Essay on clan capitalism in Russia

Kosals, L. (2007) Essay on clan capitalism in Russia. Acta Oeconomica, 57 (1). pp. 67-85. ISSN 0001-6373

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Abstract

This paper is a description of the socio-economic system which emerged in Russia as a result of the transformation to a capitalist economy. The main actors in this system are the so-called ‘clans’ including business people affiliated with state officials and sometimes with criminal groups. In the analysis of the context of the Russian transformation a detailed study deals with the internal structure of a clan, focusing on its five main constituents (leader or ‘chieftain’, ‘core’, skilled professionals, ordinary members, agents of influence). Within clan capitalism, mechanisms of clan coordination dominate, while market mechanism and bureaucratic coordination are relatively weaker. The main features of this system are a clan-state, providing the convertibility of resources that maintain favourable conditions for clan activities; post-Soviet monopolism that is basically of a non-market character; distortion of the aims of enterprise; institutionalisation of the shadow economy; and unprotected property rights. Now clan capitalism has turned to the stage of oligarch capitalism with Putin’s clan as the core of new Russian oligarchy.

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