What it cost to build the Power Vertical

Two political scientists explain how Russia’s abandonment of mayoral elections hasn’t delivered on promises of more effective management

Thanks to Russia’s recent constitutional amendments, local self-government has effectively lost its independence. State officials at all levels now belong to the “unified system of public authority,” accountable to the president. Dramatic as these changes seem on paper, the reforms, in fact, formally recognize what has long been true in reality: appointed “city managers” have largely replaced the country’s elected mayors. As is often the case with Russia’s legislative innovations, lawmakers have justified the abolition of these popularly elected positions by citing “international practices” — particularly in the United States, which is where they grabbed the term “city manager.” In Russia and around the world, the main purpose of these reforms has been to reduce ineffective and often politically-driven municipal spending. In an article specially for Meduza, Center for Advanced Governance political scientists Kirill Kazantsev and Alexandra Rumyantseva examine whether Russia’s retreat from popularly elected mayors has ushered in an era of more effective city management.

A note from Maxim Trudolyubov, head of Meduza’s “Ideas” bureau

It goes without saying that popularly-elected politicians are capable of abusing their authority in order to remain in power, which is why some democratic countries, such as the United States, delegate executive powers to recruited managers at local levels closest to the public. Russia’s rulers today embrace precisely this logic: elected politicians are too unpredictable and Russian society hasn’t yet matured enough to choose its leaders even at the local level. Technocrats, not elected officials, should lead.

The only difference is that countries like the U.S. have maintained elections at all other levels, while Russia has not. In fact, the share of elected leaders in Russia has been declining steadily for the past two decades.

Experts at the Center for Advanced Governance studied the collapse of democratic self-rule in Russia and tracked how one of the biggest reforms in the country’s post-Soviet history has affected the quality of management across cities and regions.

Our hypothesis. Who’s the better manager? Someone elected by locals or someone recruited like the head of a major corporation? Elected leaders possess legitimacy and accountability, and it’s believed that those who win elections take their own promises seriously, since they’ll have to defend their records when seeking re-election. On the other hand, incumbent politicians sometimes abuse their position and access to public resources to bribe voters and maintain their hold on office. Many countries have addressed this challenge by introducing city managers, whom city councils recruit. In theory, at least, the advantage with city managers is that they’re politically neutral and independent from lobbyists, and they’re professional urbanists with well-developed plans of action. Russia has implemented such a system, as well, but the designed “professionalization” of local management fails when free elections at other levels of government are also abolished.

Who are these city managers?

According to Russia’s Constitution, local self-government operates independently from regional and federal control. In 2003, however, federal lawmakers adopted legislation that introduced the office of city manager (albeit under different names), granting municipalities a choice between one of two models:

• An elected head of government (a mayor) who leads the executive branch himself or herself (as was the case before the reforms); or
• A recruitment panel involving regional officials appoints a city manager to lead the executive branch.

In 2014, Russia introduced a third model wherein city managers serve simultaneously as municipal heads, effectively making them appointed mayors. This design still relies on recruitment panels with an expanded role for the regional authorities, who acquired the right to determine which management model operates in “their” municipalities.

Proponents in Russia say city managers are better stewards than mayors, and they argue that city managers offer an antidote to elected populists who use local government exclusively for self-promotion. Reformers favored this approach as a means of ending the conflicts between governors and the mayors of large cities, who shared resources and political influence in the late 1990s and early 2000s. These battles are how Russia’s regional authorities won such broad representation on the panels responsible for recruiting city managers.

With deputies in every city and district council, the country’s ruling political party, United Russia, exerts additional control over city managers.

With these reforms, Russia gradually integrated its municipalities into a single “Power Vertical.” This process was informal, at first, but constitutional amendments adopted in the summer of 2020 codified the arrangement under what’s now called “a unified system of public authority.” All local self-government now inhabits this space, answering to the president.

As a result, city managers have supplanted Russia’s elected mayors nearly everywhere. In 2006, three years after the reforms got underway, about 65 percent of the country’s cities and municipalities elected their mayors. By 2018, this figure had fallen to 12.4 percent. In other words, the residents of half the municipalities in Russia lost their local mayoral elections over the course of 12 years (and others lost them even earlier).

Lessons from around the world

At first glance, anything but direct elections at the local level seems inconceivable in a democracy. After all, if mayors and district heads know their careers rely on their neighbors, they’ll act in these people’s interests. Yet, democracies have struggled throughout history with the abuse of powers legitimized through elections.

For decades in the United States, mayoral elections depended on so-called “political machines” — special interest groups that could mobilize the necessary numbers of voters to catapult their candidates to victory. Once in office, these politicians then used the public budget not to benefit the people, but to support their respective “machine” and help themselves and other allied candidates win in future elections.

