Introduction
For a long time, it was believed that there was an unwritten contract between the Kremlin and the people of Russia. Vladimir Putin provides the country’s citizens with a relatively prosperous lifestyle and, in return, they give up their political rights and freedoms, allowing the supreme leader to rule as he sees fit. Do the war against Ukraine and the accompanying mobilization mean that a contract has been broken?
The idea that there is a sort of unwritten contract between Putin and the people of Russia has always predominantly been a myth. While it reflects some aspects of Russian political and economic life, it is mostly a tendentious interpretation of a specific political ideology. The cliché gained popularity in the late 2000s and bears the imprint of the technocratic approach to the political sphere that prevailed within the Russian elite at that time, as evidenced by the very notion of a contract. As part of this technocratic approach, political issues were reduced to the language of business and the corporate model of relationships. Another popular journalistic stereotype of the time claimed that Putin regarded Russia and its economy almost as a single “corporation Russia”, and himself as its executive director. This stereotype interpreted Putin’s practice of intervening in business affairs and redistributing assets in a complimentary and pragmatic way. It implied that asset owners primarily served their selfish private interests, while Putin and his administration stood on the side of a common corporate interest in the dynamic development of the Russian economy as a whole. These clichés interpreted the practice of state dirigisme in economic policy through the lens of developmentalist ideals. Political issues and processes were deliberately reduced to a logic of business pragmatism empty of any social content.
The corporate rhetoric used to describe political processes generally served at best as a veneer for authoritarian developmentalism, where the state assumes the role of a corporation or corporations ensuring accelerated state-led growth. At worst, it serves as a veneer for redistributive paternalism in a more mundane form. All the various clichés from Putin’s alleged “agreement with oligarchs” to the “contract with the population” and “corporation Russia” were integral elements of a new ideology, the core of which was the idea of delegating powers from the lower levels to the upper levels – building a “vertical of power” – and portraying such a power grab as the result of political consensus and free choice.
The concept of a supposed contract between Putin and the population has obscured the social reality of Putin’s rule in another significant way. It presents the 24 years of Putin’s rule as essentially a single episode, while in reality the social situation has changed significantly over nearly a quarter of a century. Understanding this dynamic goes a long way to help us to comprehend the origins of the current war and the regime’s prospects.
Two Pillars of Putin’s Legitimacy
The political apathy of the Russian population in the 2000s is often attributed to the idea of a mutual contract discussed above, but in reality had entirely different roots. First, when discussing political apathy in the early 2000s, it is important to remember that this followed almost 15 years of extreme politicization in a society emerging from the ironclad shell of a totalitarian system. Moreover, in the period 1989–1992, Russia experienced a genuine, large-scale and mostly peaceful social revolution. The intensity of protest activity during this period was immense, as major protests in 1990–1991 brought millions of people together across Russia. This period of extreme political tension, reform and instability naturally had to be followed by a period of political fatigue and apathy, as people focused on their private interests. Such cyclical fluctuations in public sentiment between public and private interest have been identified by social researchers in various societies.[1]
It is worth adding that the sudden and crushing collapse of the Soviet economy led to an extremely rare peacetime reduction in gross domestic product (GDP) of around 35 percent in the first half of the 1990s. When the new and highly immature market institutions began to function in the late 1990s, they launched a mechanism of recovery and growth, fuelled by a new cycle of rising oil prices. Oil prices, which provided the Soviet and Russian economies with income in freely convertible currency, had been declining for 15 years to 1998 but experienced a rapid recovery over the next decade. In 2011, they were more than five and a half times higher than in 1998. As a result, annual growth rates driven by recovery and the growth in export income from oil and gas sales were extremely high for a decade from 1999, at around 8 percent, even before Putin came to power.
The depoliticization of society during this period was certainly not due to some agreement between Putin and the population, but to the factual and quite natural balance determined by the above-mentioned factors. Society was going through a period of depoliticization, healing the wounds of the political and economic disappointments of the 1990s, while the economy, by contrast, was on the rise.
