be useful in applying Russian leverage 11 Statement by Secretary of State designate, Warren Christopher, before the Senate Foreign Relations Committee, 13 January 1993. 12 Warren Christopher, address before the Chicago Council on Foreign Relations, Chicago, Illinois, 22 March 1993. 13 Warren Christopher, statement before Senate Foreign Relations Committee, ‘Testimony on assistance to Russia and foreign affairs budget’, 20 April 1993.

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in situations where they exerted influence such as the Middle East and the former Yugoslavia. Clinton’s desire to improve the US economy through international trade would be enhanced by the emergence of a fully-fledged market economy with 148 million potential consumers and abundant natural resources. By the time Clinton assumed office, however, economic reforms in Russia had proved disastrous. Privatization had only just started and Cold War obstacles to US-Russian trade remained in place. Increased trade and investment between the two countries would be mutually beneficial and depended on the success of workable economic reform in Russia. Similarly any meaningful partnership between Russia and America would depend on how successfully the country moved towards democracy. In the first year of the Russian Federation’s existence there had been no elections, no new constitution, and negligible progress in developing civil society. Political parties were mostly formed around individuals and factions rather than ideology and the Communist Party of the Russian Federation (KPRF) was the only genuine nationwide party. All these issues had been faced by the previous administration and could have been helped by the assistance package promised by Bush in 1992. Leon Fuerth, the Vice President’s national security advisor, informed me that their main criticism of their predecessors was that they failed to deliver the assistance they had promised.14 In the election campaign, Clinton had criticised Bush for being too slow in transferring his allegiance from Gorbachev, and concentrating too much on personalities rather than on the reform process and institutions (Clinton, 1993c). Apart from these criticisms Strobe Talbott accepts that they ‘inherited an overall approach … that we regarded as basically sound. There were some disagreements at the beginning of tactics but not of grand strategy’.15 The international financial institutions were also criticised for their unwillingness to release funds for reform. Anders Aslund, the Swedish economic reformer, argues that ‘the IMF staff were always against loans. And if it was the IMF who decided it, the IMF would not have been involved in transition in the former Soviet Union - as simple as that!’16 The Clinton administration intended to make Russia their top foreign policy priority. In order to do so they would require a strong and focussed foreign policy team to deal with Russia alongside the other pressing foreign policy matters that would inevitably arise. Clinton initially appointed two, third-tier ministers to direct the Russia policy. Strobe Talbott, journalist, author and Russia expert, was appointed Ambassador-at-large covering the FSU, and chairman of the interagency coordinating committee to oversee US Government departments regarding the FSU (Talbott, 2002:39; Christopher, 1998:39). He would work with thirtyeight year old Larry Summers, former Chief Economist at the World Bank, who 14

Interview with Leon Fuerth, George Washington University, Washington DC, 7 February 2002. 15 Interview with Strobe Talbott, New Haven, 14 February 2002. 16 Interview with Anders Aslund, Carnegie Endowment for International Peace, Washington DC, 15 February 2002.

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was appointed Under Secretary at the US Treasury. Talbott and Summers would develop a close working relationship over the years as they each assumed more responsibility. As Talbott explains: It was highly personalized. Larry Summers and myself worked together, and Larry and I worked out an understanding early on, which is that I deferred to him on economics and he deferred to me on Russian politics.17

Although day-to-day responsibility for coordinating Russia policy was entrusted to Talbott and Summers it would be wrong to assume, as many commentators have done, that they were exclusively in charge of Russia policy. Involvement in Russian reform required the active participation within the administration of the US Treasury, the State Department, NSC, the Pentagon, the White House, CIA, the Joint Chief of Staffs, the Vice President, and the President himself. Foreign policy tended to be coordinated by the NSC with the public stage for policy presentation given to the State and Defence Departments. In preparing for summits with the Russians during the administration’s first year Tony Lake, Sandy Berger and a representative from the CIA would brief the President on Russia each morning, with updates throughout the day. In addition, the President would meet regularly with the steering group on the FSU chaired by Talbott. The group included vice chairman Toby Gati, a senior director at the NSC for Russian affairs, Frank Wisner from the Pentagon, Joan Spero, under secretary of state for economic and agricultural affairs, and Lynn Davis, under secretary of state for international security affairs.18 In all discussions on Russia leading to US assistance Treasury Secretary Bentsen, NEC head Robert Rubin and his deputy, W. Bowman Cutter, were involved. Tony Lake and his staff would coordinate the negotiations for multilateral assistance for Russia. The National Security Advisor also met once a week with Les Aspin and Warren Christopher to draft the President’s foreign policy speeches, although Clinton would frequently change them up to and including the last minute.19 The President himself was keenly interested in events in Russia and, contrary to the Cox Report’s claim that he took only a ceremonial role in Russia policy (C. Cox, 2000); he was intimately involved in devising the Russia policy. Strobe Talbott revealed that ‘by the spring of his first year in office, Clinton had become the US government’s principal hand, and so he remained for the duration of his presidency’ (Talbott, 2002:5). Leslie H. Gelb,20 Warren Christopher (1998) and Strobe Talbott (2002) each reveal a president who was very much involved and in charge of national security issues. Clinton would lay down parameters for his top officials urging them to think broadly and, in terms of Russia, ever ‘bigger’. He 17 18 19 20

Interview with Strobe Talbott, New Haven, 14 February 2002. Timothy Gifford, Newsday, 24 March 1993. Gwen Ifill, The New York Times, 5 July 1993. Leslie H. Gelb, The New York Times, 11 March 1993.

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encouraged Al Gore to be involved in foreign policy, to speak up in meetings and even to disagree with the official line. Leslie Gelb describes him as ‘tough and demanding’ and questioned whether his officials would have the confidence to argue with him if he rejected their advice. The idea that Clinton simply delegated responsibility to Talbott and Summers is fanciful. The appointment of his friend, with whom he maintained close and regular contact throughout his presidency, and his eighteen presidential meetings with Yeltsin, reflected the importance Clinton accorded US-Russian relations. Despite the pressing foreign policy issues of Bosnia, Haiti and Somalia, the administration prioritized Russia from the outset. The President actually spent half his foreign policy hours on Russia during his first three months in office.21 At Warren Christopher’s confirmation hearing the Secretary of State elect explained that of all foreign policy issues ‘none is more important than helping Russia demilitarise, privatise, invigorate its economy, and develop representative political institutions’.22 The new administration believed that this would not only be good for America and Russia but also for the rest of the NIS. A successful transition to market democracy in Russia could serve as a catalyst to inspire other postcommunist countries to reform. The administration saw security, market and political reform as interdependent objectives. They believed that market reforms would encourage democracy and lead to greater security because ‘democracies don’t go to war with each other’. Similarly, the more democratic Russia became the more people would seek to acquire property that only the market could provide. A reduced security threat would enable defence resources to be redirected into the civilian economy. All such moves would benefit America, reducing the security threat and defence budgets whilst providing openings for US business to invest in, and trade with, Russia. The success of reform would depend on stability within Russia itself and the continued westernising direction of the government. From the outset the Clinton administration made support for Boris Yeltsin a key aspect of their Russia policy. Governor Clinton had met Yeltsin in Washington DC in June 1992 when campaigning for the presidency. That meeting was followed up with numerous telephone calls during the transition, and early months of the presidency, before meeting again in Vancouver for a summit in April 1993. The two men developed a genuine friendship and Clinton determined to back Yeltsin as a ‘democrat’ and ‘reformer’. According to Talbott, Clinton became ‘quite fixated on the personality of Boris Yeltsin’.23 Indeed, Yeltsin was a formidable and impressive figure that had brought down the Soviet Union and wanted to ensure that communism would never return. Within the first four months of the Clinton administration, Yeltsin mobilised popular support in Moscow to face down threats to impeach him and 21

Thomas L. Friedman and Elaine Sciolino, New York Times, 22 March 1993. Warren Christopher, statement before the Senate Foreign Relations Council, Washington DC, 13 January 1993. 23 Interview with Strobe Talbott, New Haven, 14 February 2002. 22

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won the reform referendum in April. Yeltsin’s ability to triumph in difficult circumstances convinced Clinton that he was a great leader who could deliver. Yeltsin was a combative individual and the US administration came to reflect the Russian leader’s perception of events in Russia. Wayne Merry, senior political analyst at the US Embassy in Moscow (1990-93) noticed during 1993 that there was: Increasing American involvement with commitment to, and identification with, Boris Yeltsin as essentially the focus of, and leader of, all the forces of right, truth, justice and freedom. Anybody who was not under that banner as representing the forces of darkness and reaction.24

Yeltsin was seen early on as ‘indispensable as a point of contact and leverage’.25 At first inspection Clinton’s attachment to Yeltsin seems emotional rather than rational. He ignored objective advice to engage with ‘reform’ rather than Yeltsin but the decision was rational because the Russian leader was in a position to actually bring about reform and was judged to be better than the alternatives.26 Clinton developed strong personal ties to Yeltsin, which enabled him to secure foreign policy concessions that would benefit the United States. Such a commitment to Yeltsin was largely uncontested throughout the administration and even with the benefit of hindsight Strobe Talbott still believes it was right: I think that Clinton’s decision to basically “bet the ranch” on Yeltsin, with all his flaws, which ranged from drunkenness to authoritarianism, was the right approach because it translated into concrete, bankable benefits for the United States.27

Alongside Yeltsin the administration also sought to develop a close working relationship with the team of market reformers within the Chernomyrdin government. A close relationship already existed between members of the new administration and the Russian reformers grouped around Anatoly Chubais. USAID and other international funding for privatization and market development were largely channelled through HIID. Harvard men such as Jeffrey Sachs, David Lipton, Andrei Shleifer and Jonathon Hay were intimately involved in the privatization process. Hay, HIID director in Moscow, was a senior legal advisor to GKI and Harvard Law School. The Chubais group appointed him to be an honorary Russian in 1992 empowered to approve or veto high-level privatizations of the Russian government (Wedel, 1998:124; 2000a:25). Lawrence Summers, himself an ex-Harvard man, was appointed Under Secretary at the Treasury for 24

Interview with Wayne Merry, Arlington, 7 February 2002. Interview with Strobe Talbott, New Haven, 14 February 2002. 26 Interview with Leon Fuerth, George Washington University, Washington DC, 7 February 2002. 27 Interview with Strobe Talbott, New Haven, 14 February 2002. 25

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International Affairs. Summers, in turn, appointed David Lipton, Jeffrey Sach’s right hand man, to be Deputy Assistant Secretary of the Treasury for Eastern Europe and the former Soviet Union (Wedel, 1998:124). The relationship between Harvard and the Chubais group legitimised each other in the sight of US policymakers. Harvard promoted the ‘quintessential enlightened Russian’ Chubais to US officials and commentators and he was endorsed by the United States as the only one able to deliver western assistance (Wedel, 2000a:26). The ‘reformers’ who spoke good English, and the latest economic jargon, promoted themselves as democrats and the only ones able to transform Russia into a market economy. The Clinton administration and embassy staff in Moscow increasingly saw the struggle for markets and democracy in polarised terms. Good reformers against bad communists and nationalists, with few dissenting American voices in Washington or Moscow (Graham, 2000).28 In supporting a select [self-selected] group of ‘reformers’ other reformers who either didn’t speak English or who favoured greater social provision were marginalized. Any criticism of the Yeltsin government’s reform process was poorly received in Washington. According to Tom Graham the Moscow Embassy even saw Grigory Yavlinsky ‘as less and less helpful in pushing forward radical reform, because he was raising certain concerns, certain doubts, about how this policy was being implemented and practised’ (Graham, 2000). The Clinton administration was determined to back Yeltsin and his government believing them capable of delivering reform. This backing was institutionalized in the US - Russia Commission on Economic and Technical Cooperation in April. The Commission was co-chaired by Al Gore and Viktor Chernomyrdin becoming known as the Gore-Chernomyrdin Commission (GCC). The aim was to expand cooperation in ‘commerce, space, science, energy, environment, defence conversion, agriculture and health’ (USDOS, 1995:843-46). The GCC’s work, according to Leon Fuerth, extended beyond this remit to include civil liberties and democracy.29 The administration initially emphasised democracy promotion as the vital component of their policy for Russia. In a similar vein to Clinton’s Milwaukee campaign speech, Warren Christopher stressed the importance of consolidating democracy in Russia. America would seek to strengthen pro-democracy groups and civil society, encourage people exchanges, an independent media, and a market economy producing property owners, entrepreneurs and a middle class they deemed necessary for an effective democracy.30 The administration would encourage political party development, laws protecting property and individual rights, impartial juries, trade unions and voluntary associations. A Democracy Corps would be established to assist and advise Russian democratic leaders, and the National Endowment for Democracy (NED) would be strengthened. US 28

Thomas Graham was Chief Political Analyst at the US Embassy in Moscow 1994-7. Interview with Leon Fuerth, Washington DC, 7 February 2002. 30 Warren Christopher, address before the Chicago Council on Foreign Relations, Chicago, Illinois, 22 March 1993. 29

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assistance to Russia would be channelled through a revamped USAID and NED. In addition, further support would be provided multilaterally leveraging US influence with fellow G7 members and the IFIs. Clinton was unequivocal in his verbal support for democracy in Russia: Mr President [Yeltsin], our nation will not stand on the sidelines when it comes to democracy in Russia. We know where we stand. We are with Russian democracy. We are with Russian reforms. We are with Russian markets. We support freedom of conscience and speech and religion. We support respect for ethnic minorities. We actively support reform and reformers and you in Russia (Clinton, 1993a:393-401).31

For such support to become tangible, Clinton needed to enjoy public and bipartisan congressional approval. Warren Christopher was charged with laying the groundwork to persuade the US public to support Russia (Christopher, 1998:36). A hard task given that a CBS/New York Times poll at the end of March 1993 revealed that only 41 percent of those surveyed supported aid to help the Russian economy. In July the same pollsters showed 64 percent of those surveyed opposing further aid to Russia (Fessler, 1993; Doherty, 1993b). Clinton himself sought to persuade Congress of the merits of his Russia policy. A task made easier following a trip by House representatives to Russia and Ukraine in April. The bipartisan delegation, led by Dick Gephardt and House Minority Leader Bob Michel, returned to America impressed with Yeltsin and dismayed with his opponents (Talbott, 2002:440n16). Senate Minority Leader, Bob Dole, and House Minority Whip, Newt Gingrich, led Republican congressional support for US assistance to Russia in 1993. The US administration formed the Russia Policy, according to the presidential framework, as a seemingly rational unitary decision-maker. It was the president himself, after consulting colleagues and officials, who ultimately decided policy on Russia. Clinton’s leadership style and personality played an important role in determining the goals and outcomes of the policy. Clinton’s presidential style involved delegating responsibility to subordinates who worked within clearly defined parameters and reported back to him. Clinton’s interest in Russia and his desire to help Yeltsin was transmitted to all members of the Russia team. His constant exhortations to do more to help Russia represented a genuine commitment to Russian reform and friendship with Yeltsin. Colleagues were universally impressed with the President’s prodigious memory and grasp of the issues in all areas where he expressed a keen interest. This was especially true regarding Russia and colleagues deferred to him in backing Yeltsin, rather than supporting Russian institutions, despite their personal reservations. Clinton formed a genuine friendship with Boris Yeltsin, which was to continue after Yeltsin had left office. The relationship with the Russian leader was not simply based on Yeltsin’s willingness to acquiesce in US foreign policy demands. 31

Author’s emphasis.

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Yeltsin, a large, boorish man, emotional, erratic, and with health and alcohol problems would at first sight appear to be an unusual friend for the US president to cultivate and yet a friendship did develop. Clinton trusted Yeltsin to deliver on his promise to reform Russia. Yeltsin was seen as breaking the mould of Soviet politics, going against the system, someone capable of, and willing to, lead Russia into becoming a capitalist democracy. Physically and intellectually Yeltsin could be formidable and yet he also possessed an almost self-destructive vulnerability with dubious business dealings and alcohol dependency. Yeltsin, at times, was vilified in the media, and by his political opponents, and yet he consistently won the main battles in attempting to reform Russia. Clinton may have seen a kindred spirit in the Russian leader. Clinton was an imposing figure too with a powerful intellect; he had to fight the Washington political establishment to secure the Democratic nomination for the Presidency. Both presidents had volatile relationships with their legislatures, and were threatened with impeachment but both survived. Yeltsin had decisively changed Russia and Clinton aspired to significantly change US economic fortunes. Clinton and Yeltsin both considered themselves as men of destiny and respected that belief in the other man. Yeltsin would later often confide to Clinton that together they could change the world and resolve any problem if it was left to them, and not their advisors (Talbott, 2002). As we shall discover in the next chapter the Bill and Boris friendship would involve more meetings than any other US-Russian/Soviet Union presidents ever had. Clinton personalized the relationship firstly because he liked Yeltsin, and secondly because he wanted to achieve specific foreign policy objectives. The personalization of relationships reflected Clinton’s style in dealing with members of his own administration. The Russia team kept in regular contact and developed friendships with each other and their Russian counterparts. This collegiality involved informal as well as formal NSC meetings, and meant that the team had a clear idea of what the president wanted to achieve in Russia. Even the Vice President had a vital contribution to play in the Russia policy. Harry Truman and Lyndon Johnson had both been kept out of the foreign policy loop but Clinton wanted Gore involved from the outset. He had considerable respect for Gore’s intellectual abilities, as a fellow New Democrat, and for his research on the environment. Gore’s involvement in the GCC would seek to apply practically the overall aims of the Russia policy. As we have seen, Clinton’s desire to help Yeltsin overruled US Treasury constraints on financial assistance initially at least. Clinton overruled Talbott and Christopher in their caution about supporting the reform process rather than backing Yeltsin specifically. The various departments involved in policy formation were aware that Clinton, and his departmental heads, were all determined to help Russia control nuclear weapons, remove troops from Eastern Europe, and reform. The Pentagon wished to do so without losing too much of its budget. The State Department wanted more finance for political assistance programmes and the Treasury wanted to limit spending in all areas while the domestic economy recovered. The Moscow Embassy grew in numbers considerably during 1992-3

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but its reporting of issues became narrower, as officials sought to supply the State Department with the information they wished to hear. We shall see that Clinton’s choice of short and medium range goals of supporting Yeltsin, rather than reform per se, had an adverse impact on the attainment of the long term goal of a liberal democratic capitalist country, at peace with itself and its neighbours, and cooperating with the United States. Such a policy initially enjoyed a wide consensus and popular support. For the first two years the administration enjoyed Democrat majorities in both chambers of Congress and bipartisan support continued from the previous administration. Congressmen and women were anxious to protect and promote jobs in their constituencies. A policy that encouraged business to invest in Russia, opened up markets for US advice and goods, and did not lose too many jobs in the defence industry would win congressional approval. Powerful lobby groups such as the military industrial complex could be satisfied by defence expenditure reductions being limited and offset by the opening up of new export markets in areas traditionally dominated by the Russians. Corporate business interests would be satisfied by the possibility of new markets and entrepreneurial opportunities in Russia. The American public would also be content if real security gains could be identified by a reduction in Russian troops and the elimination and control of many FSU nuclear weapons. The Russian diasporic community in America is neither large nor particularly influential and the diasporic communities from Eastern Europe and the Baltic States would welcome a diminution in the presence and threat of Russian troops. Other parties with the potential to influence overall policy included the media, who largely followed the bipartisan approach adopted by Congress, rather than suggesting alternative strategies. The NGOs were anxious to get involved in democracy promotion, human rights, rule of law, and civil society projects, and were broadly supportive of Clinton's position of active US participation in the Russian reform process. Former President Nixon, and members of the previous Republican administration, added their weight and advice to encourage the Democrat administration to develop a close relationship with Yeltsin and the ‘reformers’. Even religious leaders supported the administration’s determination to influence and assist Russia. A closer relationship with the Yeltsin administration opened up opportunities for a re-emergence of Christianity in Russia, proselytizing by western churches, and greater opportunities for Jewish emigration to Israel, all issues of concern to American religious leaders. The Russia Policy was devised and operated in response to the perceived threats to US national interests from communist or nationalist resurgence in Russia. There was the danger of nuclear materials and expertise falling into the hands of terrorists or anti American states, or on supporting forces opposed to US security interests. The possibility of managing a reduction in the Russian nuclear arsenal and conventional forces, whilst enabling the Russians to reduce the risk of nuclear material and expertise slippage, was an unprecedented opportunity. The potential to incorporate Russia within western systems, to reduce, or remove, their

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support for states acting against US interests, involved policy choices to further these objectives. The opportunity to form a strategic partnership with Russia to solve international problems, and win support for US foreign policy objectives in the UN Security Council, also determined the choices pursued by the administration. The presidential framework posits that decision-makers seek an optimal outcome for their policy over the long term. Clinton’s long-term objective, based on his foreign policy speeches and actions over the first year in office, was for Russia to become a fully functioning capitalist liberal democracy, incorporated within the international system. In the process of achieving this objective short and medium term goals were pursued in response to both the longer-range objective and short-term crises. It is the effect of these short and medium range choices that the thesis demonstrated impinged on this long-term optimally rational goal. The decisions to support Yeltsin, voucher privatization, the April referendum, attack on Parliament, and the new constitution were short or medium term choices constrained by limited information, time constraints, and political expediency. These choices were made on the basis of bounded rationality and the need to satisfice, in the short and medium term, rather than choices that would advance the optimally rational pursuit of a capitalist liberal democracy. Individually the choices taken, by the incoming Clinton administration may appear optimally rational given that Yeltsin appeared to them to be a better choice than any of his rivals. Parliament was obstructing the reform process, which served US national interests for Russia to pursue, and there was only a short period of time in which the US could hope to influence policy in Russia before Russians would begin to resent that intervention. Each of these early decisions in the first year of the administration would later have a profound impact on the health and vitality of democracy in Russia. The choices appeared rational but were only quasi-rational because supporting non-democratic means to achieve supposedly democratic ends compromised the optimal outcome of capitalist liberal democracy. The alternatives to the Russia policy adopted by the administration would have been to follow a pessimistic, rather than an optimistic or pragmatic, approach to the US-Russia relationship. Rather than seeking to engage with Russia they could have followed Brzezinski and the pessimistic advice and sought to contain Russia. Funds allocated to Russia could have been redistributed among the other states in the FSU instead. The early expansion of NATO, to include the Baltic States and even Georgia and Ukraine, would have further diminished Russia’s influence within the FSU. The administration also encouraged the dismantling of nuclear weapons in Ukraine, Belarus and Kazakhstan instead of encouraging their retention to counter the Russian nuclear arsenal. The potential advantages of encouraging a positive relationship with Russia far outweighed the risks of antagonising the Russians through a policy of containment. The arguments in favour of engaging the Russians had already been won by the previous administration and faced with the alternatives their successors made a rational

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choice. The decision to encourage three of the four FSU states with nuclear weapons to get rid of them was clearly preferable to them being retained by unpredictable regimes and encouraging nuclear proliferation. The Clinton administration had the opportunity not to assist Russia at all and risk that the country would revert to communism and renew long-standing rivalries. Such a policy would also reduce US influence in Russia as the EU, and Germany in particular, would continue to assist their neighbour on the European continent. Instead of leveraging IFI assistance the United States could have provided more unilateral assistance. The problem was that American voters were not prepared to dedicate the necessary resources to sustain such an option. Clinton, faced with the alternatives, again made a bounded rational choice to maximise US influence at minimal cost, providing gains for the United States without alienating Russian or domestic opinion too strongly. He could have made more effort in seeking to persuade the American public and Congress that such an investment in Russia was an investment in America’s future security and prosperity. The choice of Russia as the top foreign policy issue rather than Haiti, Somalia or Bosnia also represented a rational decision. Direct US strategic interests were not threatened in these other states unlike in Russia. US arms reduction treaties, the nuclear arsenal, the removal of Russian troops from Eastern Europe, and the opportunities available to US security and the economy in the Russian reform process would make it irrational to pursue any other course of action than to prioritise Russia. The administration could have sought to encourage and develop civil society in Russia before pressing ahead with economic and political reforms. Indeed such a policy would be better suited to one of the stated aims of US foreign policy that is promoting democracy. The higher priorities for American interests, however, were to reduce any potential Russian military threat in the short-term and to prevent any re-emergence of communism. In prioritising markets and the wholesale privatization of the Russian economy the United States would help create a capitalist class, principally from former members of the nomenklatura, which would have a vested interest in not returning to a command economy. Such a process might invite corruption and crime but would make a return to communism highly unlikely. In calculating the costs and benefits of pursuing the Russia policy, in this respect, or promoting civil society the administration made a bounded rational choice to gain the maximum short-term economic advantage for America. In favouring market reform over promoting civil society, however, the short term expediency of producing a capitalist class would be achieved at the expense of the majority of Russians who did not benefit from the process and became increasingly disempowered, coming to equate liberal democracy with robber capitalism. The most important aspect of the Russia policy was its focus on relationships between the US and Russian administrations. Here clear alternatives were available. The administration could have sought to develop a working relationship with the Russian Parliament and the Constitutional Court, investing time and resources in cultivating individual and institutional relationships. Instead of

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backing Yeltsin unequivocally and alienating the Congress of Peoples’ Deputies, the Clinton team could have sought to encourage greater cooperation between the legislature, executive and judiciary. They could have used their influence with Yeltsin and his government to advocate a more conciliatory approach towards the CPD, which had also been democratically elected, rather than encouraging confrontation between Parliament and the president. This strategy would have assisted long-term progress towards democratization within Russia but did not represent an optimal choice for the Clinton administration. Yeltsin possessed power and the ability to deliver national security benefits for America. A strong Russian leader desirous of good relations with the United States needed little persuasion in pursuing market and political reforms unlike opposition forces within the CPD, who had not embraced the Washington Consensus in dealing with Russia’s unique problems. Clinton’s personal rapport and friendship with Yeltsin, and their shared belief in their own abilities to achieve progress in Russia, meant that again faced with the alternatives the quasi-rational choice, to secure American advantage, lay in supporting Yeltsin and his ‘reformers’, while they enjoyed Yeltsin’s support. This choice was quasi-rational because such backing encouraged undemocratic impulses in the Russian leadership and undermined the optimal rational goal of Russia becoming a liberal democracy. Dominant Inference Pattern The actions of the new administration in providing significant bilateral, and facilitating multilateral, assistance to Russia can be weighed against its purported objectives of enhancing US national and strategic interests by promoting democratic, market and security reform in Russia. It is then possible to infer from these actions whether they were intended to produce an optimal or a satisfactory, and therefore sub-optimal, outcome. For example, was the decision to provide IMF loans before the April referendum an optimally rational choice, motivated by a desire to promote the democratic process, or an unwarranted interference in the Russian political process designed to strengthen Yeltsin’s hand against parliament? If the latter is true then was that decision taken to achieve an optimal outcome or a good enough outcome to keep the reform process moving forward? In the next chapter the purposive link between objectives, action and outcome will be explored as the outworking of the Russia Policy is detailed and analysed. General Propositions The basic assumption of quasi-rational decision making is that there is a hierarchy of goals, which can be ascertained from the relative expenditure and emphasis government devote to them. This hierarchy of goals becomes evident from studying the keynote addresses by leading officials, the National Security Strategies, and the budgets requested and utilised to achieve these goals. As we shall see in the next chapter, the administration devoted more resources to

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strategic/military and economic considerations than to democracy promotion. The general proposition is that this resource distribution reflected the real priorities in US foreign policy towards Russia. At each stage a seemingly rational decision was taken to advance different, and not necessarily complementary, goals. The long range goals of Russian incorporation into the international system, the establishment of liberal democracy and markets, Russia as a strategic partner with the United States, America’s enhanced status as the sole superpower and global hegemon were determined on the basis of optimal rationality. The willingness of Yeltsin to acquiesce in achieving American objectives was the reason the administration backed him. At the outset Yeltsin was willing to reduce nuclear stockpiles, dismantle nuclear weapons, reduce troop levels, and end support for regimes hostile to the United States. On the economy, the Russian leader was willing to privatize and introduce market reform. He was also prepared to hold referenda and elections, and at least pay lip service to democracy. The presidential framework explains why the administration offered their support in return for progress in these key areas. America’s relevant values and objectives - the promotion of capitalism and liberal democracy - determined its long term objectives. The perceived alternative courses of action to the actual policy determined on were considered, albeit fleetingly, and an estimation made of the consequences which would follow from each alternative action. Support for parliament, containment, applying pressure to Yeltsin, developing civil society, providing and encouraging welfare support, allowing the IMF and World Bank to adopt their own policies without US interference, or allowing Europe to spearhead the assistance effort were all options which were available. The net valuation of each set of consequences following the pursuit of any of these policies could be weighed and a choice made. Short and medium term choices were made to improve US national interests and relative advantage against other nations. All security gains that reduced Russia’s nuclear arsenal and conventional forces, and reduced arms and technology sales to states hostile to America, were to be welcomed. Policy choices that retained nuclear expertise within Russia rather than exporting it, and enabled the US to enlarge its sphere of influence in Eastern Europe and the developing world were desirable. In similar vein any economic gains that would open up access to Russian markets and raw materials was desirable, as were the development of capitalist structures and a middle class. In promoting democracy any advances in the structural prerequisites for democracy such as a constitution, elections, political parties, independent media and civil society would also be desirable. These short and medium term choices were seen as stepping stones to the desired optimal outcome outlined above. In the next chapter we will see the effect these sub-optimal outcomes had on the long term objective.

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Specific Propositions All American policy is conditioned by American Exceptionalism and this is particularly pertinent to democracy promotion. In promoting democracy in Russia, the US administration and assistance community are making a value judgement that political process in the US is inherently superior to the system they are assisting. President Reagan’s representation of America as a ‘shining city on the hill’ an example for all other nations to aspire to, also inspired the Clinton administration and assistance community. The triumph of capitalist and liberal democratic values over those of real existing socialism was both justification and opportunity to Americanize systems in Russia. The president was personally committed to and involved in all aspects of the Russia policy and this had an effect on the outcome of government action. Clinton’s support for Yeltsin and other short and medium term outcome choices were made on the basis of bounded rationality. The president’s choices to back Yeltsin and aspects of the reform process were made to achieve immediate or short and medium term gains for US national interests. In the process he was able to enhance his own foreign policy reputation although the choices made were not necessarily in accord with the long term optimal outcome for America. The Clinton administration anticipated that Russia would move decisively towards the market and democracy during their tenure. They appreciated that their influence could only be marginal but still significant enough to make a difference in reshaping the Russian economy and political system in the long-term. In the short-term there would be significant national security dividends for the United States. It was these security dividends that represented the biggest gain that America could achieve from the US-Russian relationship over the maximum two presidential terms Clinton could serve. Any alternatives to the strategy pursued would potentially jeopardise these security gains. When Clinton considered the goals he wanted to achieve through his Russia policy to enhance US security, develop new markets for American goods, and to help Russia become democratic, quasi-rational choice determined the emphasis given to the competing goals of US policy towards Russia. In a hierarchy of short and medium term goals from necessary to desirable, national security represented a necessary goal while democracy promotion was merely desirable, over the course of two presidential terms. Clinton made bounded rational choices determining the policy to be pursued. In the next chapter I reveal the evidence and consider the compatibility of US national interests and democracy promotion in Russia. The decision-making process and individual decisions are examined and analysed to consider those policies pursued throughout the two Clinton administrations.

Chapter 3

Promoting Democracy or Backing Yeltsin? Our obligation - the American obligation - is to promote democratic values and democratic institutions and to pursue our national interests (Warren Christopher).1

Secretary of State Warren Christopher, in a speech to the John F. Kennedy School of Government, Harvard, in January 1996 summarized the tensions within the Clinton administration foreign policy. America, he insisted, did not merely have a desire to promote democratic values but an imperative, an obligation, to do so. A missionary zeal to persuade other nations to embrace the peace, freedom and prosperity enjoyed by the United States, tempered only by the necessity to pursue its own national interests. Russia provided a unique opportunity to promote both democracy and US national interests. This chapter is divided into two parts, which analyse the Clinton administration’s stated intentions of promoting democracy in Russia. Firstly, the decision making process is examined to discover and analyse how and why the administration backed Boris Yeltsin and his small group of ‘reformers’ rather than adopting alternative strategies. Secondly, the chapter uses the presidential framework, to examine how those key decisions taken by the administration during the first term were arrived at.

The Decision Making Process The promotion of democracy in Russia was not simply the result of one decision to approve the principle of introducing market democracy to Russia. Rather, the overall intention to promote democracy was made up of numerous decisions that meant the cause of democracy either advanced, or regressed, depending on the priority attached to those other decisions. Decision-making affecting the direction and outcome of the Russia policy centred on the president as outlined in the preceding chapter. Clinton was both committed and involved in all the major decisions taken on Russia during his presidency. In this process he was advised by an inner circle of cabinet colleagues, who were aware of both his personal commitment to Yeltsin and to seeing a market democracy established in Russia. 1

Warren Christopher address before John F. Kennedy School of Government, Harvard University, 18 January 1996.

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The vigour with which democracy promotion was pursued and encouraged changed depending on its relative importance in a hierarchy of goals. I contend that the hierarchy favoured US national security interests, then US international prestige as the world’s only superpower, ending communism as an ideological challenger to capitalism, increasing trade, achieving specific foreign policy objectives, enhancing America’s reputation, and only then democracy promotion. This hierarchy of goals was affected by the aspirations of Congress, corporate business interests, the media, public and professional opinion, diasporic communities within America, and the international system itself. The policy changed over time in response to specific situations including the end of both administrations and the Russian election cycle. What did not change, however, was the US administration’s support for Yeltsin and the ‘reformers’. Why the Clinton Administration Backed Yeltsin and the ‘Reformers’ The first key decision the new administration was called to make was whether to continue the previous administration’s policy of support for Yeltsin and the ‘young reformers’. The Clinton administration’s continued support for the policy came as little surprise to either observers of US - Soviet/Russian relations or the American public. The desire to work with those in power in the new Russia to achieve US objectives was understandable and had precedents in George H. Bush’s and Ronald Reagan’s relationship with Mikhail Gorbachev. Although Clinton had criticised the personalization of the US-Russian relationship in the election campaign he had no such reservations once in power. In order to effect improvements in the relationship and change in Russia itself, the administration needed to deal with those empowered to both take and implement decisions. Although operating, until January 1994, within the much-amended 1967 Brezhnev constitution, Boris Yeltsin had the authority as President of the Russian Federation, since his election in 1991, to deliver tangible results. The American president received plenty of advice on the need to cultivate Yeltsin. Robert Straus, Bush’s ambassador in Moscow, advised Clinton that Yeltsin was politically educable (Talbott, 2002:44). Former president Nixon, in a meeting with Strobe Talbott and Toby Gati2 on 4th February 1993, advised them that: He may be a drunk, but he’s also the best we’re likely to get in that screwed up country over there. The main thing is, Yeltsin doesn’t want to be our enemy. We’ve got to keep him from becoming our enemy, or from being replaced by someone who wants to be our enemy (Talbott, 2002:46).

2

Toby Gati served as the senior official working on the FSU in the National Security Council.

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If relationship building were needed, then nobody was better placed to develop this than Bill Clinton. The president enjoyed an almost legendary reputation for his ability to make whoever he spoke to feel like the most important person in the world. The psychologist, and Clinton biographer, Stanley Renshon considered that there was both a ‘naivety and grandiosity’ in his belief that he could overcome any problem simply by talking face to face with people (Renshon, 1996:91). Clinton warmed to Yeltsin and developed a genuine friendship and rapport for the Russian leader. When asked to comment on Yeltsin’s surprise resignation on New Year’s Eve 1999, he reaffirmed both his friendship and that he had been right to invest political capital in him: I liked him because he was always very forthright with me. He always did exactly what he said he would do, and he was willing to take chances to improve our relationship, to try to improve democracy in Russia (Clinton, 1999b:2351-2).

The feeling was reciprocated with Yeltsin reminiscing that ‘over the course of several ordinary, human years, Bill and I had managed to become friends. We were fond of each other’ (Yeltsin, 2000:381). Indeed, the two had more contact than any previous leaders of their two countries, meeting eighteen times during the Clinton presidency, including five presidential visits to Moscow. Over the years Clinton would use that special relationship to persuade Yeltsin to do a lot of things which were more in US than Russian interests. ‘Bill and Boris’ considered that there was little they could not accomplish together. Renshon considered that Clinton’s narcissistic character structure provided a belief that ‘he alone’ could accomplish what other talented people were unable to do (Renshon, 1996:116). This was particularly true in Russia where Clinton considered that he could succeed where Bush had failed. He contemplated not just a functional relationship with Russia but rather a strategic partnership, and significant steps in the transition of Russia to a fully functioning market democracy. We saw Yeltsin as indispensable as a point of contact and leverage for two reasons: one was objective the other subjective. The objective reason was that he was the President of Russia, and as such very powerful. The subjective reason was that we judged him to be better than any foreseeable alternative.3

This view certainly accorded with Yeltsin’s biographer Leon Aron who believes that ‘there was never a president as favourable to US most urgent interests’.4 Renshon described the Clinton presidency as ‘unique in its emphasis on interpersonal relationships’ (Renshon, 1996:93) and those relationships were extended to include their Russian counterparts. Talbott and Under Secretary of the Treasury for International Affairs Summers developed a close working relationship and 3

Interview at Yale University, New Haven, 14 February 2002. Interview with Leon Aron, American Enterprise Institute, Washington DC, 6 February 2002.

4

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division of labour from the outset (Talbott, 2002:283-4). Summers, former Chief Economist at the World Bank, and a Harvard professor, developed a friendship with Anders Aslund early on and accepted uncritically the Swedish economist’s assessment of Anatoly Chubais as a great man,5 and that a great deal depended on cultivating personal relationships with the reformers.6 Summers also enjoyed friendships with fellow Harvard people involved in the Russian privatization process, including Andrei Shleifer and David Lipton, a close friend and business associate of Jeffrey Sachs. Summers appointed Lipton as his deputy in 1993,7 and in 1995 when promoted to Deputy Secretary of the Treasury, Lipton took over Summers’ old job as Under Secretary for International Affairs (Wedel, 1998:124). Over the course of the administration, Summers was able to develop close working relationships with Gaidar, Chubais, Fyodorov and Nemtsov, who were equally convinced by monetarist economics. Talbott, for his part, cultivated a friendship with his opposite number Mamedov, and Gore developed a close working relationship with Russian Prime Minister Chernomyrdin. Gore maintained that America’s responsibility was to ‘work closely with all of Russia’s democratically elected leaders, whoever they might be’ (Gore, 1995:39-40) but the reality, however, was the complete opposite. The Clinton administration did believe that Yeltsin was genuinely committed to dismantling the old Soviet system and replacing it with democracy, market economics and cooperative engagement with the west (Talbott, 1996a:120-3). Yeltsin spoke like a democrat using the language of freedom, choice, constitutions and elections. The words had a resonance with an administration keen to emphasize its internationalist credentials. Clinton believed that these essential ‘American values’ were ‘embodied by the policies and direction of President Yeltsin’ and committed himself to ‘work with him and support him because he reflects those enduring values’ (Clinton, 1993a:393-401). ‘Reformers’ such as Chubais and Gaidar, proclaimed their democratic credentials even though they had never been part of the democratic movement in Russia, and joined forces with Yeltsin. The Clinton administration had little doubt that with the right encouragement a market democracy would emerge in Russia. Tony Lake, Warren Christopher, Strobe Talbott, Madeleine Albright and Bill Clinton all emphasized the importance of promoting democracy abroad, especially in Russia. Lake did qualify that support, pointing out that the national security emphasis on promoting democracy did not amount to a ‘democratic crusade’ but, rather represented ‘a pragmatic commitment to see freedom take hold where that will help us most’. He did 5

Interview with Anders Aslund, Carnegie Endowment for International Peace, Washington DC, 15 February 2002. 6 Interview with Peter Reddaway, George Washington University, Washington DC, 19 February 2002. 7 Deputy Assistant Secretary of the Treasury for Eastern Europe and the Former Soviet Union.

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introduce a number of caveats including patience and pragmatism, and defined democracy broadly in terms of elections, independent judiciary, the protection of human rights, and respect for diversity (Lake, 1993:13-19). The administration considered democracy and the market as two parts of an indivisible whole. It was assumed that whatever helped advance the market would also advance democracy. All the key figures in the administration saw a causal connection between capitalism and democracy, regardless of any evidence to the contrary. An acquiescent Russian leadership, seeking American advice to improve their economy, opened up all kinds of opportunities for trade, investment, acquisitions, and the burgeoning advice industry. Corporate America was broadly supportive of Clinton’s policy but was pragmatic in waiting to see how things developed in Russia before committing significant financial resources. Although Toby Gati, Brian Atwood and Tony Lake had reservations about Yeltsin’s democratic credentials, the administration presented Yeltsin to the Russian, international and US domestic audience as a ‘democrat’ (Goldgeier and McFaul, 2003:120-1). This legitimation enabled other nations, and the IFIs, to lend the Russian leader their support, in the name of promoting markets and democracy rather than backing any one individual. Clinton’s support for Yeltsin was less ambiguous than that of his cabinet colleagues. He empathised with Yeltsin’s problems and constantly found excuses for his increasingly erratic behaviour. According to Talbott, Yeltsin was ‘a very bad boy, a natural leader and an incredible screw up. All this Clinton recognized, found easy to forgive and wanted others to join him in forgiving’ (Talbott, 2002:185). Yeltsin’s periodic struggles with parliament over impeachment echoed Clinton’s own impeachment proceedings with Congress. Clinton saw him as a kindred spirit who, despite his many flaws, was a great man who had transformed Russia, and had earned the right ‘to be called the Father of Russian democracy’ (Clinton, 2000a:94-5). Talbott remembered Yeltsin for his ‘erratic tendencies, boozing, vanity, irascibility and bouts of depression and isolation’ (Talbott, 2002:10). Despite these character flaws, he could still deliver benefits for the United States if handled correctly. Clinton was generally able to bring Yeltsin along on the major issues of concern to the US.8 He valued his relationship with Clinton and considered difficulties in US-Russian relations always to be the fault of others. He was prepared to respond positively to US requests and advice when not in front of his Russian associates (Talbott, 2002:182-5). The entire administration considered that there was simply no alternative to Yeltsin. Leon Fuerth, when interviewed, insisted that ‘first came the objective of reform and then came support for the man we felt could carry the burden of it. I mean who else was there?’.9 In reality ‘reform’ and ‘Yeltsin’ became synonymous until the economic collapse in August 1998. The initial decision to support Yeltsin was not contested at all in Congress, the media, business, the US political parties, former officials and government 8 9

Interview with Strobe Talbott, New Haven, 14 February 2002. Interview with Leon Fuerth, Washington DC, 7 February 2002.

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ministers, or the general public. Whatever Yeltsin’s personal shortcomings he was deemed better than any alternative and as the man in power, the only one who could deliver results that would directly benefit the United States. Stephen Cohen was one of the few dissident voices warning against unequivocal backing for Yeltsin from the outset.10 Academics, politicians, media and public alike would later criticise the Russia Policy but at the outset the policy had widespread approval providing the financial cost was limited. Financial Assistance to Russia In the early months of the Democratic administration the most pressing considerations were domestic. Clinton had been elected on the strength of his promise to attend to the American economy and restore the country’s prosperity. During the transitional period, and subsequently, it became apparent that the state of the economy was far worse than the Republicans had let on. When Ronald Reagan had been elected in 1980, national debt totalled around $914 billion and the budget deficit was a manageable $5 billion. By 1993 the national debt had grown to $4 trillion and the deficit was running at $300 billion. Deficit reduction was essential to restore US economic fortunes, but such a move threatened to derail Clinton’s domestic reform agenda on welfare and health. Understandably, this issue was at the top of the president’s agenda for the first half of the year, as he tried to persuade a reluctant Congress to adopt unpopular measures to get control of this seemingly ever-increasing deficit. Deficit reduction meant that welfare and foreign expenditure would be restricted, despite Clinton’s desire to assist Russia. The new president desperately wanted to be involved in helping shape the Russian future. American interventions in Russian internal political processes were intended to be significant and specific. In Yeltsin’s conflict with the CPD Clinton backed Yeltsin uncritically. When the Russian president suspended the parliament and declared five weeks of special rule on 20th March 1993 senior foreign policy advisors assembled at the White House in Washington. Clinton made it clear to his colleagues that he would support Yeltsin ‘even if he went off the rails of democracy’. Christopher advised the president to support the reform process, rather than Yeltsin per se, and not to get involved with questions of legality. Clinton overruled his secretary of state, however, arguing that the conflict was a ‘zero-sum thing. They’re not splitting the difference. That’s why we’ve got to take sides’ (Talbott, 2002:54-5). Support for Yeltsin’s seizure of special powers set America on opposite sides to the Russian parliament, Constitutional Court, Attorney-General, Justice Minister, Vice President, most of the elected local legislators, and large sections of the democratic press (Cohen, 1993:476-83). Clinton publicly declared his support at a press conference on 23rd March:

10

Stephen Cohen, ‘Can America convert Russia?’, Washington Post, 28 March 1993.

