The size of the defense industry in Russia has been a primary concern for policymakers and scholars interested in international security and arms control, as well as for students of Russian politics and economy more generally. For an issue attracting so much apparent
interest, however, there appears to be remarkably little quantitative information available on the scope of the military production sector and, particularly, on the extent to which it has changed in recent years. Analysts of the military-industrial complex (MIC)1 have either
combined the scraps of information derivable from official reports to try to form an overall picture (e.g., Cooper (1991a and 1991b), Despres (1995), Gaddy (1994), Sapir (1994), Sanchez-Andres (1995) and most of the published literature in Russian language), or they have been limited to detailed case studies of just a few firms, eschewing any attempt to measure the sector as a whole (e.g., Bernstein (1994)). Both approaches have contributed substantially to our qualitative understanding of the organizational structure of the military industry and of recent changes in the operation of some of its enterprises. But neither provides quantitative answers to the following questions: How large is Russian defense industry? What is the magnitude of decline in military production since reforms began?
What are the sources of the change? To what extent are resources being released for civilian purposes? Yet the answers have important implications for international security and for the design of foreign aid and domestic policies to assist the conversion and industrial
restructuring processes.

Has the rapid ownership transformation in Russia had an impact on enterprise performance or on worker behavior and attitudes? This paper investigates this issue using data from a nationwide survey of 1,176 Russian workers conducted in April 1995. We focus on the two primary types of ownership change in Russia: the privatization of existing state-owned enterprises, and the creation (de novo) of new, private organizations. Examining such types of firm behavior as restructuring of product lines, investment in new equipment, changes in internal organization, influences on decision-making, and labor market behavior, we find large and significant differences between privatized and state- owned enterprises, and between new private and all old organizations, controlling for other firm characteristics. Differences in the labor market behavior and attitudes of workers are significant when comparing new and old firms, but less so when comparing privatized to state enterprises. Finally, we analyze the relationship between the ownership of the firm in which an individual works and her political attitudes and voting intentions, finding that employees of the privatized companies tend to be the most anti-reform group while those in new private firms are the most pro-reform.

Most observers of Russia's historic presidential election on July 3 believed that Boris Yeltsin and his colleagues had made a dramatic bid for reelection and won. But Time magazine's ensuing cover story, "Yanks to the Rescue," by chief political correspondent Michael Kramer, and the ABC news Nightline feature "Secret Weapon," aired July 8, had a different take. They chose to downplay the greatest political event of the decade -- the triumph of democrats and democracy in the first direct election of a head of state in Russia in a thousand years -- and featured instead three American consultants who allegedly won the race for Boris Yeltsin. As one of these men boasted on Nightline, "We have brought democracy to the evil empire and the world will be forever changed because of it." This is ludicrous.

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After two rounds of voting, as you know, Boris Yeltsin was reelected President of Russia. In the first round, he surpassed his closest challenger, the Communist Party chairman Zyuganov by only 3 percentage points. However, in the second round, Yeltsin trounced Zyuganov by an impressive 13 percentage points. Voter turn-out in each round was about 67 percent. The high turn-out testifies to the electorates's continuing involvement in the political process despite many disappointments and economic hardships, and ominous predictions of a low turn-out.

...

Michael McFaul comments that events during Russia's July 1996 runoff election have highlighted the flaws in the new democracy there.

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The last year of Russian politics presented a great challenge for analysts both in Russia and the West. Polarized for years over the future of Boris Yeltsin and Russian democracy, both optimists and pessimists faced a critical test of their assumptions, models and ability to predict events. With the main event -- the presidential election -- now over, the optimists can claim victory.

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This volume contains the proceedings of a conference held at the Center for International Security and Arms Control in May 1996. The meeting was the latest in a series that CISAC had held over the years with Russian specialists from the Center for Scientific Research of the Committee of Scientists for Global Security, the Ministry of Defense, and the Russian Academy of Sciences. The general rubric under which these meetings were organized is "Strategic Stability to the Year 2000."

The May meeting had a special significance because 1996 was a year of presidential elections in both Russia and the United States, and the prospect of these elections was inevitably reflected in the discussions. But another general point emerged in the meeting, and that was the need to pay more attention to the strategic relationship between Russia and the U.S. Much had been done since the end of the Cold War to wind down the nuclear competition between the two countries, and agreements have been signed to reduce the enormous nuclear arsenals built up during the Cold War. There is much to be done, however, to ensure that this course is continued. The uncertainty
about ratification of START II by the State Duma, and the proposals in the U.S. Congress for deployment of a national ABM system both cast doubt on the possibility of further reductions in strategic offensive arms. The prospects for pushing nuclear weapons into the background of international politics are clouded by the renewed Russian interest in the role of tactical weapons in regional conflicts, and by U.S. interest
in the use of nuclear weapons to deter chemical and biological weapons attacks.

The issues discussed in the conference are embedded in broader political relationships, and this meeting suggested the need for a more intensive and broader strategic dialogue. In both countries there had been a lessening of interest in issues of arms control, but the process of reducing and eliminating nuclear weapons, to which both states are formally committed, is a complex and contentious one, which requires
political trust and careful management. Hence, the importance of a strategic dialogue which examines the conceptual basis of Russian-U.S. relations. Several participants in the conference spoke of the need to transform, or move away from, nuclear deterrence.
Many proposals were advanced for further cooperation in arms control and disarmament. But it is clear that much remains to be done to move Russian-U.S. relations onto a more stable footing.

Who are Alexander Lebed's supporters? How these voters act in the second round is one of the two critical factors that will determine whether Boris Yeltsin or Gennady Zyuganov is Russia's next president.

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Reprinted in Russian as "Komu otadadut golosa storoniki Lebedya?" Kapital, June 26-July 2, 1996, p. 12.

Michael McFaul says Russian President Boris Yeltsin's decisions regarding the hostage crises in Chechnya and changes in his government reflect his new strategy as he runs for a second term as president, and the success of Yeltsin's strategy will depend upon how the war in Chechnya unfolds.

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The Center for International Security and Arms Control (CISAC) at Stanford University convened a workshop that dealt almost exclusively with software groups from the military-industrial complex. It also excludes any examples of software initiatives in Russia that are currently directed at the Russian market; however, it is the author's undocumented impression that there is not yet much commercial activity in this area.

This report is based primarily on the presentations and discussions at the workshop and secondarily on additional case data. The process of selecting cases for the workshop was not geared to find these failures as easily as those cases in which there is an ongoing activity. Nonetheless, the tendency toward success in software ventures versus
manufacturing ventures in the enterprises that are included is compelling.