Management of Violence: Effect of Regional Authorities on Corporate Raiding in Russia

Anton Kazun (Higher School of Economics (Russia))

Abstract: Undeveloped institutions of the rule of law in modern Russia have placed violent pressure on businesses via unscrupulous law enforcers. Since 2011, the Russian federal government has made several attempts to address this problem, but all of them have failed. In a situation in which it is not possible to centralize corruption, the second best mechanism could involve "manual control" at the regional level through the replacement of governors. From data on 550 court cases against entrepreneurs taken from the Center of Public Procedures "Business against corruption" (CPP BAC) database for 2011 to 2016, we analyze the effect of political competition and the tenure, ties and replacements of governors on levels of violent corporate raiding in Russian regions. We show that after 2011, regional elites in Russia lost the preexisting opportunity to extract rents from businesses in return for strong voting results for Vladimir Putin and United Russia.