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I want to reiterate that the United States supports the historic movement toward democratic political reform in Russia. President Yeltsin is the leader of that process. He is a democratically elected national leader; indeed, the first democratically elected president in 1000 years of Russian history. He has US support, as do his reformed government and all reformers throughout Russia (Clinton, 1993d).

Having decided to support Yeltsin, the administration had to determine how to assist the Russian leader. The first major decision involved mobilising resources to support Yeltsin’s referendum on reform on 25th April 1993. The referendum asked the electorate to indicate support for the Russian president, his socio-economic policies, and on early presidential and parliamentary elections. The referendum represented a vote of confidence in the whole reform process. Clinton called several meetings to discuss how best to encourage reform and to find ways to support Yeltsin personally (Christopher, 1998:37). He persuaded fellow G7 leaders to urge the IMF Board of Executive Directors to convene three weeks earlier than planned in order to agree to release funds from a new Systemic Transformation Facility, which conveniently dispensed with the usual IMF conditionality. The IMF agreed to release the funds before the end of March to help the Chernomyrdin government and Russian treasury.11 The US also organized a bilateral summit in Vancouver between Clinton and Yeltsin in early April. Before embarking on the Vancouver and Tokyo summits the president invited twelve leading senators, six from each side, to dinner at the White House. At the meeting Clinton spent several hours hearing the views of each senator and their attitude towards an aid package (Woodward, 1994:158). In preparation for the summit, Talbott and Summers had proposed drawing up a bilateral $1 billion aid package for Russia. Clinton urged them to think bigger declaring that: We’re a big, rich country with deep pockets. We need big, bold ideas. We’re not worth shit if we can’t put together a bigger package than the one we’re talking about. We’ve got to remember that we really do have a dog in this fight (Talbott, 2002:57).

The package actually agreed amounted to $1.6 billion of which only $48 million was designated for democracy promotion. $925 million was to be provided for humanitarian assistance, largely in food credits to US farmers, a useful boost on the eve of Yeltsin’s referendum campaign (see Table 3.1). A few days later, the G7 met in Tokyo and agreed an assistance package notionally of $28.4 billion, although $23 billion of this had earlier been promised but not delivered (Reddaway and Glinski, 2001:398). The United States increased its bilateral assistance a further $1.5 billion, this time with $220 million earmarked for democracy initiatives (see Table 3.1). The G7 Joint Chairs announced the measures were specifically aimed at ‘building a democratic society, establishing a market economy and improving the welfare of its people under the leadership of 11

Aleksandr Beliker, Sevodnya, 28 March 1993.

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President Yeltsin’. The G7 also sent out instructions to the IMF, World Bank, European Bank of Reconstruction and Development (EBRD) and Export Credit Agencies to provide loans, export credits, and guarantees to promote Russian small and medium size enterprises, and the privatization of large-scale businesses (Muto and Hayashi, 1993). US Treasury Secretary Lloyd Bentsen echoed the same theme on 13th April warning of the perils to the United States if Yeltsin and ‘the forces of reform’ were thwarted or reversed.

Table 3.1

US-Russian Cooperation in 1993 ($ millions)

Private sector development Trade and investment Democracy corps initiative Support for troop withdrawal Energy and environment Humanitarian Security assistance

Vancouver 148 243 48 6 38 925 215

Tokyo 375 490 220 165 125 135 0

Total 1623 1610 _________________________________________________________________________ Source: US Department of State Dispatch, August 1993, Supplement Economic Summit vol. 4 is. 3 [sic], Supplement no. 3.

Congress initially expressed some reservations about assistance for Russia. Patrick Leahy, D-Vermont, chair of the Senate Appropriations Subcommittee on Foreign Operations, worried about the time it would take to debate both the supplement and a regular foreign aid bill, when other issues such as economic stimulus, taxes and healthcare were more important to the Senate. At the same time House Minority Leader, Robert Michel, R-Illinois, sought assurances that the money would not be squandered (Doherty, 1993a). Clinton was aware of the difficulties in seeking assistance for Russia at a time when he was required to seek austerity at home. He sought to win bipartisan congressional support for his policies by hosting a series of White House dinners for senior republicans and democrats, including Newt Gingrich, Robert Michel, and democrat David Obey, and making long personal calls to key people (Goldgeier and McFaul, 2003:93). Strobe Talbott, Ambassador-at-Large for the FSU, made a series of appearances before House and Senate committees to appeal for congressional approval. Leading Democrats, such as Leahy, felt it was presumptuous to seek a major foreign aid supplement after the Senate had rejected Clinton’s proposal for a supplement to fund domestic programmes. Instead of seeking extra funds, existing defence and foreign assistance funding could be redirected away from Israel and Egypt and towards Russia. Mitch McConnell, R-Kentucky, Ranking Republican in

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the Senate Appropriation Subcommittee, was more enthusiastic and would support assistance providing it did not add to the deficit and damage the American economy. Clinton was aware that the domestic economy and assistance to Russia were inextricably linked in congressional thinking. He gradually won endorsement for his policy when the dangers of recidivism, through not supporting Russia, were emphasized (Doherty, 1993b). Clinton’s task was made easier by favourable opinion polls indicating that his policy had won general approval. A NBC/Wall Street Journal poll in April revealed that 63 percent of the respondents felt that Clinton was paying the ‘right amount of attention’ to Russia. Also 73 percent agreed that it was in America’s national interest for Russia to become a democracy and have a free market economy. Almost half the respondents (49 percent) also agreed that it was ‘important that the United States do whatever it can to see that Boris Yeltsin remained President of Russia’ (Jacobs and Shapiro, 1995:204). Although domestic politics was fraught, the president’s Russia policy was winning greater approval. The House approved the foreign aid appropriations bill in June and a New York Times/CBS poll revealed increasing support for the policy. There was an increase from 41 to 49 percent public support for ‘the United States giving economic aid to Russia in order to help Russia reform its economy’ (Jacobs and Shapiro, 1995:204). Public support for Russia was fickle, however, and depended to a large extent on how people perceived the state of the domestic economy. Clinton and his economic team had been relatively unsuccessful at the G7 summit in persuading fellow members to offer substantial bilateral funding for Russian reform. The US public appeared unwilling to increase the funding beyond that already promised to Russia. A CNN/USA Today poll, on 6th July, revealed 64 percent opposed to any increased assistance to Russia. The Senate was ahead of public opinion in being broadly supportive of more assistance. Patrick Leahy reported that: The good news is that there is increasing bipartisan support for a real programme of Russian aid. The bad news is that we’re still hundreds of millions of dollars short of finding the money (Doherty, 1993c).

The foreign operations appropriations bill, including Clinton’s pledges at Vancouver and Tokyo, passed 321-108 in the House and 88-11 in the Senate. In order to pass the legislation a deadline was mandated to enable $1.6 billion, drawn from unused defence and foreign assistance funds from FY1993, to be used. These funds were only available until 30 September, the last day of the fiscal year. A committee met for four hours resolving over one hundred differences between the House and Senate bills. Mitch McConnell argued that the administration should provide at least £300 million to Ukraine while David Obey argued that ‘it would be an insult to Yeltsin to earmark money for Ukraine’. Senator Connie Mack, RFlorida, with a powerful Cuban expatriate constituency, insisted that the president had to certify that Russia had cut off support to Cuba as a condition of aid to

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Moscow. A compromise was reached allowing for a waiver if the president determined that it was in the national interest to do so. McConnell passed an amendment that made aid to the FSU conditional on ‘their respecting each other’s national sovereignty and territorial integrity’. This too was subject to a national interest waiver. Appropriations Committee Chair Robert Byrd, D-West Virginia, had an amendment approved, which required the president to certify that Russia had made ‘substantial progress’ in withdrawing troops from Latvia and Estonia before aid could be provided (Doherty, 1993e). Clinton signed the bill into law on 30th September. Congress had demonstrated that although Russia was in political turmoil, they had little choice other than to back their president and his support for the political and economic changes Yeltsin was pursuing. The difficulty in getting the foreign operations bill passed by Congress was a foretaste of further political problems ahead. The bipartisan consensus, which existed hitherto, started to unravel as the midterm elections approached in 1994. After the Republican victory, Clinton’s ambition to provide substantial financial assistance to Russia would be thwarted. The Chair and Ranking Republican on the Senate Appropriations Subcommittee on Foreign Operations, Patrick Leahy and Mitch McConnell, were highly critical of the administration for lacking a coherent strategy for delivering assistance to Russia. At a committee hearing on 24th January 1994 they criticised the Russia policy as being ‘over personalised’ in favour of Yeltsin, and that he exercised an effective veto over US policy in Central and Eastern Europe. McConnell wrote to the administration complaining that its information on assistance to Russia was contradictory, incomplete, inaccurate, and in one instance, might be illegal. He further emphasised that although they had signed off $923 million for projects in the FSU, only about $42 million had actually been spent or committed. Out of this total, only $91.6 million was actually to be spent on democracy promotion. Strobe Talbott argued that they had never directed support to Yeltsin personally but, in future, they would broaden contact with newly elected parliamentarians (Doherty and Benenson, 1994; CQWR, 1994). Talbott’s reply was disingenuous on both counts. Congress and academics sought to further influence and shape the future direction of Russia policy over the coming year. The policy of support for Yeltsin, engagement and partnership were strengthened with the promotion of Talbott as Deputy Secretary of State to replace Clive Wharton, who resigned the previous November. His deputy, James Collins, took Talbott’s old position as ambassadorat-large. The bipartisan consensus, which had enabled significant assistance to be offered to Russia in 1993, was dissipating as Talbott urged continued support: The United States cannot be spectator in the drama unfolding in the former Soviet Union. We must remain engaged. When I say “we”, I mean both the Administration and the Congress. We worked together to assemble a series of initiatives last year; we put our taxpayers’ money where our nation’s interests and principles were. We set the tone and provided the American leadership and made a difference, and it will continue to make a difference as these programmes are established on the ground (Talbott, 1994a).

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Any hopes of a bipartisan approach were dashed in the confirmation process for Deputy Secretary of State in February. The Senate divided along party lines 66-31, with only 12 Republicans voting with 54 Democrats, all 31 ‘no votes’ were from Republican senators. As Clinton’s friend and perceived architect of Russia policy, Talbott was an easy target, especially as many regarded him as favourite to eventually succeed Christopher. Bob Dole wanted to emphasise to Clinton that ‘maybe it’s time to say “enough promotions for Strobe Talbott”’ (Doherty, 1994b). Bob Dole led Republican resistance to any further aid to Russia, which he argued had already led to too many concessions to Moscow. The Republicans and a number of Democrats considered Clinton’s policy over-optimistic and naïve, assuming that Russia could be reformed into a peaceful market democracy. The idea of ‘Russia first’ angered Mitch McConnell who continued his advocacy for Ukraine to receive a greater share of any assistance. He accused the administration of a ‘Moscow-first, Yeltsin right-or-wrong approach’ (Doherty, 1994c). Warren Christopher continued to defend their approach urging Congress to find a further $900 million in assistance for the FSU in FY1995. The Republicans received significant support for their critique of Clinton’s policy when an influential article by Zbigniew Brzezinski appeared in Foreign Affairs. Brzezinski criticised the policy for preferring Russia to the rest of the FSU and for false assumptions about the prospect of a democratic, free market Russia emerging. He attacked the rosy picture of reform presented by the administration. Rather than hoping that Russia would stabilize, it would be better to prepare for the possibility that it would not. Geopolitical pluralism should be encouraged within the FSU to persuade Russia to be a good neighbour without seeking to dominate. There should be equality of treatment for Ukraine, and NATO should expand eastwards while entering into a mutual cooperation treaty with Russia at the same time (Brzezinski, 1994). The article and Republican congressmen caused policy to shift away from large assistance programmes to Russia, an increase in funding for Ukraine, and a strengthening of Lake’s position on NATO expansion within the cabinet. The policy was affected at the margins but the general direction remained resolute with alternative sources of funding sought from the international financial institutions. During the course of the year loans of $1.5 billion from the IMF and $1.67 billion from the World Bank were agreed. The IMF actually disbursed about $1.4 billion but the money was all destined for economic rather than political projects. In the midterm elections in 1994 Democrats suffered their worst defeat in living memory. Democrats lost eight seats in the Senate and 52 in the House and for the first time lost control of both chambers. Newt Gingrich’s Contract with America advocating a return to traditional American values, had resonance with US voters and their choice humiliated Clinton and his party. The implications of the elections for Russia policy and democracy promotion would be immediate. Speaker Newt Gingrich and Senate Majority Leader Bob Dole were no longer prepared to adopt a bipartisan approach to Russia. Dole had aspirations to challenge Clinton in 1996 and his election campaign began in earnest after the

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midterm elections. The new congressional intake had at best a marginal interest in the rest of the world. One hundred congressmen had never travelled outside the United States (Halberstam, 2003:298). In February 1995 the White House scheduled a foreign policy briefing for the Speaker and freshmen on Capitol Hill. Christopher, Lake, Perry, Albright and Shalikashvili were kept waiting, however, for forty five minutes by Gingrich and House Republicans before they left (Albright, 2003:175). The new chair of the Senate Foreign Relations Committee was Jesse Helms, R-North Carolina, who appeared suspicious of any foreign nation and Russia in particular. The Democrats also lost a leading friend of the presidency when Senate Majority Leader George Mitchell retired and decided not to contest the elections. The administration was completely demoralised and the two senior members Warren Christopher and Lloyd Bentsen resigned. Robert Rubin who, according to Christopher, became the most powerful member of the cabinet (Christopher, 2001:170) replaced the Treasury Secretary. The election result and his failure to resolve the Bosnia crisis depressed the Secretary of State, who had been instrumental in putting the administration together. Christopher’s chief of staff Tom Donilon and deputy Strobe Talbott managed to talk him out of resigning, just as Lake’s staff had dissuaded him from resigning earlier over Clinton’s indecision on Bosnia. Clinton blamed himself for the defeat, considering that he had led as a prime minister rather than a president and that from now on he would have to use the ‘bully pulpit’ to move his agenda (Woodward, 1996:22). In the aftermath of defeat though, Clinton revealed what Fred Greenstein describes as his main strength: … a remarkable capacity to rebound in the face of adversity, his fundamental pragmatism, and his capacity (in spite of his thin-skinned tendencies) to admit his own failings (Greenstein, 1995:143).

The Republicans, Gingrich and Dole in particular, sought to exploit any weakness or failings in all aspects of the presidency. US assistance for Russia would be even less popular with the public and Congress. The Chicago Council on Foreign Relations (CCFR) investigated US public and elite opinion and foreign policy in 1995. The report found that both leaders and public felt that preventing the spread of nuclear weapons was one of the most important foreign policy goals. Public and leaders saw Russia as one of the most vital US interests, although Japan, Saudi Arabia and Mexico were just as important. The public preferred to decrease or stop aid to Russia altogether (CCFR, 1995). Republicans attacked Clinton’s policy on Russia and sought to further restrict assistance. In speeches at the Nixon Centre, Washington DC, in March, Gingrich advocated cutting off aid to Russia if they went ahead with arms sales to Iran. Bob Dole criticised the administration for pursuing ‘a Russia-first policy, which has turned into a Yeltsin-first policy’. He too criticised Russia’s arms sales to Iran and violence in Chechnya (Doherty, 1995). At the same conference, Clinton reaffirmed

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his determination to ‘open markets for America’ and ‘to support democracy around the world’. The president, now faced with a Republican Congress, desperately sought a bipartisan approach to foreign policy and Russia in particular. He lavished praise on the late President Nixon and Republican foreign policy congressmen including Lugar, Gingrich, Livingston, McConnell and Gilman. Clinton’s attempts at inclusivity reflected a need to work with Congress by appealing to the higher national interest (Clinton, 1995:286). The administration was, however, increasingly obliged to scale back on bilateral assistance to Russia because of congressional opposition. The Russia First policy was abandoned to incorporate more assistance to Ukraine, as advocated by Brzezinski and McConnell among others. In FY1995, 60 percent of US assistance would go to the non-Russian NIS and less than one third of the $788 million request for FY1996 would go to Russia (Doherty, 1995; Collins, 1995). In place of bilateral assistance the Russia team sought to leverage greater IFI assistance and concentrate US resources on market reform and election assistance. James Collins, Senior Coordinator of Assistance to the NIS, emphasised US assistance in drafting commercial codes, setting up privatization programmes, and banking reform in Russia. He also signalled a change of policy in seeking to redirect assistance funds to traditional business promotion programmes such as Eximbank to encourage US business to become involved in Russia (Collins, 1995). Such a change was a response to requests from US business but they still remained reticent to make any significant engagement in Russia, while its economy struggled and Yeltsin’s future was insecure. The President remained convinced of the importance of assisting Russia, and in particular the cause of President Yeltsin. The policy won the support of all members of the administration but was increasingly resisted by Republicans who viewed the policy on Russia as an area of weakness they could exploit in the 1996 presidential elections. Public opinion was volatile and, after initial enthusiasm for supporting Russia, most felt that enough assistance had already been provided. Denied bipartisan support and public approval the administration increasingly turned to the IFIs to continue their policies. There was approval for IFI loans from all the G7 countries that faced a similar lack of enthusiasm from their own electorates. As the major shareholder in the IMF and World Bank, the United States was able to use its considerable influence to direct assistance to Russia, although this assistance was largely economic rather than for political reform. Economic Reform From the outset the Clinton administration wanted Russia to become a capitalist country with a fully functioning market economy. The key ingredients proposed for this were Washington Consensus formulas of tight monetary control, removing price and profit controls, privatization, reducing social provision and the size and function of government, and allowing only the strongest companies to survive. The

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key decisions to be made by the administration were how to support privatization, encourage market reform, and how to help the reformers win popular support for their policies. The US policy on economic reform in Russia was led by just three men during the two administrations US Treasurer Lloyd Bentsen, the septuagenarian, and former Texas senator and Vice Presidential candidate in 1988, had known Clinton for twenty years. The multimillionaire was the most experienced member of the administration with over thirty years of Washington experience. Clinton looked upon him almost as a father figure and deferred to him in all matters economic. Robert Rubin, head of the NEC was also a multimillionaire who had raised millions of dollars for Clinton’s campaign. He recommended that Clinton appoint Bentsen ahead of him at the US Treasury. He remained a good team player who did not court publicity and worked solidly to improve the economy (Woodward, 1994:62). Summers was the other key player in the Treasury team although his brief was purely economic, his control over the purse strings would impact on Talbott’s ability to assist in the delivery of political reform in Russia. Summers tended to be more territorial than Talbott and he was aware that Gore had successfully opposed his appointment as Chair of the Council of Economic Advisors in 1993. Gore objected to an article Summers had written while Chief Economist at the World Bank suggesting that toxic waste might be dumped in Africa (Woodward, 1994:74). Clinton held great store by his Treasury team, having been elected on the promise to improve the economy the President was indebted to the team that managed to achieve it. Clinton followed their advice on the issue of privatization despite vociferous opposition to the way the process was conducted. The privatization of Russian industry, it was believed, would lead to greater efficiency and the closure of unprofitable and inefficient companies. American entrepreneurs would eventually have the opportunity to acquire an interest in Russian companies. Russian businesspeople and entrepreneurs would increasingly become just like American businesspeople and entrepreneurs. Privatization would also achieve another more important objective for both Russian reformers and the US administration. Yeltsin, Gaidar and Chubais wanted to end any prospect of a return to communism. Sudden and abrupt privatization was one way to achieve this objective, by putting business and property in the hands of individuals with a stake in maintaining the new order and their latest privileges. The Clinton administration encouraged such swift and ill-conceived privatization as a political, rather than economic, imperative. Leon Fuerth confirmed that: We understood that the divestiture of state-owned properties was one way to burn bridges and make impossible a reconstruction of a communist-operated system.12

12

Interview with Leon Fuerth, Washington DC, 7 February 2002.

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Warren Christopher argued that the voucher, and later, loans-for-shares, privatizations were deemed essential ingredients in transforming Russian society: Putting private property into the hands of the Russian people is a critical step in building a free market economy. It will create millions of property owners and private entrepreneurs - a genuine middle class with a powerful stake in continued reform (Christopher, 1998:49-50).

The voucher scheme put private property in the hands of the former apparatchiks, the well connected, and mafiya, who demonstrated little commitment to continued reform. This became even more apparent when at the instigation of the Clinton administration’s favourite reformer Anatoly Chubais, a second wave of privatization took place in Russia. This privatization, known as loans-for-shares, was designed to and succeeded in transferring shares in government enterprises over to friends of Yeltsin. The government borrowed from under-regulated private banks, rather than the Russian Central Bank, using state-owned industries as collateral. The government defaulted on the loans and the bankers were able to take over the companies at a fraction of their real value in rigged auctions. The oligarchs became billionaires and sent their money abroad rather than risk losing their gains should a future government challenge the legitimacy of the privatization. The reformers defended the sales later, on the grounds that it would speed up the reform process. Although corrupt, once the oligarchs were in possession of the assets they would press for laws to protect their property rights and encourage the rule of law to be established. The danger for democracy of encouraging, or at least not challenging, such fraudulent action has been well summarised by Joseph Stiglitz, who was ideally placed at the Council of Economic Advisors and then as Chief Economist at the World Bank: The way in which transition proceeded in Russia served to erode this social capital. One got wealthy not by working hard or by investing, but by using political connections to get state property on the cheap in privatizations. The social contract, which bound citizens together with their government, was broken, as pensioners saw the government giving away valuable state assets, but claiming it had no money to pay pensioners (Stiglitz, 2003:161).

The administration’s active support for voucher privatization, through the involvement of USAID-funded advisors HIID and passive support for the loansfor-shares privatization was not uncontested. Distinguished economists including Kenneth Arrow, Joseph Stiglitz, and James Millar, who argued against the policy on the grounds that it was important to first create the institutional infrastructure of a market economy, such as legal and regulatory structures, were simply ignored. The policy of shock therapy and rapid privatization advocated by the US Treasury, IMF and independent advisors proved a monumental failure and sent the Russian economy into a decline from which it has yet to recover. Joseph Stiglitz, chair of

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the Council of Economic Advisors, recalls conflict within the administration over its advice to Russia: We at the Council of Economic Advisors felt strongly that the United States was giving bad advice to Russia and using taxpayers’ money to induce them to accept it. But Treasury claimed Russian economic policy as its own turf; turned aside any attempts to have an open dialogue, either within government or outside; and stood stubbornly by its commitments to shock therapy and rapid privatization (Stiglitz, 2003:166).

Privatization was part of an overall economic strategy for Russia that consistently favoured market reform over democracy assistance. Working with the IFIs, the US Treasury sought to open up Russian markets for international trade and to ensure that Russia repaid the Soviet debt and its loans to the IFIs. Rapid privatization was encouraged but they were less keen to permit the one thing the Russian economy needed most, long-term debt restructuring. Even after the vote of no confidence in the reform process reflected in the December 1993 elections, Talbott and Gore were overruled in their desire to mitigate the excesses and hardship of economic reform. The Treasury’s political capital was high, after achieving economic growth of 7 percent in the last quarter of 1993, and Talbott and Gore had to fall in line with the Treasury’s preferred policy. Economic policy undermined attempts at political reform in Russia but both Bentsen and Summers’ argument that the reforms were necessary and would eventually work persuaded Clinton. Clinton would have liked to be more lenient to Russia, but Bentsen won the battle in cabinet against any weakening of the West’s credit terms. In doing so he was supported by Helmut Kohl and John Major, the World Bank and IMF (Walker, 1994). The Treasury were able to influence the debate on Russian assistance because they had a clear plan for reform and the tools required to achieve it. Larry Summers and David Lipton believed in the principles of economic reform and that this was a precondition for any democratic development. Talbott was not engaged in the processes of privatization, stabilisation or social policy reform, deferring to Summers in all these areas. The democracy promoters were less sure than Treasury about how to proceed in Russia and surrendered the initiative to those who pressed economic reform before the rule of law and democratic accountability (Goldgeier and McFaul, 2003:112). Congressional support for the market reform strategy was shaken by the Duma elections at the end of 1993. These led to increased scepticism in Congress about political and economic progress in Russia. Richard Lugar, R-Indiana considered Clinton’s policies to be on course but felt that Russia’s economy was going to ‘run off the tracks’ (Doherty, 1994a; Doherty and Benenson, 1994). Lee Hamilton feared that the loss of two reformers from Yeltsin’s government and Zhirinovsky’s victory might cause Russia to revert back to a command economy. Congress was willing to acquiesce in assisting Russia if there were clear benefits for US intervention. They were encouraged by Yeltsin’s willingness to bring nuclear

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disarmament, under START II, forward and promising not to enter into any new arms agreements with Iran. As a gesture of goodwill, they lifted the 1975 JacksonVanik amendment, which tied ‘most-favoured-nation’ status to Russia’s willingness to allow free emigration (Palmer, 1994; Doherty, 1994d). During the first administration, Congress were prepared to countenance IMF loans to Russia, which were conditional on reducing inflation, implementing austerity budgets, liberalising the energy sector and removing price controls (Christopher, 1998: 265). The IMF approved a stand-by loan of 6.4 billion in 1994, followed by a further $4.7 billion loan in 1995. The World Bank also provided a further $1.6 billion loan in 1995, and the IMF provided even larger sums before the 1996 presidential elections (IMF, 2001; World Bank, 2001). Popular Support and Reform The third issue facing the US administration was how to achieve popular support in Russia for reform and in so doing help the reformers. Shock therapy and privatization had sent the economy into a greatly accelerated decline, taking the savings of ordinary Russian people, leading to hidden unemployment and the emergence of a largely barter economy. At the start of his administration Clinton persuaded the G7, Congress and the American people to support substantial assistance for Russia in time for the April 1993 referendum. The referendum asked for a vote of confidence in Yeltsin and the reform process, and whether or not early elections should be held for the parliament and/or presidency. The outcome actually represented a victory for Yeltsin and the reformers, and by implication Clinton himself. Although Chechnya boycotted the referendum, and only 20 percent of the Tartarstan electorate voted, there was a respectable 64.5 percent turnout. Almost 59 percent expressed confidence in Yeltsin and 53 percent approved of his socio-economic policies. Two thirds of the electorate thought there should be early elections for the CPD, and half that there should be early presidential elections. In order to make either of these votes binding a majority of the entire electorate was required. As far as the US administration was concerned this victory gave Yeltsin a democratic legitimacy lacking from the CPD (Graham, 2000). Clinton immediately rang Yeltsin to congratulate him and reassure him of continued US support (Clinton, 1993a:512-14). Clinton’s support had contributed significantly to the victory and represented a leap of faith by over a third of the Russian electorate that reform would improve their lot (Christopher, 1998:56).

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Table 3.2 Results (in Percentages) of April Referendum, 1993 ________________________________________________________________ Yes No % of vote % of electorate % of vote % of electorate ________________________________________________________________ 1.

Do you have confidence in the President of the Russian Federation, Boris Yeltsin?

2.

Do you approve of the socio-economic policies carried out by the President of the Russian Federation and the Government of the Russian Federation since 1992?

3.

Do you consider it necessary to hold early elections to the presidency of the Russian Federation?

4.

Do you consider it necessary to hold early elections of the people’s deputies of the Russian Federation?

58.7

53.0

49.5

37.3

34.0

31.7

39.2

44.6

47.1

25.2

28.6

30.2

67.2 43.1 30.1 19.3 ________________________________________________________________ Sources: Rossiiskaya gazeta, 6 May 1993; RFE/RL Research Report vol. 2 no. 21, May 1993 p. 12.

By the end of the year, following the crushing of Parliament, that confidence had dissipated. Those parties opposing neoliberal market reforms achieved success in both the 1993 and 1995 Duma elections. At the start of 1996, Yeltsin’s personal popularity rating could be measured in single figures in Russian opinion polls, despite sacking leading reformers from government. Rubin and Summers were convinced that the IMF/United States Treasury prescription for Russia was right and, despite setbacks, would eventually start to transform the Russian economy. Once that happened then the Russian people would welcome reforms in other areas. Clinton was personally committed to assisting Russia and supporting his friend Yeltsin. He sought to demonstrate at each meeting and conversation with Yeltsin that as long as he continued reforming then he would support him to the best of his ability. He wanted to demonstrate an ongoing commitment to Russia and was provided such an opportunity by the Russian Foreign Minister in 1994. In order to develop a closer relationship between the two countries, and promote reform, Andrei Kozyrev suggested to Strobe Talbott that a bilateral commission be formed. He envisaged Russian Prime Minister Chernomyrdin and US Vice President Gore co-chairing the body, thereby locking in the former Gazprom chair into the reform process. Kozyrev wanted Clinton to propose the commission to Yeltsin rather than suggest it himself (Talbott, 2002:59-61). Clinton and Yeltsin, Gore and Chernomyrdin agreed to set up the binational commission which became known as the Gore Chernomyrdin Commission (GCC). The GCC would meet twice a year and its original brief was to support cooperation between the two

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countries in space, energy and high technology. The brief was soon enlarged to include business development, defence conversion, environment and health.13 The Commission included deputies of the main US and Russian departments together with the Ambassador-at-large for Russia and the NIS and the Coordinator of US Assistance to the NIS. Leon Fuerth would coordinate the meetings, which provided an opportunity to discuss every facet of US-Russian relations. The Clinton administration decided that the opportunities for progress in the three main areas of national security, markets and democracy could be achieved by supporting Yeltsin, Chernomyrdin and the reformers. Such backing, as we shall see, was not unequivocal but nonetheless closed alternative avenues to advance democracy in Russia. Although the Clinton administration supported Yeltsin and reform in Russia, such support could prove counterproductive in achieving US objectives. As previously indicated US advisors were heavily involved in advising the Russian government on shock therapy and privatization. Such programmes had brought severe financial hardship to most Russians and were deeply resented. US support for Yeltsin could be undermined unless it produced tangible benefits for the Russia people. Affirmation by the United States for Yeltsin, Chernomyrdin and the reformers did provide them with political credibility. The ability to deliver assistance in the form of grants and loans to improve the Russian economy and welfare for ordinary Russians, was well regarded and enhanced the status, if not the esteem, of reformers with access to western funds. When such assistance failed to materialise then the reformers credibility was undermined. Political and Civic Reform At the outset of the administration, democracy promotion was given equal billing with economic reform and national security interests but was compromised from the beginning. By the autumn of 1993 the most serious aspect in the relationship and the biggest challenge to democratic development in Russia had arrived. The conflict between President and Parliament had deepened throughout the year resulting in a further suspension of the CPD by Yeltsin on 21 September 1993. In this latest suspension Yeltsin promised, on Russian television, to hold early parliamentary elections and to resubmit himself for election shortly afterwards. Clinton had a seventeen minute telephone conversation with Helmut Kohl to coordinate the western response. The response was to be a complete endorsement of Yeltsin’s actions. In a statement on the situation in Russia the same day Clinton pronounced that: There is no question that President Yeltsin acted in response to a constitutional crisis that had reached a critical impasse and had paralysed the political process. As the democratically elected leader of Russia, President Yeltsin has chosen to allow the people of Russia themselves to resolve this impasse. I believe that the path to 13

United States Department of State Dispatch, vol. 5 is.52, pp. 843-6.

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Lessons from Russia elections for a new legislature is ultimately consistent with the democratic and reform course that he has charted (Clinton, 1993b:1553-4).

At another press conference the same day the Secretary of State refused to answer a question about whether or not Yeltsin had promised to rule out military force against his opponents in the run up to the election. The administration closed ranks behind Clinton’s decision to unequivocally support Yeltsin in his struggle with opposition forces. This unified approach impacted Congress with both chambers voting to approve the assistance package of aid in the FY1994 foreign operations bill. There was little debate in Congress over the issue caused by the suspension of the CPD. Representative David Obey, D-Wisconsin, thought the House had ‘no choice but to press on’ because Yeltsin was ‘wrestling a roomful of alligators over there’. In the Senate, Patrick Leahy successfully steered the bill through arguing that it was a vote for reform not for the Russian president as an individual. ‘I don’t see it as saying we’re doing this for Boris Yeltsin: - we’re doing this for democracy and economic reform in the former Soviet Union’. Only a few senators raised any objections, Arlen Specter, R-PA. Argued that ‘the means do not justify an end’ and Yeltsin's actions ‘could be very damaging in the long run’ (Doherty, 1993d). Lee Hamilton, Chair of the House Foreign Relations Committee, summed up the prevailing mood: With regard to our aid, I think the choice here is really stark: Yeltsin favours democracy, the Parliament does not. Yeltsin favours market reform, the Parliament does not. Yeltsin favours an open society, the Parliament is pushing back toward the centralised state. We want to see Russia move in the direction of democracy and market reform. The purpose is to foster that, and as long as Russia is moving in that general direction, even with some bumps along the way, that is what we ought to do.14

Over the course of two weeks the CPD refused to stand down and voted to replace Yeltsin with his Vice President Aleksandr Rutskoi. Yeltsin resorted to armed force against the Russian White House to crush the dissent after opposition forces had attempted to take over the Ostankino television station. In putting down this revolt and attacking the Russian Parliament at least 139 people were killed and hundreds more wounded in front of an international television audience. The Clinton administration continued to give Yeltsin unqualified support and had earlier indicated that it would not object to the use of force to suppress the revolt. Clinton, briefed by Lake, decided to back the Russian President and blamed his opponents for the violence. Clinton had no telephone contact with Yeltsin during the crisis to avoid any accusations that America was micromanaging the situation.15 Clinton maintained, contrary to all the evidence that Yeltsin had ‘bent 14

Thomas Friedman, ‘Showdown in Moscow: US to speed money to bolster Yeltsin’, New York Times, 24 September 1993. 15 Warren Stobel, Washington Times, 4 October 1993.

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over backwards to avoid the use of force’, and wanted him to know of his ‘continued support and the support of the United States’ (Clinton, 1993b:1647-8). Thomas Pickering, US Ambassador in Moscow, advised Strobe Talbott in a number of conversations that they should support Yeltsin: Given Yeltsin’s willingness in effect to put his future on the line with a follow-on election in the Duma, this was not a time for the United States to waffle (Pickering, 2001:33).

As the battle for the White House continued over the weekend of 3rd-4th October US support remained steady. Clinton justified that support in terms of removing the legislature as an obstacle to reform. As long as Yeltsin was prepared to hold parliamentary elections and submit himself for re-election in June 1994, as he had promised, Yeltsin was still portrayed as a ‘democrat’ (Clinton, 1993b:1694). Just two years earlier Yeltsin, Rutskoi and Khasbulatov had stood shoulder to shoulder outside the same White House as defenders of Russian democracy, now the parliament building lay in ruins, laid to waste by Yeltsin’s tanks. Yeltsin acknowledged the illegality of his actions but defended them as essential for the future of democracy in his country, a theme taken up by the US administration: Formally, the president was violating the Constitution, going the route of antidemocratic measures, and dispensing the parliament - all for the sake of establishing democracy and the rule of law in the country (Yeltsin, 1994:255).

Yeltsin’s assault on Parliament coincided with America’s worst foreign policy disaster since the Iran hostage crisis during the previous Democrat administration. On 3rd October, eighteen US rangers were killed in Mogadishu, Somalia. Although Clinton and his Russia team monitored events in Moscow, the disaster in Somalia understandably distracted from their full attention. Opponents of Yeltsin were deemed to be no better than Aidid’s fighters in Somalia. The administration’s response was to immediately support Yeltsin, and then explain their policy to Congress, rather than wait for congressional support. Such support was forthcoming, however, when Talbott appeared before the House Foreign Affairs Subcommittee on Europe and the Middle East on 6th October. Representative Tom Lantos, D-California, spoke for many members of Congress in endorsing Yeltsin’s conduct: ‘If I fault Yeltsin, it’s not for having used force earlier’. He also urged Talbott and his fellow representatives to ‘give him some time, be understanding, don’t set unreasonable obstacles in his way because he is moving in the right direction’. Talbott explained that their policy was to refrain from criticising Yeltsin’s government and to support his decision to call parliamentary elections in December and presidential elections the following June. Despite Clinton’s strong personal support for Yeltsin, Talbott insisted that US assistance was intended to

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support the process of reform rather than a policy or an individual (Doherty, 1993f). In the aftermath of the crisis, a state of emergency was declared. Yeltsin’s opponents were arrested, several newspapers, including Pravda, were closed down while others were censored. A number of organizations, including the National Salvation Front and the Russian Communist Workers’ Party, were banned (McDonnell, 1994:151-2). For US-Russian relations, however, it was business as usual, with a visit to Moscow by Warren Christopher later in the month to shore up support for Yeltsin. On 22nd October, Christopher, Talbott, and Pickering met with Yeltsin at a hunting lodge in Zavidovo to express their continued support and to use the opportunity to explain that NATO expansion was inevitable, but would be evolutionary rather than immediate, and to promote the Partnership for Peace (PFP) (Christopher, 1998:93). The following day Christopher used a speech to the Academy of the National Economy, in Moscow, to justify US support for Yeltsin and to urge more privatization and democratic reform, which he described as mutually reinforcing: The political struggle was a crisis of the sort well known to students of Russian history a battle between reform and reaction. As the crisis unfolded, we in America knew what we had to do: We stood firmly behind reform. Let me be clear about our decision to support your President during this crisis. The United States does not easily support the suspension of Parliaments. But these are extraordinary times. The steps taken by President Yeltsin were in response to exceptional circumstances. The parliament and the constitution were vestiges of the Soviet communist past, blocking movement to democratic reform. By calling elections, President Yeltsin was once again taking matters to the Russian people to secure their participation in the transformation of Russia (Christopher, 1998:97).

The next stage of the hoped-for transformation was the new constitution and parliamentary elections in December 1993. Both Yeltsin and the United States regarded the plebiscite on electoral reform, as the most significant vote in Russia’s future. The new constitution, if approved, would substantially increase the presidential power, enabling him or her to rule by decree in the absence of legislation by the new parliament (Duma or Federal Assembly), as long as it did not exceed his/her competence under the constitution. Yeltsin drafted the new constitution with advice from constitutional experts. There was no opportunity to debate the proposals, which received almost universal media endorsement, in the few weeks before the vote thus again circumventing normal democratic process. Wayne Merry recalls drafts of the constitution being received by the US Embassy in Moscow as soon as they were available.16 US constitutional experts, legal scholars and academics offered advice to the Russians, eventually producing a constitution that enabled the president to dismiss his government at will, and decreased parliament’s ability to impeach the president for wrongdoing. Merry’s 16

Interview with Wayne Merry, Arlington, 12 February 2002.

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successor as Chief Political Analyst at the Embassy, Tom Graham considered that the changes enabled the US to focus on the executive branch, working with the reformers and developing legislation. If the Federal Assembly resisted the legislation Yeltsin could simply sign a decree and it would be enacted (Graham, 2000). Under previous rulings from the Constitutional Court any changes in the constitution required the support of at least 50 percent of the total electorate. In the plebiscite official figures revealed that 58.43 percent of the vote was in favour of the new constitution, this represented only 30.7 percent of the electorate and was therefore invalid. In total seventeen republics and regions actually rejected the constitution (Sakwa, 1996:391). Russia specialist Peter Rutland suggests that only 46 percent actually voted for the constitution and not the 58 percent claimed (Rutland, 2000:252). The result was not questioned by the US administration and the new constitution came into effect in January 1994. The United States’ tacit approval of the Russian president’s constitution, which enhanced presidential powers, would tend to indicate that Yeltsin’s survival was more important to US interests than the introduction of participatory democracy. At no stage did Clinton, or other members of the administration, challenge either the constitution itself or the way in which the plebiscite was conducted. Congress and the American media were similarly supportive, having backed Yeltsin’s assault on parliament; they now saw the constitution as a necessary control over any future hostile parliament’s ability to frustrate the reform process, regardless of popular support. This would become an even more significant factor following the outcome of both the 1993 and 1995 parliamentary elections. Clinton’s backing for Yeltsin was calculated to grant specific national security benefits to the United States. At the January 1994 summit in Moscow, Clinton achieved an agreement between himself, Yeltsin and Ukrainian President Kravchuk for the elimination of Ukraine’s nuclear weapons in return for security guarantees and compensation. Russia agreed to join a Partnership for Peace with America, and over the course of the first term it became apparent that Yeltsin would pontificate against NATO expansion but would effectively do nothing to prevent it. Yeltsin would also practically support US policy in Bosnia and limit sales of nuclear or military equipment to Iran. Robert Einhorn, assistant secretary of state for non-proliferation, told Sarah Mendelson that Russia’s support for the Iranian nuclear programme ‘was always one of the top three issues’ in the USRussia relationship (Mendelson, 2002:29). These were all tangible benefits, which could be proffered to the public and Congress as positive achievements of the Russia policy. The reformers fared badly in the 1993 elections for the new Federal Assembly. The Clinton administration backed Gaidar’s party Russia’s Choice, offering specialist assistance in their election campaign. Russia’s Choice despite overwhelming presidential, media, and international support was only able to achieve 15 percent of the vote. The neo-fascist Liberal Democratic Party (LPD) of Vladimir Zhirinovsky won nearly 23 percent; while the Communist Party (KPRF)

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received 12 percent of the vote (see Table 3.3). The result reflected widespread disenchantment with the reform process and represented a significant challenge to US involvement in that process. Gore and Talbott, who were in Moscow to take part in Gaidar’s anticipated victory celebrations, were devastated. Talbott famously blamed the lending policies of the IFIs and urged ‘more therapy and less shock’ to the anger of the US Treasury who forced him to recant, even though nine years later he told me that his comments were correct.17 Larry Summers reminded Talbott of the division of their responsibilities and not to interfere in economic matters in future. The election produced an even more conservative and recalcitrant legislature than before. The difference was that now the legislature had less significance. Political parties could neither nominate the president nor form the government, and would remain marginalised (Sakwa, 1995:3). In the final analysis it would be easier to circumvent parliament.

Table 3.3

State Duma Election Results, 12 December 1993

Party/bloc

Party lists Single members % seats seats Total ________________________________________________________________________ Liberal Democratic Party 22.92 59 5 64 Russia’s Choice 15.51 40 30 70 Communist Party 12.40 32 16 48 Women of Russia 8.13 21 2 23 Agrarian Party 7.99 21 12 33 Yabloko 7.86 20 3 23 PRES (Shakhrai) 6.76 18 0 18 DPR (Travkin) 5.52 14 1 15

Table 3.4

State Duma Election Results, 17 December 1995

Party/bloc Communist Party Liberal Democratic Party Our Home is Russia Yabloko

Party lists % seats 22.30 11.18 10.13 6.89

Single members seats Total

99 50 45 31

58 1 10 14

157 51 55 45

Source: Both tables adapted from Richard Sakwa (1996), Russian Politics and Society, pp. 391-2.

17

Interview with Strobe Talbott, New Haven, 14 February 2002.

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Yeltsin’s difficulties deepened with the results of the State Duma elections on 17 December 1995. The Communist Party, with over 22 percent of the vote, won the elections, with 10 percent more of the vote than in 1993. Chernomyrdin’s party, Our Home is Russia, came third with 10 percent of the vote, just 1 percent behind Zhirinovsky’s Liberal Democratic Party. Yabloko received just under 7 percent of the vote but Gaidar’s Russia’s Choice failed to pass the 5 percent representation threshold in the party-list vote and saw its seats in the Duma fall from 76 to just nine. Gaidar himself lost his seat in parliament. Voter turnout increased from 55 percent, in 1993, to 65 percent, another demonstration of public antipathy towards the reform process. Despite the reservations of Talbott, in particular, about Yeltsin’s reliability because of ill-health and his drinking problem, Clinton’s commitment to the Russian leader was undiminished (Talbott, 2002:180, 182). Although he acknowledged that Yeltsin and democracy were not the same thing Clinton saw Yeltsin as being very like himself, trying his best and therefore deserving support: You know, I’ll tell you, the one thing I believe about President Yeltsin, he’s just like me. We make mistakes, and we’re not perfect, and we don’t have all the answers. But I’ll tell you one thing about him, he at least tries to make a difference. He is trying to do something. The world is full of politicians who in times of change worry about maintaining their popularity instead of making decisions. At least he is trying to make decisions and move generally in the right historical direction (Clinton, 1994a:58-69).

Clinton was acutely aware of his own lack of popularity especially during a difficult first year in office. The President and First Lady felt victimised by the media; both over Whitewater and the President’s extra-marital activities, and that they were not given credit for taking tough decisions to improve the economy. The best efforts of the administration were either misunderstood or misinterpreted and politics seemed to concentrate more on personality than policy. In calling for greater appreciation and understanding for Yeltsin, Clinton was asking for similar treatment for himself. This would become increasingly important throughout the presidency. Chechnya Yeltsin’s unpredictability and lack of democratic credentials were clearly demonstrated in December 1994 when the Russian army invaded the dissident republic of Chechnya and posed further problems not just for US-Russian relations but for the prospects for democracy itself. The invasion was opposed by proWestern parties including Yabloko and Yegor Gaidar’s Russia Choice. Clinton’s support for Yeltsin in the siege of parliament the previous October and the example of US intervention in Haiti sent the message that the position of Yeltsin was most important to the administration. Oleg Lobov, Secretary of the Russian

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Security Council called Yevgeny Yushkenov,18 chair of the Parliamentary Defence Committee on 30 November to explain Yeltsin’s rationale: On the telephone Lobov used the phrase that “It is not only a question of the integrity of Russia. We need a small victorious war to raise the president’s ratings”. There was the comparison; the parallel that Clinton in Haiti could perform a successful operation and his ratings immediately jumped up. I was not able to convince him that Chechnya was not Haiti (Gall and De Waal, 1997:161).

