State reconfigurations: state-society relations, elites and informal economy
In this part of the essay, I would like to move on to examine how the Serbian state and society, in an ongoing interaction with each other, were being reconfigured in recent history. The extent to which conventional transitology is misleading will become more than obvious in the case of Serbia, in which relatively stable but highly ‘deviant’ (from the transition perspective) political and economic structures developed in the 1990s, and have been not fully displaced by standard democratic forms even in the post-Milošević era. These adaptations to the historically specific conditions can be observed at the state level – with the regime actively participating in the criminalization of the economy – as well as at the level of ‘survival strategies’ of the rapidly impoverished masses. Unfortunately, not much anthropological literature is available on these issues in Serbia, unlike on the more cultural and ideological aspects discussed above, so I mainly draw on authors with different disciplinary backgrounds.
Hayden (1999) has argued that the destruction of the SFRY and subsequent civil wars were driven by a logic of ‘constitutional nationalism’ (see also Verdery 1998 for non-Yugoslavian postsocialist examples). He especially highlights the significance of Slovenian and then Croatian constitutional amendments of 1989–1990, which implemented the principle of republican supremacy and aimed (although this was not openly acknowledged) at a de facto destruction of the federation and the establishment of ethno-national states of ‘sovereign’ Slovenian and Croatian nations. This system of constitutional nationalism, subsequently embraced also by the Serbian state in practice if not in law, ‘privileges the members of one (ethnic) nation over those of any other resident in a particular state (…) [and it] envisions a state in which basic sovereignty resides with a particular nation’ (ibid.: 68). Hayden also makes a provocative claim that the conflict-prone nature of ‘national sovereignty’ is inherent in the (Central) European political thought; a claim was largely taken for granted by Western powers during the dissolution of Yugoslavia.
I have already touched on how Milošević skillfully exploited the dynamism of top-down protest mobilisations in the late 1980s and early 1990s, as well as the symbolic and relational resources of Yugoslavian and Serbian political culture such as the preference for a strong state and collective rights and representation, to establish his own rule eclectically combining nationalist and some socialist ideological elements. Milošević’s regime is commonly described as ‘nationalist authoritarianism’ (e.g., Gordy 1999) or ‘hybrid/competitive authoritarianism’ (e.g., Gould & Sickner 1999). The usage of these terms rather than ‘totalitarianism’ or unqualified ‘authoritarianism’ signals that a façade of democracy and some democratic institutions (e.g., multi-party elections) were maintained, through which opposition could occasionally challenge autocratic incumbents. Nevertheless, the main concern of the regime – especially after the failure of the ‘Great Serbia’ project became apparent – was to keep Milošević, his family and close circle of allies in power. The status quo was upheld by authoritarian methods such as the control of (most) major media, security, police and military apparatuses and strategic redistribution of assets to key economic actors in an ‘insider privatisation’. The continuity with the previous regime was apparent at the ideological and institutional level alike – the SPS inherited the personnel, infrastructure and financial assets of the League of Communists of Serbia, as well as its nearly total control of the electronic media (Pavlaković 2005: 23).
In a previous discussion, I have mentioned how simplistic notions of an urban/rural binary are put into question by the existence of a large ‘semi-urban’ sector of the society. Similarly, Boulanger (1999) argues against the common tendency to interpret the Yugoslavian wars and support for Milošević’s authoritarianism as ‘the revenge of the countryside’. He maintains that militias in the former Yugoslavia indeed recruited fighters from so-called ‘Dinaric’ populations (purportedly more ‘traditional’ inhabitants of the Dinaric Alps, often living outside of their ‘proper’ ethno-nationally defined republic), but that many were in fact urban dwellers. Moreover, although some social practices of these groups were instrumentalised in the process (e.g., private gun holding), a heavy invention of tradition took place too. The way these seemingly anti-state groups, associated with social banditry, were put to the service of state violence, mirrors the past history of Balkan national uprisings and wars and is explained by the ‘flimsy’ monopoly of legitimate violence and the contested character of territorial and institutional boundaries of Balkan states. Militias became instruments in the nation-building processes: ‘In the lasting inadequacy between state and society, which is characteristic of the Yugoslav space, the militias are therefore on the side of the state, organizing provocative actions in order to sow fear and distrust in the population, tearing away local fighters from their village in order to create a territory, expelling the people whose ethnic identity does not fit with this territory’ (ibid.: 173).
