Can Russia Modernise? Sistema, Power Networks And Informal Governance

Yet in this book Alena Ledeneva, singles out the three essential components of modernity - perceived as market opportunities - as equality of economic subjects, security of property rights and equality before the law.

Needless to say all three are found wanting in Russia where the economy is characterised by "kickbacks, widespread practice of informal deals and informal capital flows," all operated by power networks within a "sistema" of informal governance.

These practices have deep historical roots. In imperial Russia corruption was all-pervasive and much of it remained in place, as Lenin pointed out in 1923, during the Soviet period.

Then, as Ledeneva comments, power networks rewarded their members with privileges of access to state-owned resources.

In privatised Russia such privileges generate monetary income and capital because Putin's sistema is focused on individual wealth acquisition.

At the heart of it all is the omnipresent informal income made up of splits on deals, kickbacks and bribes among state officials, business people and their dependants.

What it lacks in democratic graces the sistema appears to compensate for with considerable economic development. Much of it is achieved, according to Ledeneva, through the effectiveness of its networks and relationships and their impressive capacity to mobilise.

The juxtaposition of the reliance of the sistema on "personal loyalty" with "universal values" is a tenuous one in the context of capitalism and its single-minded espousing of unbridled greed - hardly a beacon for 99 per cent of humanity, including the millions of ordinary Russians left out of this narrative.

An illuminating read.