A Russian Model of Development:

What Novgorod has to Teach the West

 Nicolai N. Petro*

Keynote address to

the symposium on Civil Society and the Search for Justice in Russia

at Baylor University, February 1-3, 2001

          When I served in the State Department as a Fellow of the Council on Foreign Relations, I was given a small office and a big title—special assistant for policy in the Office of Soviet Union Affairs. With a staff of over 40 people, the Soviet desk was the largest at State and hardly needed more people, so I felt I had to come up with a job description to fit the momentous events of 1989-1990. My boss and I finally settled on the following: it would be my job in the department to think heretical thoughts. I am afraid the habit has stuck with me, and it is in this spirit that I wish to address you tonight.

          Russia lags far behind the West in establishing a just, democratic, and prosperous society. It should therefore swallow its pride, acknowledge how much it has to learn from us, and get on with reforms. That has been the West’s not very subtle message for the past ten years. I wish to suggest that our relationship may not be quite so one-sided. What has befallen Russia, in my opinion, has lessons to impart not only for the way we approach issues of development overseas, but also for economic and political development in the West.

Not since the end of WWII has Europe seen such a massive disruption of governmental institutions, or such a protracted economic collapse. As if this were not enough, no other region in recent memory has faced the task of rebuilding its cultural identity from scratch without at least the benefit of paternalistic occupiers or colonial authorities to oversee the task. Yet it is worth recalling that when this transition began in 1990, the USSR was widely regarded as a model of rapid and, generally effective modernization, whose highly educated workforce would help her to recover more rapidly than other, “tradition-bound” (read Third World) societies. It might therefore behoove other modern societies with highly educated workforces not to become too complacent. As Americans struggle to adapt to globalization, multiculturalism, and the redefinition of the “national” interest, it may even be helpful to consider what we can learn from Russia, which is undergoing this same transition in a highly compressed time frame, with some glaring failures and some notable successes.

          The media have focused almost exclusively on the failures. So much so that a worrisome gap has emerged between media portrayals of Russia as a collapsing and humiliated power, and the rather striking economic and political consolidation that has taken place there last year. If I asked you to name the country that was among the ten fastest growing economies in the world last year, where the federal budget deficit was slashed by 2/3; unemployment fell by 18%, and internet usage grew six times faster than in Western Europe I daresay that few of you would say Russia. That is because, as Oxford economist Carol Scott Leonard has aptly quipped, what is actually happening in Russia is, of course, less important than what Western observers think is happening.

          Grounding ourselves in reality rather than perception, however, requires moving beyond the media’s traditional obsession with Kremlin intrigues. More importantly, it means getting out of Moscow and into Russia’s 89 regions. At this level, more than the national one, Russia shows tremendous diversity and dynamism. It is here that Russia’s future is being forged and, in some regions, like Novgorod, already yielding some impressive results.

My interest in Novgorod came about quite fortuitously. In 1996 I won a Fulbright Lectureship to Russia, and as a family we decided to go someplace off the beaten track. My father was born in a small village in the nearby Pskov region, where Pskov had no state university and so could not be our sponsor. The neighboring region of Novgorod, however, had just received approval to set up a state university, and after a few e-mail exchanges with the Vice-President there, we were on our way. I went without preconceived notions, without any research agenda. Cognizant of Gogol’s admonition that “great is the ignorance of Russia within Russia,” I sought to follow his advice to the newly appointed governor Aleksei Tolstoy to “go out and see the land.” For me this was a very much a voyage of personal discovery.

Within a few moths of our arrival it became readily apparent that the “Russia” I had been reading about in the Western press was very different from Novgorod. While the country’s GDP was declining, Novgorod’s gross regional product had been rising steadily by more than 4% a year since 1995. While pension arrears plagued the country, the Novgorod region was able to implement a system that ensured pension payments to local recipients within 36 hours of local deposit. While barter constituted 60% of economic transactions nationally, locally it was less than half that, and while FDI accounted for less than 5% of total investment nationwide, in Novgorod it exceeded 50% of regional investment. Levels of civic activism and private entrepreneurship in the region rivaled that of the southern regions of Western Europe. In a nutshell, in contravention of every theory governing democratization and economic development, a small, resource poor region, without attention from either the central authorities in Moscow or Western aid agencies, was succeeding despite the economic and political collapse around it.