As Stephen Kotkin writes in his biography of Stalin, the primary beneficiaries of massive political change are not the people who planned and executed these changes, but those who managed to take advantage of its unforeseen consequences. This description undoubtedly applies not only to Stalin as a historical figure who concluded the Bolshevik period of Russian history, but also to Putin who concluded the period of post-communist social revolution and multiple reform. Unlike Stalin, however, who initiated a new cycle of economic reforms – forced industrialization – and needed repression to compel the population to accept redistributive policies, Putin just benefited from both the established reforms of the 1990s and favourable global conditions.
Thus, Putin did not create the basis for social stability so much as leverage the existing conjuncture for it. However, the legitimacy of his leadership in the initial period of his rule was based not on these successes, but on the myth of “the salvation of Russia”. Putin’s legitimacy at the time was largely ensured by a powerful episode of “rallying around the flag” associated with the shock of the Moscow bombings in 1999 and the beginning of the second military campaign in Chechnya. Rebellious Chechnya and Chechen terrorism were still symbols of instability and insecurity in the 1990s. Against the backdrop of the horrific bombings in Moscow and Volgodonsk, the second Chechen campaign was perceived as a demonstration of the state’s restoration of its military capabilities and its ability to “maintain order”. It was also seen as revenge for the disgrace of the defeat of “the state” in the first Chechen war.
Thus, the factor of mobilization in the face of threats – in this case Chechen separatism and terrorism – was a basic component of Putin’s legitimacy from the very beginning. This was the particular pattern in which Putin entered Russian politics. Not until 2003–2004 did the second pattern of his legitimacy begin to emerge, associating Putin’s persona with stability, and increased prosperity and well-being.
The Dynamics of Two Patterns of Legitimacy
When examining Putin’s 25-year rule, it is crucial to remember this first pattern because it soon becomes evident that small victorious wars , which occur approximately once every seven years, are a systemic element of his politics. Figure 1 shows that they generally coincide with peaks in Putin’s popularity, linked to moments of mobilization that are often referred to as rallies around the flag. In these episodes, Putin is portrayed either as the “saviour” of Russia, preventing internal discord and disintegration (as in the Second Chechen War) or as the leader who is restoring Russia’s status as a “great power”, which was lost with the break-up of the Soviet Union. Between these periods, we observe a decline in his approval ratings, a period of acclimatization and voter demobilization, followed by a new political mobilization. It should be noted that Putin’s approval rating varies in a range between 60 and 90 percent, with an average of around 75 percent over 25 years. These figures should be interpreted not as the evidence of Putin’s outstanding popularity, but as an authoritarian bias or ratings inflation due to restrictive policies in the public sphere, notably the suppression of opposition and control over the media. We do not know exactly what is the range of this inflation/bias component, but we should see these figures like a composition of real support and artificial boosting. Like in other autocracies, these abnormal figures are an important element of autocratic legitimacy based on the artificial illusion of a supportive supermajority. Thus, the decline in the president’s approval rating to 60 percent is a sign of a weakening of the autocratic power institutions that maintain the illusion of a supermajority. That is why the figures that would that would seem quite satisfactory to a democratic leader in an authoritarian environment look like a challenge to the regime.
Figure 1. Putin’s approval rating: war and protest
At the same time, the consolidation of Putin’s power in the 2000s was framed as a response to internal threats, primarily those related to the integrity of the state. Initially, this was Chechen separatism, which was seen not only as a specific act of disobedience, but also as a systemic threat of the “dissolution of Russia”. Then, when Chechen commanders shifted to terrorist tactics, terrorism became the main internal threat in Putin’s political rhetoric. Under its flag, the vertical of power was consolidated and reinforced. Thus, in 2005 the abolition of gubernatorial elections that weakened the regional autonomy was presented as a response to the tragedy of the Beslan school hostage crisis.
Only in the mid-2000s did the theme of internal threats give way to the motifs of “external mobilization”, asserting Russia’s international role. This shift was probably facilitated by Putin’s strengthened position in domestic politics and his failure to influence the Ukrainian elections in 2004, which resulted in Viktor Yushchenko’s rise to power. The August 2008 war in Georgia followed soon after Putin’s memorable Munich speech in February 2007, when he presented the primary rhetorical arsenal of the new anti-Western discourse. Georgia marked the first “small victorious war” of Putin’s rule, demonstrating the potential for mass political mobilization in the face of external threats – real or mostly invented.
