RUSSIAN FEDERATION COUNTRY STUDY A PUBLIC FINANCE PERSPECTIVE Ryan Grace rgrace@indiana.edu Dmitri Maslitchenko dmitri@mailroom.com David Lamp dlamp@indinana.edu Political Background The separation of powers which existed under the Soviet constitution was essentially a myth. A Russian accurately characterized the relationships that existed between party, state and society as, ...The state absorbed the society, the Party absorbed the state, and the Party appartchiks, the nomenclature under the totalitarian leadership of the Secretary-General absorbed the Party." Both legislative and judicial branches served as rubber stamps" to the Presidium of the Supreme Soviet which unlike the Supreme Soviet itself was constantly in session. The development of political reform in the late 1980s weakened the party's control over the reigns of power. The devolution of power from the Presidium occurred through the creation of the office of the President which received the executive powers while the legislative powers were assigned to Congress of Peoples Deputies. The judicial branch also achieved higher visibility during the late Soviet period through the creation of the Committee on Constitutional Supervision. The Soviet Union's collapse in 1992 introduced radical changes into all aspects of Russian society. Russia has little experience with democracy in any form. Without a strong democratic tradition, it should not be unexpected that instability would develop in all aspects of Russian life. The role of governmental finance in post-Soviet society is no exception. Competing explanations exist for Russia's travails but a shared trait of many them is the distribution of power at the federal level and the relationship between the federal and sub-national levels of government. Political problems did not take long to develop in the Russian Federation after the USSR's dissolution. At the federal level, the creation of the present constitution is one cause of the instability which plagues Russia today. After winning a national referendum on August 15, 1993 in which the electorate was asked to endorse the Yeltsin's reform policy, he convened a constitutional assembly to ratify his version of the new constitution. Three drafts were in contention to replace the constitution under which the Soviet Union was nominally ruled. Other than Yeltsin's constitution which became the one implemented, the two other variants were the communist draft which advocated a strong Presidium of the Supreme Soviet with a chairman who had similar powers to the position of General Secretary during the Soviet period and the Rumyanstev draft which contained plans to restrict executive power and grant the legislative body wide powers. Yeltsin's draft advocated the exact opposite of the aforementioned plans with wide powers to the executive and minimal power delegated to the legislative. After the Duma rejected Yeltsin's order to dissolve, he ordered military troops to forcefully evacuate the building--which they did by shelling it. Briefly, the president is the protector of the constitution, human rights, and civil liberty. In order to protect the constitution and the aforementioned rights, the constitution grants the president wide injunctive and declarative powers. The former powers consist of the president's ability to use "conciliation procedures to resolve disputes between the federal government and the governments of the constituent subjects and disputes between the various subjects of the federation." A three stage procedure exists for the adjudication of disputes but his ability to suspend legislation after it is submitted to the appropriate court" which he deems to be in violation of the constitution is considered by many as inappropriate for a fledgling democracy. The President also has the power to issue decrees and orders which are superior to the laws of the government as long as the decree or order does not violate the constitution. Further, the president has the ability to appoint important member of his government without consent for the Duma and has sole power to appoint and remove the command structure of the Armed Forces. In regards to the legislature, the president has the ability to dissolve the Duma if it passes two no-confidence vote in the Russian government within three months of each other and if it rejects three presidential nominee for Chairman of the Russian government. Although there are limitations of the president's ability to dissolve the Duma, it remains a potential weapon against a contentious parliament that affects every aspect of public finance. The power of the legislative and judicial branch are limited in relation to the executive. Russia's judicial system consists of a several court systems that have different spheres of federal/national jurisdiction." The most visible court is the Constitutional Court which has the right to review the constitutionally of all federal laws, presidential orders and degrees, legislation of government, and unratified treaties. Challenges to the aforementioned areas must be brought by individuals with standing. Although the Constitutional Court's power seems vast, the president's expansive powers and lack of civil relations between the different branches makes the Court's utilization of this power suspect. Federal law and federal constitution laws are the two types of laws which exist in the Russian Federation. The latter is considered superior to federal laws. The procedure for enactment differ in each case. Once a bill is passed it must presented to the president within five days of the passage by the parliament. The president then has fourteen days to reject the law. In order to veto the federal law, a two-thirds majority must be gained in both parts of the legislative assembly. In the case of federal constitutional law, three quarters of the Federation Council and two thirds of the Duma must approve it for enactment. The constitution does not describe any right for the president to veto federal constitutional laws. ............