This is the paradox I encountered and that demanded explanation. The key to the region’s success, I have since come to believe, can be traced to the creative use of cultural capital by local elites. By systematically contrasting Novgorod’s heritage as a medieval trade center (once the fourth largest in the Hanseatic League), and the cradle of Russian democracy, to Moscow’s heritage of political and economic centralization, local elites have re-defined reform as a return to the values of a more prosperous Russian tradition, rather than an abandonment of past. By embracing a positive political myth rooted in Russia’s past, they have eased the shock of cultural discontinuity, broadened the social constituency in favor of reforms, and contributed to dramatically higher levels of confidence in local government.

Just as puzzling to me, however, was the failure of Western analysts to notice this success.  Then it struck me that the predominant approaches to development have tended to focus on building institutional and economic incentives, while overlooking the issue of how local culture interprets these institutions and incentives. This led me to the works of the late University of California, Berkeley political scientist, and founder of the nation’s first school of public policy, Aaron Wildavsky. Late in life Wildavsky critically re-examined the work in public administration for which he became famous, and embraced instead an approach to politics that he called cultural theory. Cultural theory makes three important points that help us to explain rapid social change. First, people choose their preferences as part of constructing, modifying, and rejecting institutions. Culture thus has a visible manifestation and tangible social impact, that can be analyzed.

Second, while it is commonly assumed that needs and resources constrain behavior because people need to make ends meet, Wildavsky argued that “Above the level of survival needs and resources are socially constructed. . . . Constraints on development are thus located in the ways of life, not in the needs and resources themselves."[1] To me this suggests that cultural attributes can be powerful tools in shaping expectations about what constitutes the “proper” way of life for a community, redefining them when necessary.

Third, Wildavsky reminds us that cultures are not coextensive with countries. Even though "a single culture is central to the achievement of science, democracy, and development" it must always co-exist with other subcultures. He suggests that a “cultural audit” could be used to ascertain which of the elements a culture needs to adapt to new circumstances are overstocked and which are in short supply.[2]

Wildavsky’s work helps sharpen our focus on one of the central issues affecting development, namely which ways of life are best, and who is to decide? His answers, however, show that social scientists still have far to go in understanding the complex role that culture plays in economic and political development. By defining rapid socio-economic modernization as the quintessential virtue, Wildavsky simply side steps the troubling question of whether, as analysts or practitioners, we have the right to intervene in the balance of other cultures so that they become optimal from a social science perspective? Moreover, why should competitive individualism be deemed the value by which optimal socio-economic development is measured? Why not the values of a monastery or a kibbutz? Interestingly, while eschewing pluralism, competitiveness, and individualism, they each in their own way manage to resolve what Wildavsky calls the "crucial cultural question" of how to reconcile “the creative and expansionist tendencies of individualism to the stabilizing forces of hierarchy."[3]

          Not only does Wildavsky’s approach seem excessively culture-bound, his prescription are sure to provoke resentment. If a society contains a high proportion of people he calls “fatalists”—those who favor tradition over modernity and adhere to a religious world view—Wildavksy suggests that "people-changing” not new economic institutions must become the first priority.[4] Does he really mean to suggest that wherever religious beliefs and traditions dominate society, the priority of development should be to undermine them? Such a notion seems sure to engender hostility not just around the world, but even in many regions of the United States!

Still, these flaws should not blind us to the value of Wildavsky’s basic point—ignoring culture and social meaning has led analysts to misread the motivations or people in other societies. This seems indirectly borne out by the disastrous effects of western foreign assistance in the region.[5] Could cultural theory be applied to development in a less confrontational manner?  The experience of Novgorod suggests that it can.

