Regulatory and Public administration reforms
in Russian: Major Results and Prospects
National Research University – Higher School of Economics
The imperfection of the executive power is one of the major factors affecting the
economic and social development of Russia. The article surveys main problems and possible
improvements in Russian public administration and governance in four areas – Regulation,
Public services, availability of information and civil society participation, HR development
and incentives in Civil Service.
Key Results of the Past Decade
Since 2002 a number of institutional reforms started in Russia aiming to improve the
performance of the Russian regulatory policy and public administration. These reforms
include Civil service reform, which focused on development of human resources of executive
authorities, on incentives and remuneration system, Public Administration reform –
optimization of structure and functions of public authorities, improving public services,
Regulatory reform – reduction of administrative burden on business and citizens.
Administrative reform, in particular, involves the reform of institutions, that is to say, the
reform of legislation, of the structure and responsibilities of public authorities, of regulations
and of techniques of management and systems of control. It means applying modern methods
of management (dealing with such matters as motivation, accountability, the decentralization
of the decision making process, and a focus on outcomes).
Administrative reform, as a Federal Program, was begun in 2003. Some functions that were
either being duplicated or were superfluous have been abolished. There has been a
redistribution of powers between the Federal authorities and the regions. At Federal and
Regional levels, administrative regulations governing relations between and relations within
executive bodies of authority have been introduced.
Despite the efforts taken, the system of executive power is still far from being optimal. Public
opinion surveys, internal assessments of experts, as well as international indicators (GRICS,
Corruption perception indexes, Growth competitiveness indexes etc.) testify to this fact.
Key performance indicators of Russian Administrative reform (2005 - 2010)
Performance indicators 2004 Performed
Quality and equal access to Public services 14% 70% 18% (2008 г.)
(% of respondents)
Administrative Burden on Business (% in 8,5% 3% 6% (2010)
GRICS: Government Effectiveness 48 70 45 (2009 г.)
GRICS: Regulatory Quality 30 70 35 (2009 г.)
Neither the citizens nor the business have seen significant results of the public administration
reforms, that has failed to improve the business climate and the availability of public services,
reduce corruption, restore confidence in public institutions and public officers, deliver proper
and efficient regulation and administration of the state resources. Only a handful of
innovations have been implemented in full or yielded expected results. Consequently, the
imperfection of the executive power has proved to be one of the major factors affecting the
investment and business climate, as well as the attitude of the citizens to public institutions.
According to nearly all independent indicators describing the quality of the executive bodies,
Russia has lost quite a number of points, also in comparison to many post-Soviet countries.
Comparative institutional advantages – former USSR republics
INDICATORS (2011) RUSSIA KAZAKHSTAN BELARUS GEORGIA
Doing business rank 123 59 68 12
Starting a Business 108 47 7 8
Protecting Investors 93 44 109 20
Enforcing Contracts 18 36 12 41
What this means is that Russia has an inefficient, non-transparent system of public
administration – a system that is, for the most part, unaccountable, is preoccupied with the
collection of bureaucratic rent, and lacks responsiveness to the needs of the society and of
government. The gap between the quality of management in business and in the public sector
is becoming wider and this impedes the efforts of government to manage the economy more
Poor outcome is the result of the defective implementation of the relevant programs, ignoring
a number of groups and interests, underestimating the complexity of the objectives and the
importance of external conditions for their achievement.
Firstly, the existing procedures for drafting the agenda and the identification of the
reformation sequence and stages are over-bureaucratized and detached from the needs and
participation of and control by the civil society. The authorized departments plan the reforms
on the basis of departmental vision of expediency, without dialogue with target groups of the
civil society, or engaging ‘hand-picked’ experts. As a result, a lot of innovations are enforced
as a means to expand the departmental influence and to promote departmental objectives;
sometimes they serve the purpose of expanding the market of consulting services.
Consequently, the reformation initiatives receive no public support and face opportunistic
behavior, resulting in the simulation of reforms and misunderstanding by the public officers.
The gap between public expectations and the results of the reforms is getting broader.
