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State Capture and Controlling Owners of Firms

Author

Listed:
  • Evgeny Yakovlev

    (CEFIR)

  • Ekaterina Zhuravskaya

    (New Economic School/CEFIR and CEPR)

Abstract

How does the effect “state capture” depend the identity of the captor? We use a dataset on preferential treatment of selected firms by regional legislature and regulatory agencies in transitional Russia to show that the most effective and the least benign captors are “federal oligarchs” i.e., the firms within groups that have representation in more than two regions. Preferential treatments given to the federal oligarchs bring them higher than average benefits in terms of performance boost. Other firms in the region suffer more from capture by the federal oligarchs than when capture is carried out by other firms. In contrast, firms that are controlled by large regional owners do not have a strong effect of preferential treatments on either their own performance or performance of other regional firms.

Suggested Citation

  • Evgeny Yakovlev & Ekaterina Zhuravskaya, 2004. "State Capture and Controlling Owners of Firms," Working Papers w0044, Center for Economic and Financial Research (CEFIR).
    • Handle: RePEc:cfr:cefirw:w0044
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    File URL: http://www.cefir.ru/papers/WP44_StateCapture.pdf
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    References listed on IDEAS

    as
    1. Grossman, Gene M & Helpman, Elhanan, 1995. "The Politics of Free-Trade Agreements," American Economic Review, American Economic Association, vol. 85(4), pages 667-690, September.
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    6. Hellman, Joel S. & Jones, Geraint & Kaufmann, daniel, 2000. ""Seize the state, seize the day": state capture, corruption, and influence in transition," Policy Research Working Paper Series 2444, The World Bank.
    7. Timothy Frye, 2002. "Capture or Exchange? Business Lobbying in Russia," Europe-Asia Studies, Taylor & Francis Journals, vol. 54(7), pages 1017-1036.
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    Citations

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    Cited by:

    1. Evgeny Yakovlev & Ekaterina Zhuravskaya, 2009. "State Capture: From Yeltsin to Putin," International Economic Association Series, in: János Kornai & László Mátyás & Gérard Roland (ed.), Corruption, Development and Institutional Design, chapter 2, pages 24-36, Palgrave Macmillan.
    2. Tullio Buccellato & Tomasz Marek Mickiewicz, 2007. "Oil and gas: a blessing for few hydrocarbons and within-region inequality in Russia," UCL SSEES Economics and Business working paper series 80, UCL School of Slavonic and East European Studies (SSEES), revised Feb 2008.
    3. repec:spo:wpmain:info:hdl:2441/1cu21pio6c90g9i5oedr5hnaa3 is not listed on IDEAS
    4. Sergei Guriev & Andrei Rachinsky, 2005. "The Role of Oligarchs in Russian Capitalism," Journal of Economic Perspectives, American Economic Association, vol. 19(1), pages 131-150, Winter.
    5. Tullio Buccellato & Tomasz Mickiewicz, 2009. "Oil and Gas: A Blessing for the Few. Hydrocarbons and Inequality within Regions in Russia," Europe-Asia Studies, Taylor & Francis Journals, vol. 61(3), pages 385-407.
    6. Ichiro Iwasaki, 2007. "Enterprise Reform And Corporate Governance In Russia: A Quantitative Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 21(5), pages 849-902, December.
    7. repec:hal:spmain:info:hdl:2441/1cu21pio6c90g9i5oedr5hnaa3 is not listed on IDEAS

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    More about this item

    JEL classification:

    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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