View source for Postcommunist Oligarchs in Russia: Quantitative Analysis


{{short description|2009 academic paper by [[Serguey Braguinsky]] providing quantitative analysis of 296 first-wave Russian postcommunist oligarchs, distinguishing insider nomenklatura from outsider entrants}}
{{Infobox book
| name         = Postcommunist Oligarchs in Russia: Quantitative Analysis
| author       = [[Serguey Braguinsky]]
| country      = United States
| language     = English
| subject      = [[Russian oligarchs]], post-Soviet transition, nomenklatura, oligarchic capitalism
| publisher    = [[University of Chicago Press]]
| pub_date     = May 2009
| media_type   = Print (journal article)
| pages        = 307–349
| journal      = ''Journal of Law and Economics''
| volume       = 52
| issue        = 2
}}

'''Postcommunist Oligarchs in Russia: Quantitative Analysis''' is a 2009 scholarly article by economist [[Serguey Braguinsky]] that examines the careers of the 296 most prominent first-wave postcommunist business tycoons in Russia through systematic empirical analysis.<ref name="Braguinsky2009">Serguey Braguinsky, [https://www.journals.uchicago.edu/doi/abs/10.1086/589656 Postcommunist Oligarchs in Russia: Quantitative Analysis] ''Journal of Law and Economics'', vol. 52, no. 2 (May 2009), pp. 307-349.</ref>

The paper documents how the transition produced "oligarchic capitalism" rather than a clean shift to market democracy. It distinguishes insider oligarchs (43 percent of the sample) who derived status from privileged nomenklatura backgrounds under the Soviet regime from outsider oligarchs without such ties.<ref name="Braguinsky2009" />

Outsider oligarchs were younger, better educated and disproportionately of Jewish ethnicity. They initially succeeded in sectors neglected by the planned economy but the vast majority later forged special relationships with the postcommunist government and adopted similar behavioural patterns to insiders.<ref name="Braguinsky2009" />

== Author ==
[[Serguey Braguinsky]] was born in Moscow in the former Soviet Union. He earned his Bachelor’s degree from Moscow State University and his Doctor of Economic Sciences from Keio University in Japan.<ref name="UMDProfile">University of Maryland Robert H. Smith School of Business, [https://www.rhsmith.umd.edu/directory/serguey-braguinsky Serguey Braguinsky] ''University of Maryland'', accessed 9 June 2026.</ref>

He held earlier positions at the Institute for Oriental Studies of the USSR Academy of Sciences, Yokohama City University, the University of Chicago and the State University of New York at Buffalo. He served as Associate Professor at Carnegie Mellon University before becoming Professor and Dean’s Professor of Innovation and Firm Growth at the University of Maryland Robert H. Smith School of Business, with a cross-appointment at Osaka University. His research centres on industry evolution, entrepreneurship, innovation, institutions and the economics of transition from planned to market economies.<ref name="UMDProfile" />

== Publication and data ==
The article appeared in the ''Journal of Law and Economics'' in May 2009. Braguinsky assembled data on 296 oligarchs from the LABYRINTH database (Panorama 2005), expert rankings from 1995–1999, Moscow income and tax records for 1999–2004, and additional biographical sources. The sample covers the period spanning the Yeltsin era and the first transition of power to [[Vladimir Putin]] in 2000.<ref name="Braguinsky2009" />

== Core argument: insider versus outsider oligarchs ==
The paper’s central contribution is the quantitative distinction between two sources of supply into the postcommunist business elite.

"Forty-three percent of them were insider oligarchs deriving their status from a privileged nomenklatura background dating back to the previous regime. The rest were outsider oligarchs with no such background."<ref name="Braguinsky2009" />

Insider oligarchs gained entry through continuity with the Soviet ruling elite:

"The first rule deems an oligarch an insider if he or she had been the top manager or one of the top managers in charge of the main asset that qualified him or her to become a member of my sample prior to the collapse of the Soviet Union in December 1991. These members of the postcommunist business elite have also been called 'red directors'."<ref name="Braguinsky2009" />

A second category covers former politicians and nomenklatura functionaries:

"The second rule assigns an oligarch to the insider category if he or she was a prominent politician or a nomenklatura functionary before the end of 1991. These include ministers, deputy ministers, and department heads in the former Soviet government; members and staff of the Central Committee of the Communist Party apparatus; regional party and government bosses; managers of the State Bank of the Union of Soviet Socialist Republics (USSR); and military and secret-service top brass who supervised the production and export of military-related goods and equipment."<ref name="Braguinsky2009" />

A third rule adds relatives and long-time colleagues of the above. The total of insider oligarchs reaches 132.<ref name="Braguinsky2009" />

Outsider oligarchs lacked pre-1991 nomenklatura positions:

"My examination of the pretransition biographies of the remaining 164 oligarchs reveals that they either had not been in any particularly noticeable position before the onset of transition or had prospered in the late years of the Soviet regime owing not to nomenklatura ties but to exceptional personal talent (for example, [[Svyatoslav Fyodorov]], the eye surgeon who founded the Microsurgery of the Eye Institute, or the popular fashion designer [[Anatoly Klimin]]). Even though many of these oligarchs (especially those who were particularly successful) subsequently bolstered their careers by close relationships with insider oligarchs and political ties to the postcommunist government, I classify them as outsider oligarchs when those relationships cannot be traced to their pretransition nomenklatura careers."<ref name="Braguinsky2009" />

