This publication is a report read in January 2003 during the symposium “Russian city management: results 2003 – trends 2004”. The new federal law about local government foundations (¹131) that essentially changed the situation in municipalities even wasn’t under discussion then. Nevertheless the main report theses are still quite actual. Extracts from the report are given below.
As a result of the economic growth of 2000-2003 Russian cities budgetary revenues appreciably increased. Municipalities got much more resource to realize their development programs. But the most critical problems are nearly the same for all cities. First of all they are:
- Housing and public utilities reform. Unfortunately it comes to tariffs growth for natural persons. The quality of public services as an effectiveness of the all branch continues rather to decline then to grow.
- Housing and public utilities reform is impossible without fundamental change in civil engineering efficiency. By the estimations of McKenzie consulting experts made in 1997 the labour productivity in this branch was only 17% from the USA level. And the situation hasn’t changed: house-building is only rise in price.
- Social sphere (first of all education and health protection). Budgetary expenses efficiency in the social sphere of cities permanently comes down and the social differentiation increases. Local government more likely promotes these tendencies then prevents them.
- Enterprises restructuring and efficiency of city land use.
The main reason that hampers solving of mentioned strategic problems is behaviour motivation of local government employees. This motivation isn’t constant it’s been changing during last twelve years. It can hardly be said that one or another motive didn’t exist from before. The question is what motives or what people dominate in different times. Three such periods of time and accordingly three dominating motives can be defined:
- Romantic period: 1990 – 1994. During this period new people who came in local government tried to interfere in all spheres and answer for everything taking place in the city. The privatization process was going on along with the process of municipal property forming, the process of administrative commissions resigning. Local government employees along with accomplishing routine seasonal tasks had to take part in macroeconomic and political processes of new state formation. It compelled municipal officials to indicate their position on strategic questions and to solve them.
- Period of struggle for “territorial control”: 1995 – 1999. This stage was the time of “corporative feudalism”. Under conditions when the socio-economic reforms were practically stopped and the national authority was weak there was struggle for territorial resources control at the local level. Local governments were certainly weaker then regional authorities in this struggle.
- Period of exterritorial business groups domination: 2000 - up to now. Power hierarchy was forming at one time with constitution of large-scale integrated financial and industrial structures.
Present-day generation of municipal officials has the following significant economic pattern:
- Orientation toward existing status quo maintenance in relation with large-scale business groups. Maybe this orientation isn’t bad in itself (of cause if one business group doesn’t take over the tight and total control a whole town). However external investment attracting and restructuring policy pursuing are unreal in this case.
- Achievement of own commercial interests using the control over building market and land resources of the city.
This situation is entirely stable when residential population’s interests are being completely ignored.
The situation is also stable because it continues in federal authoritative structures like ministries (including Ministry of Health, of Education, Of Economic Development, military ministries), Office of Public Prosecutor, courts. As a matter of fact, they are responsible for all reforms conducting – from the housing and public utilities reform to administrative reform.