From this overview, it is evident that Putin’s legitimacy has been grounded in two main pillars from the very beginning: the economic successes of the 2000s, on the one hand, and the ideological legitimacy of restoring Russian “greatness” and the image of a strong leader, on the other. In this regard, it is more appropriate to speak not of a contract between Putin and the population, which implies an exchange of stability and prosperity for political passivity, but of a changing balance between economic and ideological mobilization factors in Putin’s legitimacy.
This situation is not unique but instead follows two types of autocratic legitimacy identified by the political scientist Johannes Gerschewski.[1] The first operates within the logic of depoliticization, where the primary instrument of legitimacy is “performative legitimacy”, based on actual improvements in the economic situation, social stability and people’s satisfaction with the current situation. In such regimes, the existence of sufficient support grounded in economic success effectively limits political competition through manipulation and the co-optation of elite groups into clientelistic and patronage pyramids. This does not require some form of special ideological or political mobilization, or broad repression against the opposition because the regime does not face strong resistance.
In contrast, the logic of super-politicization comes into play when performative legitimacy is lost or is insufficient to provide a regime with support from broad population groups and co-opt a wide range of elite groups. The economy is not growing, or growth rates are insufficient to redistribute the benefits to broad segments of the population. The regime’s efficiency is in doubt in the eyes of its citizens. In this scenario, instead of performative legitimacy – or in addition to it – the regime relies on ideological legitimacy. The long stay in power of the ruling coalition and its leader can be explained by ideological doctrines that interpret national interests and threats to the nation’s well-being and security.
These two types of legitimacy are not necessarily in opposition: they also complement each other. In this case, their relationship is akin to interconnected vessels. A decrease in “performative legitimacy” is compensated for by the introduction of elements of pro-regime politicization and increased repressive pressure.
Putin’s Two Decades: Economic and Social Dynamics
There are three distinct periods in the history of Putin’s presidency in terms of the dynamics of GDP, income levels and the public’s perception of the economic situation in Russia. In the first period, annual GDP growth averaged 7 percent and real disposable incomes doubled between 2000 and 2007 – an average annual growth rate of 15%. The Family Wealth Index, which reflects citizens’ perceptions of the economic situation, also increased significantly during this period from 70 to 120. In the period 2008–2013, economic growth slowed to 2 percent per year and income growth was more moderate. Incomes increased by 25 percent in real terms over six years – an annual average of 4 percent. Finally, in the period 2014–2022, average economic growth declined to 0.7 percent and real disposable incomes fell on average by 0.8 percent annually. Perceptions of the economy also showed a gradual decline during this period.
Figure 2. GDP and real disposable incomes
Source: Rosstat, Higher School of Economics data department
To understand the social dynamics of the 2010s, however, it is important to take into account that while income growth ceased during this period, the income levels achieved by a significant proportion of the population allowed them not only to cover necessary daily expenses, but also to save money for the purchase of long-term assets such as cars or to upgrade their housing and living conditions. In other words, given the low starting point in the 1990s, despite the income stagnation of the 2010s, the income levels attained enabled households to gradually increase their overall wealth even while total average income was no longer rising. This can be illustrated by the dynamics of car ownership. In 2000, there were 130 cars per 1000 adult population but by 2008 there were 213 and in 2020 there were 318. In other words, the average growth rate in cars per 1000 population was nearly unchanged – around 9–10 cars per 1000 population per year. The accumulation of household wealth was also facilitated by the widespread availability of consumer and car loans, and mortgages during this period, which allowed an increasing number of households to expand their current consumption despite slowing income growth or even income stagnation.
Figure 3 Social attitudes and family wealth indexes
Source: Levada Centre
The same can be said for public goods. Average oil prices in the 2010s were significantly higher than in the 2000s. The average price of a barrel of Brent Crude in constant 2010 US dollars was $54 in the period 2000–2009. This increased to $74 in 2010–2020. Thus, despite the sharp reduction in economic growth and income growth, the economy—corporate and state—had substantial resources to maintain or increase social spending and investment in public goods such as roads, the urban environment, transport, healthcare and education.
