Informal Practices in Changing Societies: Comparing Chinese Guanxi and Russian Blat

The paper defines the key features of Chinese guanxi and Russian blat networks, explores similarities and differences in the use of these networks both in communist and post-communist economies, and discovers their ambiguous relationship with the formal institutions. Having compared guanxixue and blat in detail, one should conclude that people tend to develop similar responses (as well idioms) in order to survive in state centralised economies characterized by shortages, state distribution system and ideological predicaments. Guanxi and blat networks in pre-reform China and Russia played a similarly ambiguous role in these economies: on the one hand, they compensated for the defects of the formal rules thus enabling the declared principles of the economy to exist; on the other hand, they subverted them. There are also common trends in the transformation of informal practices in post-reform China and Russia. Before the reforms, both guanxixue and blat were often beneficial to ordinary people in allowing them to satisfy their personal needs and in organising their own lives, whereas now their shift into corruption benefits the official-business classes and hurts the bulk of society. Trust and social networks are vital components of both economies and will continue to exist (as elsewhere) but their implications for the transformation may differ. The post-Soviet reforms have changed the Soviet-type blat practices so much that blat has almost ceased to be a relevant term for the use of personal networks both in the state and in the new sectors of the economy. Being more culturally and historically grounded, the term guanxi has sustained and found its new use in contemporary China. There is much more discussion of guanxi and guanxi capitalism in China than ever has been on blat in Russia. The partiality of reforms in China and the communist rulership does not prevent foreign investment and economic success, and corruption is estimated as not as damaging in China as it is in Russia

Leadership and Corruption in Russia, 2000-2004

The paper defines the key features of corruption and perception of corruption in Russia under Putin. It provides a comparison of trends of corruption perception index in the CIS region and CEE countries and focuses on specifics of President Putin’s policies in application. The analysis questions the assumptions about informal practices and formal institutions and offers interpretations of the dependence of Putin’s regime on the ‘unwritten tules’

Ambiguity of Social Networks in Post-Communist Contexts

The paper discusses three hypotheses. First, it introduces four ideal types of networks which are combined in the category of networks as used by social scientists. Four types result from the intersection of two implicit choices made about networks – networks are assumed to be either personal or impersonal, and are viewed either internally or externally. Thus, networks are understood in terms of sociability, access to resources, enabling structure, or social capital. Second, I argue that networks function in a fundamentally ambiguous way. They operate in their capacity of a safety net or survival kit, provide a ‘beating the system’ capacity or compensate for the system’s defects. At the same time networks provide constraints such as high costs of informal contract, limits on individual action, lock-in effects and the handicaps of social capital. Third, I illustrate differences between networks serving the economy of favors in Russia and networks serving the purposes of ‘network society.

Preface

The book is an impressive freight of scholarly work that leaves behind the terminological problems of earlier strains of post-communist research. Though the book's conceptual language is applicable elsewhere, its greatest analytical leverage will be in the states of the former Eastern Bloc. Clarifying and systematising a conceptual framework that rigorously covers much of post-communist state and society facilitates finer analysis and research that can be more easily related to other studies. (Insofar as its new language reduces semantic confusion, the book's value cannot be understated). The textbook format speaks to the authors’ primary audience: the book will be a welcome resource for the classroom and for students studying regimes, particularly in the post-Soviet space

Open Secrets and Knowing Smiles

Given the importance of informal ways of getting things done in postsocialist societies, research into the field of unwritten rules and informal practices has been slow to develop. In studying such rules and practices, the researcher often encounters skepticism or hostility stemming from the ways in which people relate to tacit agreements, or else she or he is greeted by an ambivalent smile of complicity—a knowing smile. This article draws a connection between knowing smiles and open secrets and argues that these notions illuminate a great deal about how the “grey areas” of social life function. It also suggests that such seemingly trivial aspects of everyday life can reveal profound features of social institutions and point in the direction of innovative research

From Russia with Blat: Can Informal Networks Help Modernize Russia?

Since the collapse of the Soviet Union, Moscow has become a global city with a vibrant urban and cultural life-one of the most expensive capitals in the world with famous clubs and restaurants, as well as one of the most popular destinations for city workers and diplomats. Has corruption been instrumental in Moscow's development? The answer is complicated and in many ways a matter of definitions. It depends on whether one considers informal practices-inherited from Soviet times as well as new ones-as corrupt and how one conceptualizes corruption. I will illustrate some of these complications for the case of the Soviet practice of blat, explain its "monetization" and its evolving relationship with corruption in the post-Soviet transition, and analyze the role of informal networks in present-day Russia

The rules of the game in transition: how informal institutions work in South East Europe

This chapter reviews the literature on the interaction of formal and informal institutions and undertakes empirical tests for the validity of claims about the substitutive role of informal institutions. We address two questions: ‘what works when the formal institutions do not?’ and ‘to what extent do formal institutions constitute real constraints in South East European societies, characterised by strong hold of personalised trust and reliance on personal connections.’ To answer these questions, we analyse survey data from eight countries of South East Europe (SEE). When formal rules fail to be effective, social norms of reliance on ‘trusted people and connections’ predominate as a default option, alongside the complexity of factors surrounding the workings of informal networks that channel and enable such interactions

Modelling the costs of informal networking: Evidence from the Western Balkans region

This is the first study to explore costs of informal networking in the Western Balkans. In a comparative survey, we find that informal networking, or use of personal contacts for getting things done, is common in the region while the economic cost of informal networking is substantial (100 euros against average monthly income of 250 Euros). In the structure of networking costs, the estimated costs of invested time, a proxy for sociability, dominate over money. Higher costs are associated with larger networks built on strong ties. Respondents who perceive networking as important tend to invest more time and money. The informal networking costs are also higher for those with more education and income, and for entrepreneurs. Individuals bear the high costs of informal networking not only for social and culturally determined reasons, but also with an instrumental purpose. Our evidence suggests that both sociability and instrumentality drive informal networking

Corruption in Postcommunist Societies in Europe: A Reexamination

Anti-corruption drives and a new ‘corruption paradigm’ have figured prominently in the reconstitution of political order in Europe's postcommunist states, under strong pressure from the international financial institutions and the European Union. Now that data on corruption are systematically collected, measured and monitored, it is both possible and essential to step back and assess what these data reveal, conceal or omit. This paper articulates and provides a critique of the assumptions, preconceptions and methodology implicit in the prevailing ‘corruption paradigm’. The critique is organized around the cultural and historical neutrality of the definition of corruption (assumption 1); problems with the measurement of corruption (assumption 2); and the implications for policy-making (assumption 3). The paper argues that the ‘disaggregation’ of the corruption paradigm in the postcommunist states is essential, both for an adequate assessment of the postcommunist experience and for determining the validity of the paradigm