Secondly, inefficient reforms administration and coordination. The reforms were prepared
and performed in such a quick-paced manner that they exceeded the adaptive capacity of
executive bodies. Innovations are enforced at the times when neither their authors, nor the
executives fully understand all the details and implications of the suggested mechanisms.
Inflation of the reform initiatives develops an attitude when the reforms are treated as a new
assignment that is to be done by a certain deadline.
Thirdly, provisions for the participation of civil society institutions were very weak, and no
extensive coalitions are formed in support of the reforms. The involvement of parliament
members at any level of power is very poor. In this situation the executive authority
(particularly the government and the involved departments) automatically assumes full
liability for the success or failure of the reforms.
The bureaucratic approach and perfunctory control of the results turn the reform strategy into
the tactics of assignment completion, the specific weight of which is inconsistent with the
long-term, socially significant result.
Fourthly, there are no provisions to make the reforms irreversible and their trends topical.
Against the background of departments fighting to retain their powers, redundant functions
and regulations in any particular sphere sort of flow over to another sphere, which does not
contributes to a reduction but rather increases the administrative burden on the citizens and
businesses. There is no system of performance assessment for the reforms and for the new
Consequently, the risks of global loss of competitiveness of the state and deterioration of the
institutional environment vital for businesses and citizens have grown over the last few years.
The trust in state institutions and the public officers have plummeted. The governance in
Russia is still poor which manifests itself in ‘manual control’ and uncoordinated performance
of certain departments. Neither human, nor managerial resources are accumulated or
developed in the executive authorities system, which cannot be tolerated especially on the
The priority task for Russian Federation is still to establish the institutional environment
favorable for the development of the business, innovation and investment activities, ensuring
the provision of quality public services, devoid of the corruption component and containing a
developed feedback system covering the citizens and the business on the one hand, and the
state authorities on the other.
In other words, the task is to build a system of executive authorities that is light-weight,
capable of responding to the needs of the society and the external changes in an adequate and
flexible manner, respected by civil society and has capable human resources.
Accomplishment of this task would call for reformation of the regulatory and legal
framework, public and municipal services, as well as extensive reformation of the
relationship between the state and the civil society, harmonized development of every branch
of authority based on the distribution and proper performance of their respective functions.
Firstly, this would require a judicial system thoroughly independent from the executive
authorities and reporting to the society. Secondly, representative authorities should exercise
democratic principles for the reconciliation of the interests of citizens, businesses and the
state in the course of drafting, approval and monitoring of compliance with legal acts, rules
and regulations. Thirdly, the public administration system is unable to develop without proper
funding of the administrative innovations, functions exercised and services provided by the
Optimization of the government Regulatory Functions
Government regulation functions include all laws, rules and procedures defining the ‘entry’
to and ‘operation’ on the market, the requirements for access to the limited state resources.
These functions involve licensing, accreditation, supervision of product compliance and other
administrative tools regulating the market and enterprises.
Government regulations inevitably entail expenditures – both for the state and for the
controlled entities (enterprises, citizens, etc.). Such expenditures should reasonably include
both actual expenses and lost profit, because regulation also shapes behavioral strategies.
There is a consistent pattern – the more rigid the regulation is (fewer opportunities of
evasion), the higher expenditures it entails. Direct relationship between expenditures and
rigidity of regulation is the basis of many proposals of de-regulation and withdrawal of the
state from the economy.
However, one should, firstly, keep in mind the benefits of the society from regulation, and,
secondly, rely on the ‘second best’ principle implying that any originally unoptimized
situation can be improved through the state’s interference, which would be irrational in any
The problems in the sphere of regulation in Russia appear to be the following: firstly,
inadequacy of state regulation measures to the declared objectives (enforcement of regulation
measures without due regard for risks of damage). As a result, the amount of prevented
damage is often exceeded by the costs incurred by the market participants. New forms of
regulation are developed without due regard for the balance of interests and involvement of
the relevant groups.
Secondly, unenforced and vague regulation requirements lead to multiple interpretations,
ambiguous assessment of compliance allowing officials and judicial bodies in Russia to make
decisions at their own discretion, thereby raising the risk of corruption.
