Mapping the Borders of
Informality:
Social Networks Economies of Favours Corrupt Practices
Alena Ledeneva, UCL/IEA Paris
University of Fribourg, Switzerland
22 November 2013
a.ledeneva@ucl.ac.uk
Russia is the best lab for
research into economy of favours,
informal practices, corrupt networks, especially
with a rear mirror methodology, studying the
know-how that no longer work (Academia.edu)
In the Soviet Union… was BLAT!
‘Neformal’noe – eto prirodnoe’
• The use of personal networks for obtaining
goods and services in short supply and for
circumventing formal procedures
• Know-how of socialism
• An informal
‘exchange of favours’ that
enabled socialist system to
operate contrary to the system’s
own acclaimed principles
Themes of boundaries and ambivalence
of Russia’s economy of favours:
• Sociability of blat made people unaware of
boundaries between friendship and use of
friendship: Better have 100 friends than 100
rubles, friendship vs. use of friendship
• Friend is a convertible asset in the economy of
shortage, where money play little role
• Alternative currency that introduced market
elements
• Reverse side of the over-controlling centre
• Enabling power of constraints
Typology of favours, given and received through strong
or weak ties and at the expense of private or public
resources
• Moral gain
• Private
resources
• Moral gain
• Public
resources
• Material gain
• Private
resource
Family and
friendship
Networks
created and
maintained
Favours as
(free) gift
Favours as
investment
Favours as
endowment
Favours as
commodity
Nepotistic/
clan/
patronage
networks
Mediated by
brokers
networks
• Material gain
• Public
resources
The most interesting puzzle is
hidden in the ambivalent functionality of
non-codified practices
Supportive but also subversive
Blat – the use of personal networks for getting
things done (‘informal institution’???) – solved
the double puzzle in the history of authoritarian
regimes
• enabled people to cope with economic,
political, ideological and social pressures of
socialism and
• enabled the regime to survive under similar
constraints
Blat is not the only one
6 paradoxes of late socialism
• No unemployment but nobody works.
• Nobody works but productivity
increases.
• Productivity increases but shops are
empty.
• Shops are empty but fridges are full.
• Fridges are full but nobody is satisfied.
• Nobody is satisfied but all vote
unanimously.
• …
Non-codified practices with
functional ambivalence
• No unemployment but nobody works.
[Absenteeism]
• Nobody works but productivity increases.
[Potemkin villages, pripiski]
• Productivity increases but shops are empty.
[Shortages]
• Shops are empty but fridges are full. [Blat]
• Fridges are full but nobody is satisfied.
[Privileges – authorised blat]
• Nobody is satisfied but all vote unanimously.
[Doublethink, ‘cynical reason’]
[Informal practices] adapt to the purpose of
transition
Changes in politics are accompanied by informal
practices of black PR, kompromat, krugovaia poruka
that promote these new institutions but also make
use of them in a manipulative way
Competitive elections
Media and civil society
The rule of law
Economic changes are accompanied by
barter, financial scheming, alternative enforcement—
informal practices that manipulate the law
(obsessively observing the letter of law but
undermining its spirit)
Competitive Markets
Transparency, Accountability, Disclosure
Property Rights and Contract Enforcement
I argue against stigmatization of
informal practices and explore their
functional ambivalence:
• Informal practices can play both
supportive & subversive role
• They are both problem & solution
• IP serve as important, and measurable,
indicators in assessing models of
governance
• Russia’s model of governance is reliant
on informal networks, practices, and
methods of governance, as illustrated
below
‘krugovaya poruka’: Informal governance
in the 1990s
Edward Keenan’s (1986) 4 features
of governance, 7th paradox, conversations with
Putin and frequency of use turned my attention
to sistema:
• the operational basis of each setting is informal
and traditional (weak correlation between real
power and formal status)
• decision-making is corporate and
conspiratorial
• stability and risk-avoidance are favored
over innovation and progress
• there is a reluctance to promulgate
systematic codified law (those who
need to know the rules know them).
Sistema is a network-based system of
governance
• Sistema is complex, anonymous, unpredictable
and seemingly irrational, but it serves to glue
society together, to distribute resources and to
mobilise people; it contributes to both stability and
change; and it ensures its own reproduction (see
diagram of sistema).
• Its unpredictability lies in the ambivalence of
networks (diagrams of Putin’s networks).
• Sistema works!!! Present-day sistema incites
people to work, offers effective stimuli and
adequate motivation, but does so in an ambivalent
and even paradoxical way
Friends of Putin: new business elite of
Russia by Irina Mokrousov, Moskva,
Eksmo, 2011
Olga Kryshtanovskaya and Stephen White
Judo
University
KGB service
Germany
years
Mayor’s
Sobchak’s
office
Dacha
cooperative
‘Ozero’
Strength of ties, strength of trust
School and
university
St. Petersburg
Mayor’s office
Judo, dacha
Security
service
Functionality of networks
Strong ties
1 ‘Inner circle’
(family and the
most trusted,
private affairs)
INCENTIVES
3 ‘Core contacts’
sharing career
(patrons and
clients,
public affairs)
AGENDA
Private
contexts
4 ‘Periphery
2 ‘Private friends’
Contacts’
sharing leisure
(sport, dacha)
(alumni,
associates,
RESOURCES
co-members)
SUCCESSION
Weak ties
Public
contexts
Functional ambivalence of networks
Strong ties
Safety net
Back-up
LOCK-IN
EFFECT
FREE-RIDING
Private
contexts
Survival kit
LIMITED
RIGHTS
Public
contexts
Weapon of the
weak/
Buffer effect
PATH
DEPENDENCY
Weak ties
Putin’s ‘manual control’ creates incentives
for sistema insiders that focus on:
• short-term profit at the expense of long-term
sustainability,
• loyalty at the expense of professionalism,
• safety and collective responsibility at the
expense of leadership, and
• innovative circumvention of sistema constraints
at the expense of productive innovation.