The Clinton administration was faced with a dilemma, to oppose Russian aggression and try to use its influence with Yeltsin to seek a peaceful solution, and risk confirming Yeltsin’s prediction of a Cold Peace. Another resort to violence did not bode well for democracy in Russia but the risk of antagonising Yeltsin could jeopardise the progress that had been made on disarmament, arms sales to Iran and trade. Opposition to the war any time in December could, as Gaidar insisted, have persuaded Yeltsin to negotiate rather than attack (Gall and De Waal, 1997:187). A misinterpreted intervention in the internal affairs of Russia, on the other hand, could stiffen Russian resolve on Bosnia, opposition to PFP and NATO expansion. It could also provide succour to nationalist forces in Russia and reverse the reform process. Clinton could ill afford another political setback and decided to do nothing. The war in Chechnya threatened to derail Clinton policy on Russia. In the past he had been prepared to overlook the suspension and siege of parliament, the dubious constitutional plebiscite and Yeltsin’s refusal to hold elections in June 1994 as promised. Yeltsin’s actions, although clearly undemocratic were considered necessary by the administration to achieve democracy in the long run, and gain short-term national interest and economic benefits. The American public was simply not that concerned about what happened in Bosnia or Chechnya. They were more interested in how effective their president was in carrying out any policy the administration decided upon. Russian actions in Chechnya could become a major point of disagreement not only between the executive and the legislature but also within the administration itself. Christopher, who had fought strongly on human rights issues in the Carter administration, opposed Russia’s use of violence to resolve the Chechen crisis, but for Gore and Talbott the issue was about protecting Russia’s territorial integrity and backing Yeltsin: The independence that the Chechens were fighting for was against American policy. As a global principle, we were for federalist solutions that preserved existing international boundaries and against the fractionation of large, heterogeneous countries into ethnically based minorities (Talbott, 2002:149).

18

Sergei Yushkenov was assassinated in Moscow in April 2003.

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The excesses of military action, with the high number of civilian casualties meant that the US. could not simply ignore Yeltsin’s war. Clinton did not wish to jeopardise his relationship with Yeltsin but general criticism of Russian actions were made without implicating Yeltsin, and no economic pressure was actually applied to temper their aggression. Christopher criticised the violent character of the Russian response and acknowledged the ‘corrosive effect’ they could have on the future of democratic reform. In several speeches throughout January he urged both sides to seek a negotiated settlement. Christopher felt that there really was no alternative to continuing to back Yeltsin, it had worked in the past and he believed it would work in the future (Christopher, 1998:243). It was not until 13 February that Clinton actually spoke to Yeltsin about Chechnya, noting that although the republic was part of Russia the death toll was of legitimate international concern (Gall and De Waal, 1997:186). Further support from the West for Yeltsin was shown at the fiftieth anniversary Victory in Europe Day celebrations in Moscow in May 1995. The Russian president was particularly beleaguered, criticised at home for the privatization scandal and war in Chechnya. Clinton’s visit demonstrated tangible support and a tacit endorsement of Yeltsin’s candidacy in the following year’s election. Clinton played down the issue of NATO expansion, saying that 1995 was for discussing whether and how expansion should take place rather than detailing a timetable. The US president urged Yeltsin to try and resolve Chechnya by making the ceasefire agreed before the Moscow summit permanent (Clinton, 1995:661-7). The war, however, continued until August the following year. The Chechen War and the administration’s effective endorsement of Yeltsin’s strategy attracted considerable criticism in Congress and in the media. Robert Dole, Senate Majority Leader and presidential candidate in 1996, led the Republican opposition to the administration’s lack of criticism. Human Rights activists including Amnesty International, Human Rights Watch, Physicians for Human Rights, Médecins Sans Frontières, and the International Commission of Jurists were also highly critical. Russian reformers including Yegor Gaidar, Grigory Yavlinsky and Yelena Bonner opposed the war. Such criticisms had little impact on the pursuit of the administration’s policy, however, because the decision to not undermine Yeltsin was supported by American business and the NGOs, which were dependent on good relations with the Yeltsin government in order to continue receiving congressional funding (Goldgeier and McFaul, 2003:143-4). The communist victory in the December 1995 elections, and vote in the Duma renouncing the dissolution of the Soviet Union, also helped concentrate minds on the real possibility of recidivism in Russia. Entering 1996, Boris Yeltsin was languishing in the opinion polls with his personal popularity rating in single figures. The elections would determine whether Clinton’s high-risk strategy of backing Yeltsin in return for national security and economic benefits for America had succeeded. The administration would continue to back Yeltsin with little opposition from republicans at the time.

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The mild criticism orchestrated by Tony Lake,19 over Chechnya, was replaced by substantive and rhetorical support for Yeltsin. Al Gore described Chechnya as an ‘internal matter’ and stated that Chechen independence was against US policy (Talbott, 2002:149-50). Warren Christopher failed to mention Chechnya at all during a meeting with Yeltsin in March. Clinton visited Moscow in April and compared the Chechen War to the American Civil War, and Yeltsin to Abraham Lincoln, who had given his life for the proposition that ‘no state had a right to withdraw from our union’ (Clinton, 1996a:610-16). He refused to condemn or criticise Russian actions arguing that Yeltsin was better placed to determine the needs of the moment. Understandably, human rights campaigners were not impressed. US Support for Yeltsin in the 1996 Election The Clinton administration publicly proclaimed neutrality in the Russian general election. Talbott, in a speech to the Council on Foreign Relations, insisted that: How the Russian people answer those questions [about reform] is up to them and to no one else. That is why President Clinton has assiduously avoided getting into the dubious business of endorsing a candidate or a party (Talbott, 1996b:315-7).

Lake echoed the theme arguing that ‘the United States does not support any one candidate or party’. The reality, however, was that the United States did everything they could to support Yeltsin. Clinton told his Russia team that although they had got to stop short of endorsing Yeltsin’s candidature, they had ‘got to go all the way in helping in every other aspect’ (Talbott, 2002:195). This help included sending US campaign experts to assist Yeltsin, downplaying Chechnya as an issue, and delaying NATO expansion (Talbott, 2002:131, 145). The formal Principals Committee was assembled in March 1996 to discuss the April summit in Moscow. At the meetings, Strobe Talbott sought to dissuade the president from identifying too closely with Yeltsin and more with the process of reform. Talbott’s arguments were defeated by Al Gore and Leon Fuerth asserting that there was simply no alternative to supporting Yeltsin. The Vice President and his national security advisor won the argument. Clinton decided to appoint Dick Morris to assist Yeltsin’s campaign and provide him with another avenue of advice on Russia. Morris was instructed never to proffer foreign policy advice to the president in front of any other advisor. He was permitted to talk to Gore and Berger but not Talbott or Lake. The president also directly assisted his Russian friend’s campaign with regular telephone calls and advice on how to run the campaign (Goldgeier and McFaul, 2003:148-9, 154).

19 See Anthony Lake’s remarks at the United States-Russia Business Council, Washington DC, 1 April 1996.

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The IMF was persuaded to agree a $10.2 billion Extended Fund Facility loan in April to cover Yeltsin’s election promises to pensioners, students and workers including the payment of outstanding wages and increased benefits. The money was to be released in tranches enabling the IMF to hedge their bets after the election.20 In June the World Bank provided loans of $270 million to improve healthcare services and $58 million for legal reform. A booster summit was organised in April with Clinton visiting Moscow with a request from Yeltsin not to meet Zyuganov, and to show respect for Yeltsin and Russia (Talbott, 2002:197-8). Clinton played his part well demonstrating that, as Christopher had privately reassured Yeltsin, the US president was ‘squarely in his corner’ (Christopher, 2001:289). Thomas Graham recalled how the overwhelming priority for Yeltsin to be reelected caused the US to overlook corruption in the loans-for-shares scandal and in the actual election campaign (Graham, 2000). According to Stephen Cohen, Ambassador Pickering even attempted to pressure Yavlinsky to withdraw from the first round of voting in favour of Yeltsin (S. Cohen, 2000:140). Yeltsin’s popularity had sunk to single percentage approval ratings at the start of the year but rose steadily as he campaigned energetically and turned the campaign, in the public perception, into a choice between progress and regression to a Soviet past, which no one, even the KPRF, wanted. Yeltsin promised increases in wages and pensions, began to pay off wage arrears, and offered financial inducements to persuade voters to support him. The President’s campaign was conducted by Chubais and financed by the oligarchs, who had benefited most from privatization and would be further rewarded after the election. Yavlinsky estimated that Yeltsin spent between half and one billion dollars on the campaign, considerably more than the official spending limit of $2.9 million. The media was overwhelmingly biased in Yeltsin’s favour giving Yeltsin more coverage than all the other candidates combined (Yavlinsky, 1998:72-3). Such tactics were not anathema to the Clinton administration, which were also disregarding financial limits in the conduct of their own election. Clinton personally controlled tens of millions of Democratic National Committee (DNC) advertising in promoting his own re-election. Over 1995-96 the Democrats television campaign cost $85 million, $45 million over the legal aggregatespending limit. Clinton’s fundraisers also got round the $1000 limit on individual donations by getting donors to give to the DNC rather than Clinton’s campaign. Large campaign donors were granted regular access to the president and overnight accommodation in the White House (Woodward, 1996:354, 435-41). Yeltsin won the election after the second round of voting against Zyuganov, after suffering a heart attack a week before the second round vote (a fact concealed from the electorate). Thomas Pickering informed the US government but, together with the Russian media, they remained silent. The heart attack followed two previous attacks in 1995 and was only officially confirmed on 5th September. 20

The Moscow Times, 28 March 1996.

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Yeltsin was unable to effectively govern until the following January (Simes, 1999a:177). The day after the first round of voting, Yeltsin appointed General Alexander Lebed as his national security advisor thereby securing the votes of most of his supporters for the second round of voting. The oligarchs had also taken the precaution of providing funds for Lebed in the belief that he would divert support from Zhirinovsky and Zyuganov. Prime Minister Chernomyrdin also misled the electorate two days before the second round insisting that Yeltsin was fit and healthy (Brady, 1999:164-182). The result was seen by the Clinton administration as a victory for reform and democracy, and a vindication of the Russia policy (Clinton, 1996b:151; Talbott, 1996a, 1996c:361-3). Having assisted Yeltsin’s election victory, Talbott announced that the US would now concentrate on three broad areas: security, regional cooperation, and economics and trade (Talbott, 1996c:361-3). The promotion of democracy was downgraded in American policy towards Russia and more generally as a national security imperative. Table 3.5

Russian Presidential Election Results, 1996 First Round (16 June 1996)

Candidate Boris Yeltsin Gennady Zyuganov Alexander Lebed Grigory Yavlinsky Vladimir Zhirinovsky Turnout

% 35.28 32.03 14.52 7.34 5.70 69.82

Number of votes 26,665,495 24,211,686 10,974,756 5,550,000 4,311,479 75,587,139

Second Round (3 July 1996) Boris Yeltsin Gennady Zyuganov Turnout

53.82 40.31 68.89

40,208,384 30,113,550 74,815,898

Source: Adapted from Richard Sakwa, (1996), Russian Politics and Society, pp. 393-94.

The First Clinton Administration: Russia Policy In describing the key decisions that were made during the first administration, I have attempted to demonstrate that the fundamentals of the Russia policy were set by the president himself, in consultation with Gore, Talbott and Summers. The policy itself changed over the four years to accommodate the interests of other parties who were less enthusiastic about Clinton’s wholehearted endorsement of President Yeltsin. The policy adapted to changed circumstances and constraints, but the President’s control of the overall direction of policy was undiminished.

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When he was unable to get his way through Congress, other channels were used to ensure that support for Yeltsin was maintained. Whereas the administration seemed uncertain on foreign policy issues such as Bosnia, Haiti and Somalia, the Russia policy was hailed as the administration’s foreign policy success story. This was largely because of the personal commitment of the president and the willingness of his administration to get behind the policy. The Russia team led by the troika of Summers, Gore and Talbott, had overall responsibility for the day-to-day running of macro-policy on Russia. The team was subject to advice, encouragement and exhortation from a range of actors, principally the President himself. They received policy advice from their staff, their counterparts in Russia, Congress, the media, public opinion including that of NGOs and corporate interests, religious leaders and academics. In all the major policy decisions taken with regard to Russia the troika would have to persuade the president, who had definite opinions of his own which were expressed to them, and the key departments any policy on Russia would have to be implemented by. Once these hurdles had been negotiated, funding was required to implement them. The budget for any bilateral assistance would have to be allocated by Congress and their support was essential to make resources available to Russia. In order to meet its objectives, the administration increasingly sought to bypass Congress by leveraging multilateral assistance through the G7 and IFIs or through the GCC, which was largely unaccountable to Congress. Quasi autonomous organizations such as NED and the Eurasia Foundation were also used to facilitate assistance. Although these organizations had a degree of accountability to Congress, their position of one-step-removed from government lessened direct interference in their affairs. The most influential department in determining the scope of assistance to Russia was the US Treasury and Lloyd Bentsen and Larry Summers in particular. Although Summers was responsible for economic policy towards Russia he nonetheless was answerable initially to Bentsen and then Rubin who controlled the US budget and determined, in consultation with the relevant departments, how much the foreign affairs appropriation would be each year, subject to congressional approval. Clinton had persuaded Bentsen to provide greater assistance for Yeltsin in 1993 at the Tokyo and Vancouver summits than he would have liked, but thereafter Treasury appeared to have the upper hand. Talbott and Gore’s plea after the first Duma elections for ‘less shock and more therapy’, and to renegotiate the repayment of Soviet era debt, was dismissed by Bentsen who, along with Summers, insisted that Russia meet its international obligations and continue to reform its economy. In terms of the distribution of assistance resources granted by Congress, there were far more funds available for market reform than for democracy promotion throughout the first term. Despite the clear distress and unpopularity economic reforms were having in Russia, the Treasury team argued that the reforms were non-negotiable and essential for Russia’s recovery. After the midterm elections Congress reduced funding and attached conditionality to Russia assistance. Following the Republican landslide in 1994, economic assistance

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became more dependent upon the IMF and World Bank. Treasury used its influence on the executive board of both institutions to maintain assistance for Russia. As the domestic economy improved so Clinton’s faith in, and reliance upon, the Treasury team increased giving Summers great authority to maintain the pressure for economic changes. He was able to acquiesce in the loans-for-shares privatization, and maintain a disproportionate balance in resources between promoting democracy and promoting the markets. The State Department also played a prominent role in discussing, if not determining, the Russia policy. Strobe Talbott as Deputy Secretary of State was involved in every major decision on Russia, but he was limited to a purely political brief. Whenever that brief overlapped into economic areas, such as the Russian electorate’s vote of no confidence in the reform process, Summers insisted that Talbott not interfere in his economic remit. Talbott’s reservations about Yeltsin’s character and Christopher’s opposition to the war in Chechnya, on human rights grounds, were overlooked by the president who made his own judgement about the Russian leader and ensured that they both put forward his position in public. Christopher and Talbott were unable to persuade the president to support ‘reform’ rather than Yeltsin, even after the siege of Parliament and the first Chechen war. Richard Morningstar, the Special Advisor to the President and Secretary of State, reported on US assistance to the NIS, in 1996. He listed three objectives of US policy: Firstly, to promote democratic institution building, the rule of law, and the development of civil society; secondly, to help establish open and competitive market economies and expand the opportunities for trade and investment; and thirdly, to enhance US, NIS, and international security through cooperative threat reduction and non-proliferation efforts (Goldgeier and McFaul, 2003:107). The department continually lost the battle though for more budget resources for diplomacy and promoting democracy as well as markets in Russia. Ambassador Pickering’s advice to support Yeltsin throughout all the major upheavals, even when the Russian leader resorted to undemocratic methods, corroborated rather than influenced Clinton’s decisions. On all policy issues, Clinton consulted with his Vice President Al Gore. This was particularly important in Russia where Gore had been given the important task of co-chairing the bilateral commission, which met every six months. Gore developed a good working relationship with Chernomyrdin and used that connection to seek to carry out US policy on Russia, and to limit Russian support for Iran, Iraq and Serbia. Gore lost his battle with Summers to encourage greater economic flexibility in assistance to Russia in order to develop political support for reform. He was more successful in convincing doubters within the administration of the need to play down the Chechen War and continue Clinton’s policy of backing for Yeltsin and Chernomyrdin, with whom they could do business. The NSC was also convinced that a stable Russia was in America’s strategic interest and that Yeltsin and Chernomyrdin represented the greatest possibility of achieving US objectives. Tony Lake attempted to inject an internationalist

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rationale for US foreign policy with the publication of the National Security Strategy of Engagement and Enlargement, which elevated democracy promotion to a central aim of US policy. The distribution of resources towards market rather than democracy promotion indicates that Lake lost the argument about the strategic importance of encouraging the world’s transitional states to become liberal democracies. Even when things were clearly not working out as Lake wished he was reluctant to intervene: One of the reasons I didn’t push for a review on Russia and a full-scale bureaucratic war was because of Strobe, whom I had a deep admiration for and still do. I had a lot of confidence in him. That’s why I didn’t fight too hard on the issue (Goldgeier and McFaul, 2003:122).

A vigorous debate took place within the administration to determine whether to expand NATO to incorporate some former Warsaw Pact countries and the Baltic States. Lake consistently advocated the eastern expansion of NATO against Talbott’s advice, which preferred to defer to Russian sensibilities. Warren Christopher and Tony Lake supported expansion but were opposed by Talbott, Gore and William Perry, who had succeeded Les Aspin as Defence Secretary. Those opposed to early expansion of NATO proposed delaying it until at least after the 1996 elections (Hulsman, 1997:101-2; Talbott, 2002:145). The president, aware that any eastward expansion of NATO would play into the hands of Yeltsin’s opponents, was inclined to defer expansion. Once his decision was made known Christopher changed his position and argued that ‘swift expansion of NATO eastwards could make a neo-imperialist Russia a self-fulfilling prophecy’.21 Rather than expand NATO immediately, Russia and its former satellite states were encouraged to join the PFP with NATO involving joint military operations. Lake succeeded in getting the issue put on the agenda and that the administration should make clear that an expansion of NATO was inevitable but would not threaten Russia. Clinton and Talbott came to realise that expansion could occur without irreparable damage to their relationship with Yeltsin, providing the timing was right and the PFP was in place. Lake was less successful, however, in opposing Russian actions in Chechnya and was obliged to moderate his criticism to fit in with Clinton, Gore and Talbott. The Defence Department was pessimistic about the prospects for Russian reform in contrast to other departments. Defence Secretary Perry was aware of ‘the small but real danger that reform in Russia might fail and a new government arise hostile to the US’.22 The department was keen to limit Russian military capabilities, encourage Russian nuclear disarmament and expand NATO. A 21

Warren Christopher, ‘A Partnership for Peace open to former Warsaw Pact members’, International Herald Tribune, 10 January 1994. 22 R. Jeffrey Smith, ‘US keeps nuclear guard against Russia’, International Herald Tribune, 23 Sept 1994.

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Partnership for Peace between NATO and European nations outside the organization to maintain peace and stability in Europe would involve Russia, without giving it a veto over US foreign policy objectives. Defence Secretary William Perry saw PFP as not just ‘defence by other means’ but ‘democracy by other means’ (Perry, 1996:71). On the whole though, while the US administration were dealing with the most acquiescent Russian government in history the Pentagon had little cause to disagree with the Russia policy, being pursued by Clinton, or attempt to lead it in a different direction. Congress, on the other hand, found many reasons to contest and seek to shape Russia policy. The bipartisan consensus that existed when Clinton took office dissipated as the Republicans prepared for midterm elections in 1994. Once victory was achieved, Bob Dole began campaigning for the presidential elections and attacked the Russia policy to undermine the president. Leading Republicans called for increased conditionality to be attached to assistance to Russia, to constrain the administration’s ability to pursue its policy. McConnell and others sought to transfer the limited resources to other parts of the FSU rather than maintaining a Russia First policy. Such opposition did succeed in diverting resources towards Ukraine and limiting the funds available generally, forcing the administration to increasingly rely on the IFIs and NED, Eurasia Foundation, and private foundations, to advance its policy. In 1993 a Majority Democrat Congress, with the backing of leading Republicans, had overwhelmingly supported Yeltsin’s use of force against his own legislature. After the midterm elections, the Republican-led chambers were more sceptical about giving the Russian leader their unequivocal support. This was particularly clear in the opposition by many congressmen and women to Russia's war with Chechnya. Despite such vociferous opposition, Clinton maintained his support for Yeltsin and continued to defend Russia’s right to intervene militarily in Chechnya. The media took a similar line to Congress on Chechnya and put pressure on the administration to distance itself from Russian actions, and to challenge Russian conduct of the war. Clinton and the Russia team refused to alter their policy of support for Russia’s actions, defending the Russian leader’s right to use force. The media provided a forum for government critics to challenge the administration’s policy towards Russia but did not directly influence policy. Opinion polls and leader columns, in the newspapers, reflected that the American public felt Russia was of vital importance for US national security interests. They argued that it would be better if Russia were to become a free market, liberal democracy, but that America had already given to the cause in 1993 and that further large assistance was out of the question. Such criticism encouraged the administration to continue the path, which they were committed to, by covert means less subject to Congressional or media scrutiny. On the whole though, media coverage reflected the decreasing importance of Russia as an international player throughout the course of the decade. Russia exercised a nuisance value but was unable to cause significant policy changes. The lack of media focus on Russia, compared to during the Cold War, had an effect on Congress, which tends to be influenced by media

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coverage of Russia to determine what America should be doing (Mendelson, 2002:21). Academics had even less influence than the media in influencing the administration’s thinking. The critique by authors such as Cohen, Reddaway, Millar, and Arrow, that the policy was fundamentally flawed and that the process of reform needed more financial backing and a longer timeframe, was dismissed out of hand. The case that support for Yeltsin and the encouragement to introduce reforms by circumventing parliament undermined democracy, made by Simes among others, was similarly disregarded. The only academic to have any significant influence on policy was the former National Security Advisor Zbigniew Brzezinski. He added his voice to Congressmen and women calling for resources to be diverted towards Ukraine rather than Russia, and of the need to contain Russia through NATO expansion and geopolitical pluralism in the FSU. In order to sustain a viable policy on Russia, the United States, if it was not prepared to provide adequate bilateral assistance, required the cooperation of their fellow members of the IFIs, G7, Paris and London Clubs. As the major shareholder in most IFIs and the world’s strongest economy, the other countries tended to follow America’s lead in policy towards Russia. The response to Yeltsin’s attack on Parliament was coordinated between Clinton and Chancellor Kohl, and assistance efforts were coordinated at G7 (G8) summits. The G7 nations agreed with Clinton’s policy of support for Yeltsin and using the loan facilities of the IFIs rather than huge amounts of bilateral funding. There was little point in seeking to change a policy that worked in all their interests by incorporating Russia within the international system, reducing its military threat, and opening up trade, with loans the Russians themselves would have to repay.

Presidential Framework Analysis Over the First Term The first Clinton administration pursued the course they did on democracy assistance because they made deliberate choices. They made those choices in the name of the United States as a national actor, a unitary decision maker. The president himself was the decision maker, guided by advisors and colleagues, especially Gore, Talbott and Summers. There were other significant influences on the decisions which it was possible to make including business interests that sought greater access to Russian markets, and the military industrial complex who wanted a weakened Russia and access to traditional Russian markets for military equipment. Congressmen, religious leaders and academics who were suspicious of Russian intentions, resented foreign assistance, and sought to promote the interests of Israel or the other NIS, especially Ukraine, also had much input to give. Over the course of the first term of office there were a number of significant choices that were made that were to have a lasting effect on the reform process and the progress of democratization in Russia.

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Russia was perceived by the administration to be more of an opportunity than a problem. It provided an opportunity for strategic and economic partnership and to help create a fully functioning market democracy. In the process, US national security would improve and opportunities for business open up. The problems appeared when those aspirations failed to materialise and Russia either acted undemocratically or did not reform economically as successfully as the United States would have liked. The administration’s response to both opportunities and problems can be illustrated by considering the main choices which resulted in specific actions. The decision to support Yeltsin and the reformers has already been documented in the previous chapter but here we examine those choices made in response to specific key events. In Yeltsin’s clash with the CPD up to and including the suspension and subsequent attack on the Parliament in October, Clinton and most of his advisors, chose to back the Russian leader. The decision placed the US on the side of Yeltsin against not just the CPD but also the Russian Vice President, the Constitutional Court, Attorney-General, and the Justice Minister. The choice represented a bounded rational choice for the president in pursuit of his optimal objective of securing a peaceable, liberal democratic and capitalist Russia. Other options available included persuading Yeltsin to negotiate with his parliamentary opponents, perhaps even offering economic and political inducements to do so, or penalties if he did not. Clinton could have used his influence to secure guarantees from Yeltsin against the use of force and at the same time sought to persuade the CPD, with similar inducements, to enter into meaningful dialogue with the Russian president. From a US foreign policy perspective an optimal outcome to this dispute would be for it to have been settled peacefully with the CPD agreeing to increased democratization of its structures. Such an outcome, given the proclivities of both antagonists, was unlikely. In any dispute with parliament, Yeltsin was going to win unless the army sided with the opposition. It was therefore a bounded rational decision to support the Russian leader given the limited information that was available about the opposition’s intentions. It would advance the administration’s relationship with the victor, even if it meant recourse to undemocratic methods to impose a settlement. At a future date the democratization agenda could get back on course and possibly progress further than would have been possible if recidivist elements continued to resist reform. The choice was sub-optimal and damaged the optimal outcome because it sent a message to the Russian people that American commitment to democratic norms was negotiable, and that the ends justify the means. The administration had made a commitment to stick by Yeltsin as early as the April referendum in 1993, based on similar calculations. Yeltsin was in favour of political, economic and strategic reform, his most serious opponents were not. In backing Russia financially the administration decided against other options which would have benefited other FSU states. The choice of Russia First was based on a calculation that if the largest and most powerful country in the FSU could reform it

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would inspire the other states, strengthen the economy of the other state’s principal trading partner, and encourage transition throughout the region. Unfortunately shock therapy and the early reforms were disastrous for the Russian economy and hardly inspired confidence in western economic and political practices. The short term and medium term objective of political and financial support was to secure his leadership in order for long term optimal outcomes to be achieved. These shorter term goals were intended to produce a satisfactory outcome but actually alienated large sections of the population who suffered as a direct result of the economic reforms. In siding so clearly with the Russian leader, the administration achieved a less than satisfactory outcome because Yeltsin was obliged to distance himself from both the reformers and US foreign policy objectives in order to retain any credibility with the electorate. On the issue of privatization, the Russia team made a choice in favour of continuing the previous administration’s determination to assist the reformers in their intention of privatizing industry and commerce. The two tranches of privatization delivered the economy into the hands of the former apparatchiks, the mafiya, and friends and associates of Yeltsin, Chubais and Chernomyrdin. In order to introduce privatization and other economic reforms the Clinton administration encouraged the Russian president to use his powers of decree to circumvent parliament. The bounded rational decision was to privatize and thereby create property owners who, no matter how they acquired their gains, would wish to protect them and would have a vested interest in promoting the rule of law. The optimal outcome was the achievement of a market democracy but, in order to achieve the market side of the equation, non-democratic methods were employed, which undermined the integrity of moves towards democracy assistance. The control of the commanding heights of the economy and the media, by oligarchs, undermined democracy by granting power to robber barons, who would use that power to influence the outcome of the presidential election, and be offered positions in government after the election. Support for Russian capitalists had a superficial rationality in creating a propertied class and an embryonic middle class, deemed necessary by transitologists for a liberal or market democracy. This support would also destroy the potential of the communists to form an alternative administration because so many of their former and potential leaders had become the new rich. The choice was not optimally rational, however, because it actually undermined democracy and demonstrated to Russians that they did not need to build political parties with mass appeal to win power, instead they could just buy it. The cause of democracy was further harmed by Clinton’s endorsement of Yeltsin’s position on the Chechen War. Russian reformers such as Gaidar and Yavlinsky protested at the violence and injustice of the first Chechen War and yet the administration chose to ignore those warnings. Clinton and other key figures within the administration opposed any attack on Russia’s territorial integrity. This short term decision had bounded rationality in that it was consistent with other decisions to support Yeltsin. There was also the potential for any Chechen

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secession to lead to other secessions causing the Federation to fall apart, creating a power vacuum and destabilizing the region. Such a scenario would have severe negative consequences for US national interests and increase the likelihood of nuclear proliferation with ineffective control over nuclear materials. The longer term consequences were that Yeltsin eschewed a meaningful political settlement in favour of a military solution until it was clear the Russian armed forces were not going to be successful. In ignoring the pleas of human rights activists and concerned NGOs, and in comparing Yeltsin with Lincoln, Clinton sent out the message that supporting an acquiescent Russian leader was more important than respecting and upholding democratic norms. The short and medium term objective of keeping Yeltsin in power was achieved at the expense of the long term goal of promoting democracy. In overtly supporting Yeltsin’s candidature in the 1996 presidential election, despite serious electoral irregularities, the short term goal of securing his reelection was again bounded rational. Yeltsin represented a four year political and personal investment by his American counterpart. Defeat for Yeltsin meant victory for Zyuganov and communism and the potential roll back of the reforms that had been undertaken. Although Zyuganov had no intention of reversing all the reforms he would have pursued a more independent and assertive foreign policy which would have undermined the national security advances that America had gained (Zyuganov, 1997). The experience of Eastern European states indicates that in the course of transition, voters may return to renamed communist or socialist parties, but that served to strengthen rather than detract from the democratic process as they conceded power when defeated in subsequent elections. In approving of elections that were neither universally free nor fair, the Clinton administration chose to use the IFIs and their own electoral advisors, including the president himself, for short term expediency rather than allowing democracy to take its course without outside interference. Victory for Zyuganov would have resulted in a determined effort to develop political parties capable of challenging the communists as a national political force, rather than sending out the message that whoever owns or can buy the media can influence the outcome of elections. The optimal outcome of a liberal democracy in which power can change hands was undermined as Clinton used the IFIs to help pay for Yeltsin’s electoral promises. Over the course of the first administration it became increasingly clear that Clinton’s overwhelming priority in Russian policy was to enhance the position of Yeltsin, confident that the Russian leader would deliver tangible benefits for America. The enthusiastic participation in the GCC by Gore and heads of departments extended that commitment to the Russian prime minister too. During the first term it appeared that Chernomyrdin was a permanent fixture in Russian governance. As a short to medium term expedient it was rational to work closely with the other centre of power and seek to persuade him and his colleagues of the merits of US advice. The opportunity to speak directly to the administration’s counterparts in Russia every six months and to have a direct input into Russian domestic politics was too good an opportunity to miss. The outworking of that

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relationship is seen in the next section and how that affected the longer term objective. Finally, the administration’s choice to circumvent the Republican Congress, after the midterm elections, by using the IFIs and G7 to supply mainly economic assistance to Russia, emphasises a collective mindset in which the retention of Yeltsin as Russian leader was of paramount importance. Yeltsin - as the single embodiment of democracy, markets and security - had to be protected in the short and medium term to create a situation in which capitalism became firmly entrenched, and there was no prospect of a return to communism or nationalism. The rationality was that he had the power, he was willing to cooperate with America, he had a good relationship with Clinton, and the alternative was opposed to markets, democracy, and the expansion of America’s sphere of influence. Despite some half hearted appeals by Christopher, Lake and Talbott for Clinton to engage with reform rather than Yeltsin, the administration accepted that there was no alternative to backing the Russian leader, because any alternative would have been worse during the duration of Clinton's term of office. The downside was that such bounded rational short and medium choices had a negative consequence for the optimally rational goals of achieving a liberal market democracy. In using or encouraging non-democratic methods to achieve supposedly democratic aims, the optimal objective was not achieved during the first term. Thus the choices made were quasi rational rather than bounded or optimally rational because although they seemed rational they actually produced a sub-optimal outcome. In the next chapter we will consider whether there was an improvement in achieving objectives over the second administration.

Chapter 4

Whither Democracy? The successful re-election of America’s chosen candidate in the election in Russia, and a strong economy at home, gave the administration an air of confidence as they embarked on their own national elections in November 1996. There were no serious foreign policy problems, NATO-PFP forces were conducting joint operations in Bosnia, and by October the administration was talking openly of admitting eastern European nations to NATO after the election. Democracy in Russia had been damaged by an election that was neither free nor fair. Lebed was dismissed in October having served his purpose; meanwhile oligarchs such as Boris Berezovsky and Vladimir Potanin, and Anatoly Chubais were rewarded for their efforts in securing Yeltsin’s victory with government positions. None of this seemed to matter any more to the US administration. They were preoccupied with securing their own re-election. Greenspan, Bentsen and Rubin’s economic policies had generated eight million new jobs since coming into office. Inflation and unemployment stood at their lowest levels for 25 years and the administration exuded confidence. Dole’s intention to use the Russia Policy in the election had failed while the Democrat’s campaign to link him with Newt Gingrich and an obstructive Congress succeeded. Clinton won the election comfortably with 50 percent of the vote to Dole’s 41 percent. The Republicans, however, did hold onto both the House and the Senate. The election victory provided Clinton with the opportunity to reshuffle his foreign policy team for the second administration. Warren Christopher and Bill Perry resigned to be replaced by Madeleine Albright and William Cohen respectively. Sandy Berger replaced Tony Lake at the NSC and the latter was nominated as Director of the CIA. Thomas Pickering came into the State Department as number three, Under Secretary for Political Affairs, and was replaced in the Moscow Embassy by James Collins. Stephen Sestanovich assumed responsibility for the FSU. Talbott, Summers and Gore retained their deputy status and continued to be Clinton’s main advisors and managers of policy towards Russia. The election victory gave a new confidence to the second Clinton administration. The new team, assembled by Clinton and Gore, reshuffled some existing cabinet members to provide an experimental team with greater presentational skills than their predecessors. Madeleine Albright had been a Democrat insider for decades and had acquitted herself well at the United Nations. Albright was the choice of Hillary Clinton and an important network of female political activists. Christopher pressed the claims of George Mitchell, while

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Talbott and Gore preferred Richard Holbrooke, after his success in Bosnia. Christopher and Lake both opposed Holbrooke as not being a team player. Clinton, however, was impressed with Albright and could not miss the opportunity to appoint the first female Secretary of State (Halberstam, 2003:369). The promotion of Sandy Berger to the NSC position, originally offered to him in 1992, was less contested. Talbott had been offered the position of National Security Advisor before the election but turned it down feeling that it might jeopardise his relationship with Clinton, cause problems with Congress and prevent him completing his work on Russia. Berger was emotionally and politically the closest to the president and to Talbott. He always considered the domestic implications of foreign policy actions and reflected the President’s view unequivocally (Halberstam, 2003: 404-9). Albright and Berger had far superior presentational skills to their predecessors. Berger had already worked closely with the NSC team and commanded their loyalty and respect. Albright brought a new flamboyant dimension to the State Department and attracted enormous positive media interest. As Ambassador to the United Nations, she had campaigned against a second term for the UN Secretary General Boutros Boutros Ghali and won the appreciation of the Republican Congress who opposed the UN as a matter of principle. The relationship between Berger and Albright was at times fractious but never on Russia policy. The two met together with William Cohen each Monday at Berger’s office following a precedent set by Lake in the first administration (Albright, 2003:148-9). The Senate, without a single vote against, approved Albright as Secretary of State. Albright was aware of the need to work with another Republican Congress to achieve US foreign policy aims. Over the course of the year the Secretary of State cultivated key Republicans, writing to congratulate Jesse Helms on his reelection to the Senate, and appearing with the Chair of the House Foreign Relations Appropriations Subcommittee, Sonny Callahan, in his home town of Mobile, Alabama. Callahan had previously voted against all foreign aid spending but Albright won his support for $19.45 billion for spending on international affairs. Albright was able to achieve bipartisan consensus on reforming the State Department and paying United Nations dues (Lippman, 2000:38-44). Clinton’s desire to work with Congress was also reflected by his choice of a liberal Republican, William Cohen, to succeed Bill Perry as defence secretary. Cohen had served three terms in the Senate and continued to think like a senator, to the chagrin of fellow members of the administration, but to the approval of Congress. The new foreign policy team for the second administration was better equipped to deal with Congress, the media and the implementation of policy. The president himself was more knowledgeable and domestic economic success brought greater assurance in the conduct of foreign relations too. Clinton had been stung by criticism that portrayed the first administration’s foreign policy as incoherent and lacking in vision. An appraisal of Clinton’s foreign policy appeared in Foreign Policy at the end of the year in which Moises Naim, Yoichi Funabashi, Jacques

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Attali, Jorge Dominguez, Fawez Gerges and Yegor Gaidar all reproved the first administration.1 The Russia policy was certainly more coherent than other aspects of foreign policy but this policy too would be revised for the second term. Albright identified three priorities in Europe for the second term. The first was to manage the process of NATO enlargement successfully. Secondly she intended to promote the integration of Russia into the West ‘to minimise the risk of returning to the divisions of the Cold War past’. Thirdly, the administration was to implement the Dayton accords (Albright, 2003:250). In the process the Russia policy would be downgraded. The re-election of Yeltsin meant that there was little chance of the communists returning to power during the next four years, or at any stage in the foreseeable future. The constitution ensured that power resided firmly with the executive and the legislature could continue to be circumvented to the benefit of US national security and economic interests. The reform process, however, had failed to produce tangible benefits, the party political system had failed to develop, corruption and criminality were rife, and the economy would grow by less than 1 percent in 1997, the first year that the GDP had not fallen. The Clinton administration was able to press ahead with NATO enlargement, national missile defence, and military action against Serbia and Iraq without the risk of electoral defeat for Yeltsin. Engagement remained a foreign policy objective but enlargement came to mean NATO rather than democratic expansion. Gore, Talbott and Clinton emphasised firmly to Yeltsin, Chubais, Foreign Minister Primakov, and Chernomyrdin that NATO would expand and that it was not a threat to Russian interests (Talbott, 1997; Clinton, 1997a:331-340). In meetings at the start of the year, Talbott had informed Primakov that Clinton would not rule out admitting FSU states into NATO. Chubais, for his part, was prepared to drop Russian opposition in return for full membership of the G8, Paris Club, WTO and OSCE (Talbott, 2002:230-36). Clinton and Talbott felt more confident than the first term that Yeltsin would always be willing to ‘cut a deal’ providing it was not in front of his subordinates (Talbott, 2002: 180, 182). As a prelude to eventual expansion the two countries signed the NATO-Russia Founding Act and set up the NATO-Russia Permanent Joint Council as a consultative mechanism. In July NATO took the decision to include new members in 1999. The Russian leadership made little protest, resigned to the idea that Clinton was going ahead regardless of their objections, and appeased by their inclusion in a G8. NATO expansion was a popular issue among countries in Eastern Europe and with diasporic communities in the US Madeleine Albright was particularly keen to involve the Baltic States in future enlargements regardless of Russian sensibilities. Talbott and Albright devised the Baltic Charter between the three states and America guaranteeing that they would not be excluded and could eventually join NATO (Lippman, 2000:106). The administration eventually decided on admitting Poland, Hungary and the Czech Republic, which Albright had left as a refugee 1

Foreign Policy, 109 (Winter), 1997/8.

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during the Cold War. The Senate approved the decision overwhelmingly in May 1998, rejecting an amendment by John Warner, R-Virginia, to halt any more additions to NATO for three years (Garrett and Omerstad, 1998). In terms of democratic reform, the successive defeats for ‘reformers’ in the parliamentary elections persuaded the US administration that ‘electoral democracy’ worked in Russia but it could produce the wrong result. Rather than train and equip political parties it would be more expedient to develop civil society, which would then hold government to account. With limited resources targeting regions that serve as models for good practice elsewhere in Russia was deemed more productive than assisting central government. The attempted Clinton Doctrine of Engagement and Enlargement had lacked resonance within and outside government. The aim of promoting democracy in target countries, of strategic interest to the United States, did not strike a chord with the US public, whereas an emphasis on creating US jobs by opening Russian markets did. Madeleine Albright was committed to promoting democracy but Russia was not at the top of her list: I wanted to do all I could while Secretary of State to help struggling democracies succeed. We could accomplish much on a bilateral basis, so I singled out Nigeria, Indonesia, Ukraine, and Columbia as priorities for our assistance and attention because of their regional importance and the scale of the challenges they faced (Albright, 2003:443).

The National Security Strategy of Engagement and Enlargement was replaced in 1997 by A New Strategy for a New Century and democracy promotion was downgraded to a subsection on promoting prosperity, reflecting a shift in the relative importance attached to democratization in the second term. The emergence of a middle class is regarded by transitologists as an essential ingredient in any transition to market democracy. Such a development encourages property ownership and the acquisitiveness necessary to sustain capitalist development. In order to protect property rights, a rule of law emerges which in turn creates security and confidence to invest and acquire more goods and property. Political parties competing to promote the interests of different sections of society are assumed to enhance the democratic process. A relatively affluent middle class was considered likely to espouse similar values to their western counterparts, and be a valuable contributor to the reform process. The second term for Clinton provided an opportunity to both handle new situations but also to leave a legacy. He would fail to bring peace to the Middle East, and reform health and welfare at home, but he could incorporate eastern European states within NATO and establish an ongoing partnership with Russia through the PFP and the bilateral commission. The policy could continue as before, despite congressional opposition, with less deference to Russian sensibilities than during the first term. Events in Russia and the United States in

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1998 would challenge the efficacy of the policy, however, and lead to an increase in Republican hostility towards the programme. Assistance During the Second Term Russia policy in the second term initially concentrated on further economic progress. Larry Summers and Robert Rubin were pleased with economic progress in Russia and maintained their support for IMF and World Bank loans, conditional on increased reform. The IMF disbursed a further $2 billion of loans in 1997 to add to the $3.4 billion actually provided in 1996. The World Bank provided $3.4 billion, following $1.9 billion the previous year, including payments for health, education and social protection (IMF, 2001; World Bank, 2001). The Russian economy started to improve with inflation falling to its lowest post-Soviet level of 14.7 percent2 and GDP growing for the first time, albeit by less than one percent. Clinton, Gore and Summers sought to increase trade by encouraging US business to engage with Russia. Total trade between the two countries grew by $0.6 billion to $7.5 billion over the previous year, with the US importing $4.3 billion worth of Russian goods (BISNIS, 2000). The administration, however, was restricted by Congress from doing more to assist political reform in Russia, even if they wanted to. Talbott complained that Congress sought to challenge the Russia Policy continually. Berger too became increasingly aware that they were losing control of policy towards Russia (Talbott, 2002:252, 261). Congress obstructed the appointment of key government officials, which led to 250 federal posts still not filled by the end of May. James Collins was unable to take up his position as Ambassador to Russia until September. Tony Lake withdrew from his nomination as head of the CIA because of Republican obstructionism and hostility (Donnelly, 1997). Congress also sought to reduce assistance to Russia and impose sanctions on Russian enterprises because of alleged Russian complicity in Iran’s nuclear technology and missile programme.3 Congress further objected to a draft Religion bill passed by the Duma that privileged Russian ‘heritage’ religions including Russian Orthodoxy, Judaism, Buddhism and Islam. Evangelical Christian sects including Baptists, Mormons and Roman Catholics had to be licensed by the state to acquire property and proselytise. The Republicans, many of whom were religious fundamentalists themselves, or owed their position to the support of such groups, threatened to further limit assistance unless Yeltsin vetoed the bill. In order to maintain existing levels of funding, and control of how the assistance funds were spent, the administration were obliged to challenge Yeltsin far more than in the previous administration. Leon Fuerth recalled that Al Gore went to great lengths to persuade Chernomyrdin and Yeltsin to stop the bill:

2 3

‘World Economic Outlook’, May 1998, IMF, Washington DC. National Review, 10 November 1997, vol. 49 is. 21, p. 16.