Thirdly, redundant, duplicating forms of inspection (control, supervision) are some times not
in compliance with the established requirements.
Fourthly, abuse of preventive forms of the state regulation, ‘presumed guilt’ of entrepreneurs
erects strong administrative obstacles for business activities and development of the market.
Fifthly, a broad range of fee-based agency services (expert examination, certification and
approvals by subsidiary organizations or affiliated persons) assisting the state authorities to
exercise their licensing and supervisory functions. This inspires additional administrative
expenditure and lowers efficiency of business.
Finally, objects, requirements and forms of regulation are noticeably inferior to the best
The main scope of the regulations improvement process consists in providing it with a target,
which implies prevention of unacceptable risks of damage to life and health of the citizens
and the environment, restrictive business practices, and provision of equal access to limited
resources. This principle requires enforcement of demonstrative verification of the necessity
and efficiency of any particular type of regulation. To this effect, the state should properly
identify and establish the values of inadmissible risks in specific spheres of business activity.
It is important to make provisions for the transition from preventive forms of compliance
assessment (control), limiting entry to the market, to routine control (supervision)
accompanied by the increased liability for failure to comply with the established
The scope of open-end permits, application of uniform procedures should be expanded, to
simplify and minimize the amount of submitted papers, and expedite their review.
If the risk of damage is moderate, it seems reasonable to outsource the compliance
assessment functions to accredited organizations. Until a competitive market emerges in this
sphere, the accredited organizations may charge customers for compliance assessment service
at the rates regulated by the state, and after the market is established – at market prices.
The targeted nature of regulations should be ensured through feedback including monitoring
and analysis of the existing state regulation, and identification of the measures to support the
improvement of state regulation on the basis of the monitoring and analysis results.
As many other countries Russia is introducing so called Smart Regulation principles. For this
purpose new department within the Ministry of economic development was established,
which responsibility is to examine drafts of new regulation acts according to principles of
Regulatory Impact Assessment. It is planned to perform retrospective assessment procedures,
as well as regular and comprehensive analysis of current legislation and tracking the impact
of normative-regulatory acts on the performance of the regulatory sphere.
Another suggestion consists in inclusion into the financial and economic feasibility
assessment of draft laws as an obligatory component not only for assessing budget
expenditure of different levels, but also costs and benefits of private organisations and
It is intended to develop mechanisms for involving recipients of regulatory activity
(businesses, not-for-profit organisations and civilians) in the planning of normative-
regulatory acts (Internet panels, public evaluation, public consultation and so on). In this
respect creation of a unified public information resource of RIA to facilitate disclosure of
draft normative-regulatory acts at the early stages of their elaboration is important.
Improving Public Services
One of the key management tools for improving quality of public services in Russia is an
administrative regulation, or reglamentation of administrative functions and services. The
idea of reglamentation of administrative functions and services came from business where it
is well known as re-engineering, optimization of business processes, streamlining of
operation etc. European countries have been widely applying the procedures of administrative
simplification. In Russian the experts of National Research University - Higher School of
Economics, voiced the idea of elaboration of administrative regulation for the performance of
public functions and provision of public services in 2003. On the one hand, it was based on
the Weber’s “ideal” bureaucrat model, which demands abidance by specific rules, on the
other hand, on the concept of performance-oriented management aimed at reaching quality
standards of public services. An administrative regulation is a step-by-step description
(algorithm) of the optimized process of performing a function or providing a service,
including the criteria of decision-making and detailed characteristics of the outcome in the
form of a standard of performance.
An endorsed administrative regulation is a legal act available to clients, which can be used for
control and appeal against incorrect or illegal actions of officials, first and foremost if they
fail to comply with the established standards of state services.
Administrative regulation contains the description of every stage of administrative process
specifies the responsibilities of officials, necessary documents and payments and as an
indispensible part standard of public services, which relate to quality, to informing the public,
and to conditions of service delivery.
Probably, the idea of reglamentation is not that topical for countries with well-established
legal culture and administrative traditions as it is for Russia where bureaucracy and civil
society are still trying to establish balance of mutual rights and commitments. At present,
administrative regulations in Russia are playing the role of original public commitments of
executive bodies delineating guarantees of quality services and interaction of the civil society
with the state.