For many commentators, the 2000 regime change came to embody something of a failed transition 2.0. For instance, Dimitrijevic (2008: 11) criticises the inability of the government to face the criminal past and its problematic relationship with the ICTY and claims that ‘Serbia remains a closed society, governed by the imposed beliefs of the ruling elite rather than by public general norms which would be equally applicable to all members of the community. The character of the legal and political system; the relationship between the individuals and the state; economic processes; ideological patterns and prevailing cultural values all reveal a regime and a society that has lost its direction.’ The political elite has quickly returned to its previous disunity, capturing and reinforcing contradictory sentiments of the electorate. The main divide was between the proponents of ‘hard’ and ‘soft’ transition, with the latter using a discourse of ‘legalism’ which in practice amounted to keeping the old authoritarian institutions intact (Gordy 2004).
Krastev (2002) considers Balkan democratic states as ‘weak’ in the sense of their administrative capacities; their ability to deliver public services as rated by the citizens; and their ‘capture’ by particularist interests. An ultimate danger for democracy in the Balkans, then, is the widespread perception that everyone and everything in politics is corrupt which stems from these inadequacies of the state. For Serbia, Gordy (2004: 15) indeed confirms that ‘[a]ll institutions, whether from the past or the present, and whether domestic or international, consistently receive low-confidence ratings in Serbian public-opinion surveys. Repeated surveys show that institutions are regarded as relatively closed, as corrupt, and as working against the interests of ordinary people.’ Walace and Latcheva (2006) establish links between the importance of the informal economy and the low trust in political institutions. They find that Serbia was among postsocialist countries where ‘black economy’ (corresponding to illegal elite strategies of wealth accumulation and regime maintenance, often directly associated with the state) and ‘grey economy’ (a-legal household-based survival strategies) were most important and exerted the strongest influence on the perception of corruption. Considering the post-2000 pattern of jobless growth, this situation is unlikely to be completely eliminated. However, there are some signs of progress. While in 1999 the FRY’s corruption perception index of 2.0 was the worst in Europe, by 2009 (for Serbia) it improved to 3.5 and even exceeded values recorded in Montenegro and Bosnia and Herzegovina (Transparency International 1999, 2009).
Various explanatory frameworks can be invoked to account for the indecisiveness of the regime change in 2000. According to the political scientists Kalandadze and Orenstein (2009), electoral revolutions are weak in promoting democratisation because they focus too much on elections themselves (which I would argue is characteristic of the procedural understanding of democracy) and do not address other structural obstacles of democracy posed by authoritarian or hybrid regimes, such as clientelism or non-transparent decision making. They consider negotiated transitions and direct international pressure as more efficient in delivering democratisation outcomes. Although in Serbia there was some post-2000 progress (at least according to the Freedom House democracy indicators), compared to the first-wave postsocialist transitions, improvements were slow and insignificant, especially from 2003 onwards, and this modest success can be explained by ‘consistent external pressure to democratize’ associated with the perspective of EU integration (ibid.: 1421). Kalandadze and Orenstein conclude by arguing that Serbia continues to face two major issues of elite power struggles and the status of Kosovo.
Writing from a politico-economic perspective, Gould and Sickner (2008) dispute the belief of market liberals that privatisation necessarily leads to the establishment of the institutions of market democracy, because new private owners will demand these so that they could protect their property and reorganise their firms to maximise profit. They claim that under illiberal conditions, this is unlikely to happen. However, their ‘path contingency’ approach differs from ‘legacy theories’ in that it does not see the illiberal postsocialist politics and economy as a stable set of affairs. Political inequality and rent-seeking behaviour – i.e, internal tensions characteristic of competitive authoritarianism – will likely lead to distorted growth and hence political and economic crises, which provide an opportunity for economic agents to reconsider their ties with the regime. They might decide to support the opposition which promises a better managed, rule-of-law economic environment, or because they fear being caught on the wrong side of the divide after the regime change. A shift is least likely where the resources are centrally controlled and redistributed by the regime (especially in the form of resource rents) through identity-based networks (‘clans’).
This was not the case in Serbia, where patronage networks outside of Milošević’s family were based on self-interest rather than identity. The business elites benefiting from Milošević-era structures therefore felt unconstrained in opportunistically changing their loyalty to the opposition, from which they sought an explicit assurance that they would keep access to their state-secured rents. A significant political change therefore did take place in 2000, but a confrontation between these actors and the proponents of ‘genuine political liberalization’ was delayed by several years and a significant part of the economic elite succeeded in conserving its illicit wealth. The most important conclusion is that ‘the beneficiaries of illiberal political mismanagement (…) did not switch allegiances because they wanted the new government to build a market democracy. Rather, they switched because opposition elites assured them that they would not. Indeed, it is probably no coincidence that when Prime Minister Zoran Djindic attempted to crack down on criminal elements in 2003, he was assassinated by Milosevic’s informal security and organized crime interests’ (ibid.: 761).
