It takes two to quango: post-Soviet fiscal relations, political entrepreneurship and agencification from below

The paper analyses the mushrooming growth of quasi-independent public agencies in the public sector of post-communist states. What at first glance seems to be a faithful transfer of institutions from the arsenal of New Public Management upon closer analysis turns into a very distinct phenomenon of post-communist transition. In the course of the 1990s, the amorphous public-private mix that was the Soviet political economy became increasingly differentiated as ex-apparatchiki turned political entrepreneurs branched out to create new commercial, collective, and even quasi-state regulatory bodies. The dividing lines between these new forms of organization, however, often remained quite blurry. This problem was further exacerbated by the severe underfunding of executive agencies that had become a notorious problem in post-Soviet countries. As a result, many agencies were forced to resort to private and semi-private sources of funding, and to commercialize their activities in order to support their official operations. In the second decade of transition, post-Soviet governments have increasingly been trying to control the worst such excesses through various forms of public management reform, such as the introduction of Single Treasury Accounts or various forms of revenue and expenditure audits. However, such efforts have met many setbacks and reversals; in some cases – such as for instance in post-Rose Revolution Georgia – the very new managerialist arsenal designed to enhance cost efficiency and separation between policy, regulatory and services tasks have instead with the government’s tacit approval been used to camouflage continuing hybridization and ballooning public sector employment. In other cases, such as Russia’s, growing restrictions on one form of organization have simply stimulated a shift to different legal forms, in this case state unitary enterprises.