Today, together with the "horizontal" division of power among the legislative, executive, and judicial branches, Russia is undergoing a no less difficult "vertical" division of power; that is, a division of power involving, first, the federal authorities; second, authorities of the subjects of the Federation; and, third, bodies of local self-government. In developing a "vertical" division of power Russia is proceeding along its own unique path. Russian federalism, different from that in any other country, is characterized by the following traits.
First, it combines the principles of ethnic (autonomous republics and autonomous okrugs) as well as territorial (oblasts and krais) federalism. Such a combination has not been possible elsewhere in the world. Second, the Russian Constitution establishes the principle of equality for all 89 (no other has as many!) subjects of the Federation, although such equality is in practice not attainable in the foreseeable future. In Russia, the Federation is de facto asymmetrical, and the most ample evidence ofthat is the "special status" of Tatarstan and the continuing war in Chechnya. Third, the foundations of Russian federalism include, in addition to the Constitution and federal laws (as in other federations of the world), the Federation Treaty and bilateral treaties demarcating jurisdictions between the federal government and the governments of the subjects of the Federation. Such treaties do not exist in other federations, where the respective spheres of authority and jurisdiction are determined by a constitution and legislation.
Finally, Russian federalism quite often is used as a tool or even a bargaining chip in the political struggles of various forces and power ministries. Therefore, as far as the budget and other spheres are concerned, federalism is often a hollow declaration. In a country that for centuries has been a unitary state, federal relations and a federal mentality are difficult to establish. Attempts to substitute decentralization for federalism often occur. Nevertheless, we must take into account the simultaneous trend toward Russia's confederalization, as regional elites still cherish hopes of being isolated in their "independent principalities."
In this situation, a most acute question arises: is Russia moving toward becoming a constitutional or a treaty-based federation? Is it possible that the treaty-signing process and the division of competences between federal and regional powers will spin out of the federal government's control, leading to confederalization, and ultimately, disintegration of Russia? This paper analyzes the ongoing "vertical division of power" and evaluates the prospects for further development of federal relations in Russia.
Between May 1990 and early April 1996, more than 700 laws were adopted in the Russian Federation. Among those, about 150 are related to joint competences of the Russian Federation (RF) and its subjects. In view of the fact that the federal constitution (article 72) identifies 35 joint competences, each is governed by five laws on average.
However, joint competence is often more nominal than real, because it is rarely accompanied by legislation specifying how it is to be implemented. For example, joint competence over maintaining consistency between the RF Constitution and regional constitutions, charters, and laws is not regulated by any law whatsoever. The same is true with regard to demarcation of state properties and coordination of international and foreign-economic relations of the RF subjects. The following joint competences lack clear legal guidelines
While a better legal basis has been adopted for implementing other joint competences such as general matters of education, science, culture, and health care, these spheres also contain serious omissions in legislation. Often the adopted federal laws on issues of joint competence tend to neglect regional authorities, and more closely resemble the laws of a unitary state.
The legislative plan for 1996, as adopted by the sixth session of the State Duma, intends to pass about 100 laws on issues of joint jurisdiction. However, the plan was not coordinated with existing bills, and hence, there are many parallel laws under preparation in various committees. For example, two very similar laws have been prepared: one called On the Circulation of Narcotic Means and Psychotropic Substances and another titled On Countering the Illegal Circulation of Narcotic Means, Psychotropic Substances, and Precursors. At the same time, however, no plan exists for adopting laws that would provide for consistency between the RF Constitution and constitutions and charters of the Federation subjects; demarcate objects of state property; and coordinate international and economic ties of the RF subjects.
While numerous partial draft laws exist, there are very few that can act as frameworks for regulating the entire set of joint competences. That is to say, for the sixth session of the State Duma, as for earlier sessions, federalism-related legislation has not yet become a priority. It is imperative to adopt the fundamentals of legislation for implementing each joint competency (with respective amendments to be introduced in the RF Constitution). On the basis of such fundamentals, the RF subjects can pass their own laws as the Union Republics had under the Soviet. These fundamentals of legislation must demarcate the authority of federal and regional organs in implementing their share of the joint jurisdiction.
