9 - Russia and Sectoral Variation

Summary

The Strategic Value Framework developed in this book explicates the dominant sectoral patterns of market governance in Russia today. Historical process tracing from sectoral origins of labor-intensive textiles and capital-intensive telecommunication in this chapter shows how Russian state leaders intersubjectively respond to objective economic and political pressures. The political basis and evolution of the perceived strategic value of national security and resource management took root in the Soviet era through Soviet collapse and transition to and away from democratic rule. In the context of macro-liberalization and mass privatization at the founding of the Russian Federation, interacting perceived strategic value and sectoral structures and organization of institutions have shaped the centralized role of the state in market coordination and variegated property rights arrangements of centralized governance in defense-origin dual use telecommunications reenforced by the rise of Vladimir Putin aided by economic and political crises. The less strategic value of non-defense sectors, such as textiles, is governed by the decentralized coordination and dominant private property of private governance and decentralized governance since Gorbachev’s perestroika. The rise of bifurcated oligarchy in Russian-style capitalism are shaped by the joined imperatives of resource security nationalism and path-dependent sectoral organization of institutions.