Increased prosperity therefore continued throughout the 2010s, although its profile significantly changed. In the 2000s, real disposable incomes grew faster than the average real wage, whereas in the 2010s the situation was reversed. This means that incomes from the market, small businesses and entrepreneurial activities were growing at a faster pace in the first period, while in the second period the incomes of those employed in the corporate and public sectors were increasing. To summarize, the slowing pace of personal income growth in 2010s was compensated for by the opportunity to increase household consumption through savings and credit, and by the increased availability and quality of public goods and social security.
However, the period of rapid recovery reached an end and annual rates of economic growth sharply declined. The 2008–2009 global financial crisis resulted in a 7 percent contraction in the economy, which fundamentally altered how the regime was perceived. While the success of the 2000s was primarily associated with Putin, the crisis revealed the ongoing vulnerability of the Russian economy and demonstrated that the economy could not only grow under the new regime, but also decline. In addition, perceptions of corruption became more acute and the power vertical ceased to be the panacea it was regarded as in the 2000s.
The Paradox of the 2010s: Two Russias
In broad terms, the cycle of depoliticization was coming to an end in late 2000s. The first protests against Putin’s regime and the suppression of political rights began in 2007–2009, which culminated in the protest movement “Strategy-31” whereby several hundred people regularly gathered in the centre of Moscow to protest against the curtailment of political rights and political competition. These protests seemed insignificant and could rightly have been considered as such if subsequent events had not shown that they foreshadowed a change in the political cycle. Routine parliamentary elections in 2011, which the regime saw as unproblematic, unexpectedly turned into mass protest rallies. From the Kremlin’s viewpoint, the protests of 2011–12 were essentially aiming for a “colour revolution”, although they did not achieve that goal.
As the author predicted, the cycle of depoliticization came to an end.[1] However, subsequent events took an unexpected turn. Immediately after returning to presidential office in 2012, Putin introduced a highly conservative programme of domestic policy, which included increased pressure on the opposition, resistance to “Western influence” and the promotion of “traditional values” in society. During this period, laws were enacted on foreign agents and the prohibition of LGBT propaganda. The latter was particularly significant, as such laws are often used by authoritarian governments to mobilize conservative segments of society by stoking fears about gender tolerance. Finally, in early 2014, Putin launched the invasion of Ukraine and annexed Crimea, which was perceived by broad segments of the population as a symbolic restoration of great power status and a symbolic and bloodless revenge for the losses associated with the break-up of the Soviet Union.
The Kremlin’s response to the first wave of opposition mobilization in 2011–12 was not only an intensification of repressive practices against civil society and political activism, but also a counter-mobilization based on conservative-statist values. This was supported by an anti-Western campaign drastically enforced through anti-LGBT propaganda intended to mobilize homophobic fears and grassroots conservatism. The annexation of Crimea, seen by many Russians as a symbolic revenge for the collapse of great power status at the end of 20th century, became the most successful part of this mobilization wave, ensuring impressive regime consolidation in the mid-2010s (see Figure 1). By the late 2010s, however, opposition agendas began to resurface and reassert themselves in protest voting in regional elections and in the protest wave of 2019–20.[2]
By taking a comprehensive view of Russian political and social developments throughout the 2010s, two parallel processes can be detected that share a common root. As mentioned above, these were years of plenty in terms of external economic income. Essentially, Russia experienced an oil boom over two decades that far exceeded the scale of the first boom of 1973–1983. On the one hand, high oil revenues provided a powerful impetus for modernization. They facilitated higher consumption in the megapolises, as well as rapid development of new sectors related to digitization, hi-tech and the internet economy. Diversified and advanced labour markets in the megapolises contributed to rapid processes of grassroots modernization, shaping a new urban environment and its political demands, which manifested activism, horizontal networks, new media and a growing demand for democracy. These dynamics were reflected in two waves of protest activity in the early and later years of the decade.
At the same time, the growing amount of rent income stimulated the formation and development of powerful rent-oriented clienteles and patronage pyramids, as well as redistributive practices in the economy that maintained and enlarged a social base of the regime. (This is actually a standard political effect of resource abundance.)[3] Clientelist networks and rent redistribution also created a broad base of support for the regime through accelerated wage growth in the public sector, and increased spending on law enforcement, the military and defence industries. This base of support consolidated under the banner of an increasingly anti-Western, isolationist and revisionist rhetoric, which was consistently pushed by the Kremlin in the public sphere.
