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Oligarchs and the Russian government: fight against corruption or the private business?

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  • Eren, Ozlem

Abstract

Many scholars have interpreted the Russian government’s attack on the private oil companies, as in the most famous Yukos Crisis, as a legitimate battle against corruption. However, in the transition economies, the state can abuse its power by acting like a monopoly and not letting any competitive firms to operate. It can easily do so, by disguising its aim of retaining its monopoly power as a “fight with corruption”. In this paper we build a game between the state firm (government) and the private firm (oligarchs), where the oligarchs can be of “strong” or “weak” type. Oligarchs use the amount of bribe to signal their type, and try to influence the government’s decision of whether confiscating the private firm by accusing it of being corrupt, versus letting her operate and collecting bribe.

Suggested Citation

  • Eren, Ozlem, 2005. "Oligarchs and the Russian government: fight against corruption or the private business?," MPRA Paper 26414, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:26414
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    References listed on IDEAS

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    1. Acemoglu, Daron & Robinson, James A., 2000. "Democratization or repression?," European Economic Review, Elsevier, vol. 44(4-6), pages 683-693, May.
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    More about this item

    Keywords

    game theory; power; Russia; transition economies; government; oligarchs; oil; privatization; corruption; bribe;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment

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