Stanislav Markus

Secure Property as a Bottom-Up Process: Firms, Stakeholders, and Predators in Weak States

How do property rights become secure? How does rule of law take hold in an economy? The author uses an original survey of 516 firms in Russia and Ukraine, as well as interview-based case studies, to reexamine these fundamental issues of political economy. Most states in the developing world lack the requisite time horizons and institutional capacity to make the credible commitments emphasized in the literature. In this context, the author argues that firms can enforce their property rights without resort to mafias by forming alliances with stakeholders such as foreign actors, community residents, and labor. These stakeholders can impose costs on the potential aggressors through diverse political strategies, allowing firms to defend their property rights not only from private predators but also from the state. The article evaluates this “bottom-up” theory of secure property rights against existing state-based theorizing.

Capitalists of All Russia, Unite! Business Mobilization Under Debilitated Dirigisme

Political mobilization of business forces in the post-communist world has crucial implications for economic development and civil society. The emergence of strong cross-sectoral business associations during Putins presidency challenges the prevailing view of Russias political economy as an informal, particularistic state–business exchange. At the theoretical level, collective action by socio-economic groups is linked to severe principal-agent dilemmas common to many ex-socialist bureaucracies. Given institutionally incoherent state structures, the state as principal facilitates collective action by business actors to create a parallel, non-state platform for policy formation and implementation. Such a dynamic of “debilitated dirigisme” should be understood in the comparative contexts of business mobilization in Latin America, Asia, and the advanced industrialized world. The argument developed here stands in contrast to two conventional approaches to business mobilization, “threat theory,” in which firms organize to resist various anti-capitalist forces, and “political entrepreneurship theory,” which holds that business is the passive object of mobilization by the state.

The Flexible Few: Oligarchs and Wealth Defense in Developing Democracies

Based on an original large-N dataset of individual Ukrainian oligarchs and qualitative evidence, this article tests competing perspectives on the political power of big capital. We find, surprisingly, that neither the assumption of direct power by the oligarchs nor the mobility of oligarchic assets helps tycoons protect their fortunes against shocks. Instead, the indirect strategies of party support and media ownership significantly enhance business wealth. Empirically, we profile postcommunist oligarchs by examining the political and economic activities of 177 oligarchs from 2006 to 2012. Theoretically, we contribute to the literatures on instrumental and structural power of capital, and on the interactions between extreme wealth, rule of law, and democracy. In doing so, we contrast the logic of flexibility, according to which oligarchs benefit from political adaptability and deniability, with the logic of commitment compensation, according to which oligarchs benefit from direct power when the rule of law is weak.

Institutions and Firm Strategy: Exploring the Interface between Firms and Institutions

Firms competing in international markets face a host of challenges. Understanding market conditions and risks is important, but equally salient are institutional issues. This symposium will feature...

The Atlas That has Not Shrugged: Why Russia's Oligarchs are an Unlikely Force for Change

There is demand among Russias oligarchs for systemic change, but not for the rule of law proper. Instead, it is the de facto accountability of political elites and improved relations with the West that the Russian oligarchs want from the Kremlin. However, the oligarchs currently lack the capacity to effect change. Their insufficient leverage vis-à-vis Putin is rooted in their competition for rents, which prevents them from confronting the Kremlin as a united force. In addition to analyzing the lack of systemic pressure for change from the oligarchs, this essay considers the prospects of individual oligarchs who have nevertheless pushed openly for liberalization or tried to effect incremental change. It also draws on comparisons with other countries to chart the political behavior of Russias business elites in the future.