In standard political-science accounts, democracy in postsocialist societies is represented as enfeebled by the weakness of civil society, which is in turn explained by a communist legacy combined with the constraints of nationalism, itself stemming from the socialist history. In the postsocialist world, citizens tend not to participate in voluntary organisations because of their experience with communist organizations. Another legacy is seen in the continuing strong presence of informal networks of friends and family, which, unlike impersonal networks, do not contribute to the building of ‘a strong impartial state with a rational bureaucracy’. Although Kostovicova (2006), who proposes to reconsider the ‘conventional celebratory approach’ to civil society, acknowledges this narrative may tell a part of the truth, she makes a seemingly paradoxical claim that civil society in Serbia is simultaneously undermined by the impact of democratisation itself. This is because under the conditions of a lack of consensus on the state-society relationship and on where the country should be generally heading, the more democratic environment enabled both liberal’ and ‘illiberal’ sectors of civil society to expand. ‘Emboldened by the state’s conservative national outlook, these groups offer an even more exclusive version of Serbian nationhood. It is built on a radical critique of the failure of Milošević’s project rather than of the project itself’ (ibid.: 31). These groups adopt organisational and communication strategies of pro-democratic agendas to pursue their nationalist, xenophobic, culturally highly conservative and sometimes (quasi) religious programs. The result is that liberal NGOs are weakened by having to confront both the illiberal state and illiberal NGOs.
Kostovicova and Bojičić-Dželilović (2006) add another piece of the mosaic by showing how transnational informal networks, often engaging in criminal activities, exploit this context of weak states and undermine formal structures and attempts at their reform. In the former Yugoslavia, this represents a post-communist legacy of the war economy, which nevertheless mediates pre-communist and communist legacies, especially the experience of sharing a common state and economic space which continues to facilitate all sorts of cross-border transactions. This threat to democratisation has not been fully appreciated by the EU whose integration policy tools are inadequate to deal with it. A fertile ground for the activities of these actors is created by various channels through which globalization impacts on the region, such as the proliferation of borders (including the outer borders of the EU, generating inequalities on which the networks capitalise), flows of migrants, refugees and forcibly displaced populations, the war economy and neoliberal adjustment. The transnational networks have an ambivalent relationship with the multi-ethnic context in which they operate: ‘inter-ethnic collaboration is necessary to sustain their activity, but stirring ethnic tensions creates an environment in which they project themselves as a guarantor of their own ethnic group’s security. Ultimately the issue of “stateness” presents itself as the impossibility for ethnic groups to achieve a consensus on the state and nation, when its root cause should actually be sought in the mode of operation of transnational networks’ (ibid.: 228).
There is a general consensus that the old socialist elite managed to maintain its privileged positions both in politics and economy through the 1990s (e.g., Sörensen 2003: 74) even on a larger scale than in other postsocialist societies, where former officials and state enterprise managers also put their social capital to good use (cf. Müller et al. 1999; Verdery 1996: 212). Elite continuity paralleled regime continuity in Serbia in that the economic elite remained relatively undifferentiated from political elite which is characteristic for socialist rather than democratic regimes. Lazić (2000) draws on Bourdieu’s theory of social capital and talks about an ‘adaptive reconstruction of elites’, by which he refers to a fast and large-scale conversion of various forms of political, economic, and social capital by the formerly quite monolithic ruling class in the 1990s, mostly into economic capital. In these ‘sectorial transfers’, former nomenklatura members and managers of state-owned enterprises typically became entrepreneurs, intellectuals turned to leaders of political parties, and so forth. The overall result was a ‘blocked transformation’ in which ‘the old League of Communist societal monopoly was replaced by interlocked positions of economic and political dominance in order to postpone the development of a market economy and political competition’ (ibid.: 130).
The new middle class (‘business elite’), as contrasted to the old middle class of various predominantly urban and highly qualified professionals and mediators between the socialist government and the rest of society, mostly operated in a close symbiotic relationship with Milošević. In 1988, the federal Prime Minister Ante Marković announced a program of privatisation which converted state enterprises into joint stock companies and incentivised employees to buy shares. However, already in 1991, in the conditions of wartime hyperinflation, these enterprise were effectively renationalised and put under indirect control by the SPS (Djuric-Kuzmanovic & Zarkov 1999: 31; Gould & Sickner 2008: 760). Milošević used various tools of corporate governance available to him to buy off foes and reward friends with directorships (which they subsequently often used to illegally enrich themselves). The way this, as well as the loyalty shift in 2000 took place, confirms Ledeneva’s (2006) assertion that informal practices are prevalent where informal and formal norms are not synchronised and the rules of game are therefore incoherent. It also confirms that their basic logic is reproduced across societies with state-centralised regimes.