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Gore engaged Chernomyrdin in a rolling debate about that Religious Bill…. that lasted for four hours in two different cities attempting to persuade him that the Bill, which had come up for a second time, and was about to be signed by Yeltsin, was a tremendous mistake for Russian democracy and should be put aside.4

Yeltsin, at the autumn summit in 1997, agreed to veto the Bill and set up a commission to investigate trade with Iran. This interference in Russian internal affairs though, further served to undermine democracy in Russia. Even Yegor Gaidar, was ‘sick and tired of being told by the US what Russia could and could not do’ (Talbott, 2002:256). From Clinton’s perspective, Russia remained relatively acquiescent on the big priority issues of US national security and economic progress. Yeltsin was in power along with Nemtsov and Chubais, and Chernomyrdin had been more supportive of economic reform than anticipated. Although Congress criticised and restricted assistance for Russia, US objectives were being achieved. Congress continued to oppose most aspects of policy on Russia with Republicans resisting any assistance to Russia. The unresolved issue of Russian cooperation with Iran, led to the Senate imposing sanctions on Russian companies in May 1998, which Clinton vetoed. Iran as an issue was a critical issue for Congress. The Israeli and American Jewish lobbies, and in particular the American Israel Public Affairs Committee, successfully lobbied Capitol Hill and the executive branch to persuade Yeltsin to restrict Russian support for Iran’s nuclear programme (Mendelson, 2002:32). The Russia Policy, so important to Clinton personally, was an obvious target for the administration’s opponents. Years of congressional reluctance to grant modest amounts of assistance to Russia without conditionality had encouraged Clinton and the Treasury to use the IMF to provide assistance for Russian reforms. The House targeted the IMF in April when the Subcommittee on General Oversight and Investigations reviewed the operations of the IMF. Karin Lissakers, US Executive Director of the IMF was the first Executive Director to ever appear before a congressional committee. Congress had for years sought to constrain or direct US government actions in using its influence and conditionalise its contributions to the Fund. Congress would ask the Chief Executive to use her voice and vote as guided by them, however, under questioning, Lissakers conceded that she had only used her vote about twelve times out of some two thousand decisions. Timothy Geithner, assistant Secretary for International affairs at the US Treasury, conceded the extent of US influence over IMF policy:

4

Interview with Leon Fuerth, Washington DC, 7 February 2002.

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We have substantial influence in the institution. If you had up here before you today any other director from any other country or the management of the IMF, you would hear from them in brutal detail how extensively we use our voice in the institution.5

The other arm of US policy towards Russia that largely escaped congressional scrutiny was the GCC. The Commission gave the US an opportunity to speak directly to their Russian counterparts and attempt to influence not only binational policy but also Russian domestic affairs. The GCC became a platform for the US government to encourage Russia to privatise and take steps to prevent the reemergence of communism. Treasury officials and the Securities and Exchange Commission worked with the Chernomyrdin government to develop private capital and financial markets in Russia, to expand private banks, insurance companies and accountancy, and further privatizations in agriculture, oil and gas industries.6 Gore urged his Russian counterpart to introduce new tax codes, laws and regulations to build business confidence (Talbott, 1996c:361-3). The GCC hindered the development of democracy in Russia by encouraging the worst aspects of top-down government. Decision-making was highly centralised, and outside scrutiny, especially parliamentary scrutiny, was discouraged. The Commission suited Russian politicians schooled in Soviet ways of centralised planning. The Commission set targets for action, which once achieved could be hailed as a success. As in Soviet days the inevitable temptation was only to report successes and cover up failures. Wayne Merry, Tom Graham and Don Jensen, at the Moscow Embassy, recalled that senior officials in the economics section and the Treasury’s representative in Moscow blocked reports about crime and corruption and privatization failures.7 Such a culture did reflect contempt for the normal checks and balances of the democratic process. By such actions, the message sent to the Russians was that America’s policy worked best when Congress was not involved. A message Chernomyrdin was only too willing to apply in his dealings with the Duma. Wayne Merry summed up the Russian approach: The people on the Russian side fell into these habits of unaccountable, untransparent [sic], top-down, closed-door, elitist, dirigiste approach, because it was the whole culture in which they had been raised. It was for them the norm and it fed into their sense of contempt for, alienation from, the mass of the Russian people.8

In order to protect his relationship with Chernomyrdin, who was seen as someone who could deliver Russian reform, Gore only wanted to convey good news about 5

Review of the operations of the IMF, 21 April 1998. US House of Representatives Subcommittee on General Oversight and Investigations Committee of Banking and Financial Services, Washington DC 6 Peter Ferrara, Washington Times, 6 February 1997. 7 Robert Kaiser, Washington Post, 15 August 1999. 8 Interview with Wayne Merry, Arlington, 12 February 2002.

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the GCC to the legislature. In 1995 he responded to a CIA report detailing Chernomyrdin’s corruption in privatizing Gazprom (where he had a major shareholding) by scrawling BULLSHIT over it and refusing to act upon it. Ambassador Pickering and Fyodorov had expressed similar concerns about the intimate connection with Chernomyrdin.9 In similar vein the Vice-President, under pressure from Congress to halt the sale of Russian arms and equipment to Iran, only partially disclosed an agreement with Russia to Congress. The 1995 agreement allowed Russia to continue delivering existing arms sales until 1999. Under the 1992 Gore-McCain law, coincidentally co-sponsored by Al Gore, arms sales to Iran would instigate US sanctions, an end to assistance, and working to block loans from the IFIs.10 Gore declared the agreement but not the promise not to impose sanctions in the event of future arms sales. The secret deal was only uncovered in the run up to the presidential elections in 2000. Such examples undermined US claims to be promoting democracy and demonstrated to the Russians how to circumvent checks and balances. The policy was severely tested throughout 1998 and caused the administration to have another rethink. The Russian president removed Victor Chernomyrdin as Prime Minister in March, beginning a series of appointments that would continue to undermine democratic accountability. Chernomyrdin’s offence was to become too popular at a time when Yeltsin was considering abrogating the constitution and standing for a third term in the 2000 elections. The appointment of a 35 year old, Sergei Kiriyenko (a pro-western reformer with little experience), after twice being rejected by the Duma, was viewed cynically by most Russians. The new Prime Minister reasonably impressed Talbott and Gore at the March meeting of the GCC, but the Russia policy had been built to a large extent on their relationship with Chernomyrdin and Yeltsin. Yeltsin’s actions were increasingly unpredictable and the administration had to decide whether to continue supporting the Russian leader. Financial Crisis Criticism of the Russia Policy and the IMF would reach fever pitch in the financial crisis in August 1998. Oil prices fell by 40 percent during the first half of the year, and an overvalued exchange rate, encouraged by the IMF, led to imports flooding into the country. Following the Asian financial crisis, confidence in the rouble began to collapse in anticipation of a devaluation, which could lead to a return of hyperinflation. The government was forced to offer higher and higher interest rates, up to 60 percent, on government securities. Years of economic decline with high interest rates, lack of investment, capital flight, unpaid wages and pensions, hidden unemployment and a barter economy finally took their toll. The US Treasury put enormous pressure on the IMF and World Bank to launch a $22.6 9

David Ignatius, Washington Post, 25 August 1999. The Plain Dealer, 25 October 2000; Doyle McManus, Los Angeles Times, 24 October 2000.

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billion rescue package in order to save the Russia Policy. The IMF would provide $11.2 billion, the World Bank $6 billion and Japan $5 billion to support the exchange rate. Many staff members at the World Bank, including Joseph Stiglitz, opposed the loan but were obliged to follow their shareholders’ instructions. The Bank released just one tranche of $300 million before the Russians defaulted on their payments and devalued the rouble in contravention of IMF advice. The IMF actually disbursed $6.1 billion throughout 1998 (IMF, 2001), but the $4.8 billion released in July was wasted in the abortive attempt to support the exchange rate. The intervention at the behest of the US Treasury was not altruism but a desperate attempt to keep Yeltsin in power and to safeguard Western banks that stood to lose billions of dollars as a result of the crisis (Stiglitz, 2003:172). The Russian default on foreign debt occurred on 17 August, the same day Clinton appeared by video link before the Grand Jury and eventually confessed to a sexual relationship with Monica Lewinsky, after having lied about it to colleagues and the nation up until then. Yeltsin blamed the reformers for Russia’s financial predicament and was desperate for Clinton to attend the summit to reassure the international financial community. Kiriyenko and Nemtsov were dismissed and Chernomyrdin proposed as Prime Minister again. The whole Russia Policy was now openly questioned by congressmen, academics, the media, and even the administration itself. A ‘Who lost Russia?’ debate commenced and forced a rethink of the administration’s strategy. Clinton had invested considerable time, effort, emotion and US dollars in his strategy for Russia and decided to go to Moscow to support Yeltsin and divert attention from the Lewinsky situation. The fifteenth summit between the two leaders was mutually supportive with Clinton for once as much in need of support as Yeltsin was. The two men could identify with each other’s difficulties with their respective legislatures, personal lives, and the sense of injustice that they both felt in believing they were achieving remarkable things in their countries and yet being vilified for doing so. Clinton was supportive of Yeltsin and expressed confidence for the state of Russian democracy and for economic recovery, if Russia stayed the course of reform. Yeltsin emphasised partnership with America rather than opposition to NATO and barred Russian companies from transactions with Iran (Clinton, 1998b:14941501). In a meeting with selected Duma and regional leaders at the US Embassy in Moscow, Clinton conceded that Russia could take its own approach to social and political structures but to be successful would need to adapt ‘the ground rules of the global economy’. Clinton attended the meeting with Albright, the Commerce and Energy Secretaries, four congressmen and Ambassador Collins. He signalled a shift in thinking and an implicit acknowledgement that few further resources would be forthcoming to assist Russia with his parting comments: But if you can find a way and work through this crisis, the United States will stand with you and will not presume to judge on the specific social systems you decide to put in place within a democratic system with a strong economy that has integrity of its fundamental elements (Clinton, 1998b:1512-13).

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The failure of western prescriptions for economic prosperity encouraged the Duma to again challenge Yeltsin’s choice for Prime Minister. Yeltsin was obliged to back down on the reappointment of Chernomyrdin and accept Yevgeny Primakov as a compromise candidate. The US administration’s revised policy acknowledged that market reforms had not worked and that they did not command popular support. For the first time Clinton acknowledged that they had ignored, or rather paid insufficient attention, to the social consequences of insisting on market reforms and providing insufficient assistance for developing social capital. Clinton had allowed himself to be too heavily influenced by the Treasury and Larry Summers, in particular, in devoting nearly all the assistance effort to economic and military issues rather than political reform. Talbott recalls Clinton saying that ‘if we lose Russia it will be because we’ve neglected the politics of it’ (Talbott, 2002:286). The Secretary of State signalled the change of policy in a speech in Chicago on 2nd October. After consulting with academics she accepted that: the time has come for the administration to recognise that its espousal of Russian democracy could not be reconciled with its support for an economic reform programme that most Russians had rejected … The policies we would like the Russian government to pursue have to be worked out democratically, with the support and understanding of the Russian people, or they are going to fail. This means we need to be patient with the workings of the democratic process in Russia (Lippman, 2000:234-5).

The policy towards Russia was severely criticised when Joseph Stiglitz presented a keynote address to the annual World Bank Conference on Development Economics in Washington DC at the end of April 1999. The speech entitled ‘Whither Reform? Ten Years of the Transition’ was written in collaboration with David Ellerman, but was presented in the name of the Senior Vice President and Chief Economist to maximise its impact.11 The address was a withering attack on the economic policies pursued by the IMF, Lloyd Bentsen, Robert Rubin and Larry Summers accusing them, by inference, of neither understanding market economies nor the reform process. He argued that ‘at least part of the problem was an excessive reliance on text book models of economics’. What was important was not just the creation of a market economy, but ‘the improvement of living standards and the establishment of the foundations of sustainable, equitable, and democratic development’. Stiglitz said that the results of the policies pursued were extremely predictable including gross inequalities, capital flight, asset stripping and a reduction in GDP. The US Treasury policy towards Russia had failed to develop social capital in Russia and this had had an impact on democratic development:

11

Interview with David Ellerman, World Bank, Washington DC, 20 February 2002.

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The social and organizational capital needed for the transition cannot be legislated, decreed, or in some other way imposed from above. People need to take an active and constructive role in their self-transformation; to a large extent, the need to be in the driver’s seat. Otherwise the reform regime is only using bribes and threats to induce outward changes in behaviour insofar as behaviour can be monitored - but that is not transformation (Stiglitz, 1999).

The key policy of the Clinton administration and the IMF was to privatize as rapidly as possible to restrict political intrusion in market processes. Stiglitz pointed out that privatization directly affected the political process: For instance, in a variety of dubious arrangements, political allies of the reformers “bought” assets (e.g., with money borrowed from the government or from the banks to which the government gave charters), with parts of the “profits” generated thereby being recycled to support the political campaigns of the reformers (Stiglitz, 1999).

The speech was greeted with incandescent rage at the IMF and US Treasury. Stiglitz was credited with the benefit of perfect hindsight, but he had been increasingly arguing against Washington Consensus formulas for Russia from within the Council of Economic Advisors and the World Bank (see Stiglitz, 1998). Stiglitz’s resignation from the World Bank in November was rumoured to be due to pressure from Larry Summers, who had replaced Rubin in the summer as Treasury Secretary. The resignation was considered necessary to secure James Wolfensohn’s reappointment as World Bank president. The impact of the paper confirmed Albright’s Chicago speech and the need to win the support of the Russian people for the reform process, which would take a long time. Corruption Economic criticism of the Clinton policy on Russia was one thing but in August the policy was attacked on the grounds of encouraging, and then covering up, corruption in Russia. The New York Times published allegations of $10 billion of money laundering through the Bank of New York. The money was alleged to have been IMF funds and the Russia team, especially Al Gore, were held complicit in encouraging IMF loans even though they knew of Russia’s corruption. The revelation followed two seminal newspaper articles on US complicity in encouraging IMF loans even though they knew of Russia’s corruption, which appeared on 15 August.12 Throughout the summer most newspapers devoted considerable coverage to corruption allegations, which eventually implicated Yeltsin, his daughter Tatiana Dyachenko, her husband, and Chernomyrdin. The previous year Janine Wedel published her allegations of corruption by HIID and Russian ‘reformers’ in appropriating USAID funding (Wedel, 1998). 12 John Lloyd, ‘Who lost Russia?’, New York Times, Sunday magazine, 15 August 1999. Robert Kaiser, ‘Outlook’, Washington Post, 15 August 1999.

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Government officials at the highest level were implicated in both concealing and encouraging corruption in Russia through their support for Anatoly Chubais. Chubais enjoyed cordial relations with Larry Summers and Strobe Talbott, even visiting them in their homes when in Washington DC. The relationship was close enough for Summers to write to Chubais in April 1997 instructing him how to conduct Russian foreign and domestic policies, including a tax code, oil industry prospects, how to prepare to join the WTO, and how to deal with US trade laws (Wedel, 1998a:125). The relationship enhanced Chubais’ credibility with the IFIs and within the Russian Government. A credibility, which the administration would not jeopardise by acting on CIA reports detailing his alleged corruption. The Chubais’ loans-for-shares privatization transferred large sections of Russian industry into private hands for a fraction of its true value, leading to the emergence of a group of oligarchs who controlled large sections of the economy. The Clinton administration’s failure to use its considerable influence to prevent such abuses emphasised that it was more concerned with supporting Chubais than with the welfare of the Russian people. James Millar, economist and Russia expert at George Washington University, considered that the administration took the view that ‘at least it's in private hands and that’s better, even though it’s completely against what is traditionally Big D democratic thought’.13 Oligarchs such as Boris Berezovsky and Vladimir Potanin were rewarded with seats in government in return for their considerable financial support in Yeltsin’s re-election. They exercised considerable power, writing laws and appointing ministers, to ensure that their own interests were protected and promoted. The Republican majority in Congress was keen to press home the advantage of the corruption scandals and change the direction of US policy. The importance of Russia to the administration’s foreign policy and the prominent role played by Clinton and Gore provided Republicans with an opportunity to recover from their failure to have Clinton removed from office, and damage Gore’s election prospects. The Senate Appropriations Committee cut the president’s request for $1 billion to $780 million for FY2000 for economic and political assistance to the FSU. The legislation designated that the bulk of the money went to Ukraine, Georgia and Armenia rather than Russia, following a pattern that had seen appropriations for the previous three years range from 53 percent to 77 percent of what Clinton requested. Mitch McConnell, with the backing of pro-Israeli groups, again proposed cutting off all aid to Russia because of its cooperation with Iran. This resulted in a compromise with the administration accepting a fifty percent cut. Ben Gilman, Chairman of the House International Relations Committee, introduced legislation to withhold $650 million payments for the International Space Station unless Clinton determined that Russia was not sending missiles or nuclear technology to Iran. Clinton had requested $241 million in the foreign operations bill to prevent Russian scientists choosing to work for Iran, Iraq, or 13 Interview with James Millar, George Washington University, Washington DC, 6 February 2002.

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North Korea but the Senate directed the money towards reconstruction in the Balkans instead (Pomper and Christensen, 1999). In the face of congressional opposition and growing anger at the level of corruption revealed in Russia, the administration were forced to retreat from continued assistance. Gore’s challenger for the Democratic nomination Bill Bradley and Republican candidates Steve Forbes, Elizabeth Dole and John McCain all criticised US assistance and lending policies.14 Madeleine Albright responded in September by threatening to withdraw backing for a $4.5 billion IMF loan package agreed in July, unless Russia dealt with corruption. The administration sought to protect Gore and to ask for time in dealing with Russia’s complex problems. Congress held hearings on corruption in the House Banking and Financial Services Committee and Senate Foreign Relations Committee attended by key members of the administration, and former officials willing to expose evidence of corruption. Robert Rubin, although no longer in government, wrote an article for the New York Times on the opening day of the House hearings. Rubin explained that their policy had been motivated by self-interest to see a ‘democratic, market-orientated Russia’. Crime and corruption were inevitable but the antidote was reform and continuing engagement with Russia.15 Both Summers and Talbott took up the same theme. Summers appeared before the House Banking Committee on 21 September to defend his use of conditional assistance to influence Russian reform. The IMF and World Bank, not Summers, were responsible for holding Russia to account for its performance. He believed they had done so but Russian reform was always going to be difficult due to the Soviet inheritance and the failure to establish the rule of law. Summers accepted that corruption and capital flight were effectively a vote of no confidence in the rule of law and economic policy. According to Summers, Russia should pass anti-money laundering legislation and further assistance should be conditional on safeguards against corruption. President Clinton was already making strong representations to Vladimir Putin, the latest of Yeltsin’s Prime Ministers, appointed in August (Summers, 1999). Talbott had a harder time defending administration policy in the Senate Foreign Relations Committee. The Deputy Secretary of State echoed Summers’ comments about the difficulty of Russian reform and its Soviet legacy, which could only be cured by creating democracy, which the administration had already helped to achieve. The administration had, and would continue to insist upon transparency in all transactions but corruption in Russia needed to be placed in context. The first and foremost task of the Russia Policy was whether or not the American people were safer as a result of this policy. Talbott concluded that they were (Talbot, 1999a). Jesse Helms, Chair of the Committee, disagreed, arguing that ‘by not pressuring Russia’s leaders to expunge corruption, the United States 14

Sandra Sobieraj, ‘Bradley criticises Clinton administration on Russia Policy’, The Associated Press, 31 August 1999. 15 Robert Rubin, ‘Don’t give up on Russia’, New York Times, 21 March 1999.

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had led the Russian people to lose faith in market economies and democracy’. He added that ‘it is patently dishonest to suggest that the only policy choice is between forsaking engagement and giving Russian “kleptocrats” a carte blanche to pick the American taxpayer’s wallet’ (Pomper and Parks, 1999). The following month Talbott was called to testify before the House International Relations Committee. He maintained his defence of Russia Policy and, at the insistence of Albright and Clinton, urged the House to adopt a bipartisan approach and restore the 30 percent cut in the Freedom Support Act budget they had insisted upon (Talbott, 1999b). The result of this concerted congressional onslaught served to move the administration to a more circumspect position on Russia. The Treasury effectively blocked a proposed $4.5 billion IMF loan to Russia, effectively ending future lending to Russia, although the IMF continued to advise the Russian government on economic reform. The Russia policy would become an important issue in the 2000 Presidential campaign with Republicans seeking to castigate Gore for his part in the Russia policy. A report by the Speaker’s Advisory Group on Russia was published in election year entitled Russia’s Road to Corruption: How the Clinton Administration Exported Government Instead of Free Enterprise and Failed the Russian People (C. Cox, 2000). The report was a thinly veiled attack on Gore’s bid for the presidency and was judged too partisan to be useful in the presidential campaign. The Cox report, however, still provides a valuable critique of the Russia policy and, in particular, how the policy failed to advance democracy in the country. The report outlines eight ‘fundamental flaws’ in the administration’s policy: a) Clinton was accused of ‘not spending enough time, or interest, on foreign policy issues’. An accusation easily refuted by analysing the amount of time Clinton did spend on foreign policy matters, which was the same proportion of time as George H. Bush - the foreign policy president. b) The president was accused of ‘having no policy on Russia’ an unusual claim given that the report is an extensive critique of a supposedly non-existent policy. c) The president delegated ‘virtually all his authority over foreign and defence policy to subordinates’. Certainly, Clinton was unwilling to micromanage policy on Russia but, as has already been demonstrated, his subordinates worked within clearly defined parameters. As Strobe Talbott has revealed, Clinton himself was actively involved in all major decisions and maintained regular, and significant, contact with Yeltsin, beyond merely ceremonial involvement. The constant exhortation to his team to ‘think bigger’ and try to do more for Russia hardly indicates a ‘lack of presidential leadership’. d) Clinton delegated responsibility to ‘an elite and uniquely insular policy-making group without accountability to the normal checks and balances within the

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executive branch’. This group is described as a troika consisting of Talbott, Summers, Gore (and his deputy Fuerth). Here the Advisory Group’s observations are more pertinent. Delegation does not necessarily mean an abdication of responsibility by the president to whom the subordinates were responsible. Each member of the ‘troika’ in Clinton’s second term were deputies of the Secretary of State, US Treasurer and President respectively, and as such were responsible to their departmental head. Policy decisions were never taken in a vacuum but had to take into account existing defence, national security, and economic priorities and programmes. The problem, as far as the administration’s stated aim of promoting democracy in Russia was concerned, lay not in the three’s relative autonomy, but in their direct involvement in Russia’s internal affairs. This was most apparent in the GCC meetings. The Cox report accused the GCC of failing to address corruption and organised crime until 1999. They accused the GCC of encouraging central government rather than free enterprise, being more concerned about personalities rather than policies, and being bureaucratic, impeding information from getting to Washington DC. The latter charge is justified with the numbers of officials attending the two meetings each year increasing to seven hundred, including deputy heads of departments. Talbott, Summers, and the President were briefed before each meeting and over two hundred agreements were reached.16 The Commission gave the US an opportunity to speak directly with their Russian counterparts and attempt to influence not only binational policy but also Russian domestic affairs. e) The fifth charge was that the policy amounted to ‘support for and dependence on a few individual Russian officials instead of a consistent and principled approach to policy that transcended personalities’. The President and his administration’s inclination to deal with personalities have already been described. This inclination promoted personalities rather than the stated objective of democracy. Stability was regarded as more important than democracy, providing elections took place and a veneer of democracy could be demonstrated to an American audience. Secretary of State Christopher’s rhetoric in 1995 that the ‘United States will continue to cultivate strong ties with a wide range of leaders and institutions in and out of the Russian government’ rang hollow (Christopher, 1998:268). Grigory Yavlinsky warned that this insistence on ‘promoting personalities rather than institutions also hinders Russia from choosing the right path’. This was especially true when their favourites embark on actions that do not promote democracy or markets’ (Yavlinsky, 1998:77). After Yeltsin and Chernomyrdin, the administration’s favourite was Anatoly Chubais. Chubais was the architect of the loans-for-shares 16

Thomas Lippman, Washington Post, 14 March 1998.

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privatization and Yeltsin’s 1996 presidential victory. For most of Yeltsin’s presidency he was the main point of contact in arranging loans with the IFIs. He also controlled much of the bilateral funding provided by USAID through his relationship with HIID. Chubais’ role was to promote market reform and privatization even when such reforms undermined democratic accountability. Chubais encouraged rule by decree rather than embarking on reforms through the parliamentary process. Richard Morningstar, aid coordinator to the NIS, explained support for Chubais: If we hadn’t been there to provide funding to Chubais, could we have won the battle to carry out privatization? Probably not. When you’re talking about a few hundred million dollars, you’re not going to change the country but you can provide targeted assistance to help Chubais.17

The administration adopted a similar attitude towards elections. All postcommunist elections in Russia had been tainted by corruption, but perhaps none so blatantly as Yeltsin’s 1996 victory. Big business not only funded $140 million of Yeltsin’s election campaign but also funded Aleksandr Lebed’s in order to take votes away from Zyuganov and Zhirinovsky (Brady, 1999:16670). The Clinton administration was more concerned that its favourite, Yeltsin, won than that the elections were ‘free and fair’. f) The Cox report argued that there was ‘a focus on the Russian executive branch to the exclusion of the legislature and regional governments’. This argument really follows on from the administration’s preferment for certain individuals. Just as the Republican Congress was regarded as antipathetic to Clinton’s Russia policy, so the Duma was regarded in matters of economic and political reform. The report highlighted former president Nixon’s visit to Yeltsin in March 1993 and his advice to negotiate with the Russian parliament. Yeltsin replied that he had received exactly the opposite advice from the Clinton administration. We have previously considered the administration’s encouragement and support for Yeltsin in his conflict with parliament, up to and including the violence of 3-4 October 1993. Even after Yeltsin’s constitution was introduced in January 1994, the administration refused to engage with parliament because it did not like the outcome of all three parliamentary elections. In five visits to Moscow, Clinton only addressed the Duma on his final visit in 2000. None of the key Russia team members considered reaching out to the legislature to be a worthwhile objective, preferring to deal directly with the government, president, or audiences of young and business people.

17 Richard Morningstar, testimony before House of Representatives Banking and Financial Services Committee, 21 September 1999.

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g) A seventh criticism was that there was ‘impatience with Russia’s nascent democratic constituencies that led to attempts at democratic ends through decidedly non-democratic means’. Here the commission correctly identified the use of presidential decrees to circumvent the legislature as being detrimental to democratic developments. The limit of the Clinton administration’s patience was never tested because circumvention was the option of first resort. The significant priority for the administration in Russia was to ensure that communism did not return and that a market economy emerged in its place. A market economy and democracy were considered to be mutually reinforcing. The legislature represented a challenge to economic reform, threatening the pace and direction of change, presidential decrees could, it was believed, expedite the reform process. The US government encouraged the formation of parallel structures and flex organizations to avoid parliament and push through legislation, contradicting its claims to be promoting democracy (Wedel, 2001:172-3). h) The final charge of the commission was to accuse the administration of ‘preferring to build Russia’s central government rather than building a system of free enterprise’. Of all the charges, this is perhaps the most partisan. The Republican Party stereotypically stands for ‘free enterprise’ and minimal government, their main criticism of the Democratic Party is that it traditionally stands for increased governmental involvement. In an election year, the opportunity to link Gore with bureaucratic big government, and being against free enterprise, was too good to miss. The administration would claim that working with central government in Russia was the most effective way to bring about free enterprise, since the privatization of state assets could only be achieved through government. The most important issue from the perspective of political reform was whether the goal of free enterprise was consistent with promoting democracy. Primakov For all the Cox Report’s criticisms, the Advisory Group saw no reason to challenge the government’s handling of Yevgeny Primakov, who succeeded Kiriyenko as Russian Prime Minister following the financial crisis of 1998. Primakov proved an effective and popular leader who worked with the Duma to rescue the Russian economy. Primakov’s and his deputy Maslyukov’s economic policies were roundly condemned by Strobe Talbott, however, for being likely to worsen Russia’s fortunes (Lippman, 2000:236). The policies contradicted IMF advice but were to prove effective. The US administration objected to Primakov because he was a former intelligence operator and had included two communists within his cabinet. Leon Fuerth regarded him as ‘a dinosaur … someone who only

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looked with longing to the past without real vision for the future’.18 Under Primakov, Russia for the first time had a central government, which enjoyed broad popular support across the Duma. The US administration was more concerned with the presence of communists in government than any popular legitimacy. They dissuaded the IMF from providing further loans to Russia while First Deputy Prime Minister Yuri Maslyukov and tax chief Georgy Boos remained in office. Gore and Summers prejudged Primakov's willingness to embark on further reforms and actively sought to undermine him. The bombing of Iraq in 1998, in the midst of Clinton’s impeachment proceedings, and Kosovo in 1999 were pursued without prior consultation. In Kosovo, where Russia had long-standing interests, Albright and Gore persuaded the president and Berger to embark on a bombing campaign against the Serbs in support of Kosovan Albanians. The bombing campaign was conducted as a NATO operation without UN authorisation. Gore informed Primakov of the bombing when the Russian Prime Minister was on his way for his first visit to Washington. Primakov had his plane turned round mid-flight to return to Moscow and joined the Duma’s disapproval of US actions and refused to ratify START II. Yeltsin was concerned by rising anti-Westernism and the popularity of Primakov, which threatened his, and his family’s, security when he eventually left office. Primakov as president would be unlikely to protect Yeltsin or his family from prosecution, which parliament had threatened several times throughout both terms of office. Yeltsin accordingly replaced Primakov with Sergei Stepashin as Prime Minister, to the delight of the US administration and Talbott’s Russian reformer friends, Chubais and Gaidar in May 1999 (Talbott, 2002:315-6). The administration quickly intimated that IMF loans could resume, avoiding Russia defaulting on the stage payments covering previous loans. The IMF actually disbursed $0.6 billion and the World Bank just $60 million throughout the year. It would be the IMF's last loan to Russia, bringing the total to around $20 billion, of which Russia had repaid nearly $9 billion by the end of 2000, including $4.1 billion in 1999. Vladimir Putin and Chechnya Stepashin lasted only a few months as Prime Minister before Yeltsin chose Vladimir Putin to replace him. Putin was chosen because of his relative obscurity and willingness to grant Yeltsin and his family immunity from prosecution during their retirement. Yeltsin’s daughter Tatiana Dyachenko informed Talbott that getting Putin appointed prime minister was ‘one of the hardest things we ever pulled off’ (Talbott, 2002:7). The new Prime Minister immediately embarked on another war with Chechnya, following an invasion of Dagestan, by Chechen rebels, and bomb attacks in Russia resulting in three hundred deaths, attributed to 18

Interview with Leon Fuerth, Washington DC, 7 February 2002.

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Chechens by Putin. The war was to be bloody and brutal but was widely supported by Russians, pleased to be avenged for the humiliation of Russian troops during the first war. The US administration had little sympathy with the Chechens and supported their retention within the Russian Federation. Clinton was concerned about the human cost of the war and in particular the criticism he received during the first conflict. At the OSCE summit in November, Clinton criticised Russian actions, only to be so severely rebuked in private by Yeltsin that he did not press for the OSCE to urge restraint in Chechnya (Talbott, 2002:362-3). The second Chechen war did not on the whole create big headlines in the media, and as such was not a vital issue for Congress. Foreign policy specialists such as Jesse Helms, Mitch McConnell, and Tom Lantos, D-California, called for Russia’s expulsion from the G8, but a resolution to that effect lost in both the House and Senate (Goldgeier and McFaul, 2003:279-83). Albright claims that she repeatedly challenged Foreign Minister Ivanov to permit an independent investigation into atrocities, allow access to humanitarian organizations, and to negotiate a political settlement (Albright, 2003:438). The effect of such interventions was minimal because the administration did not want to jeopardise their relationship with the future Russian leader, and did not to draw attention to the failure of America to make any difference in Russia’s conduct of the war. The war received a low priority in the executive with no senior figure willing to challenge Clinton and make it a vital issue. Policy on Chechnya was handled by lower-ranking officers who were constrained by Ambassador Collins’ indifference to the issue (Mendelson, 2002:12, 41n.17). The war made an instant hero out of Vladimir Putin, former head of the FSB, and now Yeltsin’s heir apparent. The endorsement of Putin as Yeltsin’s chosen successor could have damaged the former’s electoral prospects because of the President’s unpopularity. Putin’s response to the invasion of Dagestan by Chechen fighters, however, and the bombing of apartment blocks in Russia, attributed to Chechens, secured popularity in his own right. In contrast to Yeltsin’s delegation of the first Chechen War to others, Putin assumed de facto command of the Russian war effort. The war was ruthlessly prosecuted resulting in overwhelming victories for Russian troops in the early stages of the conflict - a marked contrast to the humiliation experienced by the army three years before. Putin was increasingly perceived as being ‘his own man’ and a complete contrast to his old, infirm and increasingly ineffectual benefactor. The establishment, including the oligarchs, transferred their support and resources behind Putin, following the poor showing of Yury Luzhkov’s Fatherland All Russia party in the December parliamentary elections, and the surprise success of Unity, a party associated with Putin but which had no declared policies.

120 Table 4.1

Lessons from Russia State Duma Election Results, 1999

Party/bloc % Communist Party Unity Fatherland-All Russia Union of Right Forces Liberal Democratic Party Yabloko

Party lists seats

24.3 23.3 13.3 8.5 6.1 5.9

67 64 36 24 17 16

Single members seats 61 17 35 7 1 5

Total 128 81 71 31 18 21

Source: Adapted from Yitzhak M. Brudny (2001), ‘Continuity or change in Russian electoral patterns The December 1999 – March 2000 election cycle’, in A. Brown, ed., Contemporary Russian Politics.

Russian forces committed gross human rights violations in Chechnya and levelled the capital Grozny to the ground. The Clinton administration resisted calls from human rights organizations and Russian democrats to call on the Russian Government to halt the abuses. Michel Camdessus, President of the IMF, suggested that the Fund might suspend financial assistance to Russia if the rest of the world complained about Chechnya. Secretary of State Albright told a press conference that the US would not put obstacles in the way of lending to Russia because of Chechnya.19 The US government only criticised the efficacy of the tactics deployed by Russia in suppressing Chechen resistance. Clinton did urge an investigation into human rights abuses, and for a political solution to the conflict, but failed to use his influence to call for an end to the conflict (Clinton, 2000:1081-85). Clinton was under no pressure from other western leaders to condemn Russian behaviour. They were equally anxious not to undermine the Russian leadership in order for the country to continue repaying its debts and opening up markets for further trade. The US President wanted to preserve good relations with Russia for the remaining few months of his tenure to preserve his legacy and to continue to support his friend Yeltsin. Gore was unwilling to focus attention this most unsavoury aspect of Russian policy in the build up to his presidential bid. Congress and the media condemned such reticence but were unable to influence policy, which was now more concerned with holding the line on Russia rather than issues of human rights or democracy. The reluctance to offend the Russian Prime Minister was in part due to the clear anointing of Putin as Yeltsin’s chosen successor. That path to the succession was assured when Yeltsin resigned on New Year’s Eve 1999, transferring power, in accordance with the constitution, to the Prime Minister and now actingpresident. The resignation brought the election forward from June to 26 March 19

Andrei Renisov and Vladimir Kozlovsky, Moscow News, 1 December 1999.

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2000, and gave Putin the power of an incumbent at the start of the election campaign. All the resources available to the Yeltsin campaign in 1996 were now accessible to Putin. Overwhelming media support and scathing personal attacks on Primakov and Luzhkov forced the only two realistic challengers from the presidential race in the early stages. Putin did not produce a manifesto and played on the anti Chechen sentiment of large sections of the Russian electorate to secure victory in the first round. To make sure of Putin’s victory serious electoral fraud occurred, adding up to 1.3 million fictitious voters and producing very strong support for Putin in Muslim autonomous regions, including Chechnya, despite atrocities committed in the war. In addition, 24 million voters allegedly voted in the last hour of the elections despite the physical impossibility of such a feat (Kagarlitsky, 2002: 260-263). Zyuganov, Yavlinsky and Zhirinovsky all complained of fraud immediately after the election but the claims were never officially investigated. Clinton and other western leaders welcomed the result and agreed with reformer Sergei Kiriyenko of the Union of Right Forces that authoritarianism was necessary to ensure that economic policy would remain liberal (Kagarlitsky, 2002: 263). Another reformer Boris Fyodorov complained, after the 2000 presidential election, that: Elections are no longer about ideas, principles, political programmes. It’s about how much money you have and how many spindoctors you can hire, and how much TV time you really control (Fyodorov, 2000).

Unfortunately for the Russia policy, the rapport of the Bill and Boris relationship did not extend to the new Russian premier. Clinton’s reputation had been damaged by revelations of an affair with Monica Lewinsky and subsequent impeachment proceedings. Clinton was also in the last year of his presidency and Putin awaited his successor to develop a closer working relationship. Clinton, anxious to protect the legacy of his Russia policy, was reluctant to challenge the Russian president and highlight the deficiencies in the policy. Al Gore, as presidential candidate, and under fire from Republicans for his involvement in the GCC, was equally keen to demonstrate the success of the policy. The transfer of power to Putin was handled by the administration as confirmation of a Russian transition from totalitarianism to democracy. Talbott described it as an ‘orderly and democratic conclusion of the transfer of power that Yeltsin had put in motion’ (Talbott, 2000a). Clinton met Putin on six occasions, including four after the Russian elections. The final effort of the Clinton presidency was to attempt to persuade the Russian leader to agree to alter the ABM Treaty enabling America to develop a National Missile Defence (NMD) system. Talbott, Albright and Berger joined with the president in trying to persuade their opposite numbers in the Russian leadership. Putin, however, dismissed Clinton as a lame duck president and nothing was achieved. The administration’s priority remained clear: further security

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concessions and economic reform. Little attention was paid to the crisis of democracy concerning issues of electoral fraud, media bias, corruption, or Yeltsin’s transfer of power to Putin prior to the election. Albright, aware of the inability of the administration to influence the new Russian leader, considered that all they could do was to ‘encourage his citizen’s to maintain their faith in freedom and a market economy, understanding that the development of democratic habits take time’ (Albright, 2003:440).

Presidential Framework Analysis Over the Second Term During the course of the second administration Clinton continued to play the leading role in policy towards Russia. The troika remained in position and enabled the team to speak with one voice as a national actor. Yeltsin had been returned to office and the communists ceased to present any illusion of a government in waiting. The objective of keeping Yeltsin in power had succeeded and tangible benefits emerged. NATO expansion went ahead without the problems predicted by most commentators, increasing the US role in Europe, satisfying Eastern European countries and their diasporic communities in America that they would be protected against any future Russian imperial expansion. The trade off for NATO expansion was Russian membership of the G8 and involvement in the NATO-Russia Permanent Joint Council. The choice to involve Russia inside institutions was rational on the basis of Lyndon Johnson’s mantra that it was better to have them ‘inside the tent pissing out rather than outside the tent pissing in’. The difficulty came in that membership of the club meant that it became less likely that other members would challenge Russia on its activities in Chechnya sending out a message to human rights organizations that US commitment to democracy was negotiable. Significant influences on the policy in the second administration came from Albright and Sestanovich, who were more interested than their predecessors in a democracy assistance agenda. Congress had reduced expenditure to Russia transferring resources to Ukraine and other FSU states and a choice was made to increase the proportion of this expenditure to democracy assistance relative to economic reform. The amounts involved were meagre but represented a belated attempt to influence Russia’s future political progress in preparation for the postYeltsin era. The resources were distributed where they could see a maximum visible return to developing NGOs. This choice had bounded rationality because it kept Congress content and willing to release further resources. It had the outward appearance of promoting a diverse and flourishing democracy, but ignored the serious issue of developing political parties to form credible alternative administrations and provide constructive opposition. Over the four year period of the second administration a series of bounded rational decisions were taken that did not lead to satisfactory or sufficient outcomes. The support for NGOs did not produce a thriving civil society, but

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produced tens of thousands of groups many of whom were totally dependent on western funding and unable to make a significant impact on government policy. The continued support for the GCC, and its joint chair in particular, which produced sufficient outcomes, by restricting Russian support for Iran and Iraq and making some progress on economic reform, was in reality quasi rational. Chernomyrdin, Chubais and the Yeltsin Family were all implicated in corruption scandals, which challenged the administration’s advocacy of these people as democrats. The financial crisis, and evidence that Russia continued to support Iran’s nuclear and arms programme, exposed the administration’s policy of largely uncritical support for Yeltsin as being over-optimistic. The removal of Chernomyrdin left the US policy in disarray, as he was replaced by a succession of prime ministers on short tenure, none of whom developed the same rapport with Gore. The administration had consistently chosen to back Yeltsin, Chernomyrdin, and Chubais throughout both terms of office on the basis that these were best placed to deliver US optimal objectives of peaceable, cooperative, liberal marketdemocracy. Such decisions overlooked the long term consequences of support, if these leaders did not actually have democratic credentials. Other options available included exposing and challenging corruption, when the evidence was presented, and seeking a change in such behaviour. The administration could have engaged with the Duma and encouraged a democratic ethos and constructive working relationship between government and parliament. They could have helped to develop political parties impartially, by including communist and nationalist parties, as a demonstration of their commitment to democracy, rather than just its American variant. When Primakov was prime minister, parliament and government cooperated for the first time, the government had broad support throughout the country and there were genuine prospects for democratic advancement. The Clinton administration could have tried to develop a relationship, similar to the one that they had enjoyed with Chernomyrdin. The consequences of such choices would have been to strengthen democracy at the grassroots and over the long term, but would have meant acknowledging that the assistance policy hitherto had not worked. A quasi rational choice was to continue support for the regime and point to the achievements for US national security: the defeat of communism, the existence of elections and NGOs. They could then present the policy as an unqualified success. In weighing the choices for a Russia policy, which had been thrown into turmoil by the financial crisis and Yeltsin’s unpredictability, the administration also had to consider its impact on domestic US politics. Clinton was eager to protect a foreign policy legacy which highlighted Russian reform as a key policy success. He also wanted to detract from the Monica Lewinsky affair, Al Gore wanted to win the presidential election and the democrats sought to regain control on Congress. The bounded rational choice in considering how to deal with Chechnya, corruption, the financial crisis, the hand over of power to Putin, whilst at the same time presenting the policy as a success, was to minimise the problem.

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They could downplay the issues, mute any criticism of the Russian leadership, and point to the quantifiable improvements in the US - Russian relationship over the course of eight years. Such a position was quasi rational because it obscured the deficiencies in a policy that produced a less than satisfactory, or sufficient, outcome. In consistently promoting pragmatism before democracy, the administration facilitated the emergence of autocratic leadership, compounded with the emergence of Putin as leader, specifically to protect Yeltsin and his family from corruption charges.

How Committed was the Clinton Administration to Promoting Democracy in Russia? In examining how key decisions on Russia emerged, over the course of both administrations, we are now in a position to determine how committed the Clinton administration was to developing democracy in Russia. We have seen earlier how democratic rhetoric, over the course of the first administration, gave way to the wider goal of promoting prosperity in the second. This economic primacy was actually signalled from the outset, when the management of assistance was to be conducted by the IMF not the G7, and progress evaluated by economic, rather than political, indicators (Saunders, 2001). Thomas Graham recalled how the administration’s focus narrowed down to economic determinism. The idea that: … if we just get the market right, this would bring in foreign investment, lead to a Russian recovery, spread the wealth, and develop a middle class which would be supportive of democratic values … we narrowed the definition of “democracy” largely to elections, and that’s what we focused on (Graham, 2000).

This emphasis on economic policy, over the political, was reflected in the disproportionate distribution of resources between the two areas. The division of responsibility between Talbott and Summers has been largely treated by academics, and even Talbott himself, as an equal division or even with the Deputy Secretary of State in charge. As has previously been demonstrated, Clinton was actually the architect of Russia policy; however Summers’ role has been underestimated. Summers was the dominant partner in his professional relationship with Talbott. It was Summers who reprimanded Talbott for his ‘less shock, more therapy’ outburst after the 1993 parliamentary elections. Summers was the one who controlled the purse strings and coordinated policy with the IFIs. Talbott had access to the president, through his long time friendship, but Summers cut the more authoritative figure as he bullied and cajoled the Russians to accept his economic prescriptions. Talbott admitted, when interviewed, that: We were stumped in trying to come up with sustainable, workable answers to the questions that we were facing. We, more or less throughout the administration, stayed

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with the basic Treasury line that we had to make a lot of adjustments economically in Russia.

Larry Summers, as Under Secretary, Deputy Treasurer, and then as Treasury Secretary, had no doubts that there were certain immutable principles of economics, which were reflected in IMF conditionality for loans to Russia (Talbott, 2002:85). He regarded Washington Consensus formulas as the only course for Russia to follow. The US Government should convey this view clearly to their Russian counterparts and people, and support IMF conditionality with its intrusion into Russian domestic affairs.20 The IMF was publicly criticised by Clinton for being too slow to support Russian reform in 1993. A Systemic Fund Facility was introduced, to lower the economic criteria for loans, and to offer Yeltsin tangible support before the April referendum. Behind closed doors, however, the IMF was receiving a different message. The main shareholders of the Fund are essentially the finance ministers and central banks of the G7, led by the United States, and the distribution of resources largely determined by finance ministers rather than the foreign ministers. The State Department wanted to be seen to be supporting Yeltsin but the message from the US Treasury and other G7 finance ministers’, according to a senior official at the IMF, was ‘do what you think is right and make sure they get economic policies right’. In any dispute between the finance and foreign ministries ‘our impression was that the finance ministers won nearly all those battles’.21 In every conflict between promoting markets or democracy, democracy promotion inevitably lost out, because the administration pursued a policy of markets before democracy. The administration undermined Russian democracy with acts of commission and omission. If Clinton, and his administration, were genuinely seeking to promote democracy in Russia then they could have used their influence to encourage a negotiated settlement in the dispute between the CPD and Yeltsin. Former President Nixon’s advice to Yeltsin to talk to the CPD could have been adopted by the Clinton administration rather than encouraging confrontation. Once the democratic elections to the Federal Assembly had taken place, in December 1993 and 1995, the administration could have encouraged Yeltsin to work with parliament, rather than promoting a policy of circumventing it to achieve reform aims. They could have encouraged the development of a civic and fiscal infrastructure before insisting on market reforms. They could also have condemned human rights abuses, the loans-for-shares privatization, and the war in Chechnya. In not doing so, they sent out a message that support for Yeltsin, and later Putin, was more important than human rights or probity in public life.

