The Russian Centralisation of the State: How It Occurred and Why It Matters

Putin’s Russia is often seen as a fully centralised state where power flows only from the Kremlin, but this was not destiny. In the 1990s, Russia was a fragmented federation of governors, oligarchs, and regional elites, and it was through deliberate choices—changing electoral laws, reshaping parties, abolishing gubernatorial elections, and tying rents to loyalty—that the “power vertical” was built. Centralisation was sold as the price of stability, yet it eroded the guardrails that once constrained abuse of power. Russia’s lesson is stark: institutions do not collapse on their own, they are traded away by citizens willing to accept order over rights. As an Eastern European watching the United States, I see echoes of this bargain in the readiness of some to let Trump push past limits in the hope he will “fix it.” Guardrails only hold if people defend them.

A brief history of 1990's Russia

The collapse of the Soviet Union brought deep turbulence for Russia’s political future. Only a year earlier, the August 1991 coup attempt by the GKChP — a hardline communist faction — had failed, but it revealed how much support communist forces still retained. For Boris Yeltsin, then head of the Russian Soviet Federation, this was a decisive moment. Faced with the choice of holding immediate elections, which would likely have returned communists to power in parliament and stalled liberal economic reform, or postponing elections to allow the anti-communist coalition to push through its programme, Yeltsin chose the latter [1]. This decision set a damaging precedent: democratic institutions could be set aside in the name of reform. It also enabled Soviet-era bureaucrats and elites to re-enter politics without serious competition, entrenching their influence in both regional governments and the national parliament [2].

With Yeltsin’s decision not to hold competitive elections after the collapse of the Soviet Union, regional elites quickly entrenched themselves. Old Soviet bureaucrats filled both local executive and legislative posts through patronage, leaving little space for genuine opposition to emerge. Many regions soon developed into authoritarian enclaves, governed by leaders who relied on “electoral machines”[4] — networks of patronage, coercion, media control, and outright vote-rigging. Yeltsin tolerated these undemocratic practices because he needed the governors to deliver results in federal elections. Yet this dependence came at a cost: whenever reforms were attempted or national elections approached, the Kremlin was forced to compromise with, or allow access to increased rents to, regional regimes simply to secure their cooperation and maintain power [5].

To understand the pre-Putin era, it is crucial to consider the economic collapse of the 1990s. Yeltsin’s reforms were carried out at breakneck speed, less to build an efficient state than to, in Chubais’s(the main voice economist of the Russian state) words, “put a nail in the communists’ coffin” [6]. Privatisation thus became a political strategy rather than a coherent economic policy. The consequences were severe: hyperinflation, a collapse of the rule of law, and a dramatic contraction of GDP(see table below).

Inflation peaked at over 1,500% in 1992 [10]

Between 1991 and 1999, Russia’s GDP fell by roughly 40% [8]

Trust in legal institutions all but disappeared [9].

In this vacuum, informal practices filled the void. Networks of patronage and loyalty known as krugovaya poruka (mutual protection among elites), and kompromat (blackmail material used to control rivals), became the real currency of power [11]. At the same time, privatisation was widely perceived as illegitimate, with vast state assets handed to a small group of oligarchs [7]. The combination of economic collapse, lawlessness, and reliance on informal rules created a society where the central government appeared irrelevant — a weakness that would later justify Putin’s drive to re-centralise authority.

The failure of reforms and the weakness of the state came to a head in 1993, when Yeltsin turned his frustration on parliament. In September, he dissolved the Duma by decree, sparking a standoff that ended with tanks shelling the White House, Russia’s parliament building [12]. The bloodshed cleared the way for Yeltsin to impose a new constitution that shifted authority decisively from the legislature to the presidency. The result was a “super-presidential” system, granting the head of state sweeping formal powers.

On paper, Yeltsin now ruled without serious institutional checks. In practice, his power was far less absolute. Reforms faltered in the regions, where governors resisted central interference, while oligarchs who had enriched themselves through the notorious “loans-for-shares” deals [7] wielded enormous leverage over policy. Bureaucratic inertia further reinforced the status quo. The paradox was striking: the constitution made the presidency all-powerful, yet Yeltsin still found himself constrained by entrenched elites and informal politics. What the 1993 crisis achieved was not effective governance, but the precedent that political deadlock could be resolved through force. It was a precedent that Putin would later inherit — and exploit more effectively.

The start of United Russia and Putin

United Russia began not as a true political party but as a coalition of pro-Kremlin blocs such as Unity and Fatherland–All Russia. From the start, it was never an ideological movement but a “party of power” [13] , a vehicle to secure electoral dominance for the Kremlin.

This was crucial because the governors Yeltsin had empowered in the early 1990s remained in place. Most of them were the same figures who had risen in 1991 [5], and they ruled their territories like personal fiefdoms. They rigged elections,partook in corruption, and created conditions where only they could run via ‘Bashkir Technology’[6]. For these regional leaders, cultivating a local image mattered more than representing a national party, and parties themselves were often seen by voters as corrupt or irrelevant [13].