Hyperinflation in the first half of the 1990s was a cause of radical transformation of social structure and another crucial instrument of economic governance, used for extracting wealth (especially in foreign currency) from the old middle class and other segments of the society. This wealth was then transfered to the hands of the few. It was also used for financing state security and military apparatuses, and for limited redistribution to citizens to buy their complacency (Gordy 1999; Sörensen 2003). Because people requiring cash to purchase basic necessities and thus obliged to exchange their foreign-currency savings were especially urban dwellers, this process also meant a mass spread of urban poverty and an urban-to-rural transfer of wealth (Djuric-Kuzmanovic & Zarkov 1999). As for the former professional elite, it was severely hurt by these processes and almost destroyed as a class, with some rather limited recovery occurring after 2000. Sörensen (2003) notes that the NGO sector was the single most important venue for a reconstitution of this class, albeit in a very curtailed scope; one of the reasons was an uneven distribution of foreign aid on which they largely depended.
Sampson (2002), writing about the Balkans in general, largely corroborates Lazić’s argument about the constitution of two main elite groups in the immediate postsocialist period: of the ‘technocratic’ elite of former apparatchiks, managers and technocrats, now taking over the emerging political institutions and economic enterprises, and the ‘cultural’ elite of former dissident intellectuals becoming politicians and fighting for ‘return to Europe’. He claims that both of these projects have succeeded, and these groups thus in a sense outlived their purpose. People of the Balkans now find themselves in a post-postsocialist phase, when the initial ‘shock has worn off’ and they have some kind of understanding of the frameworks and global order in which they live (ibid.: 288). This and the obsolescence of the ‘old’ postsocialist elites leads to the emergence of a new elite configuration consisting of four sets: a local political class; a comprador bourgeoisie; a domestic business elite; and warlords and mafia chieftains. They all differ in the modes of their integration into global networks and kinds of discourses and resources they can employ. Shortly, these elites are more self-consciously transnational and sophisticated than the old ‘provincial’ elites, and their practices are one of the key channels through which global forces bring both fragmentation and integration to the region (cf. Kostovicova & Bojičić-Dželilović 2006).
Sampson develops in a more detail the notion of comprador bourgeoisie (a term borrowed from Latin American dependency theory) which is extremely relevant for my subject as it is essentially associated with the development ‘business’. This is a group which is ‘inside and outside at the same time’, ‘a pliable, effective local elite which not only carries out orders from the centre but whose ultimate allegiance and frame of reference also lies with the centre’ (ibid.: 299). While the activities of this ‘project society’ may have an integrative effect, e.g. by promoting the ‘rule of law’, democratisation, or EU integration, the fragmenting aspect operating through transnational loyalties and local conflicts is equally present. This happens, for instance, when local project managers, who in the hierarchy of international aid serve as translators of the abstract knowledge of donors, ‘lift off’ in their values and mental outlook from their own society, and thus become effectively removed from it. They may also decide to emigrate physically, diminishing the ranks of national elite in the process. Moreover, resources being channeled through these structures become the object of elite struggles. This is not simply a case of aid transfers undermining the state; state officials also devise various strategies to tap into these resources.
While I think that Sampson’s chapter is invaluable in giving us a rare picture of the new elite configuration in the Balkans well as a closer look at development professionals, I would argue that not everything might be so different as it seems. Although the overall elite configuration is indeed new, the turnover of personnel is another matter. For instance, from how Sampson describes the ‘domestic business elite’ it is clear that many of its members are in fact the ‘new middle class’ of the 1990s, including Milošević’s allies discussed above, who simply managed to legalise themselves. The comprador middlemen are likely to be recruited from among Sörensen’s old middle class finding a limited refuge in the NGO sector. Furthermore, Sampson does not mention army and secret police officials, many of them high-ranking and directly connected to organised crime networks and paramilitary organisations, who managed to negotiate their impunity in 2000. They are generally thought to have assassinated Đinđić after he announced an intention to take action against them, which the ‘soft transitionist’ Koštunica opposed by ‘arguing that it “would be quite irresponsible, at the moment when we are controlling things, to start experiments with the police and the secret police”’ (Pavlaković 2005: 29–30).
NOTES
1. Writing shortly after the fall of Milošević’s regime, Djuric-Kuzmanovic (2001: unnumbered) asserts: ‘About 60 percent of the total population now lives bellow the poverty line (Sukovic 2000). While an average monthly salary in December 1990 was US$376, by December 1999 it was only US$43.50 (Group 17 2000).’
2. These figures capture the number of people living below the national poverty line, which was 8,833 Serbian dinars per capita and month in 2007, i.e. less than €100.
3. In the field of international politics, the SFRY presented itself as neutral. It pursued non-confrontational policies towards the USA and became one of the founding members of the Non-Aligned Movement.
4/ What I think is an important omission of this model is the pragmatic, especially economic aspect of EU membership, which has been a recurring pro-membership argument in political debates on the EU in many new member states and is likely so in Serbia.
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