There would no longer be a need to conclude power-sharing treaties if such legislation were adopted because the powers of all the subjects of the Federation would be legally demarcated in the Constitution and in the respective legislation. The signing of treaties could then be reserved for regulating the sphere of activity assigned to a region by the Constitution, temporarily delegating the federal government's authority to a region, or a region voluntarily sharing a matter of its jurisdiction with the federal government. Such delegation would be determined by geographic, economic, national, and other specifics of the given region rather than by subjective factors. The treaty-signingprocess would then, as in other federal states, be concerned with concrete projects and programs requiring the joint efforts of center and region.
The first stage in the treaty-signing process began with the conclusion of the Federation Treaty on March 31, 1992. (The Federation Treaty was composed of three separate treaties: one signed with autonomous republics, one with autonomous okrugs, and one with oblasts, krais, and cities of federal jurisdiction.) The next stage was the adoption of the new Russian Constitution on December 12, 1993, which equalized the provisions of the three Federation Treaties so that the status of krais, oblasts, and cities of federal jurisdiction was raised to the level of republics within the Russian Federation. The Constitution left open the possibility of concluding additional treaties between federal and regional governments (Article 11, Part 3 and Article 78, Part 3 of the RF Constitution).
The third stage occurred two months after the passage of the Constitution when the first treaty, On the Demarcation of Competences Between the Government of the Russian Federation and the Government of the Republic of Tatarstan, was signed (February 15, 1994). The significance of this treaty lay in the fact that Tatarstan had never signed the Federation Treaty, and in March 1993 it had not allowed the referendum on the new Russian Constitution to be held on its territory. Tatarstan's resistance created the impression that federal authorities had little choice but to enter into agreements with the republic.
Only after similar treaties were signed with Kabardino-Balkaria in June 1994, and with Bashkortostan in August 1994, was there reason to conclude that power sharing had moved to the fourth stage in its development.
In early 1996, the fifth stage, similar treaties were signed with Sverdlovsk, Kaliningrad, and Orenburg oblasts as well as with Krasnodar krai. This extended the treaty-making process to nonrepublic subjects of the Federation.
Since 1994 more than 15 treaties and 150 agreements on demarcation of powers in specific spheres have been signed. The signatories include republics (Tatarstan, Bashkortostan, Kabardino-Balkaria, Sakha-Yakutia, North Ossetia-Alania, Buriatia, Udmurtia, and Komi); oblasts (Kaliningrad, Orenburg, Sverdlovsk, Rostov, and Leningrad); krais (Krasnodar and Khabarovsk); a city of federal jurisdiction (St. Petersburg), as well as territories composed of okrugs (Irkutsk oblast and Ust'-Ordynsk Buryat okrug; Perm oblast and Komi-Permyatsk okrug).
The treaties contain both common and unique features. They were concluded in order to realize different objectives. In order to explain the treaty process in more detail, I offer the following categorization of motives for the different treaties.
(1) Treaties concluded primarily for political reasons. First in this category is the treaty with Tatarstan signed in February 1994. This document cannot be considered in isolation from the tense relations that existed between the federal authorities and those of the republic throughout 1990-1993. The treaty resulted from two years of negotiations and discussions which revealed the need to reach a compromise. The only alternative would have been the use of force, which would have destabilized the political situation and moved Russia to the brink of disintegration. Today it is evident that the treaty eased the growing tensions and brought Tatarstan back within the political and legal space of the Russian Federation. We believe that it is possible to conclude a bilateral treaty with the Chechen Republic as well, which would define the specifics of Chechnya's status within the Russian Federation.
Nevertheless, the treaty with Tatarstan did not remove serious contradictions between the federal and republic constitution. The treaty contains neither a provision stating that Tatarstan is a constituent republic of the Russian Federation (Article 65 of the RF Constitution) nor recognition of the federal constitution's and federal laws' superiority over republic laws (article 4 of the Constitution). The treaty has elements of both an international and an intrastate treaty, and hence is a combination of confederal and federal relations. It deviated from the principle of equality of all subjects of the Federation (as required in the Constitution, article 5), and initiated a return to the asymmetrical federalism that had existed in Russia under Soviet rule.