Putin systematically dismantled this autonomy. The 2001 Party Law required all parties to have branches in more than half of Russia’s regions and at least 10,000 members nationwide. This effectively eliminated small regional parties and independents. The creation of seven federal districts in 2000 further reduced regional independence by placing presidential envoys, often ex-military or security officials, over the governors, ensuring closer coordination and oversight from Moscow [15].

The final step came with the 2004 Beslan Law, passed after the Beslan school siege. This reform abolished direct gubernatorial elections, replacing them with presidential appointments formally confirmed by regional legislatures [16]. For many governors, this was a bargain worth taking: under electoral rules, their two-term mandates were running out, but under the appointment system they could be appointed by Moscow. In exchange for them holding onto their regions and continued access to rents, they traded away political autonomy.[6]

The 2004 Beslan school siege, carried out by Chechen militants, ended in a chaotic three-day standoff that left over 330 hostages—most of them children—dead. This frame from the Aushev tape shows hundreds of hostages packed into the school gym with wired explosives attached to the basketball hoop.

By the mid-2000s, United Russia had transformed the regions from local authoritarian machines into subordinate states of a national power vertical. Elections persisted, but no longer as contests of policy or legitimacy, instead, they became rituals of mobilisation and loyalty to the Kremlin.

Oligarchs and the Kremlin: From Free Agents to Vassals

At the start of the 2000s, Russia’s oligarchs still wielded enormous political power. They controlled vast segments of the economy and could directly influence state policy to protect and expand their wealth [17]. For Yeltsin, these oligarchs were indispensable: their media monopolies and financial support helped him secure reelection in 1996. But for Putin, who sought to centralise power in the Kremlin, this independence was intolerable. The choice was clear — either co-opt the oligarchs into his system or break them. In practice, he pursued both strategies.

The stick was used against those who defied him. In 2000, Vladimir Gusinsky, owner of the independent NTV television network, faced criminal charges widely seen as kompromat [18]. He was forced into exile and stripped of his media empire. A few years later, Mikhail Khodorkovsky, head of Yukos, was arrested and his company dismantled after he funded opposition parties and challenged the Kremlin. Yukos’s most valuable assets were absorbed by Rosneft, headed by Putin’s ally Igor Sechin, transforming it into Russia’s largest oil producer [19]. These cases sent a clear message: wealth did not guarantee immunity, and political independence would not be tolerated.

The carrot came in the form of a new economic order. Putin built an over-regulated state in which selective enforcement of tax and corporate law could punish the disloyal while rewarding the loyal [17]. This also allowed him to frame asset seizures as popular reforms. The hated “loans-for-shares” deals of the 1990s, which transferred state wealth to a handful of insiders, had deeply delegitimised the post-Soviet economy. By renationalising assets or placing them under Kremlin control, Putin presented himself as reversing this injustice. In reality, ownership simply shifted from independent oligarchs to state monopolies run by his loyalists.[7]

By the mid-2000s, most oligarchs had accepted this trade. They lost their political influence but gained secure access to rents through state contracts, monopolies, and protection. In exchange for loyalty and retreat from politics, they were allowed to thrive economically. The oligarchs were no longer free agents competing with the state; they had become vassals of the Kremlin, tied into the power vertical on which their fortunes now depended.

The Social Contract: Stability in Exchange for Rights

By the end of the 1990s, many Russians felt that the state had simply vanished. The police were corrupt or absent, wages went unpaid, and lawlessness dominated everyday life. The popular 1997 film Brat captured this atmosphere perfectly: a Russia where crime, poverty,and moral decay were the norm. For many viewers, the film felt less like fiction and more like a reflection of their own reality. This pervasive sense of chaos became the foundation for Vladimir Putin’s electoral messaging.

When Putin ran for president in 2000, one of his central slogans was the call for a “dictatorship of the law” [20]. The phrase was not about repression but about re-establishing the authority of the state. Putin argued that Russia’s weak institutions and lack of enforcement had allowed chaos to flourish. To restore stability, the state had to become strong again — able to enforce rules, curb corruption, and bring order back to society.

This vision was institutionalized in the “Strategy 2010”. Developed in 2000 by the Center for Strategic Research (CSR) under German Gref, the plan outlined an ambitious program of judicial reform, tax simplification, restructuring of monopolies, bureaucratic efficiency, and, above all, the strengthening of the state. The underlying message was clear: citizens would have to surrender certain local rights and accept greater central control in exchange for stability and competent governance [17].

The electorate largely accepted this trade-off, as reflected in Putin’s soaring approval ratings [see table below]. Russians were willing to tolerate reduced political freedoms, weaker parliaments, appointed governors, and dominant state media so long as living standards improved and order was restored. The “dictatorship of the law” thus became less about equality before the law and more about reaffirming that the Kremlin — not oligarchs, not governors — was once again the centre of power in Russia.

[21] Shows the increase of popularity around 2000 to 80%.

Why centralization led to Russia’s incompetent governance.

