Stopping the feast in times of plague: fighting criminal corporate raiding in diverse Russian regions

ABSTRACT

This paper analyzes the process of renegotiation of the informal contract between the regional and federal elites of Russia after the economic crisis. We use the database of Center of Public Procedures’ “Business against Corruption” to show that, after 2011, regional elites in Russia lost the pre-existing opportunity to extract rents from businesses in return for favorable election results for Vladimir Putin and United Russia. We also analyze the connection between the level of corporate raiding in various Russian regions and the political competition, tenure, and ties of their governors. We show that there are two distinct models for fighting raiding in a region: an authoritarian model for suppressing negative signals and a competitive model with the creation of a new consensus among the elites. Although both models are similar in terms of the absence of negative signals, they have very different consequences in the business context of an area.

KEYWORDS:

• Corporate raiding
• elections
• governors
• property rights protection
• regions of Russia
• state violence

Acknowledgments

The author is grateful to all the participants of UAEU-HSE-NYUAD Workshop “Political Economy of Development: Challenges and Perspectives” (1 October – 1 November 2018) for the suggestions and comments on the first draft of the paper. The author thanks the Guest Editors of the special issue and the two anonymous reviewers for useful comments that helped to improve the paper.

Notes

1. See, for example, Boldyrev (2012).

2. In one of the specifications of the model, I will split the variable “tenure” on two variables: “first full year” (binary) and tenure after first year (number of years).

3. We do not include Crimea or Sevastopol in the analysis, as data for these regions are not available for the full period and the corresponding statistics are not highly reliable.

4. See, for example, the results of a Russian Public Opinion Research Center (WCIOM, or VTsIOM) survey in 2017 (https://wciom.ru/index.php?id=236&uid=116444).

5. https://www.themoscowtimes.com/2019/09/18/how-the-michael-calvey-case-has-unfolded-so-far-a67335.

Additional information

Funding

The study has been funded within the framework of the Basic Research Program at the National Research University Higher School of Economics (HSE) and by the Russian Academic Excellence Project “5-100.”