The Role of Oligarchs in Russian Capitalism

Abstract

Using a unique dataset, we describe the degree of ownership concentration in Russian economy and its role in shaping economic and political institutions in Russia. In particular, we find that Russian "oligarchs" do control a substantial part of the economy. While the relative weight of their firms in Russian economy is huge, they do not seem to be excessively large by the standards of the global economy where most of them are operating. The oligarchs seem to run their firms more efficiently than other Russian owners controlling for industry, region and size.

Income inequality and oligarchs in Russian regions: A note

“…Acemoglu's (2008) proposition on the relationship between oligarchs and inequality serves well to explain the developments in Russia. This is particularly interesting because Guriev and Rachinsky (2005) show that oligarchs have rather tended to improve the performance of their enterprises, which were significantly more efficient than firms controlled either by the federal or regional government, and also more efficient than private non-oligarch Russian firms. In the terms of Acemoglu's model, Russia might thus have been, by this time, in the early phase of consolidation of oligarchic power.…”

“…It describes a businessman with considerable resources that enable him to influence politics at the national level (Guriev and Rachinsky, 2005). An oligarch, thus, not only exerts market power but also has political weight.…”

“…Ironically, already Lenin (1916) used the term financial oligarchy to express the importance of the financial sector in imperialism. For contemporary Russia the use of the term often carries a negative connotation (Guriev and Rachinsky, 2005).…”

“…Many deals followed the 'loans-for-shares' scheme in which selected investors received underpriced state assets in return for loans to the debt-ridden government (see e.g. Schröder, 1999;Guriev and Rachinsky, 2005;Desai, 2005).…”

“…The immediate and enthusiastic commitment to the performance of such radical change as well as the lack of experience gave rise to a business elite that controls large parts of the Russian economy until today (see e.g. Desai, 2005;Åslund, 1991;Guriev and Rachinsky, 2005). The so called 'oligarchs' not only took a dominant position in the Russian economy but soon established ties with political authorities, gaining access to the political sphere as well.…”