The Russian Mob: Organized Crime in a Fledgling Democracy
Since the late 1980’s the Russian people have experienced one of the most drastic transitions seen in the world to date, a transition from an attempt at communism to a workable capitalist system. As one would expect, this transition has not been painless and has been the impetus of many distressing problems for the Russian people. One such problem is organized crime. This paper will explore how organized crime during Soviet rule and the Russian Federation has created obstacles in this transition to a functioning market economy. It will illustrate how organized crime has done this by analyzing its transition from the USSR to the Russian Federation, the reasons behind its existence today, and how its operation impairs Russia’s attempts at a market economy. It will also provide some possible solutions for the crises organized crime has created, which currently plague the Russian people. Organized crime has worked its way through openings provided by the transition economy to become a setback to the Russian society and economy. Its existence disables successful economic reform by influencing important issues such as competition, entrepreneurship, capital flight, the shadow economy, and violence.
Basis in Soviet Union
In order to understand organized crime in Russia today and its affect on the Russian economy, one must examine its roots in the Soviet Union. Although many acknowledge the existence of crime syndicates in the USSR, few are aware of their extent during the 70’s, 80’s, and early 90’s. As early as the 1970’s, the Russian mafia had advanced to the status of primary protectors and beneficiaries in the robust Soviet shadow economy (Anderson, 1995, 341). By 1991, organized crime had expanded to form over 700 gangs in the Russian republic alone (Anderson, 1995, 353). This expansion was aided by perestroika’s opening up of market opportunities. In Leningrad, as much as 90% of the cooperatives produced by the liberal policies of perestroika were deeply involved with organized crime (Anderson, 1995, 352). The extensiveness of organized crime in the USSR is quite apparent when one examines such numbers, but the more important question is what was inherent in the USSR that facilitated such crime and how this later affected organized crime in the Russian Federation.
Two characteristics of the USSR were integral in the development of a powerful organized crime syndicate. These were an “excessive bureaucratic power” and the presence of illegal markets (Anderson, 1995, 347). This excessive bureaucratic power facilitated organized crime by providing a “basis for corruption, bribery, shakedowns, and extortion” (Anderson, 1995, 346). These were no small problems either. According to the All-Union Research Institute of the Soviet Interior Ministry in 1991, about half of the income of the average government employee consisted of bribes (Sterling, 1994, 93). However,...