The paradox of the 2010s, therefore, lies in the fact that the same circumstances – high external income – stimulated both the processes of social modernization and consolidation of the political ideology of resource nationalism (statism) and its social base. Two Russias developed along parallel paths. From this perspective, the current war, the most significant social consequences of which are mobilization of the most conservative segments of the population and a radical rupture with the West, appears to be an attempt to resolve the simmering conflict between these two Russias.
Putin at War: Why Putinism Remains Resilient
Returning to Gershevsky’s concept, it could be argued that the regime gradually increased the importance of new legitimacy tools throughout the 2010s using ideological indoctrination to promote “traditional Russian values” in opposition to Western ones, amid mounting repression. However, while the significance of performative legitimacy decreased, as shown above, it still played a significant role. The full-scale invasion of Ukraine became an instrument for further intensifying the logic of hyper-politicization, demonstrating both the growing significance of indoctrination and a sharp expansion of repression.
However, performative legitimacy did not entirely disappear. Paradoxically, Putin’s regime has been operating with both logics in the past two years. While it deploys mobilization rhetoric (“all for the front, all for victory”, “the homeland is in danger”) for the conservative segment of society most responsive to fundamentalist military propaganda, for another segment the “Special Military Operation” in Ukraine is a local and somewhat distant circumstance that has little impact on their daily lives. This second segment of Russian society shares neither the goals nor the methods of the special operation but remains loyal to the regime, since the costs of opposing it are high while the level of well-being that it provides remains sufficient.
The reasons why the Kremlin manages to increase military expenditure and withstand the blow of sanctions while maintaining social stability in the country are quite obvious. Paradoxically, the war has thus far cost Putin’s regime practically nothing.
The state budget presented by the Russian government includes expenditures on the war in 2024 of around 11 trillion roubles (about 6 percent of GDP), although the actual amount may be higher due to hidden items in other sections of budgetary expenditure, making total expenditures closer to 7–7.5 percent of GDP. The estimates of the current year’s costs, including hidden budget items, comes to a similar figure of 10 trillion roubles. A similar estimate of war expenses in 2023 can be found in a closed government document reviewed by Reuters. Finally, Forbes Ukraine journalists conducted their own calculations of Russia’s major expenses on the war, concluding that they could reach around $170 billion over 18 months. All these estimates are undoubtedly imprecise but fall within a common range of 6–7 percent of Russia’s GDP. These figures can be used as an anchor for an approximate assessment of the annual cost of the war.
What does this mean for the Russian economy and the budget? Russia’s average annual income from exports over the past 10 years has been $425 billion, and the average price of Brent Crude during this period was about $67. In 2022, however, the abnormal price increase triggered by the war and sanctions meant that Russian exports reached $590 billion. In 2024 exports are estimated at $480 billion. Thus, additional export income above the average annual level of the past decade will amount to about $220 billion over two years, a figure that almost covers the costs of the war in this same two-year period. The basic $425 billion in export income is a comfortable level for the Putin government, which allows for investments in infrastructure and a level of social spending that ensures stability. While not all this additional revenue goes directly to the state budget, most of it does. This explains why the capital outflows stimulated by the war and sanctions have not triggered a crisis in the Russian economy.
Figure 4 Dynamics of Oil and Gas and Total Exports, 2000–23, in millions of US dollars
Source: Central Bank of Russia
Notes: Data on the level of oil and gas exports in 2022 is missing; data for 2023 is an estimate.
In contrast to common perceptions, western sanctions have had a significant effect, leading to capital outflows, increased import and logistics costs, unproductive expenses on duplicate trading infrastructure along new routes, and reduced productivity linked to technological degradation. However, these are long-term effects that have not triggered chains of crisis events due to the relative isolation of the Russian economy and the huge increase in export revenues. The Russian government estimated a budgetary impact of 10 percent of GDP in 2022, and this allowed it to offset the impact of capital flight and other effects of sanctions.
