Oligarchs, State, and Wealth Defense in Unconsolidated Democracies

Abstract: Based on an original large-N dataset of individual Ukrainian oligarchs and qualitative evidence, this article questions orthodox wisdom on the political power of big capital. We find, surprisingly, that neither the assumption of direct power by the oligarchs, nor the mobility of oligarchic assets, help tycoons protect their fortunes against shocks. Instead, the support of political parties and media ownership significantly enhance business wealth. We theorize our findings as the logic of flexibility: oligarchs in unconsolidated democracies benefit from political adaptability and deniability. Our theory challenges the established "law lobby" and "state capture" paradigms. Empirically, we fundamentally revise the ideal type of the postcommunist oligarchs by examining the political and economic activities of 177 oligarchs from 2006 to 2012. Theoretically, we contribute to the literatures on instrumental and structural power of capital, and on the ramifications of extreme wealth stratification for democratization and institution-building.