20

Larry Summers, testimony before House of Representatives Banking and Financial Services Committee, 21 September 1999. 21 Interview with senior official, IMF Headquarters, Washington DC, 12 February 2002.

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The Clinton team failed to take into account the signals they were sending to the Russian leaders, and voters, in their one-sided support for Yeltsin, Chubais and Chernomyrdin. The willingness to overlook the corruption and anti-democratic nature of all three favourites reflected American priorities. The financial resources, and political capital, of the United States had a significant impact on the outcome of the key defining moments in post-communist Russian history. The use of IMF funding, and summitry, helped Yeltsin win the April 1993 referendum and the 1996 general election. US backing legitimated Yeltsin’s actions in Moscow in October 1993 and in the two Chechen Wars. Continued US support for Russia, after the financial crisis of 1998, restored Russia’s international credibility. A lack of criticism of Putin’s excesses in Chechnya and the early transfer of power from Yeltsin enabled ‘The Family’ to circumvent ordinary democratic procedures. In situation after situation the administration signalled that stability and relationships were more important than democratic progress. Talbott conceded that with more wisdom of foresight: ‘we could have, we certainly should have, used that influence over Yeltsin more on the home front’.22 They could have, should have, but did not. Democracy promotion was always thought of as a long-term strategy that would eventually lead to a pacific relationship between the two nuclear powers. In the meantime, more immediate economic and national security gains were available. As suggested by the presidential framework there was a clear hierarchy of goals at work in the Russia policy. At the top of that hierarchy was US national security interests, followed by increased trade, and only then concern for internal Russian political processes. Yeltsin, in a position to and apparently willing to deliver the first two objectives, was the main focus of the third objective. The preservation of Yeltsin as leader, to provide security concessions and economic reform, and then the prevention of communists returning to power came ahead of democracy in the hierarchy of goals. Once these objectives had been achieved, following the 1996 elections, democracy promotion was further relegated behind national security issues and economic reform. Leon Fuerth, looking back on the Russia policy, omitted democracy promotion as an objective of the administration. He described three primary objectives of US policy: To protect ourselves and the world against a breakdown of Russian control over the inherited Soviet nuclear arsenal; to help those who had come to power in Russia make sure that there was no return to the Communist past (Fuerth, 2000).

Here we have a clear statement that the administration was more concerned about preventing a return to communism than promoting democracy in Russia. Fuerth claims the policy was vindicated by ‘locking in important, practically irreversible progress that serves US national interests’ (Fuerth, 2000).

22

Interview with Strobe Talbott, New Haven, 14 February 2002.

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American support for Yeltsin, and the ‘reformers’, was rewarded by the removal of nuclear weapons from Ukraine, Kazakhstan and Belarus. Russia troops withdrew from Eastern Europe and the Baltic States, and participated with NATO forces in Balkans peacekeeping. NATO expansion went ahead in 1999 with the accession of Poland, Hungary and the Czech Republic, and the groundwork was laid for Lithuania, Latvia and Estonia to join. Russia-NATO cooperation was formalised and Russian diplomacy used to resolve the war in Kosovo. The administration also managed to halt the sale of rocket parts to India and persuade the Russians to downgrade long-standing friendships with Cuba, Vietnam, North Korea, Iraq and Iran. The United States influenced all aspects of the Russian reform programme through the GCC and its domination of the IFIs. America’s domination of key international finance and organizations created a dependency in Russia on American goodwill, and further enhanced America’s status as the standard bearer for the Washington Consensus, until the 1998 financial crisis. Yeltsin’s acquiescence with US foreign policy objectives enabled considerable reductions to be made in the US defence budget, which helped the US economic recovery. Over an eight-year period, Russia continued to decline militarily, diplomatically and economically, until defaulting on debts, devaluation and rising oil prices improved the country’s economy in 1999. The United States was significantly more secure entering the new century than anytime during the Cold War. Clinton could point to regular elections, a transfer of power and the development of tens of thousands of NGOs to support his claims to promoting democracy in Russia. On the economic front, he could highlight the privatization of most Russian companies as a vindication of the economic reform agenda pursued. The quantitative effects of reforms, encouraged by the US administration, however, masked the qualitative deficiencies that reduced the effectiveness of NGOs, and challenged the concept of ‘free and fair’ elections. The reforms also left Russian enterprise in the hands of oligarchs, former members of the nomenklatura and organized crime, as private rather than state monopolies. The Russia policy produced many positive gains for America, but a liberal democratic Russia was not one of them. The personal commitment of Clinton to forming a strategic partnership with Russia, and to supporting his friend Boris Yeltsin, whilst advancing US selfinterest, significantly influenced policy towards Russia. The president’s involvement explains why Russia remained the central concern of US foreign policy throughout both terms. His involvement encouraged, and enabled, the other key team members, Gore, Talbott and Summers to spend much time and effort on Russia. Clinton’s relationship with the three enabled him to delegate large areas of responsibility without losing control of decision making. Clinton conceded, after the 1998 financial collapse, that the policy had been wrong in concentrating on economic reform rather than paying sufficient attention to social conditions in Russia. The ultimate decision, however, remained the president’s even if at times

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he deferred to the Treasury team, who were not quite so willing to commit large budget resources to assisting Russia. A major factor in the Clinton approach to Russia was the personality of the key advisors, who were all committed to making the policy work, rather than seeking to use difficulties for personal advantage. Al Gore continued to support and defend the policy, even during his election campaign when it was disadvantageous to do so. Talbott was able to defer to Summers on economic matters, and be rebuked for his comments after the 1993 Duma elections, without seeking opportunities for revenge. Summers also understood that if the president wanted support at crucial times for Yeltsin then it should be forthcoming, despite economic reservations and congressional opposition. Clinton modified the policy over the two administrations when the opportunity arose to advance national security, trade or political reform in Russia. Reform in Russia was always going to take a long time, and Clinton’s priority was to achieve as many national security benefits as possible during his tenure of office. Congress would always support specific security benefits such as nuclear arms reduction, and anti-proliferation measures, but democracy promotion, or economic assistance, would prove more difficult with Republican majorities in both chambers. Clinton was able to circumvent Congress by leveraging assistance from the IFIs but bilateral support for Russia was limited by congressional conditionality, reductions in budgets, and transferring resources to other parts of the FSU. Policy was also altered by complaints in Congress and the media about Russian corruption. These complaints led to the administration opposing IMF loans and demanding action to prevent further abuses. The Russia Policy was affected over time between the first and second administrations. The first administration sought to rush Russia towards reducing nuclear weapons, privatizing and elections, whilst developing strong personal relationships, and institutional cooperation through the GCC, and keeping Yeltsin in power. The second administration could concentrate on legacy-building, by seeking to establish a permanent relationship through the NATO-Russia Founding Act and the Permanent Joint Council. The decision to expand NATO was influenced by diasporic communities in America, the Eastern European countries themselves, the Pentagon, and Clinton’s desire for a legacy. Part of the determination in seeking to defend the Russia Policy, after the financial crisis, was to protect the on-going relationship between the two countries. A relationship marked by shared peacekeeping duties in the Balkans and the twice-yearly Joint US-Russian Commission on Economic and Technical Cooperation (GCC). Clinton, Gore, Talbott and Summers considered that the relationship had brought positive advantages to America. The expansion of NATO, symbolically on its fiftieth anniversary, would leave a permanent legacy for Clinton’s foreign policy achievements to complement his domestic economic success. The Russia policy was a demonstration of the presidential framework emphasis on American Exceptionalism, as a pervading ideology. This exceptionalism was implicit in all the administration’s dealings with Russia. Partnership was never

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intended to be an equal relationship but Russia was to play the role of junior partner. The American political system, economy, and international role were considered inherently superior to whatever the Russians could devise. The US Treasury assumed that they knew best about how to lead Russia to a market economy and expected the IFIs to fall in line, regardless of the views of their own experts. The Clinton administration believed that NATO expansion would not threaten Russia because they said that it would not. The international system did limit the ability of Clinton, and his Russia team, to support and influence Russia exactly as they would have liked. They would have preferred to offer more assistance to Russia but were unable to persuade Japan to offer more bilateral support without settling the Northern Territories dispute (Marsden, 2003:101-17). The IMF was reluctant to lend on anything other than economic grounds. NATO, and G7 enlargement, required the support of the other members. All dealings with Russia had to consider the geopolitical implications on the rest of the FSU, Eastern Europe and traditional spheres of Russian influence. At a macro level, it appears that there was a conflict of interest between promoting democracy and the US national interest. Democratic impulses to ensure free and fair elections, to avoid interfering in the outcome of elections, and to develop relations with the Russian legislature were all resisted. Instead, Clinton took the view that Yeltsin must be supported by undemocratic means if necessary. The justification for this approach was that Yeltsin would ‘cut a deal’ and acquiesce on the key questions for US national security interests, and continue to support liberal economic reforms. The Russia policy changed over time in response to congressional conditionality and reductions in the budget to support Russian reform. At all times the administration maintained and adhered to a hierarchy of goals in which security and economic interests, defeating communism and maintaining status, prevailed over promoting democracy. Democracy promotion fitted in with an exceptionalism that portrays the United States as the primary example of liberty, freedom and justice. Democracy promotion was little more than rhetoric, a good idea but of secondary importance to achieving US objectives of greater power and prosperity.

Chapter 5

Implementing the Strategy For democracy promotion in Russia to be effective the Clinton administration required more than simply rhetoric. The high policy of democracy promotion had to be supported by effective implementation of policy decisions at the micro level. In this chapter I consider how the policy of democracy assistance was actually implemented in practice, before examining the assistance programmes provided by the key agencies. An implementation framework analysis is then utilised to discover the impact of bureaucracy on policy delivery. The extent of any interdepartmental rivalries, lack of coordination, and organizational difficulties are explored to discover whether or not the differences in policy objectives and policy outcomes were due to the foreign policy process itself.

The Implementation Process The policy of US democracy promotion in Russia was carried out by up to 23 departments and independent agencies (Johnson and McCool, 2000). The principal actors consisted of five government agencies: USAID, United States Information Agency (USIA),1 Department of State, Department of Defence and the Department of Justice. In addition, two quasi-governmental organizations, the National Endowment for Democracy (NED) and the Eurasia Foundation oversaw specific projects in the Russian Federation. The quasi-governmental organizations’ democracy assistance role is almost entirely funded by government but allows greater flexibility for those organizations compared to government departments. The Eurasia Foundation and NED, at one step removed from the US government; purport to provide democracy assistance on the intrinsic merits for aid recipients rather than for the benefit of US foreign policy objectives. The funding for all these agencies and organizations’ assistance efforts to Russia was provided under the Freedom Support Act (FSA) 1992. Between 1992 and 2000, the FSA appropriated $2.68 billion in grants for technical assistance, people exchanges, and humanitarian needs and to support economic and democratic reform. $2.26 billion of these funds were actually disbursed, with 24 percent (approximately $550 million) allocated to democracy promotion and rule of law programmes (Johnson and McCool, 2000). When 1

USIA was incorporated within the State Department on 1 October 1999 as part of an overall reorganization of US foreign assistance.

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dealing with democracy promotion as part of an overall assistance package, it is difficult to determine what is meant by democracy assistance. A rule of law project, for example, that protects property rights has implications for economic, social and political reform. In Lessons from Russia what constitutes democracy assistance will be determined by the State Department’s definitions. These include civic education and civic organizations, civil-military relations, training in human rights, electoral reform, media training and development, and legislative, rule of law, political party, trade union and public administration development (GAO, 1996:10). Democracy assistance in these areas included not only training, advice and support but also basic infrastructure costs including paying salaries, providing and equipping office accommodation with faxes and computers. The funds available for democracy promotion were small in comparison with the scale of the task of assisting in the reform of Russia’s political processes and civil society. The FSA appropriation could be divided into four core areas: democracy and rule of law reform, market reform, humanitarian needs, and security related reform. The total budgeted FSA appropriation for democracy and rule of law assistance was $623 million, compared with $1.4 billion on market reform assistance (see Tables 5.1 and 5.2).

Table 5.1

FSA Funded Activities Grouped by US Objectives, 1993-2000 (in $ millions)

Market promotion Democracy promotion and the rule of law Humanitarian needs Non-proliferation/security related items Total

988.22 340.19 231.31 114.03 1673.75

413.93 282.94 113.82 104.35 915.04

Source: Adapted from A. Kura, (2001), Russia’s Transition: International Help or Meddling? (New York: Nova Scientific Publishers, Inc.), p. 31.

It was not until after the financial crisis of 1998 that democracy assistance actually outstripped expenditure on promoting market reform through the FSA in Russia. The FSA provided about 36 percent of American assistance expenditure on Russia, with the overwhelming majority of the remaining 64 percent spent on market reform and security-related matters.

Implementing the Strategy Table 5.2

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Funds Budgeted for FSA Assistance Towards Russia, 1993-2000 (in $ millions) 1993

Democracy promotion and rule of law Market promotion

1994

1995

1996

1997

1998

1999

2000

52.86 213.33 74.00 42.40 46.56 57.48 72.44 64.06 205.09 572.30 260.83 136.66 72.23 125.69 46.83 32.53

Source: Adapted from A. Kura, (2001), Russia’s Transition: International Help or Meddling? (New York: Nova Scientific Publishers, Inc.), p. 120.

The limited investment in Russia’s democratic reform process reflects reluctance by any US government to commit large-scale resources to foreign assistance. The funding of such assistance requires congressional approval, which is always likely to prove problematic, especially if the President’s political opponents control both chambers of Congress. Congress has ample opportunity to curb the administration’s desire to spend their constituents’ tax dollars on assisting Russia. The departments and agencies submit their budget estimates to the Office of Management and Budget (OMB) in the spring. The OMB then reviews the estimate for the rest of the year before the President formally submits his/her budget request to Congress in January. Between the end of January and the end of September the budget legislative and appropriations committees work together to reconcile competing interests until the final budget resolution is passed in September, before the new financial year begins on 1 October (McKay, 2001:30). These intervening nine month periods provide ample opportunity for Congress to reduce the foreign assistance allocation or earmark expenditure to redirect resources to other parts of the FSU, or to place behavioural caveats on assistance to Russia. Once the budget appropriation has been agreed resources are allocated by the administration to the relevant departments and agencies. USAID has taken the lead role in bilateral assistance to Russia, having responsibility for 75 percent of FSA funding. The agency has large impressive offices in both Washington DC and Moscow2 from which it enters into contracts with mainly US companies to deliver specific programmes to assist Russia. USAID seeks to work in four key areas: elections and party political development, the rule of law and human rights, civil society, and good governance. They send outlines to organizations and agencies requesting a proposal, or set of proposals, which then reply setting out how they would meet those outlines. After discussions, which may involve significant rewritings of the documents, a final agreement is reached about what the document should contain - a work plan describing what they are going to do over a specific period of time. The agreements tend to be short to medium term, over three or four

2

The Moscow Office opened in Moscow in 1995.

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years, paid annually, and with the organization or agency reporting back to USAID on progress and results. USAID seek to achieve their four core objectives using the services of both non-profit and for-profit organizations, specialising in one or more areas of promoting democracy and the rule of law. The National Democratic Institute for International Affairs (NDI) and the International Republican Institute (IRI) receive funding for elections and political party development assistance. The International Foundation for Election Systems (IFES), specialising in electoral reform, implementation and monitoring also receive USAID support. Other grantees include the American Bar Association (ABA), for rule of law programmes, and the American Centre for International Labour Solidarity (ACILS),3 for its work with Russia’s independent trade unions. USAID also awards grants available to several universities, research and policy institutes, and the Eurasia Foundation. The forprofit organizations regularly awarded contracts tend to come from Washington DC, having developed specialisms during the 1990s. Companies such as ARD, Checchi, and Management Systems International have developed close working relationships with USAID over the years and benefited accordingly. The other government agencies involved in promoting democracy have far fewer financial resources available and tend to concentrate in their own areas of expertise. The Justice Department and the Pentagon concentrate on legal reform and civil-military relations respectively. The USIA, until its incorporation within the State Department, supported the propaganda effort in undermining communist regimes and encouraging democratic transition through Radio Free Europe/Radio Liberty. USIA were also responsible for funding NED under a line in the federal grants programme until incorporated within the State Department, which now has that responsibility. The State Department’s role tends to be one of orchestrating overall democracy promotion, rather than actually delivering assistance, through the Bureau of Democracy, Human Rights and Labour. The Bureau does deal with a small number of assistance programmes that it has acquired for bureaucratic or legislative reasons. The embassy in Moscow has also offered some small grants to Russian NGOs since 1998. Notwithstanding these programmes State’s main role is an attempt at inter-agency coordination. The main coordination role in Russia was provided by the Office of the Coordinator of Assistance to the Newly Independent States. The Coordinator’s Office, led by the Ambassador-at-large and Special Advisor to the Secretary of State, exercises ‘oversight and helps set priorities’ but allows USAID to be responsible for the provision of democracy assistance (Carothers, 1999:52). The successive Coordinators Talbott, Collins, and Sestanovich were each actively involved in encouraging democracy assistance, but for the most part agencies were left to their own devices in carrying out programmes designated by USAID. The State Department also had a coordinating role through their embassy in Moscow,

3

ACILS was formerly the Free Trade Union Institute.

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under Ambassadors Pickering and Collins. In theory the US Ambassador oversaw all USAID activity in Russia. The other two main actors in democracy promotion in Russia were the quasigovernmental agencies NED and the Eurasian Foundation. NED, as previously mentioned fully funded by the Department of State and USIA, divides its assistance effort between its own discretional grants and four institutes affiliated to it. The institutes are NDI, IRI, ACILS (formerly the Free Trade Union Institute) and the Centre for International Private Enterprise (CIPE). NED suggests programmes for the four core grantees, also based in Washington, to carry out and agree together a strategy for programmes to be implemented. Direct discretionary grants are also made to support independent newspapers, human rights and legal aid organizations and a variety of NGOs. The Endowment also responds to proposals from various organizations to promote some aspect of democracy or markets. The proposals are examined by the Board of Directors and a decision made. NED has considerable autonomy with no presidential appointments on the Board, although former members of government have occupied positions there. They are required to submit accounts and report to Congress each year. The Eurasia Foundation is another Washington based organization designed to promote democracy and markets throughout the FSU, excluding the Baltic States. The Foundation was incorporated in 1992 and receives funding from USAID. In addition they raise funds from non-governmental sources in public-private partnership agreements. Unlike NED they established offices in Russia, which were headed by American nationals during the Clinton years. The Foundation makes small grants available direct to American and Russian companies to assist NGOs and encourage an independent media. The grants are the result of requests from Russian or US companies or as a product of competitions organised by the Foundation to meet specific objectives. They are required to account for the efficacy of their programmes and expenditure to USAID. Thomas Carothers, who served as a consultant on democracy promotion programmes for NDI and IFES in the early 1990s and who now heads the Democracy Project at the Carnegie Endowment for International Peace, considered that US democracy assistance had been run according to a democracy template. He argues convincingly that, during the 1990s, there were shared assumptions among US democracy assistance practitioners that there was a natural sequence for democratization. An opening occurs among political elites for elections, paving the way for further moves towards democracy. This results in a transition towards democracy and ends with consolidation of democratic institutions and processes. Assistance practitioners set great store by free and fair elections between a few major democratic parties with no one party dominant. The State institutions are to be governed by a written constitution, based on consent and with a separation of powers. Civil society itself is to be diverse with NGOs holding government to account. The success of each of the three criteria for assistance is determined by how each of the institutions corresponds to the template. All institutions are analysed by the practitioners to see how far they diverge from the ideal. There is

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an assumption that the US system is ideal and that institutional modelling is the most effective directional emphasis (Carothers, 1999:86-90). The objective of US democracy promoters was to try as much as possible to encourage Russian institutions to resemble their American counterparts.

Table 5.3

The Democracy/Polyarchy Template

Sector

Sector goal

Dahl’s Model for democracy

Electoral Processes

Free and fair elections Strong national political parties

Free and fair elections Right to vote Right of political leaders to compete for support Freedom to form and join organizations Eligibility for public office

State Institutions

Democratic constitution Independent, effective judiciary and other law-oriented institutions Competent, representative legislature Responsive local government Pro-democratic military

Institutions for making government policies depend on votes and other expressions of preferences

Civil Society

Active advocacy NGOs Politically educated citizenry Strong independent media Strong independent unions

Freedom to form and join organizations Freedom of expression Alternative sources of information

Source: Adapted from Thomas Carothers, (1999), Aiding democracy Abroad, (Washington DC: CEIP), p. 88 and Robert Dahl, (1971), Polyarchy, Participation and Opposition, (New Haven: Yale University Press), p. 3.

The other area of general agreement between the assistance providers was their definition of democracy. While the administration may have been content to define democracy as multiparty elections, assistance practitioners preferred to use Robert Dahl’s polyarchy model of democracy (S. Smith, 2000:72; Robinson, 2000:310). This model of democracy has eight defining characteristics, which tend to be accepted by US democracy promoters in general. Democratic (or polyarchal) institutions guarantee: the freedom to form and join organizations, freedom of expression, the right to vote and eligibility for public office. The rights of political leaders to compete for support and votes are also guaranteed. Alternative sources of information must be readily available, free and fair elections held, and

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institutions for making government policies depend upon votes and other expressions of preference (Dahl, 1971:3). Unlike the assistance practitioners, Dahl made no claims about the inevitability of transition to a polyarchal or democratic society. Indeed, he argued that ‘it would be absurd to suppose that some sort of historical law of development imposes on societies an inevitable transition away from political hegemony to public contestation’ (Dahl, 1971:48). In the next section we consider how, armed with such democratic/polyarchal assumptions, the assistance practitioners responded to the task of implementing administration policy.

US Democracy Assistance Programmes USAID The supposed willingness of the Yeltsin government to countenance reform in Russia provided the State Department and USAID with what they considered to be a window of opportunity. That window could just as quickly close and the country revert to communism if reforms did not fundamentally change Russian society. USAID initially worked under an administration imperative to distribute assistance as soon as possible. As a result, according to the General Accounting Office (GAO), USAID were keener to distribute funds than they were to determine the effectiveness of the activities recipients participated in. There was an assumption that there would be no need for protracted assistance and that USAID’s role would end by 1998. Assistance was front-loaded with most resources available in 19931994 as a result of Clinton’s pledges in Vancouver and Tokyo. The projects to be supported were to be regional but managed from Washington with only a few USAID officials based in Moscow (Kura, 2001:118-19). Technical assistance would be provided by US contractors, mainly universities and private organizations, and people exchanges arranged to familiarise students, business persons, parliamentarians and lawyers with US institutions and the democratic capitalist lifestyle (Kura, 2001:119; Johnson and McCool, 2000). The main priorities of USAID policy in Russia did change, however, over time. Initially from 1990-92 the emphasis was on humanitarian assistance, and then from 1992-95 the policy concentrated overwhelmingly on market reform and privatization in particular. From 1995-97 the emphasis altered in favour of political party development, before changing again from 1997-2000 to developing civil society. In reality such divisions were arbitrary, the agency actually spent considerably more on market reform than promoting democracy, despite USAID Acting Administrator James Michel’s claim in his USAID Congressional presentation that:

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Fostering lasting democratic institutions and societies is so important to our national interests that sustaining democracy is the basic objective of all our programmes (USAID, 1993:6).

Sustaining democracy for USAID actually meant working closely with nefarious reformers such as Anatoly Chubais and his protégés, whom Assistant Administrator Thomas Dine4 described as the ‘Adam Smiths of Russian reform economics’ (Dine, 1995:29). The democracy envisaged was a society of ‘middleclass consumers’ where values such as ‘the rule of law, individual rights, free and fair trade, and democratic capitalism’ were upheld (Dine, 1995:27). USAID began democratic assistance to Russia in 1993 under the Democratic Pluralism Initiative (DPI). Under the initiative, the agency was to assist in the development of the rule of law, an independent media, fair electoral and political processes, civil society and enhanced public administration (USAID, 1994:80). DPI attracted just under $19 million for the year, out of a total USAID assistance package to Russia of $313 million. This was considerably less than the $113 million allocated to private sector initiatives (USAID, 1994:135). Under DPI an Exchanges and Training Project was launched to train current and future Russian leaders and professionals to support free enterprise and democratic governance. The exchanges involved internships and first hand experience with US practitioners, and training in democracy related areas for almost seventeen thousand Russians in 1994 at a cost of $11 million (USAID, 1994:85). USAID concentrated its democracy assistance efforts on elections and political parties, the rule of law and human rights, civil society and the trade unions, and good governance. NDI, IRI and IFES were relied upon as significant grantees to assist the Russians with conducting and monitoring free and fair elections and developing political parties. Between 1992 and 1997 NDI and IRI were awarded $17.4 million for such assistance (Wedel, 2001:100). A Citizens Participation Programme from 1992-2001 encouraged Russians to get involved in civil society and politics. The programme was delivered on USAID’s behalf by twelve grantees including NDI, IRI, IFES, FTUI, Internews, Russia/American Press and Information Centre (RAPIC), USIA and the Moscow School of Political Studies (USAID, 1997:275). The other initial programme adopted by USAID was on civilmilitary relations. Between 1992-1994 the Atlantic Council was awarded a $625,000 grant to encourage the integration of the Russian (and Ukrainian) military establishment into society, with greater accountability and supervision. The programme consisted of six seminars over a two-year period but produced negligible results and was not renewed (GAO, 1996:50). The coordinating role for USAID assistance to Russia was the responsibility of Mission Directors for Russia, James Norris (1993-1996) and Janet Ballantyne (1996-2000), and the Centre for Democracy and Governance. The Centre, based in 4

Thomas Dine Assistant Administrator, USAID Bureau for Europe and the NIS. Later became President of RFE/RL.

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USAID’s offices in Washington DC, was established in May 1994, with a role to help field missions to design and implement democracy strategies. The Centre also provides intellectual and technical leadership in democracy development and even manages some smaller projects itself (USAID, 1999:1). As resources became more limited, after the initial enthusiastic expenditure, USAID sought to focus on those other areas that could contribute directly to systemic change, or would support the reforms already underway with government, business and the NGOs.5 These were identified in the 1995 USAID Strategic framework as a strengthened rule of law and respect for human rights, a more genuine and competitive political process, the increased development of a politically active civil society, and more transparent and accountable government institutions (Shaiko, 1999:2). These crucial aspects of the Strategic Framework became known as ‘Building Democracy’ in 1996, and ‘Democratic Transition’ from 1997 onwards, for which $61 million was allocated in FY1996 (USAID, 1995:499). In accordance with USAID’s original brief, they began phasing out programmes with a view to them ending in 1998. There were significant reductions in 1997 to a budgeted $15.9 million, increasing to $69.8 million in 1998 as programmes were brought to a close. Exit strategies were developed to complete activities and prepare Russians to continue them with support from other donors (USAID, 1996:868). By 1997 USAID was responsible for just under half FREEDOM Support Act expenditure in Russia, the rest handled by other US agencies. A further reflection of this diminished role was the introduction that year of the ‘Partnership for Freedom’. This aimed to strengthen democratic institutions and practices by focussing on partnerships and exchanges, rather than more extensive programmes. The financial crisis of 1998 and the uncertainty of the political process in Russia caused USAID to review its policy of closure at the end of 1998. Instead of ending USAID commitment in Russia they retained continuity with the ‘Sustaining Partnership into the Next Century’ programme (1999). This programme sought to sustain US-Russian commitment to working together in areas of civil society, rule of law, tax reform, the financial sector, business development, energy, the environment and health (USAID, 1998). The final two years of the Clinton administration involved further USAID budgets for democratic transition of $20.9 million and $16.45 million, out of a total budget of $225 million and $295 million, in 1999 and 2000 respectively (USAID, 1998; 1999a). Elections and Political Party Development For USAID and the government, the primary indicator of democratic progress was the existence of free and fair elections between competing political parties. Russia had been used to regular elections, but not between rival political parties or 5

See US assistance and economic cooperation strategy for Russia, http://www.usaid.gov/ countries/re/rus.fin.txt 3 February 1995.

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individuals who were members of the CPSU. USAID had developed, through its grantees, a model of electoral assistance to apply in transitional countries. This consisted of five major categories: Helping design electoral systems (preferably based on the US model rather than proportional representation), providing and teaching good administration of elections, voter education, election observing and mediation (Carothers, 1999:125-28). USAID awarded grants to IFES, NDI and IRI to deliver electoral assistance. IFES was awarded a regional grant of $10.7 million in 1993 to work anywhere in the FSU with American and the host country’s approval. Over the course of the Yeltsin years, IFES provided advice and technical assistance to the Russians as a sort of information clearing house on elections, the rule of law, governance and civil society. The organization carried out pre-election technical assessments and managed election equipment and commodities procurement. IFES provided training programmes for poll working, voter and civic education programmes, and coordinated regional networking programmes of election officials, donors and NGO representatives. In addition to its training programmes IFES also supplied interested parties with election information from its Centre for Participatory Democracy resource unit. IFES worked closely with the Russian Central Election Commission (CEC) to develop election training and voter education programmes. They coordinated international observers in the December 1993 elections. They also helped address legal, institutional and procedural shortcomings in those elections. In November 1994 the Voting Rights Act was introduced in Russia following advice from IFES on legislation governing elections to the Duma, and for an independent electoral commission, voting rights, and to use parliamentary election procedures on law not presidential decree (GAO, 1996:4). IFES put on training courses, roundtable discussions, conferences, and designed a national voter education programme. They also established an electronic archive to create an institutional memory of elections in Russia to dissuade any recidivism seeking to return to a one-party state (GAO, 1996:27-9). With the end of the Yeltsin years and the relative success of Russian election procedures, IFES withdrew from Russia leaving its resources, and most of its staff, to an indigenous successor - the Institute for Election Systems Development. This Russian NGO also inherited the IFES Election Resource Centre.6 Electoral assistance in Russia was also supplied by IRI and to a lesser extent by NDI. IRI observed the 1993, 1995 and 1999 Duma elections, the 1996 and 2000 presidential elections, and the April 1993 referendum. Russia’s Parliament and Presidential Electoral Laws largely endorsed IRI’s conclusions and recommendations, following the 1995 Duma election. IRI and NDI trained election monitors and poll workers within their political party and civil society programmes. This overlap becomes more apparent when we consider USAID’s party political assistance to Russia. This had both an organizational and an 6

See the IESD website at http://www.democracy.ru.

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electoral focus. The organizational focus concentrated on planning, organizational development, developing local and regional party organizations, and developing the party message. The electoral focus was on voter participation and identification, campaign strategy, coalition building, grassroots outreach, and in women and youth programmes, to encourage them to both vote and participate in politics (Shaiko, 1999:19-20). In a country that had been dominated so long by the Communist party, USAID looked to NDI and IRI to work with the pro-reform parties in Russia to assist in the transition to a genuine multiparty democracy. USAID wanted to see the establishment and organizational development of viable and competing democratic parties at all levels of governance. Once established, political parties would be able to give expression to the electorate’s political preferences through electoral choice, and ensure democratic governance through the party system in government and in opposition (Shaiko, 1999:1). USAID specifically ruled out any party development assistance to communist, nationalist or socialist parties in Russia. USAID practitioners considered that a democratic party should be organised around political rather than ethnic, religious, or regional identities. The party should have democratic internal structures and have distinctive but not extreme policies (Carothers, 1999:142-3). In seeking to encourage and develop political parties, USAID has theoretically, over the years, developed clear guidelines to avoid partisanship. Aid practitioners have to adhere to domestic laws and regulations regarding assistance to political parties. Any training given should be generic, rather than advancing specific policies and party political programmes. Training programmes and activities should be inclusive and not privilege individual parties. Any party political programmes, other than election observation, should be concluded one month before an election, to avoid accusations of attempting to influence the outcome (Shaiko, 1999:1-2, 23). The goal of party development is to encourage a democratic polity rather than one particular party platform. There is no obligation on assistance practitioners to work with parties USAID deems to be undemocratic. In reality USAID have only been prepared to offer assistance to those parties that support liberal economics. USAID’s party political assistance programme began in 1992 under the title, ‘Strengthening Democratic Political Process’. NDI and IRI were the recipients of $17.4 million between 1992 and 1997 to help ‘reformist’ political parties strengthen their organization and their role in elections, parliament and local government. They were also tasked with supporting civic organizations to work with politic parties, promoting wide participation in political processes and monitoring elections. Although both organizations were involved in the same task, Nelson Ledsky, Director in charge of NDI’s democratic development programme in the FSU since 1992, informed me that they had reached an agreement with IRI early on ‘to do the same work in different places’.7 In 1993 both organizations 7

Interview with Nelson Ledsky, 8 February 2002, Washington DC.

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were involved in training party leaders in Moscow and activists, in over twenty cities and regions, in preparation for the April referendum and December elections. The training developed relationships with party officials that would be sustained over the years, of particular value because both organizations relied on requests for assistance from those parties to attract funding. IRI was involved in party training in nineteen cities, while NDI concentrated on training party organisers and managers in Moscow and the regions. In order to avoid duplication USAID asked the two organizations in 1994 to focus on six cities each, although IRI actually targeted nine (GAO, 1996:37-8). The two organizations rely on funding from USAID to allow them to plan long-term party development programmes. IRI tends to adopt a neoliberal fundamentalist approach seeking to work exclusively with anticommunist parties. During the Clinton years its programme leaders were exclusively American nationals. The main focus of IRI’s party political work initially was concerned with organising and providing grassroots training for parties, election workers and parliamentarians. They provided single-party seminars and workshops in order to build mutual confidence and trust with the political party concerned. Overall their aim has been to develop broad-based political parties, which are viable, able to govern, and have democratic internal structures (Shaiko, 1999:16, 35-6; Carothers, 1999:145). IRI trainers attempt to prepare the ground for systemic reform and to enhance the electoral competitiveness of participating political parties. They brought USstyle campaigning techniques to Russia and tried to adapt them to local conditions, with limited success. They trained Russians how to draft party by-laws and codes of conduct. Training was provided in building up local party organizations, developing leadership and widening membership. Trainees learnt how to use polling, surveys and focus groups to build their parties. IRI provided workshops and seminars on developing messages and political platforms to communicate with their own members, the media and voters. Perhaps the most important training, in order to secure electoral victories, was advice on how to mobilise resources and raise funds (Shaiko, 1999:37-8). IRI had also concentrated its resources on encouraging women to become active in politics. In 1994 they established a women’s network, which was formally registered as the ‘League of Women Voters of St Petersburg’. IRI established a Public Response Centre and published the League’s newsletter. A Women’s Political Leadership programme was established, offering training and assistance to female candidates before and after elections. Similarly, youth programmes were developed to encourage youth participation in the political process, and to develop strong youth sections in political parties in the regions. IRI constantly reviewed their programmes in Russia and in 1997, with encouragement from USAID; they shifted their emphasis from campaign training to grassroots organization building. A Local Party Leader’s Academy was created to present seminars for reformist political parties on how to strengthen their regional and

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local party infrastructure, develop communication skills, and establish political education programmes. NDI tends to be more internationalist than their Republican counterparts, working with the Christian Democrats and People’s Party International, the Liberal International, and the Socialist international. Funded by both USAID and NED it devoted about 40 percent of its resources to Russia at the outset of its involvement there. NDI were less convinced than IRI of the replicability of the American model for democracy in Russia, although they made party political development a key priority from the beginning (Ledsky and Clark, 1995:45-7). Ledsky conceded that with only a few people working on Russia they could do little more than ‘touch the surface’.8 As a consequence they concentrated their resources by only working with Yabloko, ‘Our Home Is Russia’, and Russia’s Democratic Choice (Carothers, 1999:145), even though they had worked with reformist ex-communist parties in Poland and Hungary. NDI, like IRI, sought to develop strong, viable, and broad-based democratic political parties. They emphasised coalition building and presented single and multi-party training seminars, workshops, roundtables, and conferences. They acted as consultants for individual parties, provided opportunities to study or go on training missions, and for international delegations to visit the US and Russia. NDI saw their role as helping to build national, regional and sub-regional networks of democratic parties. As the prospects of further funding receded, they increasingly sought to train local party activists to continue running programmes after NDI’s funding had expired. Party political development has not been particularly successful in Russia and increasingly both institutions began to move their resources into developing civil society, from the late 1990s. Developing Civil Society Where assistance to political parties in Russia had proven problematic, USAID’s attempts to assist in the development of civil society were more profitable. The idea of democratization from the bottom up had been dealt a deathblow by Yeltsin’s appropriation of Russia’s nascent democracy movement, but help developing civil society could have long-term benefits. Many of the new USAID bureaucracy had come from NGOs themselves and welcomed this focus for democracy assistance. In USAID thinking NGOs became Civil Society organizations, local people willing to campaign to improve specific aspects of Russian society. With relatively small budgets, NGOs could stimulate democratic debate about the direction Russia was heading. With Clinton’s man in the Kremlin, a democratic impetus could be maintained by local advocacy and lobbying government without giving succour to nationalists or communists. The Russian NGOs had clear aims and objectives, which appealed to the American NGOs which could relate to their shared concerns on issues like the 8

Interview with Nelson Ledsky at NDI Headquarters, Washington DC, 8 February 2002.

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environment, women, human rights, worker’s rights, race, ethnicity and religion. Carothers points to two forms of assistance for advocacy NGOs: Technical assistance and direct funding. Technical assistance in Russia, as elsewhere, consisted of training, advice and information about organizational development and management. NGOs were taught how to raise money, to lobby, and how to analyse issues and put across the message to the media. Young, enthusiastic Americans who were often experienced in civic activism in America provided the service. They taught them to frame and analyse policy issues, develop advocacy campaigns, write grant proposals, and to persuade government of the merits of their case. Secondly, direct funding was available on a smaller scale to provide equipment for NGOs (Carothers, 1999:213). USAID listed the development of indigenous NGOs as apart of the Democratic Pluralism Initiative. By 1998, USAID and its grantee organizations had established NGO support centres in 27 towns and cities, covering two thirds of the Russian Federation. These provided information and training support for civic advocacy. USAID provided grant support for hundreds of the more than sixty five thousand Russian NGOs that grew up in the 1990s. Under the Regional Initiative from 1997 USAID gave encouragement to US and Russian NGO grantees in the three most reformist regions - Novgorod, Samara and the Russian Far East, and in 2000, Tomsk (Kura, 2001:126). Grantees included IRI, NDI, IFES, ITAR, Save the Children Federation, ACILS, United Way International, Internews, National Press Institute and the Moscow School of Political Studies (USAID, 1998). One of the principal components in any US democracy assistance programme is support for an independent media. Throughout the Cold War, the ability of US propaganda from Radio Free Europe/Radio Liberty to undermine the Soviet system was appreciated by successive US administrations. In the post-Cold War era, the power of an anticommunist and pro-reform media could greatly assist in encouraging the emergence of democracy. USAID paid particular attention to working with US private organizations to try and develop a strong, independent Russian media. USAID provided Internews with a grant over three years (19931996) to assist in the establishment of self-sustaining television news networks to rival state-owned television. The project, which included six other FSU states, included over 60 training programmes in journalism, station management, advertising and commercial skills for over two thousand journalists and station personnel. Grants were made for video equipment and a network of over 110 independent radio stations organized in the region. Internews helped to coordinate a half-hour weekly news programme and acquired and distributed western and Russian documentary programmes free of charge to over 170 Russian television stations. The project enabled a number of stations to become viable, forestall bankruptcy, or merge with larger networks (GAO, 1996:4, 22-24). The Internews project, to develop independent media provided Russian partners with the opportunity to provide independent local news coverage, including the 1993, 1995 and 1996 elections, and to report critically on the first Chechen War. The funding, however, ended in 1996 with most activities coming

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to an end the following year. In 1995-1998 further grants were available under the Media Development Programme, which provided up to 20 media partnerships and a Sister Cities scheme, joining 13 regional newspapers from America and Russia. By the end of the three year period, USAID believed that 16 out of 20 of the media partnerships were self-sustainable (USAID, 1998). In order to develop civil society in Russia, USAID sought to influence more than just NGOs to lobby on specific concerns, or an independent media to hold government accountable. They also sought to influence those disaffected by economic reforms in Russia, namely the working and professional classes. Workers had suffered considerably during the reform process with non-payment of wages, late payment or payment in kind presenting real problems. Privatization had led to disguised unemployment, a barter economy and resentment against the whole reform process. Most Russian workers were represented by Soviet-era trade unions, which sought to resist the reforms that so harmed their members. USAID chose to implement its trade union strategy through the AFL-CIO’s international institute, the FTUI. The AFL-CIO was led by Lane Kirkland until 1995, a virulent anticommunist, and the organization reflected that hostility in its dealings with established trade unions in Russia. For reforms to be sustainable it was necessary for workers to not actively resist the imposition of neoliberal values in the workplace. The emergence of independent trade unions would lead to divisions within the Russian workforce and undermine the hegemony of established unions. Capitalists required a flexible and compliant workforce prepared to operate within defined parameters that would not weaken Russia’s drive to capitalism. In 1992, USAID awarded FTUI a $7.7 million five-year grant to increase the size and effectiveness of the independent trade unions. The proposal included education programmes, regional and national conferences, and raising public and governmental awareness about workers’ rights and trade union issues. The funding also provided direct support for the largest of the independent trade unions, including Sotsprof with over quarter of a million members. USAID funding enabled the FTUI to create the Russian-American Foundation for Trade Union Research and Education (RAFTURE) in 1993. RAFTURE sought to encourage the independent trade unions to organise, recruit members, undermine existing unions and undertake US-style free collective bargaining. They published literature and facilitated trips to meet Russian trade union leaders to introduce them to FTUI programmes. The FTUI trained Russian independent unions to deal with the media and increasingly became involved in legal programmes to protect workers’ rights. In 1994 the FTUI received $465,000 from USAID rule of law funds to cover operating costs at two Labour Law Centres in Moscow and Yekaterinberg. Under their grant, FTUI were able to make a subgrant to the Glasnost Defence Funds to produce twice-weekly radio broadcasts on workers’ rights and independent trade unions (GAO, 1996:4-5, 30-36).

