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The Invisible Hand of the Market and Indivisible Hand of the State

  • Ararat L. Osipian
Chapter

Abstract

This chapter moves the investigation of raiding phenomenon from future prospects to a more fundamental question, that of legitimacy of property and illegality of predatory raiding. This question is addressed through the perspective of possible revision of privatization results. The state is considered as an instrument of legitimization and raiding being taken over or privatized through political raiding. In case of Russia, the state is privatized by extended families of former Communist elites in Moscow and regions. The state, captured by clans, transforms from the institution into a tool that may be rented out to predatory raiders. When the state as the major regulatory institute does not perform its major functions, helping the predatory raiders instead, transaction costs increase. When the ruling political regime loses its credibility, legitimization of property rights becomes problematic.

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Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Ararat L. Osipian
    • 1
  1. 1.University of Wisconsin–MadisonMadisonUSA

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