Post-Soviet Developmentalism and the Political Economy of Russia’s Electricity Sector Liberalization

Observers of Russian state market relations typically consider the state as an entity engaged in creating rent-seeking opportunities for bureaucrats, or for the most powerful economic interests. The trajectory and outcomes of electricity sector reforms demonstrate the limits of this perspective and serve to highlight a developmental strand in Russian economic policy, which I call post-Soviet developmentalism. I found that post-Soviet developmentalism is key to understanding the patterns of market institutions that have emerged in the newly liberalized electricity sector. A close analysis of the institutional underpinnings of new electricity markets suggest that they were shaped in political bargains, in which the government sought to enlist Russia's oligarchic conglomerates for its developmental agenda. Institutional patterns cannot be adequately explained if the state is largely seen as a predator or as captured by oligarchic interests. Finally, the paper suggests an analytical lens to understand the role of industrial geography in the creation of market institutions