Tuesday, May 01, 2007

Braguinsky on oligarchic capitalism

Serguey Braguinsky has written an exciting new paper on oligarchic capitalism in Russia: The Rise and Fall of Post-Communist Oligarchs: Legitimate and Illegitimate Children of Praetorian Communism.

He finds

Although the Soviet order was characterized by insider-serving property rights and discriminatory barriers against outsiders, especially Jews, more than half of the first cohort of oligarchs came from new entrepreneurial entrants in market-oriented sectors. Compared to “old oligarchs” who derived their status from insider connections, “new oligarchs” were younger, better educated and were disproportionately Jewish. But instead of changing the rules of the socio-economic game, they themselves were changed by those rules, as the overwhelming majority engaged in asset stripping and rent seeking. Business empires based on politically-protected oligarchic property rights were vulnerable to political risk. The recent backlash against oligarchs took a particularly heavy toll on former new entrants, especially those of Jewish ethnicity.

He underpins his findings by using a unique data set on which he runs various econometric models.

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