Through this treaty and 11 supplementary agreements, the federal center has delegated a much larger number of powers and benefits to Tatarstan than to other subjects of the Russian Federation. Furthermore, Tatarstan has received a number of the federal government's exclusive authorities. A number of agreements included in the Tatarstan treaty have no relation to power sharing. This refers to such agreements as On Issues of Ownership, On Realization and Transportation of Oil and Oil-Refinery Products, On Budget Relations Between the Russian Federation and the Republic of Tatarstan, and In the Military Sphere.
The above has created a dangerous precedent of exceeding the region's authority above the limits set by the federal constitution, arbitrarily redistributing authority and jurisdiction without regard for consistency with the federal constitution, and delegating certain concessions and benefits to a region which are denied to others.
Tatarstan's example set a precedent for other republics as well. Soon after, similar treaties and agreements were signed with the Republic of Bashkortostan and the Republic of Sakha (Yakutia), whose relations with the federal government were also strained. In terms of political concessions to the region, these two treaties were less extreme than that with Tatarstan. They did contain provisions stating that the republics are constituent parts of the Russian Federation, and an assertion of the superiority of the Federal Constitution. At the same time they also contained numerous political concessions and "unconstitutional" redistribution of authority, as well as economic and budget benefits.
The three republics, being among the richest in natural resources, succeeded in gaining from the federal authorities the right to retain the lion's share of their revenues and spend them on their own populations. While natural resources are both a guarantee against an unforeseen crisis and a source from which many regions can draw to solve their local problems, they belong to the whole country and to each Russian citizen. Redistribution of the country's national wealth through such methods may lead to the destruction of economic ties within the country.
Despite the above-cited problems, the development of treaty-based relations between the federal center and the three republics brought positive results as well. The separatist and nationalist trends in these republics lost much of their momentum following the conclusion of the treaties. All three republics now recognize and abide by federal legislation. In exchange for being offered certain tax benefits, Tatarstan and Bashkortostan have abandoned their single-channel tax system (by which they could unilaterally halt the flow of taxes collected on their territory to the federal budget) in favor of a multichannel system of taxation. The republics' legislatures have made progress in demarcating joint competences, as well as accumulating positive experience in the development of treaty-based relations in various spheres. In the course of a working visit last February to Tatarstan, Bashkortostan, and Yakutia by the deputies of the State Duma Committees for Federal Affairs and Regional Policy, we could see that the timely demarcation of authority (even if imperfect) provided broad possibilities for the development of new economic relations.
A large number of treaties with oblasts, krais, and autonomous okrugs signed by Boris Yeltsin in the course of his election campaign in spring and summer of 1996 can also be categorized as "politically motivated." Those treaties were used by the president to win the regional elites' and population's loyalty in the pre-election rush. The president viewed these treaties as a panacea; a universal remedy against all troubles. While in the economically troubled Tver' oblast, Yeltsin, responding to complaints by local leaders and citizens, said bluntly that all their troubles owed to the fact that they had not signed a treaty with Moscow, and ordered that such a treaty be urgently prepared and signed prior to the elections.
(2) Treaties signed to confirm close ties between the regional and federal authorities, as well as to support the leaders of these regions in difficult political situations (the treaties with Kabardino-Balkaria and with North Ossetia-Alania, for example).
(3) Comprehensive treaties with oblasts and krais seeking to acquire the same rights as the republics enjoy. This refers to the treaties with Krasnodar and Khabarovsk krais as well as with the oblasts of Orenburg, Leningrad, Irkutsk, Perm', and especially Sverdlovsk.
For a long time, federal authorities signed treaties only with republics. This approach angered the leaders of many oblasts and krais. Almost two years after the signing of the first treaty, the federal authorities, seeking "to balance the treaty-making process," agreed to sign treaties and agreements with a number of oblasts and krais high up in the so-called "table of ranks" and with strong support in the federal echelons of power.
These treaties initiated a new phase in the treaty-making process. The difference is exemplified in the treaty signed with Edward Rossel', the new head of the Sverdlovsk oblast, who had been dismissed in 1994 for his notorious attempt to build "the Urals Republic," but returned to power after winning the region's gubernatorial election in 1995.
