Dollars and Democratization: The Role and Power of Money in Russia's Transitional Elections

Transitions to democracy in the 1980s and 1990s often coincided with severe economic crises and attempts to implement drastic economic adjustment. Various scholars have attempted to specify how such economic factors might interact with and affect the political reform process.' One crucial aspect of this process is how early results of economic reforms may shift the distribution of resources that can be used in the competition for political power. While imposing heavy costs on much of the population, orthodox stabilization and structural reforms create new concentrations of wealth. Income inequality often increases. Price and export liberalization favors producers of goods that are scarce, efficiently produced, and profitable on world markets. Partial price reforms generate profit opportunities for middlemen who can arbitrage between regulated and market sectors. Privatization often creates a new capitalist nomenklatura, enriched by its previous control over undervalued state assets. The first items to be marketized are often inside information, access, and personal connections.2 At the same time, democratization provides abundant opportunities for the winners of market reform to try to consolidate their gains through the political system. In any democracy tension exists between the principle of voter equality and the power of money to influence elections. But for various reasons new democracies would seem particularly vulnerable to well-financed candidates and groups. In such systems, voters are inexperienced and may be more likely to believe unrealistic promises. Almost all candidates with a track record are discredited by association with the previous regime; those not discredited are unknown. Parties tend to be undeveloped; they have little influence and few resources. Agencies to monitor campaign spending and corruption are established on the run, in a politicized environment, and have untested staff and unclear legal powers. Law enforcement in general is often weakened by rapid change in political institutions. In brief, an inexperienced electorate is confronted by a field of unfamiliar, cash-rich, and poorly regulated candidates who are eager to invest in consolidating their new property rights through the electoral system. In Latin America, Asia, and eastern Europe democratizing regimes have recently been shaken by major scandals involving campaign cash. When Colombian presi-