Thanks to the introduction of administrative regulations the civil society has been granted an
opportunity to take a look into the bureaucratic machinery, which was an absolutely closed
entity until recently, able to expand its authority at its own will, and assess the results of its
own performance. Open standards and administrative regulations ensure transparency of
As was mentioned above, quality standards of a public service are an integral part of
administrative regulations, established mandatory requirements to information, deadlines,
range and forms of required documents, as well as the quality of services including the
interior of reception areas.
The standards of public services are aimed at minimizing all types of transaction costs laid
upon individuals and organizations in their interaction with the state bodies, their greater
openness, accessibility of information on the procedure and progress of the function
performance, and availability of services at each stage. The pre-set standards ensure actual
opportunities for public control over executive bodies’ delivery.
In Russia the Government Commission on administrative reform reviews administrative
regulations, including standards, of most socially and economically significant public
functions and services. In the majority of instances the degree of simplification of an
administrative procedure is the key criterion of the administrative regulation and standards
A precondition for the endorsement of an administrative regulation is an independent expert
examination. Expert examination has to determine the conformity of the procedure and
quality standards of a service specified by the administrative regulation with the needs of
social groups affected by this regulation.
By the end of 2010 approved about 500 administrative regulations on Federal level, what
covers approximately half of the functions and services of federal executive bodies. In 2012
the Process of “reglamentation” should be completed.
The 2011-2013 Concept for Reduction of Administrative Burden and Enhancement of
Availability of Public Services makes provisions for key measures envisaging the completion
of ranking and updating of standards, optimization of most demanding public services,
promotion of the ‘single window’ or ‘one-stop’ approach to provision of public services at
multi-functional centers. Within fulfillment of ‘Information society in 2001-2020’ federal
program e-services will be developed, instruments of e-democracy will be introduced.
To focus the public and municipal services system on the needs of the citizens and the
business implies optimization of services provision based on real-life situations, the
development of mechanisms allowing the consumers to control service quality (complaint
Implementation of the principle of integrated and targeted servicing requires systematization
and integration of services provided by various departments and levels of public authority.
Combination of services into packages sorted by real-life situations requires organization of
interdepartmental information exchange and joint development of standards for interrelated
public and municipal services. It is also important to introduce the mechanisms of services
delivery allowing to take into account the individual preferences of particular applicant.
Expanding the front office functions (interaction with applicants, consultations, suggestions,
etc.) of the executive agencies is also an issue for the improvement of services.
The bureaucratic structure of public authorities makes it difficult to exercise customer-
oriented service functions implying “individualized approach” and active consulting, the
provision of not only requested information but also information across the entire spectrum of
the applicant’s needs. This problem could be solved by means of outsourcing of front office
functions to nonprofit, nongovernment organization. This kind of approach is currently
implemented in Russia in the course of establishment of multi-functional centers (MFC).
A multi-functional center is an integrated reception area for registration and issuance of
documents to an applicant when providing various public and municipal services. Its
organizational background is interdepartmental information exchange, information sharing
agreements and documents circulation among federal, regional and municipal executive
By the end of 2010 166 multi-functional centers were established in 50 regions of Russia,
what provide 100-200 public services each. Although MFCs are very costly (74% of total
budget of Administrative Reform in 2007-2010), they demonstrate good results – high clients
satisfaction, reduction of risk of corruption and all kinds of transaction costs.
The quality public services require that the consumer should be able to effectively control all
components of it standards. Active quality control implies the existence of an effective pre-
trial appeal and incentive systems to economically motivate quality services.
It is also necessary to establish a permanent quality monitoring system for the provision of
public and municipal services. This system should have two objectives: firstly, promote
quality service assessment by the consumers to identify the performance indicators for any
particular organization; and, secondly, provide information for the re-engineering of public
and municipal services, for simplification of administrative processes.
As the information society and e-Government advance, the bulk of public and municipal
services will be rendered in distant form through the portals exercising the functions of
interaction with the customers. However, depending on the specifics of various services and
the customers’ preferences the development of multi-channel forms of public services
delivery is required.
