Ack - I have to leave soon so I have to give a short answer.  At one point I'd found the origin of the term but now I don't want to go through this again.  It was a term used in particular by Kremlin ideologist folks.  McFaul, Lucas, LR. etc ran with it as a derogatory term to describe a kind of corruption and authoritarianism.  Then Russia was like, "actually, it's soveriegn democracy, yeah."  Now Medvedev is talking about rational democracy.  Whatever.  I realize many people use it as a derogatory word, but it does seem like a very good descriptor of system, and one with origins in the Kremlin itself.  I'm ambivalent as to whether it is nefarious or not.  The tendency does seem to be to have competent managers appointed.  

"Pretending that you already know the answer when you don't is not actually very helpful." ~Migeru.