The category also includes reformist politicians turned oligarchs such as [[Anatoly Chubais]] and those whose primary source of power was organised crime.<ref name="Braguinsky2009" />

== Demographic and sectoral differences ==
Table 2 in the paper quantifies sharp contrasts. Outsider oligarchs averaged 37.7 years old in 1995 versus 47.8 for insiders. They were far more likely to be Jewish (23.2 percent versus 2.4 percent), born in Moscow, and graduates of elite colleges. Their start-up sectors were concentrated in finance and consumer goods and services—areas largely absent from the planned economy—while insiders dominated energy and metallurgy.<ref name="Braguinsky2009" />

"Almost half the outsider oligarchs made their first fortunes in finance and banking... The share of outsider oligarchs who made their initial fortunes in the consumer goods and services sector is more than three times higher than the corresponding share among insider oligarchs."<ref name="Braguinsky2009" />

"23.2 percent of outsider oligarchs were of Jewish ethnicity, while just 2.4 percent of insider oligarchs were Jewish (1.7 percent among red directors). We can think of the collapse of communism as a natural experiment that (at least temporarily) destroyed the mechanism of nomenklatura-determined selection of business elite."<ref name="Braguinsky2009" />

== Political ties and convergence ==
Despite initial advantages in human capital, most outsider oligarchs converged toward insider patterns by forging privileged relationships with the Yeltsin administration, especially during the 1996 re-election campaign. Seventy-eight oligarchs in the sample were classified as active Yeltsin supporters or their close associates.<ref name="Braguinsky2009" />

Regression analysis of expert influence ratings shows that being a Yeltsin supporter raised influence by approximately 23 percent, outweighing the outsider background effect.<ref name="Braguinsky2009" />

== Behavioural differences ==
Outsider oligarchs, particularly Yeltsin supporters, reported significantly lower incomes to tax authorities than insider oligarchs, even after controlling for influence ratings used as a proxy for actual wealth.<ref name="Braguinsky2009" />

"the estimates imply that outsider oligarchs who were active Yeltsin supporters reported about 90 percent less income than insider oligarchs who were not active Yeltsin supporters."<ref name="Braguinsky2009" />

Outsider oligarchs were also more likely to operate as behind-the-scenes owners and to seek elected political office.<ref name="Braguinsky2009" />

== Expropriation and the Putin era ==
Expropriations peaked between 1998 and 2003. Under Yeltsin, insider oligarchs were more often expropriated to make way for politically connected outsiders. Under [[Vladimir Putin]], many outsider oligarchs with close Yeltsin-era ties lost assets and faced ostracism, while some insider oligarchs in state companies were retired. Lack of transparency in income reporting made outsider oligarchs particularly vulnerable.<ref name="Braguinsky2009" />

The fate of [[Mikhail Khodorkovsky]], former owner of the largest Russian oil company, illustrates how even highly successful independent oligarchs could lose everything after falling out of favour.<ref name="Braguinsky2009" />

== Conclusion of the paper ==
The study finds that outsider oligarchs initially possessed characteristics associated with a new entrepreneurial class but were largely absorbed into the existing incentive structure of political patronage. The basic rules of the game from the decaying communist regime carried over into the transition period.<ref name="Braguinsky2009" />

"As noted by Baumol (1990, p. 894), '[H]ow the entrepreneur acts at a given time and place depends heavily on the rules of the game—the reward structure in the economy—that happens to prevail,' and the salient feature of oligarchic capitalism is that political support is the precondition for exercising effective property rights."<ref name="Braguinsky2009" />

== Named oligarchs in the study ==
The 296-oligarch sample includes prominent figures such as [[Vagit Alekperov]] ([[Lukoil]], insider red-director category), [[Yelena Baturina]] (wife of Moscow mayor [[Yuri Luzhkov]]), her brother [[Victor Baturin]], [[Vitaly Malkin]] ([[Roskredit]]), his senior partner [[Boris Ivanishvili]], [[Svyatoslav Fyodorov]], [[Anatoly Klimin]], reformist-turned-oligarch [[Anatoly Chubais]], and [[Mikhail Khodorkovsky]] (cited in discussion of expropriation risks).<ref name="Braguinsky2009" />
==Text==
*[https://powerbase.info/images/0/04/Braguinsky_-_Postcommunist_Oligarchs_in_Russia%2C_Quantitative_Analysis.pdf Full text]
== See also ==
*[[Russian oligarchs]]
*[[Privatization in Russia]]
*[[Nomenklatura]]
*[[Boris Yeltsin]]
*[[Vladimir Putin]]
*[[Anatoly Chubais]]

== External links ==
[https://www.journals.uchicago.edu/doi/abs/10.1086/589656 Journal of Law and Economics abstract]

== Notes ==
<references/>
[[Category:Economics literature]]
[[Category:Post-Soviet Russia]]
[[Category:Privatization in Russia]]
[[Category:Academic papers on oligarchy]]