The development of administrative regulations is closely connected with the formation of the
e-Government. The transfer to e-services occurs above all to those services, for which
administrative regulations have already been approved. Such an approach is instrumental in
avoiding the “automation of chaos”. This also enables a 30-40% reduction of costs involved
in the creation of e-services.
In international and Russian practices several stages of “maturity” of e-services can be
identified. The first is the informing stage, i.e. placing detailed information on a public
service on a departmental web site. The second stage of “personal accessibility” allows the
applicants to independently prepare all the requisite papers for submission to a government
body. The third stage of partial interactivity enables initial application to the relevant
government body through the Internet followed by subsequent personal application if
necessary. On the fourth stage one can monitor how his (her) application is advancing. And
lastly the fifth stage of interactivity envisages the realization of a state function (rendering a
service) without personal participation of the party concerned.
The average level of correspondence of the first, informing stage of electronic interaction is
about 60%. On the whole the level of readiness of federal bodies for electronic interaction is
a little more than 30%. According to the Civil Service Act #210 all public services of federal
level will be ready for electronic interaction of individuals with government bodies till
The development of the Unified portal of public services is under way. This portal will
combine both electronic resources and services by various departments at federal and
regional levels. By the end of 2010 the Unified portal of public services encompass 575 of
the public services (functions) provided by 56 federal agencies. In May 2011 it was 782
public services (functions). Total number of services (functions) on the federal level is about
One of the most acute problems involved in the creation of E-Government in Russia is to
build up joint information resources and draw up rules of interaction acceptable to the
government and all stakeholders.
Availability of Information and Participation
Monitoring of executive authorities provided by the Ministry of Economic Development of
the Russian Federation in 2010 reveals, that availability of information index is 53% of
required standards. It varies from region to region within the range of 9% to 72%. Since there
is no official confidential information list, departmental acts tend to impose various
restrictions and fees for provision of data from the governmental information resources.
The recipient often fails to understand public domain information as the latter is not properly
structured and not oriented towards target groups. Therefore, lawful requirements to promote
openness and availability of governmental information resources, plain writing are not
properly complied with.
There is a need for a more specific regulation of the data format and settings, to promote a
more ‘user-friendly interface’ (intuitive and logical placement, search, download, etc.). This
is to say, that the laws should regulate not only the contents but should also set specific
parameters for data presentation, taking into account the specific features and needs of certain
client groups. Information concerning each specific client should be provided in maximum
detail and in a most convenient manner.
It would seem reasonable that public authorities should use their own Websites to present
their plans and programs used as the basis for decisions of executive authorities, as well as
draft decisions, information and the appropriate analytical data. There should also be some
kind of a forum to discuss these draft decisions, which also necessitates a user-friendly
“Depositing” of problems, i.e. filing of the application, detailing the potential problem, and
the response of the appropriate official in the departmental database (open Website), may
prove to be an effective tool of enhancing of public participation and control. Analysis of
such applications and responses of officials allows for assessment of quality performance of
the departments and any individual specialists: if a forecast problem mentioned in the
application happens in reality, distribution of liability (at least moral) for not taking the
appropriate measures would be fairly transparent.
It seems reasonable to elaborate a list of departmental documents for which the public
councils should formulate its conclusion: the federal programs, strategic plans, regulatory
Despite the numerous public councils, expert groups and commissions acting in Russian
governmental bodies, it is not infrequent that administrative decisions fail to take into account
the diverse interests and representative opinions. Consultative bodies and commissions are
often nothing but rubber stamps, which is fine with the departments reluctant to promote
interaction with civil society on an equitable basis.
It is generally known, that public participation would enhance creativity and reconcile
interests of various public groups at the stage of drafting and implementation of the
administrative decisions, which is vital for handling any conflicts of interests. Participation
system is particularly important in conditions when traditional democratic institutions are
underdeveloped, lack the necessary expert potential and are inferior to executive authorities
in terms of information access and analytical capabilities.
Public participation mechanisms should be sufficiently fast, ensure the detection of the entire
spectrum of new ideas and open discussion thereof, and be protected against monopolization
of public opinion by the most influential groups.