Anomalous export revenues in 2022 and the extraordinary budgetary injections into the economy led to a rapid recovery in the first half of 2023. At the same time, an exodus of around half a million people from the country, along with the removal of around 300,000 people from the labour market who have been mobilized into the army, as well as a sharp expansion of defence production, resulted in a record surge in the demand for labour and a corresponding rapid rise in wages. However, real disposable incomes at the beginning of 2023 remained at pre-war levels, while average wages in the second quarter of 2023 increased by 4.5 percent compared to pre-war levels in the fourth quarter of 2021. While a significant proportion of the middle class and high-income groups lost access to their property abroad, as well as various services and brands and the opportunity to travel, other groups – especially those associated with the arms industry or engaged in low- and medium-skilled labour, or with military contracts – have to some extent benefited from the war.
Figure 5: The Dynamics of Real Incomes and Real Wages, 2000–2023
Source: Rosstat, Higher School of Economics data department
In this context, the war and subsequent mobilization have undoubtedly undermined the sense of long-term stability for a significant proportion of the population and elites. Nonetheless, political mobilization and propaganda pressure, coupled with repression against opponents of the war, have allowed the regime to cope with these effects. At the same time, the economic impact of the war and sanctions has been limited. The effects of sanctions are unlikely to have a political impact for the foreseeable future. Changes in this situation can only be expected if oil and gas revenues decline sharply. If they fall to the levels of the previous decade (total export revenues of $420 billion, of which $250 billion was from oil and gas), the requirement to spend $120–140 billion on the war annually will pose serious difficulties for the Putin regime. If export revenues fall to the levels of 2015–17 and 2020 (total export of $325 billion, of which $175 billion was from oil and gas), war-related expenses will be practically unsustainable. In this case there would be visible signs of crisis in the economy, changing the mood of the elite groups and eventually leading to increasing mass dissatisfaction. For now, however, the economy – or more precisely export revenues – continue to favour Putin, allowing him to balance the situation by using economic opportunities to co-opt and buy the loyalty of elite groups and parts of the population, as well as the means of patriotic ideological mobilization.
The analysis presented above is intended to show that, contrary to the myth of some kind of metaphysical contract established by Putin with the Russian population, we are dealing with complex and dynamic political and social realities. First and foremost, there were several periods in which the political and social situation underwent significant change. The period of depoliticization and rapid income growth was replaced by a period of two counter-politicizations, which characterized the political dynamics of the 2010s. In addition, the nature of social dynamics changed significantly. If in the 2000s the driver of income growth was the intensive expansion of the market, then in the 2010s redistributive policies played an important role, allowing the regime to form a new coalition of support and to enhance its ideological repressive apparatus. Throughout the entire period, the key factor remained the high rent revenues, which were significantly higher in the 2010s than in the 2000s. Ultimately, this was the key factor that allowed the Putin regime to maintain the political balance in its favour and wage a war against Ukraine, which in domestic politics has enabled it to make a decisive turn towards the de-westernization of Russia.
Second, there is no Russian population with which Putin or any other leader could make a contract. Instead, there are different groups within the Russian population, to which the regime employs different strategies – mobilizing some of them, buying off or bribing others and repressing the discontented. These three drive belts of Putin’s authoritarianism continue to play their role, although the relative importance of each may change over time. There is a possibility that this mechanism might become unbalanced. If it does, there will be three likely causal factors: (a) a significant decline in raw material export revenues, as mentioned above; (b) significant military defeats in the war with Ukraine; or (c) an escalation in intra-elite conflicts in connection with various groups preparing for a future transfer of power.
References
[1] Gerschewski, J. (2013). The three pillars of stability, legitimation, repression, and co-optation in autocratic regimes. Democratization 20(1), 13–38; Gerschewski, J. (2023). The Two Logics of Autocratic Rule. Cambridge: Cambridge University Press.
[1] See the well-known concept of Schlesinger Jr’s “cycles of American history” or Huntington’s concept of periods of creedal passion followed by periods of anti-ideologies, complacency and disappointment: Schlesinger, Arthur Jr. (1999). The Cycles of American History. Houghton Mifflin Harcourt; Huntington, Samuel P. (1981). American Politics: The Promise of Disharmony. Belknap Press.
[3] Rogov K. The Hypothesis of the Third Cycle // Pro et Contra. 2010. Vol. 14. July-October
[4] On this see, for example, “Countermobilization: The protests in Moscow and regional elections - 2019. Moscow, “Liberal mission”. 2019
[5] Michael L. Ross, The Oil Curse: How Petroleum Wealth Shapes the Development of Nations. 2012.
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