Russian Politics Today Stability and Fragility

Institutions that protect property rights, enforce contracts, and resolve business disputes are essential for a market economy to function smoothly. These institutions may be formal or informal, ranging from courts to the reputation of prospective business partners. But in the chaotic transformation from Soviet-era economic planning to a market economy, firms in Russia came to utilize far more extreme strategies for securing property, including services provided by organized crime and corrupt public officials. This chapter traces the evolution of Russian firms’ strategies for protecting property rights, enforcing contracts, and resolving business disputes from the early days following the Soviet Union’s collapse through the contemporary Putin era. The focus is on “everyday” Russian firms, rather than on oligarchs, state-owned enterprises, or conglomerates in the natural resource sector. We will see that a central challenge of Russia’s post-Soviet transformation has been to forge state institutions strong enough to prevent chaos and coercion by criminals yet also constrained enough to curtail predation by powerful state officials.