Ability of public representatives to participate in the process of recruiting for public service,
anti-corruption arrangements, etc. should be a prerequisite of transparency for governmental
bodies. The legislative acts of the Russian Federation regulating the civil service make
provisions for such capabilities by including independent experts in tender committees,
personnel review boards and conflict settlement commissions. However, all this entails a vast
number of problems.
Firstly, there are no proper procedures for the selection of experts. Specifically, there are no
provisions ensuring that the experts are independent from the governmental bodies requesting
their services. Secondly, independent experts participation in commissions is treated as a
social assignment, no compensation is provided. This limits the choice within expert
community. Thirdly, and most importantly, procedures established for the operation of
commissions are developed in such a way that the representatives of a governmental body
may approve a decision even if the experts disagree. The ability of an expert to effect the
decision in the event of any disputes is really slim.
Effective procedures for involvement of public representatives in the tender committees,
personnel review boards and the conflict settlement commissions should be established.
Terms and procedures regulating the participation of the public and business community
(including the industry-specific community) in the discussion of draft decisions (including
regulatory legal acts, programs, etc.) of the authorities, registration of initiatives in the course
of policy shaping and normative regulation should be more explicitly stated (probably in the
form of Federal Law). To this effect, it would be reasonable to make more detailed and
imperative regulations applicable to professional deliberations and public hearings of draft
regulatory legal acts applicable to the relevant sphere of public relations. One should approve
specific procedures for the relevant public hearings and the registration of conclusions made
on the basis of such hearings. Specifically, there should be provisions for the organization of
hearings of the governmental programs that will serve as the basis for budget funding.
The Civil Code of the Russian Federation should be modified so as to expand the right of
nongovernment organizations to protect the interests of citizens and organizations in the
judicial procedures, including protection through the review of lawfulness of regulatory acts.
Provision of this opportunity will be all the more feasible, because occasionally (especially
on the regional and local level) business entities making a stand for their interests and
appealing against decisions of administrative bodies find themselves in a difficult situation.
Effective contract with bureaucrat
Despite the reforms going on since 2003, the Civil Service still leaves much to be desired.
The search for features of the effective contract with bureaucracy is still underway. There is
no transparent and readily available career development ‘roadmaps’ for public servants.
Consequently, ‘negative selection’ is still in place. Young professionals do not link their life
strategy with the public service, seeing it rather as a temporary shelter where they may get
some individual benefits. Quit often the skill level of civil servants is inadequate for complex
administration and regulatory tasks. As a result the civil society is increasingly distrustful of
the bureaucratic corps, its ability to effectively solve problems of social and economic
development. Public service still operates the outdated HR technologies that fail to recruit
qualified personnel according to the scope and complexity of executive authorities’ functions
and prove to be demotivating for the incumbent public officers in terms of career
One of the most acute problems of staffing in Civil Service consists in inadequate
compensation package (first of all - level and structure of pay). The pay system of public
officers is often inconsistent with the labor market and does not encourage any strive for
results or professional development. It evolved into something unique for international
practices: base salary of a Russian public officer accounts for 20%-35% of the total
remuneration. Many bonuses and supplementary payments vastly overshadow the base salary
and are not linked with individual performance. This is vastly discouraging to public officers
who sometimes use it as an excuse for poor performance or even corruption, regarding the
latter as the ‘underpayment rent’. Prompt revision of the public officers’ remuneration
structure should make sure that the base salary includes all compensatory payments except
merit-based bonuses for best performance.
Another problem comes from the profound difference between the comparatively low level of
pay at the territorial bodies of federal executive authorities and higher remuneration at
regional and sometimes at local governments. As a result, the principle “equal pay for equal
work and responsibility” is not fulfilled. Consequently, ‘negative selection’ is detrimental to
the federal territorial bodies in Russian regions.
To solve these problems, it would be feasible to focus on the establishment of a more flexible
and graded pay system, consistent with the labor markets. To this effect, it would be
necessary to introduce comprehensive and regular monitoring of remuneration by categories
of employees including public officers of all levels of government.