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Rule of Law USAID was not just concerned about workers’ rights but were mainly interested in establishing a rule of law framework in Russia that would protect property rights and reinforce market reform. Rule of law programmes were intended to be an integral part of the market reform process by helping rewrite Soviet-era laws and procedures. US democracy promoters sought to rewrite laws, encourage judicial independence and trial by jury. The rule of law is a key component in democratic societies, providing an accepted framework to tackle crime and corruption. The equal and consistent application of laws, without fear or favour, provides an opportunity for civil liberties to develop, and holds government accountable to the law. In Russia rule of law programmes were slow to commence, and only developed after voucher privatization had further redistributed resources to the new rich. Carothers suggests that democracy promoters adopted a standard menu for rule of law assistance. The first item involved reforming institutions, including the judiciary, defence and prosecuting counsel, the police and prison service, dispute resolution, and the legislature itself. The second area consisted of rewriting criminal and civil laws and introducing new commercial laws. The legal profession must be upgraded to strengthen bar associations and legal education expanded. Finally, legal access and advocacy should be increased and public interest in law reform stimulated. NGOs should be supported if they pursue their social and economic goals via the law. NGOs that promote legal reform, journalists that cover legal matters and legal aid clinics are all considered worthy of USAID support (Carothers, 1999:168). Carothers’ standard menu was in evidence in Russia, although the amounts of expenditure involved were small. In 1992-1994, USAID made an inter-agency transfer to the State Department and a grant available to the American Bar Association (ABA) to support the limited reintroduction of jury trials and commercial law training. The grants were available under the Democratic Pluralism Initiative and included $200,000 for the US Embassy’s political office to hold seminars and provide the travel expenses for experts to design publicity on jury trials and a new constitution. The ABA received $950,000 regional grant to arrange training workshops in Washington and Moscow on judicial restructuring, constitutional reform, and advocacy for defence lawyers. The ABA also supplied equipment to legal institutions, arranged exchanges between US and Russian judges and developed a guide for use by judges in jury trials. The ABA received a further $750,000 from USAID in August 1994 to spend on strengthening and starting new lawyers’ associations and developing continuing legal education programmes over two years (GAO, 1996:45-49). The association was further rewarded with grants totalling several hundred thousand dollars to develop legal systems in the late 1990s. Other beneficiaries included CEFLI, the US Department of Justice, Chemonics, Ard/Checchi, and HIID, Institute for a Law Based Economy, the National Judicial College in Nevada, and the Sakharov

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Centre. USAID assistance for legal systems was $16.5 million between 1998 and 1999. The programme involved judicial reform, legal education and training and drafting commercial law. All Russian commercial court judges were provided with the new civil code and over 40 percent of them trained on substantive Russian commercial law topics (USAID, 1998, 1999). The largest rule-of-law grants were awarded to Ard/Checchi, which included a $12.3 million grant awarded in September 1993 (to 1996) to assess Russia’s legal needs and then develop an action plan. The work was further subcontracted to NGOs for voter education, trade union legal assistance and the development of civic organizations. Ard/Checchi took over a year to start work but once they had started seminars, faculty and workers at the Supreme Commercial Court received training. Training was also provided for the public, judges and jurors on jury trials, with computers and other equipment provided. In March 1995 Ard/Checchi expanded their training, following five grants from USAID totalling $475,000, to environmental law, community legal assistance, legal education, tax law reform, women’s rights and freedom of information. Good Governance For democracy assistance to be effective it was important that Russia had a written constitution ascribing to democratic values, an independent judiciary and media, military accountability to civilian leadership, free and fair elections, a civil society with trade unions and NGOs. An essential ingredient would be good governance at national and local level. USAID tended to concentrate on local and regional government initiatives through its grantees, with the Congressional Research Service playing the lead role in legislative assistance. Under the Strengthening Democratic Political Processes programme in FY1996 USAID supported the Congressional Research Service in working with the Duma to establish a research unit to equip legislators (USAID, 1996:495). US assistance to central government activities began phasing out in 1997 as USAID sought to make the most effective use of dwindling resources. NDI and IRI received grants to help strengthen the legislature. NDI were involved in the heart of the legislature, in the mid-1990s, carrying out governance work with political groups in Parliament to try and develop effective organizational structures. They convened regular roundtable meetings for parliamentarians to discuss pending legislation in the Duma (Ledsky and Clark, 1995:48). IRI sought to get NGOs more involved in the legislative process, and encouraged the reformists in the Duma to reach out to youth, civic and business groups to make the legislature more accountable and relevant. After the Duma elections, they were able to conduct parliamentary training for the newly elected deputies’ staff from Moscow and the districts.9

9

http://www.iri.org/countries.asp?id=6134613543.

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The good governance objective, however, had greater impact at local and regional rather than national level. USAID, through its grantees, tended to select ‘reform’ minded regions to model good practice, in the belief that other regions of Russia would be inspired to imitate them. NDI worked in Moscow, St Petersburg, Krasnador, Yaroslavl, Chelyabinsk, Saratov, Samara, Astrakhan, Kaliningrad, and Nizhny Novgorod. They organised town meetings seeking to promote citizen participation in local government.10 This strategy trained Russians in the favoured places in municipal financial management.11 Local government in Moscow, Nizhny Novgorod and Vladivostok was assisted with such programmes, provided with technical equipment and assistance, and exchanges to the United States were arranged for local government officials (USAID, 1996:495). By 1997 the regional focus had extended to Siberia, Southern and Central Russia and USAID changed its emphasis to equip Russian trainers to deliver subsequent training. The organization ended support for effective, democratic local governance in 1997, when it was subsumed into a community development initiative, including NGOs, local government and the private sector (USAID, 1998:273). The assistance effort did not end, but other quasi-governmental organizations and private foundations increasingly took up the burden of delivering that assistance.

National Endowment for Democracy In many ways the NED was a more natural conduit for US democracy assistance to Russia. The organization was established in 1983 specifically to encourage the development of democracy in areas where America had a strategic interest. Democratic institutions were to be encouraged through private sector initiatives and arranging exchanges between the US core groups, ACILS, CIPE, NDI and IRI, and democratic groups overseas. Training was to be provided to promote nongovernmental participation in the political process. Elections and democratic pluralism were to be fostered and all forms of democratic development, which served US interests, were to be encouraged.12 NED was already established and conducting programmes in Eastern Europe and the FSU before USAID became involved. The organization was small, with one person, being solely responsible for programmes in Eastern Europe and the NIS at the outset. Throughout the 1990s, NED’s Russia programme was handled exclusively by just two programme officers based in Washington DC. NED, from its inception, established a reputation for being a virulently anticommunist organization. This image softened over the Clinton years as the organization sought to compete with other organizations for funding, by highlighting NED’s distinctive contribution. In the organization’s two strategy 10 11 12

http://www.usaid.gov/democracy/techpubs/dialogue/96sp1.html. http://www.usaid.gov/countries/ru/rus-fin.txt. David Lowe, http://www.ned.org/about/nedhistory.html.

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documents, covering the two Clinton administrations, they sought to demonstrate that they were on the ‘cutting edge’ of democratic change. The Second Strategy Document stressed the need for them to exploit their non-governmental status, strengthen the coordination of their four ‘core groups’, and to develop an international forum for the dissemination of ideas and information about democracy promotion.13 As a quasi-governmental organization, working to promote US strategic interests through promoting democracy, NED had greater flexibility than USAID and other governmental bodies. The organization was, however, almost entirely dependent on the US government to provide funding. Funding, Independence and Accountability The idea of spending US taxpayers’ money on foreign assistance has never been popular in Congress, despite the urgings of foreign affairs specialists within both chambers. In 1993, the Senate Foreign Relations Committee, agreed with Clinton, and proposed awarding NED $50 million in the FY1994 appropriation. Senate eventually agreed to approve £35 million, while the House sought to delete the entire budget. By 1995, this sum had been reduced to $30 million, which remained constant throughout the Clinton presidency. At the beginning of the Clinton administration 70 percent of the funding went on the four core grantees with 30 percent available for administration and discretionary grants. Just under half of the core group funding went to the Free Trade Union Institute, part of AFL-CIO (Conry, 1993). Over the course of the 1990s the proportion of discretionary grants became equal, if administration costs are included (Centre for Democracy and Governance, 1999:46). The $30 million each year went to fund NED programmes throughout the world. As the most challenging and strategically important region, the FSU received between $4-5 million funding each year (Carothers, 1999:41). Although funding was supplied under a line item in the USIA budget appropriation, the organization nonetheless enjoyed considerable autonomy. NED could operate in Russia at a distance removed from US government, which would prove less threatening to Russian NGOs and other grassroots organizations. Being a relatively small operation provided greater flexibility to adjust to the changing political climate in Russia, whereas government programmes could prove unwieldy.14 The NED’s independence from government enables it to pursue an innovative and riskorientated grant strategy in a manner consistent with broad US national interests. While the endowment consults on an ongoing basis with the State Department and with US embassies abroad on programmatic matters, it is not an instrument of US foreign policy (USAID, 1996:2).

13 14

http://www.ned.org/publications/strategy1997.html. James Phillips, ‘Short sighted NED slayers’, Washington Times, 13 July 1993.

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The NED is governed by an independent Board of Directors, serving a maximum of three terms of three years. The Board has no presidential appointees and has complete programmatic oversight. Financial oversight remains with those providing the funds and for that the endowment submits annual reports to Congress to account for their expenditure. Prominent Board members serving in their own right have included Madeleine Albright, Richard Lugar and Zbigniew Brzezinski, reflecting a broad base of support for the organization. The make up of the Board has attempted to reflect the different aspects of democracy assistance represented by the four core grantees: Labour, private enterprise, and the two political parties. NED continued to work in its traditional areas of activity such as the trade unions, NGOs, business and the political parties, while also providing resources to promote the spread of democracy. These additional resources were funded from private sources and included the Journal of Democracy (1990), the International Forum for Democratic Studies and its Democracy Resource Centre (1994), and the World Movement for Democracy (1999). NED, with its limited funding, sought to maximise the effectiveness of its resources in Russia and to make a significant contribution to Russian reform. Grants The endowment awarded grants to the four core organizations, which worked on projects that fell within their sphere of competence. The two party institutions worked on political party and election programmes, the trade unions worked on labour issues, and the private enterprise group concentrated on programmes that supported the market. In addition discretionary grants were made available for other aspects of democracy promotion, including support for independent news media, civil and human rights organizations. NED’s Board of Directors responded to proposals submitted by organizations, which included a budget and a clear outline of how their programme would advance democracy in Russia. The majority of NED’s funding went to the four core grantees, the foremost of which was the Free Trade Union Institute, which established an office in Moscow in 1992. The organization, part of the AFL-CIO, sought to consolidate the independent trade union movement while seeking to undermine the rival official Federation of Independent Trade Unions. FTUI set up RAFTURE to provide resources to trade unions, which supported Yeltsin and market reforms. In the early years FTUI paid the salaries of some of the independent trade union staff and actively intervened to persuade trade unionists to support Yeltsin. A $250,000 grant from NED enabled FTUI to start a newspaper, which urged workers to support Yeltsin and not mount mass protests against reform. A further $660,000 was spent on four radio stations to promote the idea of a partnership between labour, business and government. FTUI developed trade union and labour education programmes and drew up a data base of activists and monitored the activities of members of the Federation of Independent Trade Unions (Bacon, 1998).

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Experienced American trade union activists and educators staffed the FTUI office in Moscow. The organization sought to help independent trade unions register, resolve local disputes, and take-up workers’ grievances, including illegal dismissals (Samogyi, 1995). Under the leadership of Irene Stevenson in Moscow, FTUI sought to become more inclusive. In 1995 the vehemently anticommunist Lane Kirkland was replaced as AFL-CIO president by John Sweeny. Sweeny encouraged the FTUI to pursue traditional trade unionism rather than seeking to undermine the official unions in Russia. The office provided assistance to all trade unions, including education and training, to campaign against the non-payment of wages and wage arrears by employers (Bacon, 1998). In 1997 this change of emphasis was recognised by changing the name of FTUI to the American Centre for International Labour Solidarity (ACILS). ACILS established a Solidarity Centre, which provided education, training, research, legal support, and organizational assistance. The Centre provided training in basic workers’ and human rights, advocacy, occupational health and safety, economic literacy, civic and voter education. In addition to NED funding the project was also supported by USAID, the State and Labour Departments, the AFL-CIO and International Labour Organization.15 This service was particularly necessary in Russia where in 1998 forty million workers were not paid, one in eight Russian were paid in kind and $10 billion was owed in wage arrears (Bacon, 1998). In addition to promoting workers’ rights as part of a democracy initiative NED also supported employers and the free enterprise system. Up to twenty percent of the funding for the core grantees was set aside for the Centre for International Private Enterprise. This distribution reflected NED’s, and indeed the Clinton administration’s, thinking that democracy and market economics were inseparable. The Centre’s objective was to promote privatization and market reforms organizing training, seminars and conferences to improve the business climate and, towards the end of the 1990s, to combat corruption. CIPE’s contribution to the promotion of democracy in Russia was negligible but nonetheless commanded significant resources, including grants amounting to over one million dollars during the Clinton era. The two core political institutional grantees, NDI and IRI possessed a more clearly defined role in democracy assistance. The organizations both received approximately $4 million each year, a significant amount of which was spent on Russia (Centre for Democracy and Governance, 1999). NDI and IRI, as we have seen, also received funding from USAID who wanted them to build democratic pro-market parties and to advance free and fair elections. NED funding complemented that supplied by USAID and financed different but complementary projects. NED provided grants for political party development, local governance programmes, and to provide training and advice for civic groups. Towards the end of the 1990s, IRI tended to concentrate more on working with Russian women’s groups, especially the League of Women Voters of St Petersburg. IRI sought to 15

http://www.solidaritycenter.org/about-us/.

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train female campaign workers to become activists, to oversee electoral processes and become candidates in all elections.16 Over the course of the decade NED weakened its financial commitment to its core grantees, which also received funding from other sources, to providing discretionary grants to fill the gaps that the other assistance organizations were unable to reach. As the decade drew to a close, NED funding to Russia halved to around $1.5 million each year as programmes were developed in other parts of the FSU, especially Ukraine.17 The proportion of discretionary grants to core grants increased from 30 to 50 percent. These grants were modest often amounting to tens of thousands of dollars but ‘a $40,000 grant can keep one organization in business, with a few full time staff people, for a year in Russia’.18 The grants were targeted at the more political organizations that government agencies tended to avoid rather than risk antagonising the Russian authorities. The limited resources available to NED meant that they had to be judicious in awarding funding. A senior member explained the organization’s thinking: You have to look at that spectrum of non-governmental organizations and take a look at which ones are making an impact - and it's always for us, the human rights organizations, the press freedom monitoring organizations. The ones that nobody in Russia will support with internal funding, and the ones that the government doesn’t like because they’re pointing out the flaws in the political system or exposing corruption, or something like that.19

Discretionary grants from NED went to support local human rights groups across Russia, including Kazan, Perm, Nizhny Tagil, Ekateringberg, Ryazan, Snezhinsk, Irkutsk, and Saratov. Grants were made available to the Moscow Helsinki Group and the Human Rights Foundation for Civil Society to help establish regional groups and human rights commissions in five regional cities.20 Further grants and encouragement were given to the Youth Centre for Human Rights and Legal Culture to develop an alternative human rights curriculum for secondary schools throughout Russia. The election victory of Vladimir Putin, and subsequent weakening of civil liberties in Russia, emphasised the importance of human rights organizations checking governmental abuse of basic liberties and rights. NED grantees such as the Glasnost Defence Foundation and the Information Centre of the Human Rights Movement published analyses of the erosion of press freedom and trained journalists to deal with external pressures. The grantees placed hundreds of human rights stories in popular newspapers,

16

http://www.ned.org/grants/99programs/nis-programs99.html. http://www.ned.org/grants/99programs/nis-programs99.html. 18 Interview with senior staff member, NED, Washington DC, 22 February 2002. 19 Interview with senior staff member, NED, 22 February 2002. 20 http://www.ned.org/publications/98annual/nis98.html and http://www.ned.org/grants/ nis-highlights.html. 17

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highlighting atrocities in Chechnya and the erosion of individual freedoms (NED, 2000). Small grants were also allocated to civic educators such as the Development Through Education Foundation in Togliatti and the Russian Association of Civic Educators. The grants funded seminars and conferences for local civic education teachers.21 The guiding principle for NED, in Washington DC, was that the majority of the limited funding they had available should be spent in Russia itself, rather than being involved in flying experts and advisors on fact finding missions. Small grants could make a real difference to local organizations in increasing awareness of civic and human rights issues. Very often it was only NED funding that kept grantees operating, and NED aimed to make a small but significant contribution to their ability to defend and promote civil liberties and human rights.

Eurasia Foundation The Eurasia Foundation was designed to complement NED’s democracy assistance work. The Foundation was incorporated in 1992 and started making direct grants in June 1993. The Eurasia Foundation’s remit was to actively promote democracy in the FSU. They were allocated between $5 and $10 million each year to support economic and governmental reform, the non-profit sector, and media and communications activities. In addition, the Foundation received funds from non-governmental sources giving them more flexibility and financial resources than the Endowment. The Eurasia Foundation, unlike NED, set up three offices in Moscow and Vladivostok and had significantly larger staff (two hundred) working on democracy assistance in the FSU. Throughout the Clinton era all the local directors involved with the Foundation in Russia were American nationals but 92 percent of the field staff were Russian. This distribution of human resources gave the Foundation considerable local knowledge and helped in being able to respond quickly to grant requests from both Russian and American institutions. The field offices were authorised to make local grants up to $50,000 without having to refer to Washington.22 The average grant was just $20,000, which was initiated and managed by the Foundation. The funding would be allocated directly to the Russian or US companies responsible for implementing the programmes without the need for an American intermediary (Carothers, 1999:271). Foundation funds were awarded to organizations either by them submitting an acceptable democracy initiative proposal or being successful in grant competitions. Competitions were held to support an independent press in North West Russia, Eastern Siberia and the Ukraine (1996), and in Southern Russia (1997). There were also competitions to support independent radio in Russia (1997), and media 21 22

http://www.ned.org/publications/98annual/nis98.html. http://www.eurasia.org/who.html.

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development in the Russian Far East (1998), to provide alternative conflict resolution initiatives in Southern Russia (1999), and to prevent corruption (2000), all key initiatives. The Foundation tended to focus on providing small grants quickly to develop an independent media and a strong not-for-profit sector able to influence civil society. In order to assist this process they developed online manuals in Russian offering advice on writing successful grant proposals and providing contact information for donors working on NGO development (Henderson, 2003:81). The Eurasia Foundation provided almost nine hundred grants worth over $14 million, during the Clinton era to Russia, 96 percent of which were under $50,000. Larger grants tended to go to media specialists including Duke University, which trained Russian journalism students, Mitacom Ltd who received $270,000 in 1999 for a Russian television series, and Internews who were awarded $151,000 in 2000. Internews helped establish independent television stations in Russian provincial cities. They created a network of independent stations and trained journalists to be effective and television companies how to run their operation as a business.23

Table 5.4

Eurasia Foundation: Democracy Assistance to Russia, 1993-2000

Year

Number of programmes

1993 1994 1995 1996 1997 1998 1999 2000 Total

12 70 154 134 148 194 127 45 884

Amount of funding in $ 786,000 1,687,312 2,709,663 2,076,854 2,335,873 3,910,888 2,767,931 1,043,329 14,608,785

Source: Eurasia Foundation programmes http://www.eurasia.org/who.html.

Other Sources of American Democracy Assistance Although most funding for US democracy assistance to Russia was supplied through USAID, NED and the Eurasia Foundation, other sources also made a contribution. The Defence and Justice Departments provided limited assistance in civil-military and rule of law programmes respectively. The United States Information Agency in addition to funding NED also provided funds to Radio Free 23

Editorial in the Washington Post, 8 June 1997.

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Europe/Radio Liberty to continue commentating on events in Russia and promote American values. The US Embassy in Moscow also had some direct involvement in supplying assistance to Russia. In 1994 the Democracy Commission Small Grants Programme was established at the US Embassy in Moscow to support local democratic initiatives. It took four years though before the Commission approved the first grants. Ambassadors’ Pickering and Collins chaired the Democracy Commission, which comprised members from the various US government agencies based in the embassy. The Commission was able to accept or reject applications, but final approval had to be obtained, after a technical review, in Washington DC. The only organizations eligible were Russian NGOs and Russian non-commercial organizations. The projects received up to $24,000 and had to be completed within one year. Grantees were paid 80 percent of their fee up front and the remaining 20 percent on satisfactory completion. The embassy sought to provide funding for NGOs proposing to tackle discrimination on the basis of gender, race, ethnicity, and disability. They would look favourably on proposals to develop an independent media, make government more transparent, and rule-of-law and legal reform programmes. The sorts of issues of concern to the embassy were those of concern to most western nations. NGOs’ proposals tackled conflict resolution, human rights, empowerment, civic education, volunteerism, HIV/AIDS, violence, corruption, prostitution, racism and xenophobia were more likely to attract funding. The total resources were not large but gave the embassy the opportunity to provide assistance in areas they had identified, which were not adequately provided for by other bodies. One of the more successful democracy assistance programmes involved citizen exchanges which relied on the private sector for developing exchange programmes. The State Department’s Bureau of Education and Cultural Affairs (BECA) created a programme designed to inculcate market democratic values among initially the business community. The programme was overseen by the Office of Citizen Exchanges and was originally called Business for Russia, before being relaunched in 1996 as Community Connections. Community Connections enabled 52 NGOs, in 51 cities and 32 states, to receive funding to bring business and professional people from Russia and the FSU for a two to five week exchange visit to America and experience for themselves US democracy and capitalism in practice. Over the Clinton years 9000 participants were brought to the US from Russia, Belarus, Ukraine, Armenia, Moldova, Georgia and Kazakhstan. Funding increased from $1 million to $14 million each year over the course of both administrations. Educators, entrepreneurs, government officials, NGO leaders and legal professionals were targeted with programmes of activities organised. Although, reflecting the administration’s prioritising of markets rather than democracy, 70 percent of the participants were entrepreneurs and business leaders. The programme benefited US cities and states and appealed to Congress because 100 percent of all Community Connections money was spent in the United States (Reveron, 2002).

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US democracy assistance to Russia was not left to just those organizations funded from the public monies. Many foundations and philanthropic bodies seized the opportunity in the hope of influencing Russia’s progress towards democracy and the rule of law. The most significant actors included the Ford Foundation, Freedom House, Henry M. Jackson Foundation, MacArthur Foundation, Mott Foundation, and the Open Society Institute. All these organizations acted in accordance with their own objectives but nonetheless complemented some of the FSA funded programmes. They worked with Russian organizations in the areas of civil society development, human rights, and other democracy assisting initiatives. This study concentrates on the FSA funded sector but further research on private sector initiatives in particular George Soros’s Open Society Institute involvement in assisting democratic development in Russia would prove valuable. Although USAID was the main channel of democracy assistance funding to Russia, many other organizations made contributions. The common characteristic of all publicly-funded organizations was that most of the money went to American organizations and personnel rather than to their Russian counterparts. The public are generally unwilling to make significant contributions to foreign assistance and Congress responds accordingly by favouring budgets that specifically benefit their constituents and donors by creating jobs and opening business opportunities. The programmes carried out for USAID, NED, Eurasia Foundation focussed on the same areas of elections, political party development, media, the rule of law, good governance, trade unions and NGOs. Indeed these organizations tended to subcontract the same US organizations to carry out their programmes such as NDI, IRI, the American Bar Association, Internews, and Ard/Checchi. The various programmes could have duplicated one another, but the reality was that the scarcity of resources to need meant that all organizations were able to carry out their role without too much overlap. Eurasia Foundation had been set up to complement NED but with just a few million dollars each year between them their contribution was useful for some NGOs, but hardly significant in changing civil society or the political environment. Specialist providers supported specific programmes such as rule of law (Department of Justice), civil-military relations (Pentagon), propaganda (USIA), citizen exchanges (BECA) and small grants to Russian organizations (US Embassy). Organizations competed with one another over limited funds, but once acquired they were able to deliver those programmes without stepping on the toes of other assistance providers. There is no evidence of any overall coordinated strategy for different providers to complement the contributions of other organizations, despite the existence of a Coordinator’s Office.

Chapter 6

An Analysis of Paralysis Implementation Framework Analysis In this chapter an implementation framework analysis is used to discover the extent to which bureaucracy had an impact on the delivery of the Russia policy. This section establishes the basic unit of analysis, dominant inference patterns and the sources of evidence used. The implementation framework is then used to examine organizational actors including the State Department, US Embassy, USAID, NED and the Eurasia Foundation to reveal how their organizational concepts influenced the way the Russia policy was implemented. The paradigm’s general propositions are then used to reveal the impact that organizational routines, culture, change, goals and objectives, competition, personnel, and accountability had on the policy. The penultimate section addresses the specific propositions that Congress, public opinion, Russia’s commitment to reform, and presidential involvement had a significant influence on the implementation process. Finally the chapter concludes with an assessment of the impact of the foreign policy process on the effective implementation and outcomes of that policy, and how this affected the long-term benefit of promoting democracy in Russia. Basic Unit of Analysis, Dominant Inference Patter, and Evidence The implementation paradigm posits that the basic unit of analysis is that government action is conducted as an organizational output. The administration adopted a democracy promotion strategy for Russia but the implementation of that policy was entrusted to individual departments and the organizations they chose to subcontract the work to. The administration retained ultimate control and responsibility for the programmes carried out in its name. The dominant inference is that the way the various departments and organizations carried out their remit was affected by their organizational character and patterns of behaviour. This is demonstrated throughout the chapter by the use of evidence from congressional records and reports, interviews with leading players, and qualitative and quantitative evaluation of democracy assistance efforts using government and nongovernmental sources.

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Organizing Concepts Organizational Actors. As we have seen, the implementation of the policy on democracy assistance to Russia involved myriad actors. In this analysis of their role we concentrate on the principal actors including the Department of State, USAID, the embassy in Moscow, and the quasi-governmental organizations NED and Eurasia Foundation. All organizations involved in the implementation of the policy are important, including those subcontracted by the main funding bodies to work in the field, such as NDI, IRI, FTUI, American Bar Association or Internews. This study examines the principal organizations and their relationship with each other, their subcontractors, and Congress. Organizational Control. The democracy assistance field in Russia involved several thousand Americans but was controlled by only a few dozen key figures in government and the assistance agencies. The size of the task was enormous and funds were insufficient to do little more than scratch the surface of any Russian transition to democracy. Organizations had their own internal hierarchy but these in turn were answerable to presidential appointees, who headed the departments, and ultimately to Congress and the President. The State Department's main role was to coordinate policy on Russia through the personal involvement of Deputy Secretary of State, Strobe Talbott and the Coordinator of US Assistance to Russia and the NIS. The Coordinator’s Office, led initially by Talbott, then James Collins, and Stephen Sestanovich, passed most assistance finance to USAID but retained oversight of these programmes and others initiated by other government departments. The Coordinator’s Office was also required to cooperate with the Binational Commission and other governments. The Coordinator’s remit was mainly with policy rather than aid, ensuring that the administration’s policy was on course, and rewarding progress towards the market and democracy whilst penalising recalcitrance (Carothers, 1999: 52). The State Department made a series of assumptions about reform in Russia that was also shared by USAID and most sections of the embassy in Moscow. The assumptions were that Russia was a wealthy country, rich in natural and human resources that had been misdeveloped. They assumed that if assistance were to be given it had to be delivered quickly, before the window of opportunity closed. Any such support should not be protracted and should follow on from, rather than precede reform. The Russians themselves had to want change and most projects should be regional and managed from Washington to maintain control and reduce the possibility of corruption (Kura, 2001:118-19). That control from Washington would remain a feature of not only USAID and the US Embassy, but also NED and the Eurasia Foundation. Separation of Responsibilities. We have already seen how many different organizations were involved in implementing policy. Although there was the potential to duplicate assistance efforts, the scale of the task minimised that risk.

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USAID, NED and Eurasia Foundation each took on aspects of developing civil society, training and developing political parties, NGOs, the media, and helping to establish electoral systems. In so doing they each enjoyed a degree of autonomy within the overarching framework of the policy, providing they could produce evidence of the efficacy of their programmes. The quasi-governmental bodies, as well as funding similar programmes to USAID, were also able to carve out different areas of responsibility. Even though NED’s organizational structure was both inflexible and unwieldy they were, nonetheless, able to assist organizations that USAID would not on the grounds that they were too political. Many of the NGOs had flat organizational structures and were inefficient because it was never clear who was directing the project (Mendelson, 2001b:23-4). USAID’s philosophy was that such organizations should become self-sustainable as soon as possible. A senior official at NED observed that this was not possible for those they deal with: Most of the organizations we fund are never going to be self-sufficient because no one in Russia will fund them because they’re exposing the very sort of criminal/business organizations that are providing funding … 1.

The Eurasia Foundation encouraged competitive tendering but favoured organizations continued to receive most funding. Umbrella contracts were favoured, especially during the first administration, to demonstrate to Congress and the administration that funds were obligated quickly (Johnson and McCool, 2000). Aid recipients agreed to carry out programmes in accordance with the designated Russia Policy strategy. In effect NGOs were being asked to carry out US foreign policy at one step, or even several steps removed from the government. The administration, by delegating, were able to disclaim responsibility for actions committed by NGOs critical of Russian government policy, especially on human rights and the environment, even when US assistance funded such organizations. The Russia team was content providing they were able to demonstrate to Congress and the electorate that their assistance produced quantifiable achievements. Organizations which were able to produce results that demonstrated the success of US administration policy were rewarded with additional resources. A further example of the separation of responsibilities can be seen in the US Embassy. The State Department’s representative in Russia was the US Embassy in Moscow, with Ambassador Pickering, and later Collins, being the eyes and ears of the administration. Ambassador Pickering was a career diplomat presiding over an institution that grew enormously in size during the 1990s. Wayne Merry, who had earlier served at the embassy in the early 1980s, recalled during our interview, that there were only 135 people in the embassy at that time. By 1994 there were over one thousand staff in the embassy, over one hundred official visitors each day, and thirty thousand Americans living in Moscow. Whereas before the embassy had 1

Interview with senior NED official, Washington DC, 22 February 2002.

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enjoyed an unique status reporting back to Washington they now had to compete with thousands of impressions. These came from business people, tourists, advisors, Congressmen and their staffs, government officials, other government’s advisors, students and academics all returning with impressions of Russia.2 The embassy had lost its unique status but still retained considerable influence on the direction of US policy in Russia. All the main government departments had sections within the embassy. The lead agencies concerned with Russian reforms were USAID, the Political Section, Economic Section and the US Treasury. The Economics Section was responsible for coordinating the Nunn-Lugar Commission activities and progress on the Russian economy. The Treasury representative was there to ensure that the Treasury’s directions were carried out in Russia. The Political Section role was more nuanced and was divided into three sections: The Political-Military, the External and Internal Sections. The Political-Military oversaw civil-military programmes, while the External Section was responsible for bilateral relations. The Internal Section, which although it managed a few programmes on legal reform, jury trials, and human rights, had a wider, unstructured, remit to discover what was really going on in Russia. This section would travel, meet ordinary people, talk to them and report back through embassy channels to Washington. The embassy sought to implement administration policy in Russia while reporting back on the success, or otherwise, of those policies. The official line was in favour of market reform, the Washington Consensus, and uncritical support of Yeltsin and the Chernomyrdin government; career bureaucrats knew this and usually acted accordingly. The Political Section, although only part of the stream of information going to Washington, nonetheless had a very important readership including Talbott, the State and Defence Departments, the intelligence community, and NSC staff. The Section regarded itself as best placed to know what was going on in Russia and were one of the few departments where the officials had any knowledge of Russia. The Embassy enabled dissenting opinions to be heard back in Washington by allowing a dissent channel, but such dissent could signal an early end to the dissenter’s career. Organizational Priorities. Those organizations promoting democracy assistance developed considerable expertize in the areas within which they operated. This expertise was based on narrow specialisation and the recruitment of personnel who would fit in with the existing patterns of behaviour and bureaucratic procedure. The organizational culture determined their approach to promoting democracy in Russia. Many US democracy assistance providers in Russia approached the task fresh from their experiences in Eastern Europe and South America. The National Endowment for Democracy was alone, among democracy promoters, in having prior dealings with Russia. USAID had recently acquired experience in Eastern Europe and the Eurasia Foundation was established specifically to deal with the 2

Interview with Wayne Merry, 5 February 2002.

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FSU. USAID, as we have seen, commanded most of the resources available for democracy assistance. They arrived in Russia with a predilection to market reform rather than democracy assistance. Despite the assurances of the administration that promoting democracy was a key objective during the first Clinton administration at times they allocated as little as 6 percent of their FSA budget to the task (Mendelson, 2001b:24). USAID had followed Washington Consensus formulas in promoting markets in South America and Eastern Europe. The apparent success in Poland encouraged them to adopt a similar approach with essentially the same actors in Russia. Democracy assistance was a secondary consideration because they believed that market reforms would lead inevitably to democratic thinking, which in turn would impact society. Those officers assigned to democracy assistance within the organization simply followed set procedures with a democracy assistance formula adapted by other democracy promoters. This democracy template emphasised US rather than other types of democracy. Legislatures were encouraged to become replicas of Congress, and NGOs were trained as if they were to impact American civil society. An independent media was encouraged to adopt US journalistic practices with vigorous investigative reporting, but little attention was paid to ownership of the media. Political parties were encouraged and trained to adopt US style campaigning techniques concentrating on media relations, polling and message development (Carothers, 1999: 97). While the Political Section housed those who knew Russia best, USAID arrived at the embassy with the least knowledge. Merry described USAID’s understanding of the country as: … totally, unmitigated ignorance of Russia because they had never been here before. But they brought with them programmatic habits and prejudices developed in the Third World, with very little understanding that the Second World were quite different.3

USAID had considerable experience in development but not in democracy assistance, and certainly not in Russia. According to former US officials interviewed by Johnson and McCool, USAID preferred to rely on personnel with experience of poor developing countries rather than take advantage of Russian expertise within the US government (Johnson and McCool, 2000:28). The favoured method of the assistance providers to encourage Russian political and civil society reform was to use the procedure of institutional modelling. The American model was established as the benchmark, and any deviation from this was an indication that a programme of reform was needed. The same areas of reform occurred as for Eastern Europe:

3

Interview with Wayne Merry, 5 February 2002.

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Judicial reform, parliamentary strengthening, civil society assistance, media work, political party development, civic education, and electoral programmes (Carothers, 1999: 18).

The work would be assigned to US intermediary organizations, which would further subcontract the work to either US or Russian organizations to fulfil their remit. At the end of the two or three year contract the project was briefly evaluated by a different US consulting firm, which reported back to the main funding agency. Aid bureaucracies, understandably, preferred to work with people and organizations that understood their objectives and procedures. Russians, who dressed well, spoke excellent English, and more importantly spoke ‘market’ and ‘democracy’, were preferred to other reformers who were less Americanised but may have had greater ability to influence Russian civil society. The bureaucracies required tangible, quantitative, results to report back to the administration, Congress or their funding agency to demonstrate the effectiveness of their programmes. Election observance, monitoring, and evaluation received considerable attention with the expectation that if the elections were deemed free and fair then the funding would have been justified. The success of media assistance was defined in terms of the number of independent, privately owned newspapers, television and radio studios that were assisted, even though many were owned by oligarchs with little or no interest in changing a system from which they had so spectacularly benefited. Similarly, the measure for success in working with NGOs was the number created over the period, with little regard as to whether or not they were able to influence civil society. The future health and wellbeing of aid bureaucracies was totally dependent upon satisfying funders of their effectiveness. Future promotion prospects or contracts depended more on demonstrating to Congress that programmes were successful than that were actually successful. The health and status of the organization thus became more important than the pursuit of the national interest through the effective implementation of the desired policy. Organizational Constraints. The ability of organizations to act as they pleased was constrained by accountability to departmental heads, government leaders and Congress. Public opinion, especially from diasporic communities and special interest groups and reflected in Congress, meant that organizations continually had to justify their programmes. Limited funding resources meant that organizations were determined to keep their share by acting within their remit, and providing quantitative evidence of success, to justify future funding. Throughout the Clinton presidency, USAID felt vulnerable to attack from Congress and that at any time their funding would be curtailed. Along with this uncertainty USAID procedures discouraged the provision of small direct grants. Instead the agency preferred to award umbrella grants to enable intermediaries to carry out a range of projects and to be seen to distribute assistance monies quickly.

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The projects, in the first instance, were more concerned to meet the agency’s needs rather than Russia’s. USAID Administrator Brian Atwood introduced private sector-style ‘performance management systems’ to demonstrate to Congress the efficacy of foreign assistance. Projects became known as ‘results packages’ and were required to set out clear objectives, with highly specific, quantitative, progress indicators. The necessity to fulfil the criteria actually made it more problematic for those working in the field. The constraints of ‘result packaging’ left little room for innovation or flexibility as aid practitioners discovered more about Russian needs or circumstances changed (Carothers, 1999:270). The quasi-governmental organizations, NED and the Eurasia Foundation, were far more secure in their role than USAID. NED had been involved in the Russian Federation from the beginning and had, since its inception in 1983, been exclusively involved in democracy promotion. Although the endowment experienced early antagonism from some members of Congress, who complained about taxpayers’ money going to special interests, over the course of the Clinton years that criticism abated. The endowment itself operated with minimal staff from offices in Washington DC. They were secure and confident in their limited role but aware of the potential for criticism and its ancillary, reduced funding. In order to maintain ultimate control of programmes, and to ensure that money was not misappropriated, NED and the Eurasia Foundation introduced invasive evaluation mechanisms. Organizational Outputs. USAID and the other organizations had set ways of conducting their activities. Assistance providers in all organizations were under constant pressure to distribute resources, oversee programmes, and report back on the use to which those distributed funds had been put. In such a pressured environment there was minimal scope for innovation and creativity in devising programmes, or long-term planning. Each of the organizations examined here fell back on standard operating procedures to deliver the assistance and programmes previously detailed. As Graham Allison demonstrated, these standard operating procedures sharply limit and constrain the behaviour of individuals within the organization (Allison, 1971: 78-9). NED’s and Eurasia Foundation direct grant programmes provided the organizations with a different perspective to government agencies. The bureaucratic structure, where programmes had to meet certain criteria, and be approved by the board of Directors, curtailed spontaneity. On the other hand, the small numbers of staff members involved in overseeing programmes meant that the organizations were well informed about the progress of these programmes. The standardization of procedures led to predictability and action rather than reflection and initiative, favouring those organizations which learned how to cooperate with standard operating procedures. Successful grant applications supported US organizations and Russian NGOs and were more dependent upon following

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USAID, embassy, NED or Eurasia Foundation procedures than their intrinsic merit or viability. Organizational Development. Over the course of the Clinton administration, democracy assistance organizations and departments did evolve in response to developing situations and levels of budgetary support. The Eurasia Foundation was founded specifically to deliver assistance to Russia and the NIS. Over eight years they distributed over $14 million with an average grant of just $20,000. The Foundation evolved by employing more and more Russian field officers until over ninety percent were Russian, providing considerable local knowledge. NED also evolved over the 1990s, although it continued to operate predominantly through its favoured four core grantees. There was a significant increase in the proportion of discretionary grants over the Clinton period with half of all grants being at the endowment’s discretion. The organization slowly changed its ethos from a vehemently anticommunist organization to one seeking to promote American values. Not content with organizational evolution the Clinton administration sought to radically overhaul the main assistance provider. Within the first year of USAID involvement in Russia, a six-month review of the organization was carried out under Deputy Secretary of State Wharton. A new administrator, Brian Atwood, was brought in to reform the agency and add a democracy assistance portfolio to the existing development work. The review was wide-ranging involving 35 officials from departments and agencies involved in programmes funded by the international affairs budget. Congress members and their staff, and outside foreign assistance groups were also involved in the discussions. The review complained that USAID’s fiscal and personnel resources were spread too thinly. There were too many layers of management between the Administrator and the field programmes. There was a lack of coordination in designing and implementing policy; and little understanding of the central direction, monitoring and compliance of agency-wide assistance policies. The task force identified nineteen organizational and administrative changes that would make the organization more efficient. As with all organizations this one had got into malaise due to the previous regime’s ‘lack of strong and consistent leadership’ (Wharton, 1993). Atwood conducted a top to bottom examination of USAID, in cooperation with Al Gore’s Reinventing Government initiative, to deliver assistance and satisfy Congress that the agency was effective. At Atwood’s confirmation hearing he acknowledged that: USAID is burdened by a surfeit of goals and objectives, encumbered by excessive red tape, and beaten down by poor morale … We have spent more time on paperwork than people work. USAID personnel have become more concerned with process than development.

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The first thought that should come into the mind of a USAID project officer should not be “have I filled the forms out right?”. It should be “what will this project achieve?”. (Atwood, 1993).

How effective Atwood’s reforms were can perhaps be judged by the G.W. Bush administration’s determination to again overhaul USAID as soon as they entered office. There was also dissatisfaction among USAID staff with the ineffectiveness of their predecessor’s attempts at reform.4 General Propositions Organizational Routines. USAID possessed routines including standard operating procedures, programmes and repertoires that had been used in Eastern Europe and South America. The Eastern European experience, and in particular the relative success of reform in Poland, encouraged USAID to adopt similar strategies in Russia without regard to local conditions. In order to receive funding, American organizations and their Russian associates had to satisfy standard conditions, apply in accordance with strict bureaucratic procedures, deliver programmes based on a narrow range of predetermined assistance options, and report back positively on the ‘success’ of their programme delivery. NED was also bound by its routines, which favoured its core grantees and tended to view Russia through a Cold War prism. It was not, for example, until halfway through Clinton’s second term of office that the endowment dealt with Russia’s established trade unions as representatives of workers rather than their oppressors. Organizational Culture. Christopher Brown is right when he argues that bureaucracies tend to see the world from the perspective of their own organizations (Brown, 1997:78). This was clearly true for all those involved in US democracy assistance. This parochialism extended to US practitioners equating democracy exclusively with its American variant. Carothers considers this preoccupation with an American model for democracy stems from either a ‘hubristic belief that America is the most democratic country in the world’ or ignorance about other democracies (Carothers, 1999:121). This tendency toward American exceptionalism leads to a lack of critical reflection and the belief that, because they wanted to help democratize Russia, the Russians should accept their efforts at face value. The belief that American democracy assistance practitioners knew better than their Russian counterparts affected how they interpreted information. This prejudice meant that they saw what they wanted to see in Russia and evidence that their programmes were either unsuccessful or ineffective was discounted. As Robert Jervis identified in his seminal text on international politics Perceptions and Misperceptions in International Politics: 4

Private conversation with senior USAID official, February 2002.

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Actors are more apt to err on the side of being too wedded to an established view and too quick to reject discrepant information than to make the opposite error of too quickly altering their theories. People often undergo premature cognitive closure (Jervis, 1976:187).

Cognitive closure certainly permeated the American Embassy in Moscow. The embassy was wedded to Washington Consensus and Democracy Template formulas for reforming Russia and dissenting voices were discouraged. The Embassy reported back what the administration wished to hear, keeping both sides content but ignoring the hardships the policies they promoted caused to most Russians. Wayne Merry described how the process of cognitive closure became institutionalised: In that process any dissenting voices tend to get reassigned elsewhere or downgraded. And what you begin to get then is a sort of process that takes place over the ensuing years, most prominently within the embassy, but also within the intelligence community, the CIA, within some degree the State Department, between the people who actually know anything about Russia and the people who are the advocates of the Washington Consensus.5

American democracy promoters, within and without the administration, supported the Clinton administration’s Russia Policy, even though bureaucratic constraints limited their ability to deliver effective long-term programmes. Within the US Embassy, the political section was the main advocate of an alternative approach to Russia. The embassy’s approach was uncritical support for Yeltsin and criticism was not appreciated (Jensen, 2000). The problems and disagreements within the embassy were well known in Moscow and Washington (Graham, 2000). The internal political section staff were marginalized because they opposed the consensus view. The section’s impact on democracy assistance was negligible and assistance providers depended on a well-balanced endorsement of the policy to secure their funding. USAID were even more effective than the embassy in closing down discussion on Russia policy. The working environment was pressured and filled with shortterm bureaucratic tasks that require immediate action. Officials had little time or incentive for reflection or considering alternative strategies. The agency had little time for academic input, considering that as aid practitioners they knew best how to assist democracy in Russia. Those officials involved in democracy assistance faced suspicion and opposition from more established sections of the agency. The Centre for Democracy and Governance was only established in 1993 and had to battle to win recognition and respect from other sections. Although one of USAID’s main objectives was to promote democracy, this area was afforded a lower priority, in terms of budget and status, than the more established sections.

5

Interview with Wayne Merry, 5 February 2002.

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Democracy assistance in the agency had a distinctive organizational culture, which emphasised its differences with traditional development assistance. There was a belief that democracy assistance had little, if anything, to learn from traditional development aid. When an indicator system was introduced to make programmes more controlled, accountable, and results-orientated, there was considerable disquiet among those working in democracy assistance. The reaction from those bodies receiving USAID funding was equally resentful, having to put their programmes through a mechanism that was time-consuming and expensive (Carothers, 1999:339, 296-7). Atwood at his confirmation hearing expressed hopes that his tenure at USAID would change this culture: I want the people of USAID to take risks in an effort to produce results; I want them to expect to be recognised and rewarded for the results they produce; and I want them to know that they will have a role in defining the way we will measure results (Atwood, 1993).

The organizational culture produced results that were almost the precise opposite of these laudable ambitions. USAID officers were unwilling to take risks and retreated behind standing operating procedures, which reduced the possibility of mistakes for which they would be held accountable. The fear of failure and necessity to produce quantifiable results reduced flexibility and encouraged officials to seek to micromanage ‘results packages’. If recognition and rewards were based on results then quantitative rather than qualitative assessments became more important. In order to be sure of achieving predictable results USAID officials favoured the same organizations they had previously worked with, who knew what was required and how to play the game. The projects could be evaluated by familiar consulting firms, which depended upon USAID for a substantial part of their income. US assistance providers had a clear idea of the direction they wished to steer Russia and as Tom Graham, Chief Political Analyst at the Moscow Embassy (1994-1997) argues: The view, one of intellectual arrogance both here and in Russia, was that if people didn't understand this, it was because of a certain amount of ignorance, not because they have legitimate concerns (Graham, 2000).