The treaty and its 17 supplementary agreements are comprehensive, encompassing most joint competences and regulating relations between the federal center and the Sverdlovsk oblast's bodies of power in all major spheres of life. Analysis of the provisions of the Sverdlovsk treaty reveals the following:
First, the treaty contains an inventory of joint competences of the Russian Federation and Sverdlovsk oblast (article 2 of the treaty). The list elaborates in fuller detail the joint competences mentioned in article 72 of the federal constitution, such as
These concrete joint competences are needed by all other subjects of the RF. The Sverdlovsk treaty contains a number of joint competences not listed in the federal constitution, such as the "regulation of matters related to processing and use of precious metals, gems and their products in enterprises located in Sverdlovsk oblast" (Sverdlovsk is the Urals' richest region in minerals), or the article On organization of alternative forms of civil service (similar to the relevant provisions in the treaties with Tatarstan and Bashkortostan).
The Sverdlovsk treaty delegates to the federal government authority over elaborating, funding, and implementing federal programs for structural reorganization of the regional economy; restoring mineral and raw-material bases, converting defense industries, and developing the agro-industrial complex; securing the economic conditions necessary to maintain defense mobilization readiness in Sverdlovsk oblast; and coordinating with Sverdlovsk authorities on the appointment of high-level personnel to federal agencies operating in the oblast.
All these prerogatives are equally necessary for other subjects of the Russian Federation. The powers delegated to Sverdlovsk authorities by the treaty include participation in the implementation of federal programs and participation in decisionmaking with regard to appointment of administrators (see above).
A unique provision of this treaty is the requirement that the oblast's laws be brought into conformity with the treaty. Also unique is the right "to define, in conformity with federal laws, conditions for licensing and use of nature on the territory of Sverdlovsk." It seems that none of the subjects of the Russian Federation would decline such commitments.
In addition, there are a number of provisions which moderately resemble clauses in the constitution of the failed "Urals Republic," such as the oblast's right to introduce legislation concerning issues of joint jurisdiction prior to the passage of federal law on the given issue; extension to Sverdlovsk of benefits, rights and other advantages provided by the federal government after the signing of the treaty; directors of regional divisions of federal agencies shall be appointed to and relieved from their respective positions by the Governor of Sverdlovsk oblast in coordination with the respective federal body of power (but not vice versa); and regional executive bodies can be assigned the functions (prerogatives, rights) of territorial branches of federal agencies by agreement.
The most demanding provision is article 8 of the treaty, which says: "In case the RF Government does not abrogate the legal acts of the RF ministries and agencies, mentioned in Part 1 of the present Article, such legal acts shall not be subject to implementation by the government of Sverdlovsk oblast until the respective court shall have passed its verdict." Whereas the constitution of the Urals Republic entitled the local authorities to stop federal laws, the treaty allows it only to stop the acts of Russia's ministries and agencies. This means that all federal agencies have to take into consideration the laws of one oblast, Sverdlovsk, in doing their work.
All the above provisions are disputable and are not unique to Sverdlovsk oblast. They should be coordinated with other subjects of the RF, and then reflected in federal laws, and especially in a law on demarcation of competences.
The agreements signed with the Sverdlovsk regional administration have produced the following results:
First, many of the agreements provide for power sharing in specific spheres of activity such as forestry, health care, the agro-industrial complex, and international political and economic ties. This is a useful innovation, and after coordination with other subjects of the RF, it should be introduced by specific federal laws (founding legislation) to regulate specific spheres of public affairs.
Second, the agreement In the Sphere of State Property Management concretely divides state property between federal and oblast authorities, and joint ownership (municipal property is missing entirely). Unclear, however, is what criteria they used for dividing property, since no federal law on property has been adopted yet. This division of property must have resulted from a bargain between the sectoral ministries and the regional administration. With several ready precedents (Bashkortostan and others), it would be advisable to generalize their experience and regulate this important issue by means of legislation.
