Social Science Research Council

"Where Do the ‘Rules of the Game’ Come From?: State and Corporate Property Rights in Post-Privatization Russia"

Mass privatization resulted in an extremely chaotic corporate property rights regime (CPRR) in Russia, where everyone seemed to prey on everyone else in the scramble for redistribution in the aftermath of the Soviet regime. However, since the late 1990s, there has been an increasing demand for rule of law and public protection of property rights among Russian businessmen. Even the most notorious oligarchs are transforming themselves into proponents of investor protection and good corporate governance. Envisioning the process as a choice made solely by societal actors, three explanations claim that “end of privatization,” or “insider consolidation” or “pressure from international capital” have driven the transformation.

In contrast, I offer a state-centric theory and argue that the change in CPRR is leading corporations’ reaction to both their decreasing political influence over the state and the reassertion of state control in the Russian economy since the late 1990s. Moreover, rather than a general phenomenon, there are significant differences in the conflicts over three different dimensions of the CPRR: corporations’ internal rules, formal public laws and the implementation and interpretation of these rules. Agents involved in property rights conflicts always refer to certain aspects of these rules selectively so as to further their own agenda. While after the default in 1998, a certain section among the business elite started demanding stabilization in property rights, a certain section among the political elite have become more interested in a new round of redistribution of economic assets. Without an effective balance of power among elite groups, I will argue, stabilization of “rules of the game” will only be replaced by permanent redistribution. The project will combine both quantitative and qualitative research strategies to adjudicate between rival hypotheses.

Statistical analysis will be conducted to test the implications for all four hypotheses, while comparative case studies, detailed narratives with information collected through media study and interviews during my field research will be employed to further complete those causal mechanisms that cannot be fully established by quantitative studies.