With such a mindset it was hard for assistance providers to consider alternative strategies to developing democracy in Russia. Members of different departments and organizations developed cohesive in-groups, often in the face of opposition or competition from other groups. These in-groups thought as a group and were consequently unable or unwilling to think outside the democracy template paradigm (Janis, 1972). USAID and the embassy with their rigid bureaucracy were more susceptible to groupthink than the quasi-governmental organizations, which

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were much smaller, confident and experienced in democracy promotion. As the larger assistance providers it was the governmental departments that exerted most influence on the course of democracy assistance in Russia. NED shared some similar characteristics with the democracy assistance officials at USAID. While the Democracy and Governance section sought to distance itself from a development perspective, the Endowment had never had such a perspective. This lack of experience led to difficulties in planning and examining their programmes in a wider context. There was little consideration for how American funding might affect the Russian recipients, especially if that funding created a dependency or America-centricity that prevented the organization gaining local support. The Endowment continued to operate in a transition paradigm that suggested that the same formulas could operate in any country to effect, or assist, a democratic transformation. The Endowment’s four core grantees operated in much the same way they had in other parts of the world. The two party institutions found pro-market political parties to work with and train in US-style political techniques. CIPE encouraged privatization and market reforms just as they had in Eastern Europe, and ACLIS, encouraged the pursuit of US-style labour practices and industrial relations. All four grantees designed their own programmes, in consultation with USAID and NED, and because they were actually delivering the programmes believed they had an unique understanding of the problems involved in assisting Russia. They considered that they were best equipped to deliver results; if left by the funding agency to get on with the job. Organizational Change. The bureaucratic structures of each organization affected the flexibility of their assistance programmes. Stavrakis’s study of USAID reveals an organization characterised by ‘bureaucratic pathologies’, a lack of vision, ineffectiveness, waste and ignorance. USAID reserved the right to give final approval to every project, regardless of the size of the contract, or whether or not approval had already been granted by their approved contractors (Stavrakis, 1996). The organizations subcontracted to do the work were either based in Washington DC, or had to report back to head offices based there. Not withstanding the delivery of programmes and relationships developed in Russia itself, all US based organizations owed their primary allegiance to their head office. They were dependent upon American public funding and so were restricted to designing, or applying to deliver, programmes which met the formulaic bureaucratic requirements of USAID, NED, Eurasia Foundation or other funding departments. The assistance organizations changed slowly and incrementally. In the case of USAID changes made little difference to the bureaucratic procedures of applying for, delivering and reporting back on funded programmes. Even the changes that were made were deeply resented. A senior agency official revealed to me that there had been considerable disquiet throughout USAID. Atwood’s reorganization created more problems than it solved and many of the bureaucratic changes, including the emphasis on democracy promotion, were resented. The official

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doubted the agency could survive in its present form as a direct result of Atwood’s tenure. In fact when I visited USAID in February 2002 the agency was in the midst of yet another major review and reorganization.6 Organizational Resources. In dealing with Russia, the assistance organizations lacked sufficient and adequate resources to implement the policy fully. Organizational staff were not given the time necessary to acquire the requisite experience, knowledge, skills, and authority to deliver the policy effectively. Carothers identifies general problems with USAID’s bureaucratic procedures with projects lasting an insufficient length of time to make a significant impact. He divides three-year programmes into three distinct phases, each lasting about one year. The first year consists of getting the project underway, in the second the project is functioning, and the final year is closing out the project and worrying about its sustainability (Carothers, 1999:264). An additional problem, in terms of owning the policy, stems from the reassignment of field mission personnel every three years. The reassignment lost valuable experience, local knowledge, and introduced new personnel who had to undergo the whole learning process again, only to be reassigned when they were most valuable to the Russia project. The time constraint, lack of local knowledge, and the pressure to dispense assistance quickly led to unwieldy procedures to ensure fiscal accountability. Aid agencies were tempted to fund projects by enthusiastic consultants and organizations, which put forward proposals that complied with bureaucratic procedures but lacked the necessary local knowledge and quality of personnel to carry out the tasks. Many Russian organizations made the right noises to attract funding for the development of their organizational infrastructure and status, rather than to impact Russian society. They concealed information and in some instances misled assistance agencies. The ability to know how to work the system was the key to further funding. Many Russian NGOs, organizations and institutions were more concerned about their own survival rather than identifying with an idealised US mission to reform their country. Organizational Goals and Objectives. American organizations were also concerned with their own survival. The main priority of USAID, NED, and the Eurasia Foundation was their own survival and status as principal democracy assistance organizations. The absorption of USIA into the State Department in 1999, and the constant threat from Congress over the existence of USAID, as a separate entity, focussed organizational thinking on securing their own future. The quasi-governmental organizations were also conscious of the need to demonstrate their unique contribution, to prevent their remit being usurped by USAID or the State Department. The key to survival and beyond to maintaining or increasing their share of the overall assistance budget, was satisfying the administration and Congress that they were able to deliver their programmes successfully, on time, 6

Private conversation with senior USAID official, February 2002.

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and within budget. The organizations wanted to promote democracy in Russia but their programmes were a means to secure and advance their organizational goals and objectives rather than Russian democracy itself. Organizational Competition. With so many organizations involved in the field how successfully did they cooperate with one another in order to deliver the Russia Policy? Kegley and Wittkopf suggest that: All bureaucratic organizations pursue their own purposes, promote their own power, enhance their own position in the government hierarchy, and strive to endure (Kegley and Wittkopf, 1996:482).

The democracy assistance field was no different. The limited availability of funds increased competition among organizations for funding. The size of the task meant that there was ample work for all practitioners and therefore duplication was not a particular problem. The competition for scarce resources, however, discouraged organizations from sharing their knowledge with one another, or undertaking and publishing, energetic reviews of their own performance (Carothers, 1999:9). It mattered to each organization who had the responsibility and gained the credit for each programme. Organizations were accountable to Boards of Directors, the administration and Congress, either directly or indirectly, and wanted to show that they could deliver better results than their competitors. As Carothers has observed, organizations ‘often work alongside one another, but only rarely in a genuinely cooperative fashion’ (Carothers, 1999:343). The competition and rivalry between democracy assistance providers also extends to ancillary assistance efforts. The Office of the Coordinator was responsible for coordinating the economic, political, social and military reform effort in Russia, but democracy and market promoters were wary of each other. The weighting of assistance heavily in favour of economic reforms made democracy promoters nervous about incorporating a democracy programme within a socio-economic agenda. They feared, with good reason, that if the distinctive identity of democracy assistance sections were lost, then their role would be subsumed into larger departments, which were sceptical about promoting democracy. Traditional rivalries between the White House and Congress, State and Defence, State and the Treasury, Justice, Agriculture and Commerce Departments were played out in Russia (Diamond, 1997:352). The 1996 GAO Report revealed how this affected the coordination of US assistance: We found that there were frequent, sometimes bitter, disputes among US agencies over how the programme should be structured and implemented and that other agencies and departments resisted, hindered, or overruled the State Department Coordinator, efforts (Johnson and McCool, 2000:21).

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Lee Hamilton, D-Ind, Ranking Member of the House Committee on International Relations, complained of ‘flawed projects, epic inter-agency battles, and poor coordination’ (Hamilton, 1995). These turf wars dissipated towards the end of the Clinton era, once the bureaucracies had ‘devised mechanisms for resolving differences of opinion about potential approaches’ (Johnson and McCool, 2000:22). In particular the relationship improved between USAID and the Coordinator’s Office at the State Department under Sestanovich’s tenure. The relationship between State and USAID had always been strained. The change of administration in 1993 led to the top-to-bottom review of the agency, and at the time all options concerning its future were considered. The options included reforming or revitalising the agency, abolition, incorporation within the State Department, or even dispersing its functions to other departments or agencies (Wharton, 1993). USAID suspected State of seeking to add the agency to its bureaucratic empire. The two organizations had different outlooks and USAID sought to distance itself from State Department oversight in order to work alone on democracy assistance programmes. The two organizations were mutually antagonistic, had their own subcultures and regarded each other with barely disguised contempt. State officials considered their counterparts in USAID as ineffective bureaucrats, while USAID viewed State bureaucrats as being out of touch careerists (Carothers, 2001; A. Cohen, 1995). The State Department also had problems of conflicting interests within the embassy. Don Jensen, Second Secretary in the Political Section at the Embassy, 1993-95, describes a very ‘atomised group of people’, some of who were nominally responsible to the Ambassador but many were answerable to their head offices in Washington. USAID were there to dispense financial assistance, the foreign political section conducted diplomacy between Moscow and Washington, and the Treasury representative made sure that the US Treasury view was reported and implemented. The political economic section ensured that the US government’s economic programme was explained, but it was left to the internal political section to report what was actually going on in Russia (Jensen, 2000). USAID and USIA had responsibility for democracy promotion within the embassy so the internal political section had few specific programmes to implement. This afforded the section with the opportunity to talk to all sections of Russian society. Those officials dealing with economics had a vastly different perspective from those dealing with politics. Thomas Graham, Chief Political Analyst, 1994-97, acknowledged that their approach was very different from other sections: We probably had a different balance, and ours was balanced towards those who were dissatisfied with the reform process, who saw themselves as outsiders, as people who had been stripped of a certain amount of prestige, power and authority (Graham, 2000).

That perspective was very much resented by other sections, which sought to report positively to Washington about the success of US policy. The political

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section became seen increasingly as trouble-makers reporting evidence that bore little relation to the reports of the Russia Policy advocates (Jensen, 2000). Wayne Merry recounted that other sections were envious of his section: We tended to be the ones that pointed out the failures and that’s never appreciated. Particularly by people who say - “yeah, well what are you going to do about it?” And the answer of course is - “we’re not going to do anything about it. We’re reporting it that’s our job”.7

People within the economics section expressed doubts about the missionary fervour with which Washington consensus formulas were pursued, but the political section were isolated voices calling for a change in policy to mitigate the excesses of shock therapy, privatization and market reforms. They presented Washington with a clear picture that reforms were inflicting hardship on the Russian people, led to corruption involving many of the administration’s friends, and fostered hostility and resentment towards America, and a diminution rather than an increase in the democratic impulse. Increasingly political analysts were obliged to use the dissent channel to cable reports and observations to Washington. Tremendous rows took place between the political, economic and treasury sections and eventually dissenting views were censured. Any cable that mentioned economics had to be agreed by the economics section, which felt that the political section encroached on their territory. The advice of the political section to coordinate economic, political and social policy went unheeded as each bureaucracy sought to protect its own sphere of influence and expertise (Graham, 2000; Jensen, 2000; Merry, 2000). Apart from its internal divisions the embassy also faced the usual problems with USAID experienced in other countries. They sought good relations with the Russian government and did not want democracy assistance to jeopardise that relationship. The embassy enjoyed rewarding reform-minded officials and ministers with study trips to the United States. They received kudos from Americans monitoring Russian elections, provided those observations did not undermine their relationship with the victors. USAID/Moscow, for example, was warned by the embassy to keep their distance from monitoring the 1996 Russian elections. ‘Unofficially, they were told of worries that fraud benefiting Yeltsin might be uncovered’ (Mendelson, 2001a:86). The protracted nature of USAID’s assistance delivery frustrated the embassy but during the second administration both sides worked together aware that Russian reform was going to be a long drawn out affair. USAID tended to be disdainful of other organizations’ and departments’ contribution to democracy assistance. The organizational culture, encouraged by receiving the majority of democracy funding, was to pursue their own programmes with little attempt to liaise or coordinate their efforts with others. NED had been 7

Interview with Wayne Merry, 5 February 2002.

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involved in democracy promotion for a number of years and yet USAID made no attempt to learn from their experience. This institutional arrogance meant that dialogue tended to be almost entirely one way. A senior official at the endowment recalled that apart from a few general meetings contact was almost non-existent. They would call USAID to find out what they were doing to discover that usually the programmes were completely different from NED’s: I would sort of call over there every now and then, but if it weren’t for that I’m not sure that they were particularly interested or didn't know how to coordinate.8

Organizational Personnel. The ambivalence of USAID to co-workers in the democracy promotion field may have some relation to differences and similarities in the background of members of the various organizations. Aid practitioners in this field are American and familiar with the US model of democracy. Some may have familial ties to Russia or the FSU, all will have an interest in assisting the democratic transition of Russia without having ever experienced such a transition themselves. Many USAID practitioners, especially with the arrival of the Clinton administration, came from NGO democracy assistance backgrounds like Brian Atwood. Once in the government sector, however, the organizational culture differentiated them from their counterparts in the non-governmental sector. In the government sector careerism tends to dominate the consciousness of individual officials. Don Jensen noted that ‘careers are made on making sure the policy works and promoted making sure the policy works’ (Jensen, 2000). Officials within the embassy or agency tend to be team players, acquiescent personalities, and are promoted on the basis of their ability to fit in and successfully achieve specified tasks/targets. Individualists, as Wayne Merry among others discovered, tend to be systematically selected out. Once on the career ladder officials tend to prefer incremental change, established rules and procedures, and become increasingly less willing to innovate the longer they remain in public service (Kegley and Wittkopf, 1996:531-2). Although many workers with NGOs go on to work for government agencies, the organizations have a different ethos. They tend to be idealistic with a missionary zeal to export democracy throughout the world. Members have a tendency to be young, enthusiastic, and believe fervently in the merits of American democracy. Field workers in Russia tended to be young, inexperienced and cheap. They were willing to work hard for very little financial reward in flat organizational structures. Workers generally had no experience of the local area and little understanding of local customs and historical legacies. Very often these enthusiasts would come from an American political activist background that was wholly inappropriate to the Russian experience (Mendelson and Glenn, 2002:3). Sarah Mendelson who had worked for NDI in Russia during some of this period lamented that: 8

Interview with senior NED official, 22 February 2002.

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The pay was abysmal and not one person in AID would go work for an NGO because the pay was so low. It’s just absurd. It’s staffed by young, earnest people who don’t have a lot of experience … they’re doing better, but by and large these organizations have very little money and as a result it’s hard to get really good people.9

Democracy assistance, unlike economic assistance where large profits can be made, tends to attract believers within government and the not-for-profit organizations. In some situations bureaucrats can try to impose their policy preferences by resisting clearance, or refusing to cooperate with decisions they disagree with, but not in Russia (Brewer, 1992:136). Democracy promoters may have lamented the paucity of funding but not the general direction of the policy they were asked to implement. The inexperience and lack of local knowledge referred to earlier, created problems for the successful implementation of policy. USAID, in particular, saw a brief period of opportunity to assist Russia and originally expected their task to be largely completed by 1997. The Russia Policy was eagerly embraced with attempts made to distribute assistance as widely and quickly as possible. This pressure led inevitably to a lack of thought about how sustainable programmes would be, especially after US funding ended. US democracy assistance operates in the interest of American foreign policy but is carried out almost exclusively by NGOs. The implementation framework questions whether this delegation to outside bodies has an effect on policy implementation. As we have seen, democracy assistance funding mostly goes to American intermediaries, which have long-standing relationships with the main aid providers. Key organizations such as IRI, NDI, AFL-CIO and the American Bar Association have powerful lobbies within Congress and receive regular funding from USAID and/or NED. All assistance providers are acutely aware that Congress ultimately authorises their funding, and support for such organizations are likely to be well received. American organizations that were relatively successful in Eastern Europe were well placed to be asked to do similar work in Russia. Janine Wedel in her extensive study of USAID’s assistance programme in Eastern Europe and Russia describes the largely Washington-based organizations involved as ‘Beltway Bandits’ (Wedel, 1998a:27). The organizations, all situated around the Washington beltway won most of the contracts for economic and democracy assistance in Russia. USAID, throughout the Clinton era, preferred to award contracts to US intermediaries to benefit US organizations, as a deliberate policy, and to retain control over the funds. These organizations then worked with Russian political parties, NGOs, central and local governments to train them in US-style democracy. NED and the Eurasian Foundation, although using US intermediaries also funded Russian NGOs directly. Russian recipients of direct assistance would invariably be pro-western, English speaking, familiar with aid procedures, and able to convince

9

Interview with Sarah Mendelson, CSIS, Washington DC, 19 February 2002.

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the funders that they could satisfy their objectives. Funds were distributed on the basis of personal connections built up over the years. Carothers describes the two groups of NGOs, which were supported directly or indirectly, as an inner and outer core. The inner core were several dozen Russian NGOs concentrated in (and on) Moscow. These focussed on human rights, civic education, women’s issues, the environment and media. They were funded almost entirely by donors and run by young westernisers fluent in ‘civil society-speak’. The outer core tended to be a larger heterogeneous grouping of small organizations involved in civic advocacy and education in the regions. They tended to concentrate on local rather than national issues, and relied on the privileged Moscow-based NGOs for their support (Carothers, 1999:215-16). Few of the 65,000 or so Russian NGOs, which emerged during the 1990s, were selfsupporting and viable. Many relied on direct funding from the west or the trickledown effect from those privileged to receive such funding. The US Government chose to delegate its assistance effort to favoured organizations, chosen on the basis of their likeness to the agency providing funding. In a volatile and unfamiliar environment where all parties believed that there was only a limited amount of time to make a significant difference in Russia, bureaucrats preferred to deal with people they felt comfortable with. It was easy and convenient to award contracts to reliable parties who could produce, or claim to produce, the desired results. Democracy assistance, with its relative lack of resources, became a game of claiming to exert an influence over the Russian democratic process that did not exist. Accountability. With any form of delegation there must also be accountability. In the case of US democracy assistance, accountability was necessary at several different levels. Ultimately, US foreign policy is a shared responsibility between President and Congress, in which ‘the president proposes and Congress disposes’. Delegation requires those to whom a task has been assigned to carry out their task as if the one delegating were conducting the task themselves. In considering the effectiveness of delegating democracy assistance to others it is necessary to consider who and what they were accountable to and for. As Congress held the purse strings it also helps in this analysis to know how effective they were in holding both organizations and the government to account. All agencies and organizations, entrusted with carrying out democracy assistance programmes with US government funding, did so on behalf of the Clinton administration. They were all accountable to the Ambassador in Moscow and the Coordinator of Assistance to the NIS. These two people in turn were accountable to the Secretary of State and ultimately the President. The State Department in the final analysis could ask USAID, USIA, NED or the Eurasia Foundation to end programmes they disapproved of, but tended to let these organizations get on with their activities. Democracy assistance was a major pillar of Clinton’s foreign policy and as such, government departments were content to leave organizations to their tasks providing they could report positive results.

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The Republican Congress after 1994 was sceptical about democracy assistance in Russia and more determined to hold organizations and government to account. They considered that if democracy assistance were to achieve anything, then it should help develop democratic capitalist organizations and structures within Russia. At the same time, American expertise and equipment should benefit from any assistance ostensibly designed to benefit Russia. Assistance, once authorised, should be dispensed quickly and the results should be quickly apparent. Democrats and Republicans were quick to complain when allocated funds were not distributed. House Majority Leader, Richard Gephardt, D-MO., and Minority Leader Robert Michel, R-Ill., complained in April 1994 that urgency was ‘conspicuously absent in our delivery of assistance to Russia’ (A. Cohen, 1995). The following year, Lee Hamilton, D-Ind., the Ranking Member of the House Committee on International Relations, also complained about the slow pace of expenditure of funds (Hamilton, 1995). Following such interventions USAID stepped up its distribution. Congress principally held USAID to account for its assistance efforts in Russia by holding investigations, examining aid officials, and through its control over the budget. Jesse Helms, Chair of the Senate Foreign Relations Committee, was a fierce critic of administration policy on Russia and foreign assistance in general. One mid-level State Department official hung a picture of Helms on his office wall to remind him ‘that that son of a bitch is always looking over my shoulder at everything I do’ (Corry, 1999). That sense of constant Congressional disquiet about foreign assistance kept USAID officials aware of their need to justify their expenditure. NED and the Eurasia Foundation were under less scrutiny because their structures distorted accountability, making it difficult to know at which level decisions were taken (Conry, 1993). Congress could, and did, wield the sanction of reducing the assistance budget. They were able to, and did, earmark expenditure, tying it to unrelated federal spending bills on Russian foreign policy behaviour in other areas (Hook, 1998). Congress was further able to threaten the closure of the Centre for Democracy and Governance at USAID and terminating NED funding in 1999 (Carothers, 1999:348). The administration was also held accountable to Congress for its policies. Investigations took place examining allegations of complicity in Russian corruption, the possible disappearance of IMF or USAID funds to Russia, and the effectiveness of US assistance. An increasingly partisan Congress criticised the Russia Policy and its perceived failings in order to attack the Clinton presidency and Gore’s candidacy in 2000. As a consequence of intense congressional scrutiny and inherent antipathy towards foreign assistance the aid agencies, organizations, and the government itself, developed strategies to obfuscate Congress. USAID used the external method to avoid media and congressional scrutiny and made strenuous efforts to justify their expenditure. The ‘managing by results’ initiative was designed to convince Congress that democracy assistance was worthwhile. USAID, NED and Eurasia Foundation, provided quantitative evidence to demonstrate how many

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NGOs had been assisted, how many programmes had been implemented, elections observed, Russians trained and the number of visits exchanged. Aid agencies attempted to provide scientific measurements of essentially qualitative achievements. Nelson Ledsky described NDI’s approach to assistance as ‘very much trial and error and thoughtful piece of work. It’s not susceptible to scientific analysis but we’re doing okay’.10 The same organizations presented a portfolio of unbridled success to Congress, public, and the media in order to maintain funding and overcome scrutiny and criticism. Companies that benefited from their largesse and were dependent on them for future work evaluated the organization’s programmes. It did not serve such companies’ interests to be overly critical of the programmes they were asked to comment upon. Success stories satisfied both Congress and the administration but raised false expectations about the impact of democracy assistance. An uninterrupted diet of good news stories impaired prospects for more considered judgement. The failure of 65,000 NGOs to significantly impact policy decisions during Yeltsin and Putin’s terms of office was simply ignored. Success propaganda also prevented a thorough consideration about how most effectively to assist a transition that was problematic and had led to further hardship for ordinary Russians. Providing positive achievements were emphasised and US assistance did not benefit the communists, then aid providers received less congressional criticism. The less congressional criticism, the more willing the administration were to allow the agencies and organizations to proceed as they thought best. The bureaucracy understood both what was required of them, and the priority government attached to the implementation of the policy. USAID, the Embassy and the State Department had a general indication of the Clinton administration’s commitment to Yeltsin and the principle of democracy promotion. They were also aware that the administration needed quantitative evidence to satisfy Congress that Russia was becoming more democratic as a result of US efforts. The GAO, however, reported that policy on democratic assistance was not clear: There is no central US. policy regarding US objectives and strategy for democratic development, no specific and common definition of what constitutes a democracy programme, and no specificity regarding the roles of foreign affairs and defence agencies in promoting democratic processes (Hook, 1998).

The administration sent out confused messages to the bureaucracies charged with overseeing the provisions of democracy assistance. Although ostensibly promoting democracy was one of three pillars of Clinton foreign policy, in reality it was far less significant and valued than other aspects of foreign policy. The aid bureaucracy understood this and set about providing the quantitative evidence needed to guarantee their funding and existence. The bureaucrat’s role was to produce evidence that the nebulous democracy promotion programme was 10

Interview with Nelson Ledsky, Washington DC, 8 February 2002.

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working successfully. They were required to neither challenge the efficacy of the policy nor suggest alternatives. They understood that the administration did not prioritise democracy assistance as evidenced by the distribution of overall assistance resources. Specific Propositions Congress and Public Opinion. The implementation framework posits that in order to hold the administration to account, Congress relies on a full and frank disclosure of relevant information pertaining to foreign policy decisions and implementation. When the president’s party do not run either houses of Congress, that disclosure is not forthcoming. The hostility of the Republican Congress to the Clinton administration and its willingness to use the Russia Policy to undermine both Clinton’s presidency and Gore’s candidature led to the administration using the tactic of circumvention to try to enable their policy objectives being met on Russia. The administration’s main priorities, however, were its domestic agenda and securing re-election. The issue of Russia could prove troublesome in the US elections if a Republican Congress successfully undermined the policy. The administration was more interested in satisfying Congress, public opinion, and the media that promoting democracy was effective in Russia, than actually achieving democratic gains on the ground. The bureaucracy understood this and delivered according to the administration’s real policy objectives, rather than its democratic rhetoric. The assistance agencies and organizations also attempted to deliver the official policy objectives but were hampered by lack of resources, contradictory signals from the administration, and their own bureaucratic structures and processes. Russian Reformers. The second specific proposition is that it made little difference if the administration were genuinely committed if their Russian counterparts were not. The Chubais clan, the Family, Chernomyrdin and Putin had few democratic credentials and were content to accept US funding for democratic initiatives providing the results did not undermine existing power structures, and did not interfere in the enrichment of the Russian elite or the conduct of the war in Chechnya. Russian NGOs and activists who were interested in building democracy and civil society were genuinely committed but were treated very much as junior partners by their American funders. The use of American intermediaries consumed large amounts of assistance budgets and aroused resentment from these Russian organizations The costs of providing salaries, accommodation and flights for advisors, technical experts, consultants and even volunteers, took tens of thousands of dollars out of budgets. It was not until the second administration that US organizations began a concerted policy of training Russians to do the same job as their US trainers. Tom Carothers complained, during the first administration, that American intermediaries were expensive and had other priorities other than embracing democracy in Russia:

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They often emphasise high-volatility activities that seemed designed less to meet the needs of the recipient countries than to play well in Washington, in particular to satisfy the unrealistic impact for taxpayer dollars spent abroad (Carothers, 1995).

Ariel Cohen lamented the ‘wasteful expenditure on contract field office infrastructure, poor recruitment of participants, and misdirected short term training in the United States’ (A. Cohen, 1995). US trainers failed to turn the political parties they worked with into well disciplined, election-winning machines along American lines. Russia’s Choice, Yabloko, the Union of Right Forces, and Our Home is Russia each failed to win a single election or significantly increase its percentage of the vote. Instead the Communist Party, Liberal Democrats, and later Unity, dominated the Russian Parliament, all without US funded assistance. The independent trade union movement remained a marginal force in Russian labour relations throughout the 1990s. On the whole, NGOs too, although numerous, made little impact on their local communities or national politics. A three-year long study conducted by Columbia University involving sixteen case studies in Eastern Europe and the FSU revealed that: While a non-governmental third sector now exists in these societies, often it is not driven by civic concerns. Local NGOs tend to focus on issues important to people outside their community rather than on the needs of those nearest them. The influence of local activists on their own elites and decision-makers ranges from negligible to nonexistent, and many refuse to cooperate with one another (Mendelson, 2001b:21).

The pro-American bias of those Russian NGOs awarded assistance, set them apart from many in society who saw their problems as being exacerbated by American advice and interference. The encouragement for NGOs to become professional activists, rather than enthusiastic volunteers, led to the development of bureaucratic styles that distanced organizations, like the women’s movement, from the rest of society. American assistance for the women’s movement tended to concentrate on those organizations with more in common with colleagues in the west than within their own communities (Mendelson and Glen, 2002:14, 23). Western training methods and materials encouraged recipients to write grant proposals rather than find alternative local sources of funding. This culture of dependency within Russian NGOs was further encouraged by the funding of resource centres, which equipped powerful local organizations but left other groups dependent on these for their funding (Richter, 2002:74-76). Presidential Involvement. How active and ongoing was the administration’s involvement? The administration’s commitment to Yeltsin and their rhetoric in favour of democracy promotion in Russia were unequivocal. This Russia Policy, headed by the president himself, was well known by all parties involved in democracy assistance and created a positive, albeit frustrating, environment for those working in the field. The administration’s involvement in policy

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implementation theoretically was considerable. The Coordinator’s Office designed the overall democracy assistance and economic strategy and was responsible for proper management, implementation, and oversight by US agencies. The Coordinator was required to submit and publish an annual report on US assistance to the FSU, including Russia (Kura, 2001:117). Coordination for the first few years though was poor and ineffective involving 23 departments and independent agencies (Johnson and McCool, 2000:19). The Coordinator’s Office, which directed Russia policy throughout the Clinton presidency, was the clearest indication of the administration’s active and ongoing involvement. The Office was an integral part of the State Department, which was the principal agency for promoting democracy abroad. The USAID administrator reported to the President, through the Secretary of State, and received policy guidance from the latter. The Deputy Secretary of State, Strobe Talbott, had a strong commitment to reform in Russia and enjoyed privileged access to the President through their long-standing friendship. Talbott visited Russia on many occasions and was called to give evidence before congressional committees in which he emphasised the importance of assisting Russia. Talbott encouraged the embassy in Moscow to keep him informed of all developments - positive or negative in Russia,11 although the Embassy’s bureaucratic structure led to staff, with some notable exceptions, reporting results the administration wanted to hear. The administration was involved and active in Russia at the highest levels through the Binational Commission meeting twice a year. Democracy assistance, however, was of less importance than security issues or economic reform. Carothers in his examination of the Clinton record on democracy promotion regretted that: Secretary of State Albright is the only top official in either the first or second administration who has demonstrated a searching, sustained interest in democracy promotion (Carothers, 2000a:5).

The rest of the administration, including the President himself, was more concerned with the appearance of promoting democracy than actually doing so. Aid agencies were given broad guidelines and then left to their own devices, subject to fulfilling their remit. The administration largely ignored those with actual experience of promoting democracy in Russia. Stephen Sestanovich organized a number of meetings among organizations and agencies involved in assisting Russia but those responsible for democracy assistance programmes such as NED were rarely consulted.12 The administration emphasised the importance of creating democratic institutions, human rights, free and fair elections, and civil society, but seldom talked with those working on such issues (Mendelson, 2000:8). 11

Evidence given by Strobe Talbott before the House Committee on International Relations recorded in (Gilman, 1999). 12 Interview with senior NED official, 22 February 2002.

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Even when the administration was in dialogue with aid providers, through the embassy, they were not necessarily supportive. Democracy promotion was desirable providing it did not impair Yeltsin’s ability to govern and deliver security and economic gains for America. The embassy even tried to discourage NDI from encouraging free and fair elections in 1996 as Sarah Mendelson recalled: But in various periods I found the embassy less supportive because they very much wanted Boris Yeltsin to win and they didn’t want to be in a situation of having supported organizations that help uncover fraud. That says to me - there’s a lopsided commitment to democracy.13

Democracy assistance fitted in with the administration’s appeal to American exceptionalism as a desirable aspiration but would not be allowed to undermine relations with either Russian president. The administration was content to grant aid providers a free hand, within budgetary constraints, unless they undermined support for Yeltsin. Clinton wanted to be seen to be supporting his friend Yeltsin and democracy assistance was one way of satisfying a lot of the Democratic Party’s natural constituency, amongst the assistance community, while at the same time demonstrating confidence in the Russian leader and his commitment to reform. Even though it was clear by the second administration that the policy had not achieved qualitative results, the identification of the president with the policy, and his determination to stick with the policy, meant that assistance providers continued to receive resources based on their ability to portray minimal impact programmes as democracy success stories.

Conclusion on Policy Implementation The Clinton administration’s policy objectives on Russia were elaborated in almost every foreign policy speech on Russia throughout their eight years in office. Democracy promotion was consistently lauded as a major pillar of US foreign policy and that democracy assistance for Russia was a top priority. This message was well known by the entire democracy promotion community, inside and outside government, all members of the administration, the media, public, and Congress. The message was also well known among the Russian nongovernmental sector and political parties. Despite the clarity of rhetoric there was a paucity of funding available to effect real change in Russia’s civil society and political system. The administration continued to favour economic assistance over democratic assistance in terms of resources and indeed saw the two as an indivisible whole. This linkage of markets and democracy dominated USAID thinking, with the assumption that the latter proceeds from the former. NED, 13

Interview with Sarah Mendelson, Washington DC, 19 February 2002.

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which provided a significant amount of its funding for private sector initiatives, was also influenced. Given the low levels of funding available, the democracy promoters faced an uphill task to translate policy objectives into policy outcomes. The foreign policy process itself undermined the ability of funders to significantly impact Russian civil society and political processes. Foreign assistance is never popular with the American public or their representatives and so the assistance community was put on the defensive from the outset. The future wellbeing of organizations and departments, which depended on public finances, to grow or simply survive meant that bureaucracies would operate in tried and trusted ways to fulfil their remit whilst safeguarding their own organization. USAID and other funding bodies would award funds to organizations that they felt comfortable with, that they had dealt with before, which spoke the same language, and could be relied upon to deliver a satisfactory result or at least a positive programme evaluation. They were not interested in taking risks that if they misfired would lead to problems for their organization with Congress, with all that that implied about future funding. Funds would be offered for safe and predictable projects that would look satisfactory on Capitol Hill even if they were not the most efficacious in Russia itself. In deciding upon Russian partners, then the avoidance of risk and the desirability of a sufficient rather than an optimal outcome was again the preferred option. Russians who spoke perfect English and made the right noises about democracy and civil society were favoured regardless of whether they represented any constituency. Often funders would request applications for specific democracy promotional objectives and the same organizations would apply and obtain funding regardless of their ability or expertise in being able to deliver the objective. Russian speakers were disadvantaged irrespective of the impact their proposals and work could have at the local level. The NGOs which emerged and grew with US funding became dependent upon that funding and learnt how to write grant proposals, rather than develop an infrastructure that could be supported by local people. In the process these organizations in many cases became increasingly westernised, having more in common with their American counterparts than with the people they claimed to represent. The American consultants, trainers, and assistance workers were largely inexperienced and unfamiliar with Russia. They attempted to teach political parties and civil activists western methods of dealing with specific Russian problems. Until reduced funding forced organizations to employ Russians to deliver training considerable amounts of the assistance budget went on salaries, flights and accommodation for American specialists. This reduced the amount of money available for actually promoting and delivering more schemes. When they were involved in the field, American assistance providers tended to be moved on to other countries once they had actually become useful and developed local knowledge. This difficulty was compounded by the short time span available for most programmes. The time frame was generally about three years, with the first year devoted to getting the programme up and running and learning about the task,

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the second year delivering the programme, and then the final year considering exit strategies. Such an environment creates much activity but little effective action. The need to preserve the status and budgets of funding departments and organizations also precluded initiative in deciding on programmes to be delivered. Assistance providers had a selection of safe, non-contentious, minimal risk programmes they could be reasonably confident would not be opposed by Congress. These included election monitoring and systems, political party development, rule-of-law, human rights, civil society, and good governance. Congress would not object, providing democracy promoters did not work with socialists, communists, nationalists, official trade unionists, or any other groups which would oppose privatization, and opening Russian markets and raw materials to American business. Rather than seeking to include and convince communists and others of the benefits of democracy, it was safer to deal with only sympathetic groups and seek to increase their chances of winning elections. In a pressured environment, assistance bureaucracies were constantly anxious about maintaining their own funding and their status in the assistance field. Rather than cooperating with other organizations these were seen as rivals and competitors for diminishing democracy assistance resources. In order to demonstrate to Congress and the administration how worthy they were of additional funding and responsibility, the organizations developed evaluation procedures that demonstrated the effectiveness of their programmes. The evaluations were often carried out by organizations that were dependent upon the organization being evaluated for future funding and so were unlikely to be too critical in their appraisal. The information presented to Congress and the administration was designed to provide them with the results they wished to hear. Quantitative evidence provided evidence of outputs but not of outcomes. The numbers of programmes delivered, people trained, publications written, numbers of people attending conferences and seminars were easy to quantify, but not so the qualitative outcomes that revealed the difference the programmes had made to individuals and organizations. The foreign policy process did undermine the effectiveness of the limited funding that was available for democracy assistance. It also had an adverse effect on the long-term benefit of democracy promotion in Russia. The administration not only sought short and medium-term security and market promotion gains, as indicated by my hypothesis, but also sought short and medium-term democracy gains through short-term programmes delivered by familiar beltway organizations to pro-American Russians. In pursuing democracy initiatives with more concern about the impact on Congress and US beneficiaries than on changing the political and civil sphere in Russia, short term expediency was at the expense of long-term democratic advancement.

Chapter 7

Demoting Democracy Lessons from Russia has attempted to analyse the foreign policy process that both formed and implemented President Clinton’s policy of democracy promotion in Russia. The preceding chapters have demonstrated that the pursuit of short and medium-term American security and market promotion gains was achieved at the expense of the long-term benefit of promoting democracy in Russia. The book has presented two new models to consider both the making of foreign policy decisions and their subsequent implementation. The Presidential Framework and the Implementation Framework models modify and develop the decision making models presented by Graham Allison in his seminal text on crisis decision making, The Essence of Decision. Rather than presenting three separate models to demonstrate three different perspectives on decision making I develop and modify Allison’s Classical (Rational Actor) model to present an actor centric Quasi Rational Actor model called the Presidential Framework. This new model emphasises that ultimately foreign policy decisions are decided by the president after consulting colleagues and interested parties. The extent of the president’s personal commitment to specific policies will determine the likelihood of that policy being adopted and then implemented. The Presidential Framework argues that long-term objectives are decided on the basis of optimal rationality, whereas short and medium-term decisions are taken on the basis of satisficing and bounded rationality. When short and medium-term decisions are taken which adversely affect long-term objectives such decisions are quasi rational and as such fail to meet long-term optimal outcomes. The president has a personal agenda that centres on the desire to win elections for him/herself and their party. The president is also interested in legacy building to ensure a place in history, which requires factoring in to any understanding of the foreign policy decision making process. The book contends that all US foreign policy is underpinned by American Exceptionalism. This is the notion that America has a unique mission, even divine destiny, to propagate the values of ‘freedom and democracy’ throughout the world. This exceptionalism predisposes the United States to assume a moral leadership role in all aspects of foreign policy. All American presidents are imbued with a sense of America’s historical destiny, and foreign policy decisions tend to be wrapped in a rhetoric that espouses essential American values, even if they lack the substance of those values. Once any foreign policy choice has been made it still has to be implemented. The Implementation Framework increases understanding of how the process of

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implementation affects policy delivery. An implementation paradigm demonstrates that argues that organizations are parochial, conformist, and concerned principally with their own survival or advancement. They prefer to recruit and deal with people and organizations in their own image. The standard operating procedures, programmes, and repertoires encourages predictability and standardization, but stultifies flexibility, reflection and initiative. Each organization has its own objectives and is careful to safeguard its own position, recruiting similarly-minded personnel and protecting their role in implementing foreign policy. Other organizations or departments are seen as potential rivals and competitors, as a result ‘turf’ is fiercely protected. Organizations that can be relied upon to enhance the status and reputation of the funding organization are preferred to potentially more effective bodies. The competition between different bodies can lead to duplication rather than complementarity. The book argues that organizations compete for scarce resources and are more concerned with their own well-being than in implementing policy. Instead of seeking effective policy implementation they prefer sufficient implementation to satisfy Congress, using analytical tools to emphasise success rather than real outcomes. Congress and public opinion have an influence on policy implementation in so far as organizations produce evidence to secure continued funding. To be effective in influencing policy, Congress and the public it represents relies on a full and frank disclosure of all relevant information but this is rarely available, especially when the president has a personal commitment to a particular policy. That full and frank disclosure is even less likely to be forthcoming if the president’s party does not control both chambers of Congress. The president will circumvent Congress if it is obstructive whenever possible. Organizations, for their part, will seek to provide the quantitative, if not the qualitative, results an involved president wants to hear. However, if the subjects of the foreign policy initiative, in this case the Russian reformers, are not committed to the same objectives as the foreign policy decisions, then the whole policy is doomed to failure. The Presidential Framework model has enabled us to demonstrate why the administration made the choices they did affecting democracy promotion. Governmental action is defined as one of choosing between competing options. The policy was seen by the administration as a-once-in-a-lifetime opportunity to influence Russia to become a peaceful, capitalist, liberal democracy cooperating with America in a US-led world. The framework reveals the importance of friendships, collegiality, and deference, set within a wider US foreign policy team that included the heads of department in State, Defence and the US Treasury. Personal relationships at all levels between members of the cabinet with each other and their Russian counterparts were vitally important. Clinton was the main actor in determining the Russia policy. His leadership style with its strong emphasis on personal relationships, particularly with Yeltsin, and the delegation of policy delivery to Gore, Talbott, and Summers, had an impact on the overall direction of policy.