Third, almost all of the Sverdlovsk agreements contain a clause stating that in case of untimely or insufficient funding of federal programs operating in the oblast, the Sverdlovsk administration may fund the programs at the federal budget's expense by drawing on the funds of a mutual account (see for example the Agreement on the Sphere of the Agriculture-Industrial Complex, Article I; Agreement on Health-Care). This provision, extremely kind to Sverdlovsk oblast, was one of the main goals in signing the treaty because it enables Sverdlovsk oblast to reduce its allocations to the federal budget. At the same time this provision hurts other subjects of the RF that are in grave economic need. Such a budget benefit would be desired by all subjects of the RF, and not only by the donor-region Sverdlovsk. However, if during the current high deficit and nonpayment crisis such a privilege were extended to all subjects of the RF, the federal budget would collapse and no money would be available to fund the army, militia, communications, and other federal structures and programs of vital importance for all subjects of the RF.
In addition to the above-mentioned advantages, Sverdlovsk oblast has gained several others:
There are other advantages received by Sverdlovsk oblast (as well as by many other treaty signatories). For example, the agreement with the Republic of Komi contains a very generalizable preamble: "On the basis of annual agreements between the RF Ministry of Finance and the Government of the Komi Republic, in order to accelerate mutual accounts between the budgets and to reduce counter-flowing financial streams, expenditures to fund territorial divisions of federal executive bodies, federal institutions and federal programs in operation on the territory of the Komi Republic, can be relayed to the budget of the Komi Republic, with due account of the respective prerogatives, delegated by the federal executive bodies to the state power bodies of the Komi Republic."
The reason for such detailed discussion of the treaty and agreements with Sverdlovsk oblast is that they represent a qualitatively new phase in the treaty-making process. While the earlier treaties and agreements with republics were seen by their backers as compensation for the return of those republics to the constitutional and legal space of the Russian Federation, the treaties of the Sverdlovsk type actually legitimize law-making via treaty. The "parties" to the treaty often consider it superior to federal laws and sometimes even to the constitution. This view openly legitimizes benefits and advantages received by the signatories, and leads to an extraconstitutional change in the status of the Federation subjects. This trend may move Russia from being a constitutional federation to a treaty-based federation.
(4) Treaties necessitated by the specific conditions of the Federation subject-for example, treaties with Buriatia and Kaliningrad oblasts.
The treaty with the Republic of Buriatia begins by saying: "Considering the fact that the Republic of Buriatia is a water-collection zone of Lake Baikal; recognizing the unique ecology of that lake and treating the lake as a national treasure of the Russian Federation . . ." It then proceeds with joint competences, strictly federal jurisdictions, and those of Buriatia, all aiming to preserve, restore, and improve the Baikal region's ecological system. The treaty concludes by elaborating the mechanisms for implementing it and the arbitration procedures in case of dispute. The treaty is in full conformity with the federal constitution. For example, the Agreement on Demarcation of Prerogatives in Creation of Conditions for Economic Activities in the Water-Collection Zone of Lake Baikal points out: "Considering the difficult financial and economic condition of the Republic of Buriatia, the parties agree that the additional expenditures necessary for providing essential services in the republic will be reimbursed from the federal and republic budget in an agreed-upon proportion. The list of essential services and the volume of additional expenditures shall be determined and agreed upon at the planning stage of the federal budget and the Republic of Buriatia budget for the respective years." Another agreement, which demarcates prerogatives with regard to exploitation of minerals and other raw materials, offers a different mode of funding: "In compliance with the RF Constitution and the federal Law On Natural Resources, the RF Government shall provide funding for work on geology-exploration, effective in the territory of the Republic of Buriatia within the framework of the federal program for development of the mineral and raw-material base of the Russian Federation, which shall be funded by revenues received from the Republic." The treaty with Kaliningrad oblast appears quite reasonable in light of the region's exclave position and its importance for Russia's national interests.
In sum, we already have treaties and agreements that are grounded in the specific conditions of individual subjects of the RF and that stipulate a real demarcation of competences and prerogatives in compliance with the constitution and federal law.