By the early 2000s, Russians expected that a strong centralised state would finally deliver efficiency, prosperity, and order after a decade of chaos. The belief was that by consolidating power, the government could implement reforms, rebuild infrastructure, and ensure stability. Yet this transformation never materialised. Instead, centralisation produced stagnation, inefficiency, and systemic corruption.

The core problem lay in the nature of authoritarian governance itself. The main goal of such regimes is not reform but regime survival [13]. Reforms are pursued only insofar as they strengthen political control. This logic shaped the appointment of officials across Russia’s sprawling state-owned monopolies: loyalty mattered more than competence.

A clear example is Russian Railways (RZhD). Vladimir Yakunin, a long-time ally of Putin, led the company from 2005 to 2015. His appointment prioritised political stability over efficiency. Under Yakunin, RZhD became emblematic of rent extraction: transport tariffs were arbitrarily raised, the state repeatedly intervened with subsidies to maintain public affordability, and inefficiency flourished. Profits were privatised while losses were socialised [17]. Rather than serving as a driver of modernisation, RZhD became a pillar of the patronage system, a means of distributing rents to loyal elites.

The same pattern extended to state-led projects, which became vehicles for corruption rather than development. The 2014 Sochi Winter Olympics demonstrated the depth of this dysfunction. With an official cost exceeding $51 billion, it became the most expensive Olympics in history. Infrastructure contracts were awarded to companies owned by Putin’s associates, inflating costs and guaranteeing profits regardless of performance. The road from Adler to Krasnaya Polyana alone cost roughly $200 million per kilometre [22]. Such projects revealed how political loyalty and rent-seeking had replaced accountability and efficiency.

Even the reform agenda that had once promised to modernise the state was hollowed out. Of the major reforms envisioned in Strategy 2010, only the tax reform was implemented successfully, largely because it offered immediate fiscal benefits and visibly strengthened the state’s revenue base [17]. Longer-term reforms, such as in education or bureaucracy, were abandoned. Bureaucratic reform, in particular, failed outright: prioritising stability over efficiency made it impossible to challenge entrenched officials whose power depended on maintaining the status quo.

Instead of shrinking, the bureaucracy expanded dramatically. The number of state employees grew from about 1 million in 2000 to 1.6 million by 2010 [23]. Each reform created new layers of administration designed to control, monitor, and extract — not to improve governance. The result was an overregulated, inefficient state apparatus that existed less to serve citizens than to preserve itself.

In the end, the centralisation that promised order produced rigidity. Reforms ran aground against rent-seekers and bureaucrats protecting their privileges. The Kremlin in the name of stability, sacrificed innovation and quality of life for political predictability. Centralisation did not build a strong state; it built a stagnant one.

A Warning from the East: Populism, Trump, and the Fragility of Democracy

As someone from the post-Soviet world, with friends and family still living in Russia, I see a truth that many in the West overlook: people rarely understand the value of their political and human rights until they lose them. Across Eastern Europe, this lesson has been written in blood and struggle. If you asked Ukrainians fighting on the frontlines, or those who stood in the streets during Moldova’s 2009 parliamentary revolution or Georgia’s Rose Revolution, they would tell you the same thing, they fight, they risk their lives, for the simple hope that the next generation might live in a country where rights truly matter.

Living in Russia today, for those who wish to start a business, speak their minds, or challenge authority, feels suffocating and hopeless. The system punishes initiative and rewards obedience. Many of my friends describe life there as nihilistic, a place where no change seems possible, where the future has already been decided. That despair was born the day the Russian people traded their liberties for the illusion of a “strongman.”

From where I stand, Americans often take for granted the rights that others would give everything to have. Too many seem to view those rights as inconveniences, obstacles to a leader who promises to “get things done.” When I hear Trump supporters say that he should be allowed to act outside the Constitution for the good of the nation, or watch him refuse compromise with Congress over the shutdown, I see echoes of a familiar pattern. It begins with the belief that only one man can fix the system. It ends when the system no longer exists.

Even Trump’s appointments reflect this trend: loyalists without competence, chosen not to govern effectively but to obey. Americans may think they are simply choosing a decisive leader, but in truth, every concession to expedience erodes the very guardrails that keep democracy alive. What begins as the promise of “efficiency” can quickly become the justification for unchecked power.

If you truly understand what rights cost to earn, then you know they must be defended every day. Protest. Organize. Speak up. Do not wait until your freedoms are gone to realise what they were worth. Those of us who come from countries that lost them can tell you, living without rights is not stability; it is hopelessness. And no society can build a future on silence.

[1] - McFaul 2001

[2] - Flikke 2004

[3] - Ross 2005

[4] - Halle 2003

[5] - Grigorii V. Golosov 2011

[6] - Chubais https://www.youtube.com/watch?v=rgIzflkIkws

[7] - Aslun 2021

[8] - https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=RUgdp

[9] - https://data.worldbank.org/indicator/RL.PER.RNK?end=2012&locations=RU&start=1996-ruleoflaw

[10] - https://www.imf.org/en/Countries/RUSInflation

[11] - Ledeneva Alena 2006

[12] - Gel’man 2024