Comparative analysis of the large-scale privatization in Russia and Kazakhstan in the 1990s

The thesis focuses on the process of large-scale privatization in Russia and Kazakhstan in the 1990s, after the dissolution of the Soviet Union. The main research problem was finding the structural similarities that two countries shared before and during the implementation of the economic reforms and, also, the differences that defined the divergence of the political and economic trajectories already in the second half of the 1990s. The main method used in the thesis is a comparative analysis based on David Kang´s analytical framework described in his book ‘Crony Capitalism: Corruption and Development in South Korea and the Philippines’ (Cambridge University Press, 2002). The focus of the analysis is the balance of power between the government and the private sector as one of the main determinants of economic development. The conclusion of our work is that the large-scale privatization that was supposed to be democratic and distributive ended up enriching a small group of beneficiaries in both Russia in Kazakhstan but because of completely different reasons. Kazakhstani regime very early transformed into the predatory state where the political elite, consolidated around a strong figure of the president, could successfully take advantage of the private sector. Whereas, in Russia, stronger political polarization led to the rise of the powerful economic groups and actors (the ‘oligarchs’) that had a say in the key political decisions during the 1990s. Thus, portraying just one group of actors (whether the oligarchs or the corrupt government) as responsible for the ‘failure’ of large-scale privatization is too simplistic. The dynamics between the government and the private businesses as the system constraint was much more important