The Post-Soviet Oligarchs and the Nomenklatura Capitalism Hypothesis

Who are the post-Soviet oligarchs? Have they been members of the nomenklatura before 1991? Did they accumulate their initial wealth before or after privatization? To answer these questions, I have compiled an original data set of oligarchs drawing on publicly available biographical data in the fifteen republics of the former Soviet Union. The data set covers the period from 1991 to 2011. There are two trends in the literature on oligarchs. One group of scholars argues that the oligarchs represent the former nomenklatura, while the second group claims that the members of the new business elites have diverse career backgrounds. The findings in this paper dis-confirm the nomenklatura capitalism hypothesis. First, I show that many of the oligarchs were initially founders of cooperatives, some of them too young to be part of the party bureaucracy. Second, I parse out the oligarchic career paths, and suggest that most oligarchs made their fortunes by trading various goods during the perestroika period. Trading involved significant risks and was deemed as a quasi-criminal activity, so leading party officials were less likely to jeopardize their party careers by engaging in trading. Third, many oligarchs move from trading to banking and from banking to industry. The future oligarchs were individuals, who took high risks and accumulated their initial capital prior to the privatization rounds in their respective countries. However, numerous oligarchs have used their initial capital to become industrialists. This project contributes to a better understanding of the origins and emergence of oligarchs in the fifteen republics of the former Soviet Union