Corporate Interests and the Politics of Transition in Russia: 1991-1994
The political struggle over economic reform in Russia developed in three stages. First, in late 1991 and early 1992, the Russian government attempted to force the development of a market economy by liberalizing prices, stabilizing the ruble, and cutting the state budget before privatizing industry. These policies, collectively known as "shock therapy," were opposed by industrial managers and their organizations, since the policies threatened to break their power and control over industry before they had the opportunity to take advantage of privatization. Therefore, the industrial managers organized to try to gain influence over economic policy and developed strategies to protect their enterprises from outside interference.
These strategies were relatively successful and led to the second, overlapping, stage of political struggle over economic reform. As a set of policies, shock therapy was increasingly compromised from April 1992 onward: New ministers were brought into the government because of pressure from the industrial managers, and the actions of individual directors of enterprises ensured that the budgetary and deflationary targets of the economic team led by Yegor Gaidar were not met. However, the increased power of the industrial managers and the prominence of their organizations did not lead to a fundamental compromise between them and President Boris Yeltsin because to preserve the power and autonomy of his presidency from the encroachments of the Russian Parliaments (the Congress of People's Deputies, [CPD] and the Supreme Soviet), Yeltsin maintained a formal commitment to shock therapy and divided his government between radical economic reformers and gradualists, who differed over the speed of reform (for a detailed discussion, see Murrell, 1992, 1993). Consequently, the organized opposition of industrial managers to the Yeltsin government and shock therapy peaked rapidly. The Civic Union, the main political alliance made