Let us now address the problem of the treaties' consistency with the Constitution of the Russian Federation. The following three cases indicate the lack of such consistency:
First, the authorities that are referred to in the RF Constitution as within the jurisdiction of the federal government are often included in the list of joint competences of the Russian Federation and its subjects, for example:
Second, in a number of treaties, exclusive jurisdictions of the Russian Federation are extended to the subject of the Federation:
Third, what a number of treaties categorize as joint jurisdictions belong according to the RF constitution to the jurisdiction of regional governments:
Therefore, one can conclude that the treaties signed by the federal and regional governments to some extent run counter to the RF Constitution. At present, the situation is such that some provisions of the RF Constitution are not effective in parts of Russia. For example, Articles 71 and 72 do not hold for those subjects that have signed treaties with federal authorities. In addition, the treaties have transferred some costly responsibilities, such as shipment of foods and commodities to the northern areas and natural disaster relief, to the federal government.
The above analysis of the signed treaties leads us to the following conclusions. Treaty signing with subjects of the Russian Federation should be motivated by:
Apart from the first reason, all others are problems inherent in the transition from a unitary to a federal state. Hence, in our view, the signing of treaties is a temporary phenomenon. When Russia builds an integrated system of federal and regional laws and creates stable economic and political conditions for the development of subjects of the Federation, there will no longer be a need for such treaties. Matters relating to the demarcation of competences will be regulated by legislation as in other federal states. Such regulation would include passing laws for regions with unusual circumstances; for example, the existing law on the free economic zone in Kaliningrad.
Today the treaties put subjects of the RF in unequal positions and thus run counter to the principle of equality as stipulated in the Russian Constitution. In precise terms, Article 5, Part 1 of the RF Constitution means the following: if some subject of the RF expands its rights by whatever means (treaty,agreement, presidential edict, federal law), the same is automatically provided for all the other subjects of the RF. Hence, we can offer the shortest sample draft treaty between the subjects of the Federation and the center. It would contain just one provision, stating that "All rights, benefits, and advantages stipulated in the earlier or later signed treaties of division of authority between federal and regional governments shall be extended to every subject of the Federation (oblast, krai, republic, autonomous okrug, city of federal jurisdiction)."
In the absence of such a law, Russia will be saddled with the coexistence of both legislative and treaty-based demarcation of authority. Hence, our task is to try to develop-within the shortest possible time-a legal process for dividing authority and jurisdiction. Such a system should build on the experience of treaty-based relations. Furthermore, it is necessary to "civilize" treaty-based relations, i.e., to put them in the framework of the constitution and federal law and thus put a stop to separatist trends, further economic differentiation of subjects of the RF, and the burgeoning of shadow mechanisms for redistribution of national income among various regions of the country.
At the same time, we stand in favor of an evolutionary adjustment of treaty-based relations, as we understand that radical changes would only aggravate the situation in many subjects of the RF.
Finally, we draw attention to one more problem-the authority of the individual officials who sign such treaties. All treaty titles mention the "bodies of state power of the Russian Federation and bodies of state power of the RF subjects." However, the treaties are signed by officials representing only some bodies of state power, usually the executive.
On the Russian Federation's side, the treaties in all cases were signed by the RF president and-with the exception of the treaties with Buriatia, Krasnodar krai, and Sverdlovsk oblast-the prime minister as well.
Among the subjects of the RF, there exists a broader variety of signatories. On the part of republics, the treaties were signed by their presidents and heads of government. The treaty with Udmurtia is the only exception, as it was signed by the chairman of the State Council (the parliament of the republic) and the head of the government.
On the part of territories and regions, in three out of four cases the treaties were signed only by the heads of administration or by the head of the government (the treaty with Sverdlovsk). In only one case, Kaliningrad, was the treaty signed by the head of administration and the chairman of the regional duma.
The federal parliament, despite being a state organ of the Russian Federation, is excluded from the treaty-making process, even though its jurisdictions-as well as those of the president and prime minister-are demarcated by the given treaties. Almost all the treaties have similarly excluded the legislative bodies of the subjects of the RF. However, requiring the approval of the duma speaker would be difficult because representative bodies are collegial, and none of their deputies (not even the speaker) isentitled to sign a treaty without authorization from the assembly.