In response, by 1908, some American municipalities started experimenting with a new system that transferred certain administrative and economic functions to specially recruited city managers. Modeled on corporate hiring practices, this new approach was designed to find professional executives. Advocates believed a politically neutral manager — a salaried technocrat — would manage the job better at the local level. The system later spread to other countries, as well.

Armed with mountains of high-quality municipal data, scholars in the United States have spent decades studying the relative effectiveness of city managers and elected mayors. This research generally confirms the basic hypothesis that city managers spend less public money than their elected counterparts, presumably because they are less susceptible to the influence of citizens’ groups that are interested in particular municipal projects. It has proved impossible, however, to say for certain if this lower public spending is the result of greater efficiency or deliberate austerity.

Scholars have conducted similar research in Germany, where city managers were ultimately discarded. German studies show that elected mayors more eagerly allocated grants and investments to locally important infrastructure projects, in order to have something they could present to voters when seeking re-election. At the same time, Germany’s experience also demonstrates that direct elections can actually reduce municipal spending because fiscal conservatism appeals to many voters.

But what about Russia? Has the steady decline of political independence at the municipal level ushered in a new era of government efficiency?

What happened in Russia

Regional officials love the idea of city managers more than anyone. The initial adoption of city managers in some parts of Russia was relatively smooth. This changed in 2014, however, when regional authorities gained control over how municipal officials select their leaders. As a result, city managers replaced elected mayors in a political avalanche. In 2015 alone, roughly 500 municipalities ditched direct elections — more than in the eight preceding years.

Municipal spending has, in fact, decreased. Though city managers in some municipalities expanded their budgets, political appointees cut public spending by 2–6 percent, on average. Where municipal spending rose, city managers likely exerted restraint, judging by the even greater spending hikes in places that retained their elected mayors. Curiously, it’s impossible to say unequivocally how appointed leaders save money. Most likely, they make decisions that are specific to the situations in their particular municipalities, though some of the biggest cutbacks across the country have come in spending on housing and communal services. This makes sense, given that a large share of this money is perhaps the most discretionary part of a city’s budget.

Employment in the economy’s municipal sector also fell. Appointed leaders generally reduced the number of people working at municipal organizations, from unitary enterprises like theaters, recreation centers, and bathhouses to housing facilities and foundations partly owned by the city. Previous researchers identified a similar effect, arguing that elected mayors are more inclined to support high employment as a social benefit to potential voters. On the whole, Russia’s experience with municipal employment fits with city managers’ tendency to cut spending and may serve as additional evidence that appointed officials are more willing to streamline budgetary policy, which affects healthcare, education, and local recreation.

Local governments’ budgets have dwindled. Typically, we weigh a municipality’s financial independence by measuring how heavily its budget relies on taxes and other revenues collected from the organizations it owns. In Russian cities with appointed managers, this reliance has increased (suggesting greater independence), but the measurement is actually ambiguous. In reality, regional governments have reduced transfers to city-manager-run municipalities by 6 percent, while local revenues have remained largely unchanged. In other words, appointed officials were allocated less money and they spent less money. It’s not exactly shocking: it’s much harder for appointees to contest budget allocations with regional officials because they depend heavily on these same officials.

Replacing mayors with city managers doesn’t improve the quality of governance. A lack of access and quality data limits the conclusions we can draw about advances in local management, but we found no evidence that appointed leaders were able to achieve significant improvements. In terms of financial management, municipal organizations’ accounts payable (both salary payments and transfers to social insurance funds) did not decrease. Municipalities run by political appointees failed to earn more in either local tax revenues or fees charged for the use of municipal and state property (which city managers control completely). Removing elected officials hasn’t improved infrastructure quality, either: the level of sewage and water-supply malfunctions in areas under appointed city management has remained the same as in municipalities with elected mayors. Investments in municipally-owned organizations’ fixed assets, moreover, have also declined by roughly 6–10 percent. These trends indirectly confirm that city managers are less motivated municipal leaders.

Conclusions. Reforms to local government, initiated in 2003, have had a powerful, largely negative impact on the state of local self-rule in Russia. The abolition of popular mayoral elections has not led to qualitative improvements in municipal performance. Instead, the level of public authority closest to the people is now unaccountable to the public. Problems with financial dependence, meanwhile, have only grown worse. The reforms’ main purpose, it turns out, was to finish building Russia’s unified “Power Vertical,” not to facilitate more effective governance.

Text by Kirill Kazantsev and Alexandra Rumyantseva

Translation by Kevin Rothrock