As if overdosing on Cold War tropes, Vladimir Putin’s Russia has, ever since he came to power, assiduously been rebuilding and expanding espionage networks neglected in the 1980s and 1990s. In part this reflects the institutional loyalties of a KGB veteran, in part an unwillingness to take at face value the surface realities and narratives of the West – and in part an eager willingness to use these capacities as active political, economic and even military instruments. Whatever else it is not, Russia certainly is an intelligence superpower. But recent moves might put even that achievement at risk, and are unlikely to have the kind of upsides Putin may believe.

In particular, the proposed – and to date unconfirmed, but heavily supported by circumstantial evidence – creation of a Ministry of State Security (MGB). Uniting almost all the intelligence and security services into a single agency dominated by the existing Federal Security Service (FSB), this move poses some unexpected risks to Russia’s intelligence, in every sense of the word.

Diseconomies of scale

This MGB (although it remains to be seen if the Kremlin really would use the same name as that of Stalin’s last political police) would control the Foreign Intelligence Service (SVR), the espionage elements of the FSB, and also the cyberintelligence capacities of the Federal Protection Service (FSO). Only military intelligence (the GRU) would remain outside this agency, in a pattern explicitly replicating that of the old KGB.

In theory, the assumption is clearly that this will lead to economic of scale, and less of the duplication and competition currently visible in Russian intelligence activity (most notably in the recent hack of the US Democratic National Committee, where two separate operations appear to have been unaware of each other). In cyberespionage in particular, uniting the relevant components of the SVR, FSB and, to a much lesser extent, FSO would create a serious concentration of capacity.

However, if the story of Russia teaches us anything, it is that gigantism and monopolies tend to prove much less efficient and much more dysfunctional than hoped.

What are Putin’s priorities in the next few years? It is almost certain that while he will devote time and energy to international affairs, the usual refuge of a leader finding domestic governance difficult and messy, in the final analysis he is most interested in the preservation of his personal position and his system of rule. In other words, when push comes to shove, the domestic will take precedence over the external.

And push will come to shove in the next few years. With the economy still far from meaningful recover, austerity measures on the horizon, and regional debt an even more serious problem than ever, grassroots unrest will continue to grow. Likely, so will disenchantment within the wider elite. Meanwhile, the budget of the security apparatus will also come under pressure. In 2015, after all, the FSB had to accept a budget cut for the first time since Putin came to power.

In this context, foreign espionage will come under increasing pressure to hold on to and justify its budgets. At least in the current model, the SVR is a separate agency with a separate budget. Within a unitary MGB, the temptation and opportunity for other elements of the ministry to raid foreign intelligence budgets would be all the greater.

Furthermore, with the primary of internal security, the spies will have to demonstrate their value by focusing on real and presumed challenges from abroad, from dissident émigrés to those pesky human rights and transparency advocates. They may well prove effective – not least witness the regular assassination of Chechen rebel fundraisers in Europe – but their ‘proper’ espionage activities may well suffer.

Of course, one might look to the head of foreign intelligence to fight such diversions. However, this week it was announced that Sergei Naryshkin would be moving from chairing the State Duma to heading the SVR. Naryshkin is another of the long, undistinguished line of hawkish ex-KGB, ex-St Petersburg administration figures who have done well under Putin. However, while he may have been a low-ranking KGB officer in the 1980s, he has little serious foreign affairs background beyond playing footsie with right-wing parties in Europe.

The Kremlin needed an honourable sinecure so that he could vacate his position for deputy presidential chief of staff Vyacheslav Volodin, the kind of dealmaker and leg-breaker deemed necessary to keep a potentially fractious new Duma in line during tough times to come. That the SVR is deemed a consolation prize speaks volumes about its current prestige.

Ben Aris suggested this week that, “the new ministry is perhaps designed to create an irresistible force to bring the corrupt officials and top powerful top businessmen into line.” This may well be so, as there certainly has been a drive of late to purge the system of some of its most egregiously inefficient and corrupt persons. However, Putin is likely to be disappointed if he thinks that relying on a coercive super-agency built on the FSB is going to be much help.

To be sure, of late it has been the FSB that has been in the news arresting corrupt officials, such as the Investigations Committee’s Denis Nikandrov. However, how many corrupt FSB bigwigs has it tackled of late?

First of all, every recent anti-corruption case within the security and law-enforcement apparatus has been primarily the result of pressure and investigation from an outside agency. Internal affairs divisions have proven essentially to be complicit in the corruption (as in the Nikandrov case, for example). By definition, nothing will be outside the MGB, and thus the likelihood is that even if it does begin to tackle corruption in the wider government system, it will be dirty itself.

And this is where the current reputation of the FSB should be warning enough. Leave the petty graft to the cop on the beat or the fire inspector: the FSB is notorious for its massive and ruthless raiding and extortion. Furthermore, it has often preyed on the corrupt, allowing them to continue so long as they kick back a share of their take. With no serious moves to change the institutional culture of the FSB and the security community as a whole, the MGB will simply become the protection racketeers’ protection racketeer, taking over or ‘taxing’ high-level corruption rather than ending it.

Dictatorship of analysis

But perhaps we should not be surprised that Putin could be making bad decisions. After all, he has made many of late – and that in itself is in part because of dysfunctions within his own intelligence apparatus.

There is a reason why it is called ‘intelligence’ – the main purpose of espionage is to provide information and insights to inform policy, to help governments make the best and most effective decisions possible. Information is collected by the spooks, analysed, and then conveyed to the decision-makers through briefings.

A series of foreign policy missteps, from intervention in the Donbas assuming Kyiv would quickly capitulate and the West lose its interest in sanctions, through to misunderstanding Beijing’s interests in cooperation, indicate not so much failures of intelligence gathering, or even analysis, but briefing.

The near-stranglehold the Presidential Administration has on materials reaching Putin’s desk, a Kremlin culture increasingly disinclined to listen to hard truths that challenge its assumptions and prejudices, and competition between agencies to please their master has led to a dangerous politicization of the process. Valuable material is being gathered, good analysis being carried out, but by the time it reaches policy circles, nuance, contrarian perspectives and anything challenging the Kremlin Zeitgeist have been stripped away.

One of the few ways a little pluralism of intelligence reaches the Kremlin is through the perspectives of different agencies. A single super-agency is going to present a single view, further contributing to a simplification of the worldview with which Putin is presented.

The MGB, or whatever it is finally called, may look to Putin like the ultimate tool. The spooks may well be thinking the same when they look back at the Kremlin.

Mark Galeotti is a senior research fellow at the Institute of International Relations Prague, a visiting fellow with the European Council on Foreign Relations, and the director of Mayak Intelligence. He blogs at In Moscow’s Shadows and tweets as @MarkGaleotti.