Novgorod’s success in an environment that many analysts view as hostile to democracy and markets not only challenges the conventional wisdom about development in transition societies, but offers intriguing alternatives.

First, economic and political reforms seem closely linked to a revitalized sense of identity. Finding the appropriate historical reference point can help create a framework receptive to change. Both Western and Russian analysts, however, pay scant attention to Russian culture as a possible sources of support for economic and political reforms.

Second, even in the absence of a national consensus, local governments and elites can forge common values and priorities to lead their communities. The key to success is minimizing the disruption of old institutions where they continue to serve public needs, while simultaneously embracing new institutions and values. This can be done by placing them within the context of traditional cultural values.

Third, the proper sequencing of foreign assistance is vital to its success. Instead of pushing quick structural and economic reforms in the hopes that that these will yield rapid benefits and transform public attitudes, Novgorod created a receptive cultural environment before pursuing institutional changes.

Finally, just as working within the context of local culture can promote democratization, ignoring local culture can undermine the prospect for democratic consolidation. Efforts to introduce democratic institutions and new economic incentives without first encouraging a receptive cultural framework can increase social tensions and undermine political stability.

Novgorod thus encapsulates the first fruits of an indigenous, Russian model of development that could have implications for other societies in transition. It suggests that there are practical mechanisms that can effect political changes even after traditional institutions have collapsed. Finally, it challenges us to think about the way in which programs to assist development are designed, and who they are designed for.

Novgorod’s success also shows that it is high time to reject the condescending notion that certain cultures should be dismissed as hopelessly “pathological.” This idea is still all too common in writings about the Third World, to which Russia and the countries of the former Soviet Union have been conveniently added, now that the World Bank and IMF have “assisted” them. I submit that it is both counterproductive and unscientific to posit that there is something wrong with the values of any civilization that has lasted hundreds, perhaps thousands of years. It is not people’s choices that need to change, but the ability of their institutions to represent those choices. A key task of development should therefore be to promote more effective institutional representation (both economic and political) of core cultural values. A “cultural audit” can be a helpful tool in identifying such core values, but instead of using it to measure the deficiency of local cultures compared to the West, it should be used to identify the imbalances within a society that lead to sub-optimal performance, as defined by the cultural traditions of that society.

The experience of Novgorod further suggests that a receptive cultural environment is a key prerequisite for development. This does not mean the imposition of a particular set of cultural values in whose absence a vast reconstruction of the culture must be undertaken. Development specialists should be trained to understand how development has historically occurred within the context of the local culture. A proper cultural audit should first define the core components of local cultural and how they shape overall attitudes toward socio-economic well-being. Then, it should identify the mechanisms by which these values enter the public arena and are translated into policy priorities. Lastly, it should look at how to improve that translation so that government legitimacy and social consensus are strengthened.

Finally, if there were ever any doubt, Novgorod shows that there is no universal measure of development. Wildavsky himself acknowledges that it is unlikely that the answer to fundamental questions of value will be the same for all societies. If this is true then ipso facto there can be no single measure of success in development. A cultural audit must therefore be as concerned with identifying how much economic development is too much for a society, as it is with how much is enough. It should be as careful to identify how much democracy is too much for a society as it is with how much is not enough.

What I propose is two-fold shift in our approach to development issues: First, shift the focus of attention from the center to the regions, where changes take place more quickly and have a more immediate impact on people’s lives. Second, start with a regional cultural audit—an assessment of the priorities and values of a local community. It is here that we will find the operational characteristics that constrain or enable behavior by groups and individuals, rooted in history and symbols and manifested in peoples daily lives—symbols that, as Clifford Geertz reminds us, are “as public as marriage and as observable as agriculture.” Once identified, they can be tapped to build public support for development, without such support the entire endeavor has little hope of promoting civil society or social justice.

If the study of just one region of Russia can yield so much, how much more might the systematic study of regional cultures bring, in Russia and elsewhere?  This brings me back to my original point: Russia can certainly use help in setting her house in order, but she also has a lot to teach about promoting civil society and social justice more effectively.

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