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Foreign policy choices are revealed as attempts to achieve short, medium, and long-term goals. The optimal goals are long-term which envisaged the incorporation of Russia fully into the international system as an established liberal democracy and market economy. The United States would enjoy enhanced status as the only superpower and global hegemon and their values of capitalism and liberal democracy would be advanced. The framework demonstrates that short and medium-range goals actually undermined the achievement of long-term objectives. The shorter goals were designed first and foremost to support Yeltsin because of his power and role and also because of Clinton’s personal commitment to the Russian leader. The support for Yeltsin’s use of undemocratic means sent out a message to the Russians that maintaining power is more important than democratic niceties. The framework presents decision-making as a choice, and alternative strategies could have been attempted with potentially better results for democratic progress. Clinton could and should have applied pressure on Yeltsin to reach an accommodation with the CPD rather than escalating confrontation. The US government could have engaged the Russian parliament in the reform process and encouraged the development of civil society. Instead of pursuing economic reform at all costs they could have supported the development of civil infrastructure and assisted in the provision of adequate welfare resources to cushion the impact of shock therapy. In doing so they would have demonstrated a commitment to a genuine reform process rather than simply encouraging the transfer of power from communist to capitalist elite, with ordinary Russians paying the price in terms of reduced living standards and adequate social provision. Clinton’s commitment to assisting Russia was genuine but democracy promotion was only desirable not essential for America, unlike national security issues, that received more of the president’s attention. For the American president there simply was no alternative to backing Yeltsin and the reformers to achieve US objectives. The decision was based on genuine friendship and rapport between Clinton and Yeltsin, and a belief that they together could achieve things that others could not. These friendships extended to include Summers and Chubais, Gore and Chernomyrdin, Talbott and Mamedov. The relationship with Yeltsin was pursued because he held power in Russia and was able to deliver benefits for the Americans. He was considered better than any of the alternatives and members of the administration believed that he was a genuine democrat. More importantly was the belief, held by all members of the administration, that there is a causal connection between capitalism and democracy and that both components were part of an indivisible whole. Yeltsin was seen as symbolising the reform process - for the Clinton administration Yeltsin was reform. Clinton used America’s influence to pressure the IMF to provide loans at politically opportune times in an attempt to influence the outcome of the April 1993 referendum and the 1996 Russian elections. He was obliged increasingly to turn to the IFIs to pursue US policies after the Democrats lost control of Congress

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in the 1994 elections. He struggled to win consensus for his policies in both chambers, but the Russia policy became an issue in both the 1996 and 2000 elections, as Republicans sought to extract political capital about the failure to restore the Russian economy to the level under Gorbachev or make democratic advances. During both terms the president deferred to the Treasury in putting economic policies before democracy promotion because they had a clear idea about what they hoped to achieve in Russia. Decisions were not taken for solely economic reasons, however, and the insistence on privatization was based on political rather than economic criteria. Voucher privatization and loans-for-shares would transfer resources to the New Russians, who would subsequently seek to protect their gains by ascribing to the rule of law. The appropriation of large sections of the economy by former members of the nomenklatura, and their families, would prevent a return to a command economy and, over time, prevent a return to power by communists. The administration’s backing for the reformers gave them credibility in Russia based on their ability to attract western funding. If there was a problem about the ability to deliver new sources of funding and to protect old sources, then the credibility of Russian reformers suffered. The administration provided backing for the Russian president in all his dealings with parliament, producing a constitution to strengthen his powers, on Chechnya, and during the 1996 election. Alternative strategies, including Brzezinski’s suggestion to provide greater assistance to Ukraine instead, were partially considered and acted upon, but on the whole the administration was able to pursue the policy they wanted on Russia despite limited resources. During Clinton’s first term, the Russia policy was considered by them to be one of their better success stories. The administration was largely able to get their way on assistance to Russia by bypassing Congress whenever possible. The G7, IFIs, GCC, NED and the Eurasia Foundation were all outlets which the administration could use with less accountability to Congress than USAID. In America there was little interest in Russia, and because they no longer presented a potent military threat, the media and Congress did not pay the issue as much attention as they had during the Cold War. There was no strong diasporic Russian community in the United States bringing their historic homeland to the government’s or public’s attention. With limited outside involvement in the discussions over Russian policy the two key players in determining policy towards Russia were the president and Larry Summers, rather than Strobe Talbott. In controlling finances and insisting that Talbott stayed within his political remit, Summers, through force of personality, was able to determine the distribution of resources in favour of market rather than political reform. The presidential framework shows us that the policies on democracy assistance were deliberate choices made by Clinton with advice from the troika. The policy pursued over the first term put Russia before the rest of the FSU in the belief that it would serve as a role model for other post-communist countries. The decision to back Yeltsin was a suboptimal decision because Yeltsin inevitably was obliged to

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distance himself from the Americans to retain any credibility and to fend off opposition within Russia. The encouragement for Yeltsin to circumvent his own parliament to bring about economic reform taught Russians the lesson that economics were more important than democracy. The example of the Clinton administration circumventing their own Congress again undermined democratic principles of transparency and accountability. The support for Yeltsin in the war against Chechnya, despite the opposition of reformers such as Gaidar and Yavlinsky, and assisting the Russian leader in the presidential elections, that were neither free nor fair, demonstrated clearly that power was more important than democracy, and power did not have to be won but could be bought. Democracy would have been strengthened had Zyuganov won the 1996 election, and Russia followed the pattern of many other former communist countries in electing a reformed and renamed communist government. A communist victory would probably have been reversed at a subsequent election and represented a real chance to change the leadership that has been so far denied to the Russian people. The second term of office witnessed a downgrading of the Russia policy. The defeat of Zyuganov ended any realistic hope of communist revanchism and there was awareness that this too would be the last term of office for Yeltsin. Yeltsin became more erratic and unpredictable and it became clearer that the reform policy was not working. Political parties had not developed and democracy assistance had failed to capture the imagination of the American public. The Republicans were still reluctant to assist democracy promotion or economic reform in Russia, and the administration continued to circumvent Congress and cover up misdemeanours or policy failures such as Russian corruption and arms sales to Iran. The financial crisis demonstrated the failings of US and IFI advice on Russian economic reform, and it was not until the Russians defaulted on their international debt, devalued the rouble, and oil prices rose that the economy started to grow. During the second term, Clinton’s priorities changed to ones of legacy building, as suggested by the presidential framework, and securing the election of his vice president to succeed him. Clinton sought a strategic partnership with Russia and the expansion of NATO to three countries in Eastern Europe with agreement for further expansion. In order to protect this legacy, the administration were prepared to overlook evidence of corruption involving Chernomyrdin and the Yeltsin family, human rights abuses in the second Chechen War, and the loans-forshares privatization scandal. Republicans in Congress increasingly saw the Russia policy as an Achilles’ heel for the administration especially following Russian opposition to the US bombing of Kosovo and Serbia. The administration was even more determined to reveal the policy as a foreign policy success. The presidential framework allows us to demonstrate that NATO expansion was the main objective for the administration, because it represented a major national security gain, strengthened the US role in Europe, satisfied the Czech, Hungarian and Polish diasporas in America, and incorporated Russia within the G8 and the NATO-Russia Permanent Joint Council. The influence of Madeleine Albright and Stephen Sestanovich shifted the democracy assistance emphasis more

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towards civil society. The administration made great play of the emergence of tens of thousands of NGOs, even though many were totally dependent on the west for financial support and were not sustainable without such assistance. At the macro level it was always pragmatic short term gains for US national security interests that took precedence over the longer term aspiration to contribute to the development of a liberal democratic Russia. The administration adopted an unhelpful and antagonistic approach to dealing with Yevgeny Primakov, the only Russian prime minister to date to have opened the prospect for an inclusive and democratic polity. Primakov represented a threat to Yeltsin in that if he succeeded the Russian president he was unwilling to offer Yeltsin immunity from prosecution. Clinton and the administration resented Primakov’s Arabist credentials and his previous role in Soviet intelligence. He had two communists in government and was willing to enlist support from all Russia’s political parties. The administration decided not to engage with the prime minister as they had done with Chernomyrdin, and in not doing so missed an opportunity to encourage the emergence of democratic accountability in Russia. The framework reveals an administration more concerned with promoting stability than democracy in Russia. This extended to tacit approval of Yeltsin’s resignation and hand-over of power to Putin, giving him three months as the incumbent and commander-in-chief of a popular war against Chechnya. The administration muted criticism of human rights and electoral abuses, and later of the steady erosion of democratic gains made during Yeltsin's tenure, in order to protect Clinton’s legacy and secure Gore’s election. During the first administration they were concerned with the control and reduction of nuclear weapons and material, privatization, having elections that could be presented as free and fair, building relationships between the US and Russian administrations, cooperation, and keeping Yeltsin in power. The second administration tended to concentrate on protecting national security gains, expanding NATO, and tying Russia into the NATO-Russia Founding Act. Over the two terms, the Russia policy produced significant foreign policy gains for America. Nuclear weapons were removed from the three nuclear weapons states of the FSU and dismantled. Russia reduced its nuclear arsenal and conventional forces, removing the latter from Eastern Europe and the Baltic States. NATO expansion was able to go ahead in 1999, with the promise of further expansion to follow. Russia-NATO cooperation was formalised and Russian troops served as peacekeeping forces in the Balkans. Russia was involved in negotiating an end to the conflict in Kosovo. They ended the sale of rocket parts to India and downgraded relationships with their former allies which had been US adversaries. Russia’s rapid decline as a major power over this period also represented a significant advancement for US national security. Over the course of the decade, access to the Russian market opened up to the benefit of US business. From a pragmatic standpoint, Clinton’s Russia policy had significantly advanced US short and medium-term national security interests. The presidential framework suggests that this was not by chance but represented the outworking of a hierarchy

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of goals in which national security interests took precedence, followed by increased trade, concern for international political process, keeping Yeltsin in and the communists out, with democracy some way behind. US democracy promoters used a combination of Dahl’s polyarchy and a Democracy Template as the basis of their assistance effort in Russia. Although USAID was the main source for distributing FSA funding, NED and the Eurasia Foundation also played a significant role in the distribution of resources at onestep removed from the US government. USAID was more concerned with market rather than democratic reform until after the financial crisis in 1998. It concentrated its resources on elections, political party development, rule of law and human rights, civil society, and good governance, subcontracting its work to favoured organizations within the Washington Beltway. They were only prepared, however, to offer assistance to parties, trade unions and NGOs that support liberal economics and were committed to the reform process. There was a lack of overall coordination of strategy between organizations despite the existence of the Coordinator’s Office. This situation improved with the appointment of Stephen Sestanovich in the second administration, but with fewer resources the initiative had been lost. The American public are never enthusiastic about contributing to foreign assistance unless there is a specific benefit for the domestic economy. USAID and other democracy promoters were able to temper this reluctance by using democracy assistance funding to provide employment and opportunities to a burgeoning American assistance industry. NED and the Eurasia Foundation provided the administration with a means of providing more flexible assistance without the same degree of accountability and scrutiny USAID was subject to. This enabled support to be given to human rights and environmental organizations, which might be critical of the Russian government, without the US administration being held responsible and so damaging their relationship with their Russian counterparts. The implementation framework allows us to reveal the impact of bureaucratic and administrative practices on putting policy into practice. What emerges is a pattern where organizations’ willingness to carry out their remit is affected by organizational character and patterns of behaviour. Organizational expertise is based on a narrow specialisation which is intensified by recruitment practices which seek to replicate that specialisation. USAID and other democracy promoting bodies preferred to work with US and Russian organizations just like them. This favoured English speaking, westernised Russian reformers who spoke ‘market’ and ‘democracy’ rather than other reformers who might have been more effective in reaching their Russian constituency. The US organizations involved conducted their programmes in Russia, but owed their primary allegiance to their head office, usually in Washington DC. The main objective of departments and organizations was to ensure the health and status of their own organization. In a fierce competition for limited resources, organizations were more concerned with securing or increasing their share of those resources rather than effectively implementing the policy. With limited funding

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available, satisfying the funders became the crucial objective for all assistance providers. This meant that organizations were unwilling to take risks or demonstrate initiative, preferring to act within a narrowly defined remit. They were then able to organize evaluations from organizations, which relied on the organizations they evaluated to provide them with future contracts, to produce a positive assessment of the value of the programme. The success of programmes were presented as a quantitative analysis, which revealed the output of people trained, courses ran, and newsletters distributed, rather than the outcome which would show the effectiveness of those programmes. USAID and USIA were under constant threat from closure or incorporation into other departments by Congress throughout the Clinton era. Similarly, the quasi-governmental organizations also had to justify their programmes, and introduced invasive evaluation mechanisms to do so. In such an environment with fierce competition for resources, it is little wonder that organizations were unwilling to share their knowledge or reviews of their own performance. Indeed, USAID were quite disdainful of other organization’s contribution to democracy assistance in Russia. All the organizations were under constant pressure to distribute resources, oversee programmes and report back leaving minimal scope for longer term planning. The standard operating procedures ensured predictability and contracts were awarded on the basis of ability to comply with procedures rather than the merit of the application itself. This procedure self-selected favoured applicants, many of whom were ex-employees of USAID, who had mastered form filling. The organizational culture of the different organizations depended on whether they were in the public or not-for-profit sector. All organizations tended to share the administration’s belief in American exceptionalism, causing a lack of critical reflection and an assumption that American models of democracy could be transplanted into a Russian context. Such a mindset led to early cognitive closure and groupthink especially within the US Embassy and USAID. Typically, three year reform programmes would be introduced with FSA funding that were able to little more than scratch the surface of the democratic deficit in Russia. Initially programme deliverers lacked experience and as soon as they gained that experience, they were charged with winding up the programme before moving on to another job. The organizational personnel were overwhelmingly American and had no personal experience of transition. In the public sector, workers tended to be relatively secure and well paid careerists who had a shared organizational ethos and wanted to remain within the department. They tended to be acquiescent and unlikely to propose radical shifts in policy, because taking risks undermines the dependability and predictability of a department. On the other hand, individuals within the not-for-profit sector tend to be paid less, are more creative and individualistic idealists. Fieldworkers in Russia were often young, idealistic, and cheap. In choosing who to award grants and funds to, both sectors preferred to deal

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with organizations and individuals who represented the same values or at least claimed to do so. The constant partisan pressure from Congress seeking to reduce budgets or earmark expenditure away from Russia led to the development of strategies to obfuscate. The production of quantitative evidence and the constant stream of unsubstantiated successes secured funding but led to false expectations that were never realised. There was a general awareness amongst assistance providers that the president was personally committed to assisting Russia and they needed to produce evidence to support that commitment. The most successful assistance providers received resources based on their ability to present minimal impact programmes as democracy success stories. The programmes that would attract funding were safe ones concerned with elections, political parties, rule-of-law, human rights, civil society, and good governance rather than imaginative ones that would seek to involve the communists, nationalists and official trade unionists in the democratic process. The democracy promoters became more concerned about the impact of their programmes on Congress, and their US beneficiaries, than their effect on democracy in Russia. In doing so they sacrificed long-term democratic advancement for short-term expediency.

Major Findings About the Making and Implementation of US Foreign Policy This book has used the example of US democracy promotion in Russia as a case study to highlight tendencies in both the making and implementation of foreign policy that result in suboptimal outcomes. The presidential framework allows us to demonstrate that foreign policy decisions are made on the basis of choices between alternative courses of action. The choices are made on the basis of limited and incomplete information and will vary between long-term rational choices, designed to produce an optimal outcome for US interests, and short to mediumterm choices, based on achieving a satisfactory result and immediate national interest gains. The decision to take action based on achieving short and mediumterm gains can actually undermine the achievement of long-term optimal objectives as we have seen in this case study, where the prospect for liberal democracy in Russia has been replaced with the reality of ‘managed democracy’ or electoral autocracy, under Putin. The personal commitment of the president to a particular policy will have an impact on the administration’s attitude to his choice. The power of patronage is such that advisors are unlikely to criticise the president’s decision, and officials are less likely to produce contrary evidence to shape the policy, as was demonstrated when Talbott and Christopher backed away from challenging Clinton on his wholehearted embrace of Yeltsin rather than reform as a whole. The choices that are made are subject to a hierarchy of goals which will be different for different administrations. The goals will not necessarily be compatible but will be premised on the abiding principle that the interests of America come

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first. This indicates that in any foreign policy strategy adopted by the United States, the protection and prosperity of the nation are primary. In any hierarchy of goals, American national security comes first, followed by the opening of markets and increased trade to develop the US economy. American exceptionalism will underpin any foreign policy decision, providing both the rhetoric and legitimation to export perceived American values of ‘freedom’ and ‘democracy’. This represents an almost messianic zeal to demonstrate to the world their superiority and the desirability of other nations following their example. The framework reveals that there are many influences on US foreign policy making, but rarely do they have a significant impact on the choice of policy to pursue. The most significant influence is Congress, although their role has become increasingly one of shaping policy through budgetary control, earmarking funds, and requiring accountability for how funds are spent. They are also able to use their influence to direct policy by raising issues concerning foreign policy that may become factors in elections unless their advice is heeded. If the president’s party does not have a majority in either chamber then the chances of his/her foreign policy choices gaining consensus are limited in direct proportion to the proximity of the next election. The regularity of elections shapes the foreign policy agenda and will determine whether or not, and when, the president will take foreign policy decisions. The president is either seeking re-election, preparing to hand over to his successor, attempting to win mid-term elections to secure party advantage in Congress, at all times and so his/her foreign policy decisions take this into account. The presidential framework suggests that the media and public opinion are not decisive influences in determining policy. The CNN effect in Kosovo was rare and usually the media follow rather than set the agenda in US foreign policy making. Public opinion is largely unconcerned about foreign policy except when the lives of US servicemen are at risk or when they benefit with jobs in their locality. Diasporic communities can wield disproportionate influence on policy, but usually this is useful additional pressure to justify policy choices already taken or intended. Business, the military, and election sponsors all have an input into the sort of policies they would like to see pursued, but again these tend to be a desire to make the most of opportunities opened up by prior foreign policy decisions. Religious leaders may exert influence if they speak on behalf of significant numbers of their co-religionists. Christian fundamentalism and the pro-Israel lobby have an influence on the direction of policy as presidents either agree with their position or seek to attract the support and finance of their supporters. Probably one of the least influential groups is the academics in universities and think tanks who seek to advise the president on his foreign policy decisions. Often presidents will seek to appoint academics as members of the administration but generally, busy government officials and their staff have neither the inclination nor time to read scholarly analysis. The implementation framework reveals that once a policy has been decided upon, it will not necessarily be implemented to achieve maximum advantage. Bureaucratic and organizational procedures make the programme of policy

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implementation long-winded, bureaucratic, and confusing to bodies which have not mastered the procedures. The system operates in such a way as to favour those who know their way around the rules and procedures. Governmental departments tend to be staffed by careerists who value their organization and are content to work within its bureaucratic structures to secure advancement, they tend to be team players who are unwilling or unlikely, to take risks or attempt new methods of dealing with situations, preferring to stay with tried and trusted, if suboptimal, formulas to solve problems. When recruiting new staff or subcontracting policy delivery, organizations will tend to prefer dealing with people just like them, who know the terminology, the systems, and the required end product. The implementation framework revealed bureaucratic structures that were under pressure from the administration and Congress to produce tangible evidence of the successful implementation of policy. Most congressmen and women are not interested in foreign affairs and foreign affairs expenditure, although minute compared with defence budgets, is hotly contested. Organizations such as USAID and NED will always be subject to Congressional pressure and have to justify their expenditure in detail. Similarly we can say that foreign affairs expenditure is always going to be insufficient to meet the demand. In such a climate, organizations are obliged to compete with one another for the funds that are available. This competition leads to professional jealousies, rivalries and a lack of cooperation between bodies working in the same field. Practitioners will err on the side of caution in deciding on which policies to support and which organizations to engage to implement policy. This will result in a lack of initiative and producing evidence based on outputs rather than outcomes. The implementation system operates in a way that guarantees suboptimal outcomes. Organizations, fearful for their own future and determined to safeguard, or advance, their share of resources will play down the impact of other organizations’ contribution and emphasise the importance of their own. They will produce evidence of their own achievements based on quantitative outputs rather than qualitative outcomes. This evidence will be accepted by government and Congress usually without question if it enables them to claim that the policy objectives are being met. There is little incentive for organizations and practitioners to present a real picture of what the impact of the policy implementation has been. It is difficult, if not impossible, to quantify the impact of many policies and the results may take years to show, which does not help politicians who have an electoral cycle to take into consideration, and need swift results. Such short term thinking also results in short term programmes often of three years duration, as in Russia, which are carried out by people who are not familiar with the area or situation. They have one year to become knowledgeable about the work, another year to actually get on with it, and a further year to develop exit strategies before they too are moved on to another area they have no knowledge of, and the whole process begins again.

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Why US Democracy Promotion was Sacrificed in Russia Lessons From Russia has shown that ‘the pursuit of short and medium-term American security and market promotion gains was achieved at the expense of the long-term benefit of promoting democracy in Russia’. Clinton would certainly have preferred democracy in Russia to any other outcome if the issue were that clear cut. However, issues are seldom that clear, and a predictable Russia was more important to America’s national interest than a democratic Russia. A capitalist Russia was also more important than a democratic one; trade would help the US economy and offer American business new markets and opportunities to invest. Russian capitalists may have been corrupt, ex-communists or mafiyaconnected but their self-interest in time would persuade them to introduce democratic reforms and the rule of law to protect their dubiously acquired property interests. Clinton and fellow members of his team spoke the language of idealism but inevitably pursued naked American self-interest to achieve their objectives. The Russia Policy conducted by Clinton, Gore, Summers and Talbott did not achieve its original objectives of a strategic partnership and a functioning market democracy, fully integrated into the international system. However, the Russia Policy did secure an optimal outcome for United States interests at a comparatively low cost. Over the course of the decade, the military balance between Russia and America shifted significantly in favour of the latter. Russian troops were removed from Eastern Europe and the Baltic States while some nuclear weapons were decommissioned. Ukraine, Belarus and Kazakhstan surrendered their nuclear weapons, which were also decommissioned. Despite hostile noises of disapproval, Russia was not in a position to challenge NATO’s involvement in the Bosnian and Kosovan conflicts. Similarly Yeltsin, despite protests for domestic consumption, went along with NATO expansion into Poland, Hungary and the Czech Republic. Clinton managed to persuade the Russians to sign up to the Partnership for Peace with NATO and join in with peacekeeping duties in post-conflict Bosnia and Kosovo. The Russians were also persuaded to limit assistance to Iraq, Iran, North Korea and Cuba. Immersed in their own problems in Chechnya, Russia was unlikely to seek involvement in other states within the FSU. New markets were opened up for US arms manufacturers in the former Soviet bloc, and American industry and business were able to get involved in the Russian economy. The advice to privatize and proceed with shock therapy, given initially under the first Bush administration, concentrated power in the hands of a powerful capitalist elite who would work together with the political elite to ensure that the country would not return to communism. Russian indebtedness to the IFIs, encouraged by American advisors, meant that Russia was deeply immersed within the international economic system and would be less likely to revert to a command economy. Clinton’s friendship with Yeltsin kept Russia’s focus on the West rather than seeking to build an alternative power bloc with China and India to counter US hegemony. The transfer of power from Yeltsin to Putin, while a setback for

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democracy, provided Russia with a strong and popular leader, who would become a future ally of Clinton’s successor, George W. Bush, in the war on terrorism, following the events of 11th September 2001. Democracy promotion was always seen as antipathetic to US foreign policy short-term gains. A liberal democratic Russia might actually set Russian foreign policy at odds with American interests. The Russian people had little to be grateful to the Americans for, financially, socially, diplomatically, militarily they were worse off than before the end of the Cold War. A democratically elected government, rather than a presidential administration appointed following elections that were neither universally free nor fair, might have been less acquiescent to America foreign policy objectives. A government responsive to its own people would have paid attention to their welfare, standard of living and health, ensured that wages and pensions were paid on time, would have been accountable when most Russians’ life-savings were wiped out and life expectancy fell. In short, a democratic government representing the electorate would not have pursued economic reforms that inflicted so much damage for so little benefit on its own people. The United States was not prepared to take the risk and so endorsed a regime that was pliable, and worked within the international community to make sure that the regime stayed in power, leaving them free to pursue their own policies in the Balkans, Middle East and Eastern Europe. The achievement of an optimal outcome for US national interests was not simply an unintended consequence of the Clinton administration’s actions. The president consistently made choices to optimise his own and America’s strategic interests in relation to US-Russian relations. The first choice was to select a Russia team that would carry out the task he desired. Clinton selected a small group of extremely loyal team players who remained involved throughout both terms of office, providing stability and knowledge of Russian affairs that enabled key objectives to be accomplished. Gore, Talbott and Summers were not charismatic and were therefore unable, and unwilling, to upstage the president in any successes that the policy might achieve. The primacy of the nuclear proliferation issue had been identified early on with the Nunn-Lugar legislation and was a bipartisan concern, which Clinton also chose to prioritise. The best way to achieve cooperation on the nuclear issue was through dialogue and developing a relationship of trust with the Russian leadership. The most stable feature within the Russian leadership was the president himself. President Yeltsin was willing to cooperate with the West and America in particular; reaching out to them for assistance in transforming Russia into a capitalist country. The alternative sphere of influence was a bitterly divided and acrimonious CPD, many of whom were antagonistic towards any market reform and resented America’s victory in the Cold War. Faced with these alternatives it was little surprise that rather than seeking to work with the CPD, and later the Duma, Clinton opted to develop a relationship with his Russian counterpart. Yeltsin was an authoritarian but weak leader whose popularity peaked during the elections for the presidency of the Russian Soviet Socialist Republic and had

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declined thereafter. He was willing to acquiesce in US foreign policy objectives providing he was flattered and accorded status within Russia and on the world stage. Clinton, who began as a foreign policy novice, who had failed to act decisively in Somalia, Haiti or Bosnia at first, saw in his relationship with Yeltsin an opportunity to enhance his own prestige as a world statesman. The need of the West to engage with Russia in the post Cold War era provided Clinton with the opportunity to take the stage as leader of the international community. The decision to encourage Russia to marketise and privatize was not taken simply because a prosperous, trading Russia would be good for the US economy. If the gamble to reform the Russian economy, by introducing radical measures of shock therapy and privatization succeeded, the US administration would have been delighted but if not, a rational decision had been taken to encourage measures that would prevent Russia ever reverting to a command economy again. In the process this would destroy any prospect of communism re-emerging as an ideological rival to capitalism. Other threats to US hegemony would meet the same ambivalence to democratic norms. Clinton was prepared to overlook human rights abuses in Chechnya because the Chechen bid for independence threatened the integrity of the Russian Federation and ultimately Yeltsin’s power to govern the 89 federal subjects. The fact that the threat was from an Islamic republic was not without significance and defeat for the Chechens would serve as a warning to other Islamic regions and countries not to resort to violence to achieve their aims. To have condemned human rights abuses and challenge, even order an end to, Russian activities in Chechnya would have severely damaged the relationship with Yeltsin that was bringing foreign policy gains for America in other areas. The relationship with Yeltsin, and close personal involvement in the Russia policy, helped Clinton at critical times when domestic politics were dominated by his personal life. At the height of the Lewinsky scandal the president was able to escape to Moscow for a summit with Yeltsin that was portrayed as crucial to restoring international confidence in Russia after it had defaulted on its international debt following the financial crisis. The summit enabled Clinton to rise above the triviality of scandal and controversy to portray himself as an international statesman, representing America’s best interests on the world stage at a time of international crisis. The message was clear that there were more important considerations than the president’s private life, even if that did involve lying to the country. The president appealed to the country over the heads of Congress and won the nation’s support with Republicans in Congress being vilified for pursuing a vendetta against the head of state. The president cleverly outmanoeuvred Congress to deliver assistance to Russia by using the IFIs to deliver loans and grants, thereby leveraging US assistance. Congress was useful as a body to blame when the Russians sought greater assistance. Clinton was able to portray himself to Yeltsin as desperately trying to help him despite having to overcome a recalcitrant Congress opposed to any assistance to Russia. He was able to use the threat of congressional conditionality on assistance, to persuade the Russian leader to make policy concessions and to

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press forward with reforms in Russia. Clinton was not willing, after his initial enthusiasm, to invest large amounts of American money in Russia unless it was necessary to keep his man in power. The ability to blame Congress for America’s parsimony enabled Clinton to save face with Yeltsin and convince the Russian leader that he was committed to helping Russia. In Clinton’s hierarchy of foreign policy objectives, democracy promotion, despite the rhetoric actually featured somewhere near the bottom. Democracy was a nice idea and would eventually lead to a democratic peace among liberal democracies, but that was for the future. In the meantime significant national security and economic advantages could be secured, providing Yeltsin remained in power and acquiescent. Once Clinton’s second term was secured, attention could be devoted to legacy building and the substantial gains of a weakened Russia, prepared to play a supporting role in NATO operations, NATO expansion, and unrivalled American power were far more important than any commitment to helping build democracy in Russia. When the promise to promote democracy in Russia did not materialise, the Russians themselves could be blamed; after all they were not used to democracy and felt comfortable with authoritarian leadership. Unfulfilled promises towards Russia would make no difference in American elections. The history of US elections demonstrates that foreign policy does not win elections but, if it goes badly wrong, then it could lose an election. Clinton was able to deliver a compliant or weak Russia and enough positive quantitative evidence to suggest some progress towards civil society had been made. The reality that so much more could have been achieved had he been genuinely committed to promoting democracy was not considered important. If Russia had been made aware that its participation in prestigious international organizations was conditional upon observing democratic norms; or that civil society and the rule of law was more important than pursuing economic reforms regardless of the social consequences, then greater progress towards a democratic polity might have occurred. However, American foreign policy has never been based on altruism, and Bill Clinton was elected to serve the best interests of the American people. It was at the macro level that democracy promotion was most seriously compromised, making the task of those charged with implementing the policy very difficult. The democracy assistance effort was seriously under-funded and relied upon favoured contractors to fulfil a narrow remit of democracy promotional tasks. Those implementing organizations were fearful of their continued existence through incorporation into other bodies or through losing their share of a small assistance budget. Such fears inhibited them from attempting imaginative programmes or involving groups other than those committed to liberal economics and American values. Organizations, in order to maintain funding reported back to Congress and the administration the evidence they wished to hear. The quantitative evidence that tens of thousands of new NGOs had emerged, thousands of seminars had been delivered, and all the elections had been monitored, was disseminated. What was missing was the analysis about how such assistance had actually developed democracy in Russia. The reality was that for all US assistance the

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cause of Russian democracy had gone backwards, elections were less free and fair, political parties had not developed, and freedom of the media had eroded. Clearly most of the blame for this lies at the door of the Russians themselves, but the Clinton administration had missed an opportunity to champion a democratic future for their adversary. Lessons from Russia The lessons from the Russian experience have implications for current US democracy promotion efforts in the Middle East. Unconditional support for any leader, no matter how loudly they proclaim their democratic credentials, is fraught with danger. A failure to engage with the representatives of the people in parliament, no matter how strongly they oppose US policies, will also undermine the democratic process. Any encouragement of leaders to circumvent democratically elected bodies, in order to bring about reforms, will lead to a weakening of the foundations of democracy and pave the way for a return to authoritarian government. Political reform must precede economic reform or the wealth of the state will be appropriated by apparatchiks and organised crime. Capitalism does not necessarily lead to democracy and US assistance should act accordingly, putting the rule of law, civil society, free and fair elections, political parties, freedom of assembly and expression, an independent media, and accountability ahead of developing a market economy. After eight years of democracy assistance in Russia, the country reverted towards an elected authoritarianism, will Afghanistan or Iraq fare any better?

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Index AFL-CIO 145, 149-50, 174 ABM Treaty 121 Albright, Madeleine 44, 64, 72, 1014, 109, 111, 113-4, 118-122, 150, 180 Allison, Graham 2-7, 9, 13, 15-19, 163, 185 American Bar Association 134, 146 American Centre for International Labour Solidarity (ACILS) 134-5, 134n3, 144, 148, 151 American exceptionalism 7, 12-13, 15, 21, 59, 128, 165, 181, 185, 192, 194 Aslund, Anders 34, 38, 40, 40n5, 48, 48n16, 64, 64n5 Aspin, Les 44, 49, 93 Atwood, Brian 65, 162, 164, 167-8, 173 Balkans 113, 127-8, 190, 197 Ballantyne, Janet 138 Baltic States 55-6, 92, 103, 127, 135, 190, 196 Belarus 38, 47, 56, 127, 155, 196 Bentsen, Lloyd 46, 49, 68, 72, 74, 76, 91, 101, 110 Berezovsky, Boris 101, 112 Berger, Sandy 44, 49, 101-2, 105, 118, 121 Bosnia 50, 57, 101 Brzezinski, Zbigniew 28-9, 32, 44, 56, 71, 73, 94, 150, 188 Bureau of Educational and Cultural Affairs (BECA) 155-6 Bush, George H.W. 28, 30-1, 33-5, 37, 40, 42-3, 46, 48, 62-3, 114

Bush (GHW) administration 23, 25-6, 30-33, 35-6, 38, 43, 196 Bush, George W. 197 Bush (G.W.) administration 164 Callahan, Sonny 102 Camdessus, Michel 120 Carnegie Endowment for International Peace 40, 135 Carothers, Thomas 32, 36-7, 134-6, 140-4, 146, 149, 153, 158, 161, 163, 165, 167, 169-71, 175-6, 178-80 Central Intelligence Agency (CIA) 32, 44, 101, 105, 108, 112, 166 Centre for International Private Enterprise 135, 148, 151, 168 Chechnya 22-23, 72, 77, 85-8, 91, 93-4, 118-23, 125-6, 152, 178, 188-90, 196, 198 Chernomyrdin, Viktor 39, 51-2, 64, 67, 78-9, 84, 89, 92, 96, 98, 103, 105-11, 116, 123, 126, 160, 178, 187, 189-90 Christopher, Warren 22, 44-50, 47n11-13, 50n22, 52-4, 52n30, 61, 61n164, 66-7, 712, 74-5, 77-8, 81-2, 86-8, 91, 93, 93n2198, 101-2, 115, 193 Chubais, Anatoly 36, 51, 64, 74-5, 89, 96, 101, 103, 106, 112, 116, 118, 123, 126, 138, 178, 187, 190 Civil society 39, 48, 52, 55, 57, 59, 92, 104, 122, 132-3, 135, 137-40, 143, 145, 147, 152,

214

Lessons from Russia

154, 156, 158, 161-2, 175, 178, 181-3, 187, 191, 193, 199-200 Clinton, Bill 1-2, 20-23, 37-40, 4158, 60, 61-74, 76-81, 83-98, 61-2, 64, 73-5, 78-80, 83, 85, 88-90, 95, 97-8, 101-6, 10916, 118-29, 135, 137, 142-3, 148-9, 151, 153-5, 162-5, 171, 174-8, 180-1, 185-90, 192-3, 196-9 Clinton administration 1-2, 9, 234, 31, 41-3, 46-8, 50, 52, 56-60, 61-2, 64, 73-5, 79-80, 83, 88-90, 95-6, 98, 131, 139, 149, 151, 161, 163-4, 166, 173, 175, 177-8, 181, 187, 189-90, 197, 200 Clinton’s Russia Policy 2, 7, 20, 23, 65, 71-2, 76, 86, 94-5, 101-3, 105-6, 108-9, 113-4, 116, 121, 123-4, 126-9, 157, 159, 166, 170, 172, 174, 176, 178-80, 186, 188-90, 196, 198 CNN 11, 69, 194 Cohen, William 101-2 Collins, James 70, 73, 101, 105, 109, 119, 134-5, 155, 158-9 Communist Party of the Russian Federation 28, 48, 83-4, 120, 141, 179 Communist Party of the Soviet Union 39, 140 Congress, US 3, 10-11, 13-14, 1618, 20-24, 34, 36-7, 39, 45-6, 53, 55, 57, 62, 65-6, 68-73, 76-7, 79, 81, 83, 87, 90-91, 93-5, 101-2, 105-8, 112-3, 116, 119-20, 122-3, 128, 133, 135, 149-50, 155-6, 157-9,

161-4, 169-70, 174-8, 181-3, 186-9, 192-5, 198-9 Congress of People’s Deputies (CPD) 22, 37, 40, 57-8, 66, 78-80, 95-6, 125 Contract with America 71 Contracts 16-17, 34, 133-4, 157-9, 162, 168, 174-5, 179, 191-2, 195, 199 Corruption 23, 34, 38, 57, 88, 103, 107-8, 111-6, 122-4, 126, 128, 146, 151-3, 155, 158, 172, 176, 189 Cox Commission 49 Cox Report 114-7 Cuba 3-4, 69, 127, 196 Defence Department, US (see also Pentagon) 10, 22, 30, 49, 93, 131, 154, 160, 170, 186 Democracy assistance 20, 76, 97, 122, 131-2, 134-5, 137-8, 143-4, 147-8, 150-1, 153-6, 157-8, 160-1, 163-7, 169-81, 183, 188-9, 191-2, 199-200 Democracy promotion 1-2, 7, 12, 15, 20-24, 36, 42, 45, 52, 55, 5860, 61-2, 67, 70-71, 79, 91-2, 104, 125-6, 128-9, 131-5, 149-50, 157, 163, 167-8, 171, 173, 177, 179-83, 185-9, 193, 196, 199-200 Democratic Choice, Russia 143 Democratic Party, US 23, 54, 117, 181 Democratic Pluralism Initiative 138, 144, 146, 148 Democratization 27, 31, 58, 95-6, 104, 135, 143 Dine, Thomas 138, 138n4 Dole, Robert 53, 71-2, 87, 93, 101 Donilon, Thomas 72

Index Duma 76, 78, 80, 82, 84, 87, 91, 105, 107-110, 116-8, 120, 123, 128, 140, 147, 197 Dyachenko, Tatyana 111, 118 Elections 59, 64, 67, 115-6, 121, 123-4, 127-9, 133-41, 147-8, 151-2, 156, 162, 177, 181, 183, 185, 187, 190-1, 193-4, 197, 199-200 Elections, Russian 23, 36, 48, 769, 81-4, 86-7, 91, 93, 98, 104, 116, 119, 121, 124-6, 128, 142, 144, 147, 172, 181, 189, 197, 200 Elections, US 3, 23, 30, 37, 7073, 91, 93-4, 98, 101, 108, 178, 187-8, 191 Ellerman, David 110, 110n11 European Bank for Reconstruction and Development 67 Eurasia Foundation 91, 94, 131, 1345, 153-4, 156, 157-60, 163-4, 168-9, 175-6 European Union 27, 29, 33, 56 Fatherland All-Russia 119-20 Federal Security Service (FSB) 39, 119 Freedom 12, 15, 26, 35-6, 39, 42, 51, 53, 61, 64, 122, 129, 136, 147, 152, 185, 194, 200 Freedom for Russia and Emerging Eurasian Democracies and Open Markets Support Act (FSA) 36, 114, 131-3, 156, 161, 191-2 Freedom House 156 Free Trade Union Institute 135, 14950, 158 Fuerth, Leon 43, 43n5, 48, 48n14, 51n26, 52n28, 53, 65, 65n9,

215 74, 74n12, 78, 88, 105, 106n4, 115, 118, 118n18, 126 Fyodorov, Boris 64, 108, 121 Gaidar, Yegor 39-40, 64, 74, 83-7, 97, 103, 106, 118, 189 Gati, Toby 49, 62, 62n2, 65 Gazprom 39, 78, 108 Gephardt, Richard 45n10, 46, 53, 176 Gingrich, Newt 68, 71-3, 101 Gorbachev, Mikhail 30, 32, 39, 48, 62, 188 Gore, Al 23, 44, 49, 54, 64, 74, 76, 78, 83, 86-8, 90-3, 95, 98, 101, 103, 105-8, 111-15, 1178, 120-1, 123, 127-8, 164, 176, 178, 186-7, 190, 196-7 Gore-Chernomyrdin Commission 22, 52, 78, 91, 98, 107-8, 115, 121, 123, 127-8, 188 Graham, Thomas 52, 52n28, 78, 82, 88, 107, 124, 166-7, 171-2 Group of Eight (G8) 94-5, 103, 119, 122, 189 Group of Seven (G7) 34, 52, 67, 69, 73, 77, 91, 94-5, 98, 124-5, 129, 188 Haiti 32, 50, 57, 85, 90, 198 Hamilton, Lee 76, 80, 171, 176 Harvard Institute for International Development (HIID) 22, 36, 51, 75, 112, 116, 146 Helms, Jesse 72, 102, 114, 119, 176 India 127, 190, 196 Inflation 34, 38, 76-7, 101, 105, 108 International Foundation for Election Systems (IFES) 134-5, 138, 140, 144 International Monetary Fund (IMF) 34-5, 37, 48, 58-9, 67, 71, 73, 75-8, 88, 91, 105-11, 113-4,

216

Lessons from Russia

117-8, 120, 124-6, 128-9, 176, 187 International Republican Institute (IRI) 36, 134-5, 138, 140-4, 147-8, 151, 156, 158, 174 Iran 44, 46, 72, 76, 81, 83, 86, 92, 105-6, 108-9, 112-3, 123, 127, 189, 196 Iraq 33, 92, 103, 113, 118, 123, 127, 196, 200 Israel 55, 68, 95, 106, 112, 194 Ivanov, Igor 119 Jackson-Vanik Amendment (1974) 76 Joint Chiefs of Staff, US 10, 32, 44, 49, 67 Justice Department 134, 154 Kant, Immanuel 26, 42 Kazakhstan 38, 47, 56, 127, 155, 196 Kennan, George 1, 25 Khasbulatov, Ruslan 81 Kiriyenko, Sergei 108-9, 117, 121 Kohl, Helmut 37, 76, 79, 95 Kosovo 118, 127, 189-90, 194, 196 Kozyrev, Andrei 38, 78 Kravchuk, Leonid 83 Lake, Anthony 41-2, 42n4, 44-5, 49, 64-5, 71-2, 80, 87-8, 87n19, 92-3, 98, 101-2, 105 Lebed, Aleksandr 89-90, 101, 116 Lewinsky, Monica 109, 121, 123, 198 Liberal Democratic Party, Russia 834, 120 Lipton, David 51, 64, 76 London Club 94 Lugar, Richard 36, 47, 73, 76, 150, 160, 197 Luzhkov, Yuri 119, 121

Market democracy 21, 27-8, 32, 50, 61, 63-4, 71, 95, 97, 99, 104, 196 Marshall Plan 29, 33 Media 25, 36-7, 39, 52, 54-5, 59, 62, 65-6, 82, 85, 87, 89, 94, 98, 102, 109, 119-22, 128, 132, 135-6, 138, 142, 144-5, 147, 150, 153-6, 158, 161-2, 1758, 181, 188, 194, 200 Mendelson, Sarah 83, 94, 106, 119, 159, 161, 172-3, 174n9, 179, 181, 181n13 Merry, Wayne 50, 51n24, 82, 82n16, 107, 107n8, 159, 160n2, 161, 161n3, 166, 166n5, 172-3, 172n7 Morningstar, Richard 92, 116, 116n17 National Democratic Institute for International Affairs (NDI) 17, 36, 134-5, 138, 140-4, 147-8, 151, 152n16-20, 153n21, 156, 158, 159n1, 173-4, 173n8, 177, 181 National Endowment for Democracy (NED) 17, 52, 91, 94, 131, 134-5, 143, 148-54, 149n13, 156, 157-9, 163-5, 167-9, 172-6, 180, 180n12, 182, 188, 191, 195 National Missile Defence (NMD) 121 National Security Council (NSC) 44, 49, 54, 92, 101-2, 160 NATO-Russia Founding Act (1997) 103, 128, 190 NATO-Russia Permanent Joint Council 103, 122, 189 Nemtsov, Boris 64, 106, 109 Nixon, Richard 11, 55, 62, 73, 116, 125

Index Non Governmental Organizations (NGOs) 16, 19, 22, 37, 87, 90, 97, 122-3, 127, 134-6, 139, 143-50, 155-6, 158-9, 161-3, 169, 173-5, 177-9, 182, 190-1, 199 North Atlantic Treaty Organization (NATO) 47, 56, 71, 81, 83, 86-8, 92-4, 101, 103-4, 109, 118, 122, 127-9, 189-90, 196, 199 North Korea 113, 127, 196 Nuclear weapons 33, 37-8, 47, 54-6, 59, 72, 83, 127-8, 190, 196 Nunn, Sam 36, 47, 160, 197 Odling-Smee, John 35, 35n2 Organization for Security and Cooperation in Europe (OSCE) 103, 119 Our Home is Russia 84, 143, 179 Paris Club 94, 103 Partnership for Peace (PFP) 81, 86, 93, 101, 104, 196 Pentagon (see also Defence Department) 49, 54, 93, 128, 134, 156 Perry, William 72, 93, 101-2 Pickering, Thomas 80-1, 89, 92, 101, 108, 135, 155, 159 Political parties 3, 11, 36, 39, 48, 59, 65, 84, 97-8, 104, 122-3, 136, 138-9, 141-3, 150, 158, 161, 168, 174, 179, 181-2, 189-90, 193, 200 Powell, Colin 32, 44 Primakov, Yevgeny 103, 110, 117-8, 121, 123, 190 Privatization 23, 34, 36, 38, 40, 48, 51, 56-7, 64, 68, 73-7, 79, 82, 87, 89, 91, 96-7, 137, 145-6, 151, 168, 172, 183, 188-90, 198

217 Public opinion 11, 13-14, 18, 20-1, 23, 69, 73, 90, 157, 162, 178, 186, 194 Putin, Vladimir 23, 113, 118-26, 152, 177-8, 190, 193, 196 Radio Free Europe/Radio Liberty 77, 134, 144, 154 Rationality 2, 4, 7-8, 15, 21, 59, 978, 185 Bounded rationality 8-9, 14-15, 21, 56, 60, 97, 122, 185 Quasi rationality 2, 21 Representatives, House of, US 46, 53, 69, 71, 79, 101, 106, 107, 113-4, 116, 119, 149 Republican Party, US 20, 23, 42, 44, 46, 53, 66, 68, 70-3, 87, 91, 93-4, 117 Rubin, Robert 46, 49, 72, 74, 78, 91, 101, 105, 110-11, 113, 113n15 Rule of law 35-6, 42, 55, 75-6, 81, 92, 97, 104, 113, 131-4, 13840, 145-6, 154, 156, 188, 191, 196, 199-200 Russian Federation 1, 34, 38, 48, 77, 97, 131, 144, 163, 198 Russian Public Television 79-80, 89, 119 Russia’s Choice 83-4, 179 Russian-American Foundation for Trade Union Research end Education 145, 150 Rutskoi, Aleksandr 80-1 Satisficing 8-9, 21, 185 Senate, US 11, 30, 68-72, 80, 87, 101-2, 104, 106, 113, 119, 149 Sestanovich, Stephen 101, 122, 134, 158, 171, 180, 189, 191 Shalikashvili, John 72 Shleifer, Andrei 36, 51, 64

218

Lessons from Russia

Somalia 32, 50, 57, 81, 90, 198 Soros, George 156 Soviet Union 1, 17, 48, 50-1, 54, 70, 80, 87 State Department, US 17, 22, 32, 36, 41, 44, 47, 49, 54, 91, 101-2, 125, 132, 134-5, 137, 146, 149, 151, 155, 157-8, 160, 166, 169-71, 175-7, 180, 186 Stepashin, Sergei 118 Strategic Arms Reduction Talks (START) 37-8, 76 Strategic Defence Initiative (SDI) 6 Stiglitz, Joseph 34-5, 75-6, 109-11 Summers, Lawrence 45, 48-51, 63-4, 67, 74, 76, 78, 90-2, 95, 101, 105, 110-13, 115, 118, 124-5, 125n20, 127-8, 186-8, 196-7 Talbott, Strobe 17, 22, 30, 41, 41n12, 44-5, 48-51, 48n15, 49n17, 50n22, 51n25, n27, 53-4, 628, 65n8, 70-2, 74, 76, 78, 801, 83, 83n17, 85-93, 95, 99, 101-3, 105-8, 110, 112-5, 117-19, 121, 124-8, 126n22, 134, 158, 160, 180, 180n11, 186-8, 193, 196-7 Tokyo G-7 summit (1993) 67-8, 91, 137 Trade unions 37, 52, 134, 138, 145, 150-1, 156, 165, 191 Treasury Department, US 10, 22, 335, 48-9, 51, 54, 63-4, 68, 746, 83, 91, 106-7, 109-11, 114, 125, 128-9, 160, 170, 171, 186, 188 Ukraine 29, 31, 38, 47, 53, 56, 69, 71, 73, 83, 94-5, 104, 112, 122, 127, 152-3, 155, 188, 196 Union of Right Forces 120-1, 179 United Nations 10, 12, 31, 44, 101-2

United States-Russian relations 22, 25, 43, 45, 50, 56, 58, 60, 62, 65, 78, 81, 83, 85, 160, 190, 197 United States Agency for International Development (USAID) 17, 22, 36, 51-2, 75, 112, 116, 131, 133-5, 137-49, 148n10-11, 151, 154, 156, 157-177, 165n4, 169n6, 180, 182, 188, 192, 195 United States Information Agency (USIA) 36, 131, 131n1, 1345, 138, 149, 151, 154, 156, 169, 171, 175, 192 Unity 120, 179 US Embassy, Moscow 17, 44, 51-2, 54, 82, 101, 107, 109, 134, 146, 154-6, 157-61, 163, 1667, 171-3, 177, 180-1, 192 Vancouver summit (1993) 50, 67-9, 91, 137 Wofford, Harris 28-9 World Bank 34, 37, 48, 59, 64, 68, 71, 73-7, 88, 91, 105, 109-11, 113, 118 World Trade Organization 103, 112 Yabloko Party 84-5, 120, 143, 179 Yavlinsky, Grigory 52, 87, 89, 8990, 97, 115, 121, 189 Yeltsin, Boris 22-3, 30-4, 37-40, 5060, 61-99, 101, 103, 105-6, 108-14, 116, 118-29, 137, 140, 143, 150, 160, 166, 172, 177, 179, 181, 186-91, 193, 196-9 Zhirinovsky, Vladimir 83, 89-90, 116, 121 Zyuganov, Gennady 88-90, 98, 116, 121, 189