Unfortunately, the RF Constitution does not offer specifics about the process for ratifying power-sharing treaties. Therefore, we suggest that the Federation Council be endowed with the authority to approve treaties signed between the federal government and its subjects.
Leaders of Tatarstan, Bashkortostan, and other regions complain that the treaties are not being properly implemented by federal authorities. However, such noncompliance is directly related to the lack of real demarcation of authority in these treaties, as well as with the political nature of many of them.
As we were told by the government and the National Bank of Bashkortostan, in 1995 the republic had transferred about 28 percent of taxes collected on its territory to the federal budget. Though this is much more than it had transferred in the years of confrontation (1992-1993), it is half the amount paid by other regions. The republic's Council of Ministers explains the disparity by claiming that in absolute terms, Bashkortostan's allocations to the federal budget exceed those from Perm and many other regions. But in terms of its area, population, and natural and material resources, Bashkortostan is not comparable to many other regions.
At the same time, we do not support egalitarianism and equal poverty. On the contrary, we suggest that the state should support the advanced regions in order that they might, like locomotives, drive our economic growth. Such support, however, must not take place through reduction of their payments to the federal budget. In this regard, the proposal to create a fund for economic encouragement incentives for well-developed regions seems worthy of promotion. Such a fund could be formed with off-budget monies and special allocations from the RF subjects.
As revealed by the actual federal budgets of 1994 and 1995, the volume of transfers from the federal budget to the regions is rather insignificant, amounting to only about 10 percent. The major portion of budgetary funds is received by the regions through various kinds of short-term budget loans and mutual accounts-in other words, through their respective access to "the Kremlin corridors of power." Such a personalized approach to budget relations creates a "shadow" government and paralyzes the federal budget-and-monetary relations fixed in the federal Budget Law.
The current situation is beneficial not only for regional elites, but for the federal power structures as well. Standing at the uncontrolled helm of distribution, state bureaucrats act by the "divide and conquer" principle. At the "right" moments (elections, aggravation of the political situation, etc.) they can buy the loyalty or help of subjects of the Federation, and thus ensure their own continuation in power. The situation can be improved only by a democratic and open procedure of budgetary relations set by law.
As shown in the above analysis, the ongoing construction of the new Russian state involves, on the one hand, the trends and rules that have been well tested by world experience in the development of federalism, and, on the other hand, the very specific and unique features of the Russian and other peoples of our country.
Accelerating in breadth and depth, the treaty-making process demonstrates an attempt to take into account the historical, geographic, ethnic, and other particularities of the subjects of the Federation. This process has also demonstrated, however, our insufficient legal culture, legal nihilism, subjectivity, and "belief in a good czar," and the willingness to solve important issues of the state and its subjects at the level of "common law" rather than at the level of the Constitution and legislation.
In the prevailing circumstances, the most important task is to formulate standard rules of the game that will be accepted by all subjects of the Federation and the federal center. As long as there are no such rules, or they are not recognized, or the game is run by the rules set between Moscow and individual subjects, there will be no truly democratic federation in Russia.
Today, only two alternatives are available: (a) either the federal parliament together with the legislative bodies of the RF subjects can build a modern legislative basis for development of federal relations, while the judicial power would oversee strict implementation of laws, and the executive branch would implement the law; or (b) the "treaty-making rush" will become a permanent rather than a temporary process and the Russian Federation will be transformed from a constitutional into a treaty-based state. Which of the trends prevails will be clear in the near future.
Meanwhile, it is absolutely evident that for Russia today it is impossible to separate the federal structure of the state from democracy. It is federalism-"the fourth branch of government"-that today serves as a major constraint, a counterbalance, and a guarantee for the preservation and development of democratic institutions in the center and in the periphery. Attempts by various forces seeking to revert to the USSR (the Communists) or to the Russian Empire (Vladimir Zhirinovsky's Liberal Democratic Party), i.e., to the "initial Soviet, Russian" forms of state organization, would inescapably be accompanied by establishment of an authoritarian regime in Russia. Today, such a gigantic and diversified country as Russia cannot be governed democratically without a federal form of state organization. Sustaining and developing federal relations is a major component of the reform process in Russia.