Political economy of energy sector restructuring in the post-soviet space: Russia and Azerbaijan in comparative perspective

Abstract

This dissertation explores the political economy of energy sector restructuring in the post-Soviet space with a particular focus on the role of elite structure therein. After remaining under the same Communist regime for seventy years, ownership structures of energy sector in the post-Soviet countries diverged significantly during the transition period. All countries in this space maintained their state monopolies in the sector. In Russia, however, privately-owned national energy companies emerged to control the majority of the sector under Yeltsin’s rule. Using the comparative elite structure model, I argue that during the transition period, elite structure, dimensions of which are political elite integration and elite capacity, shaped the Russian and Azerbaijani energy sector restructuring differently. Privately-owned national energy companies gained the majority of the energy sector’s ownership in Yeltsin’s Russia with weak political elite integration with and high elite capacity. I observed consolidation of the state’ ownership in the energy sector in Putin’s Russia with strong political elite integration and high elite capacity. I observed continuation/consolidation of the state’s ownership in Azerbaijan with strong political elite integration and low elite capacity. I show that these processes are conditioned by the structural political economic context each energy rich country finds itself in. Thus, I also argue that country’s status as a center or periphery shapes the levels of political elite integration and elite capacity in transitional periods after an exogenous shock. Furthermore, the dissertation explores economic and political repercussions of different ownership structures in Russia and Azerbaijan.