Insecure property rights (where access to wealth
and business opportunities is achieved through
cronies and informal channels, the property rights
cannot be fully legitimate and secure)
Vulnerability of economic actors should be
preserved in order to enhance political stability and
corporate control.
…subtleties of the wine will eventually unfold for those who can:
Factors of
Factors of change
continuity
Soviet
‘Bottling’:
Monetisation:
administrative
administrative
business
system
culture
integration
Russian patrimonial
‘Barrelling’:
Technology/
rule
political culture
infrastructure:
legal culture
Universal roots of
‘Soil and vine’:
Globalisation:
informal power
social network
reflexivity
culture
Universal patterns of informal power add
to the ambivalence of governance
Connections: lift, but also a hook
Universal patterns of informal power
control and leverage, but also vulnerability
Universal patterns of informal power
Personalised loyalty: provides security/immunity, but
entails compliance/dependence/lack of innovation
Universal patterns of informal power: ‘carousel’
Porous boundaries (informal affiliation enables
informal governance/ informal control/corrupt deals)
Similar to carousel: ambivalence of favours, given and
received through strong or weak ties and at the expense of
private or public resources, link to corrupt exchanges –
porous internal boundaries
• Moral gain
• Private
resources
• Moral gain
• Public
resources
• Material gain
• Private
resource
Family and
friendship
Networks
created and
maintained
Favours as
gift
Favours as
investment
Favours as
endowment
Favours as
commodity
Nepotistic/
clan/
patronage
networks
Mediated by
brokers
networks
• Material gain
• Public
resources
Blurred boundaries of informality
• Blurred boundary between friendship
and use of friendship
• Helping a friend at the expense of
public/state/corporate resources
• In fact, the use/redirection of public
resources is what distinguishes
friendship from the use of friendship
(blat)
• 3 types of ambivalence
Ambivalence
•
•
•
Sociological ambivalence: contradictory demands upon
the occupants of a status in a particular social relation
(Merton 1976)
Possibility of assigning an object or an event to more than
one category, language disorder inability to choose a
correct action (similar to ambiguity, uncertainty,
unpredictability, illogicality, irrationality, ambivalence,
brought about by modernity with its desire to organise and
to design (Bauman 1991: 7).
Ambivalence of favour(s) pictured towards the centre of
the diagram is intermittently displaying contradictory
features, depending on state of mind and perspective
3 types of ambivalence
• substantive ambivalence of favours/ the degree of
uncertainty of obligation in social relations and
intermittent display of features of gift and
commodity exchanges, as well as features of
benefiting from and investing into networks’
expansion.
• functional ambivalence/ whereby favours derive
from certain structural conditions and play
supportive but also subversive roles for the formal
and informal constraints that frame them.
• attitudinal ambivalence on the part of both
individuals and governments, relying on
economies of favours, but also denying
engagement, criticizing EoF but also accepting.
Attitudinal ambivalence:
George Orwell’s ‘doublethink’ (1984)
Joseph Brodsky’s ambivalence (1986)
If one had brains, one would certainly try to outsmart
the system by devising all kinds of detours, arranging
shady deals with one’s superiors, piling up lies and
pulling the strings of one’s [semi-nepotistic]
connections. This would become a full-time job. Yet
one was constantly aware that the web one had woven
was a web of lies, and in spite of the degree of
success or your sense of humour, you’d despise
yourself.
That is the ultimate triumph of the system: whether you
beat it or join it, you feel equally guilty. The national
belief is – as the proverb has it – that there is no Evil
without a grain of Good in it and presumably vice
versa. Ambivalence, I think, is the chief characteristic
of my nation. (Brodsky 1986)
The next step is to distinguish blat/IP from corrupt
practices, but to explore the boundaries between
informality and corruption is difficult:
• Some of the reasons for this are pragmatic: in
studying sensitive issues associated with informal
institutions, networks and practices, researchers
encounter methodological challenges, pressures
to work cross-discipline, and unwelcoming
attitudes from respondents.
• Yet there are also conceptual puzzles in
integrating the informal dimension into disciplinary
research and in breaching moral resistance to
unearth inconvenient facts about the functionality
of grey areas in politics, economy and society.
• Paradox and ambivalence
Ambivalence, further research
Ledeneva,A. (2013). “Beyond Russia’s Economy of Favours:
The Role of Ambivalence,” Chapter 2 in Nicolette Macovetsky
and David Henig (eds.) Economies of Favour. Oxford: Oxford
University press, forthcoming.
Ledeneva,A. “Open Secrets and Knowing Smiles,” East
European Politics and Society, 25(4), November 2011.
Ledeneva,A. (2013). “A Critique of the Global Corruption
‘Paradigm’” in
Kubik, Jan and Amy Linch, eds. forthcoming. PostCommunism from Within: Social Justice, Mobilization, and
Hegemony. New York: SSRC/NYU Press.
!!!!!!! Invitation to contribute to
Encyclopedia of Informality !!!!!!!!