Capture or Exchange? Business Lobbying in Russia

tween business and the state. This redefinition has been particularly difficult in Russia, where policy makers and scholars alike have cited an incestuous relationship between business and the state as a key impediment to an orderly market economy.1 However, we have few empirical studies of business lobbying in Russia.2 Views about lobbying are extensively coloured by writings about the oligarchs-a small group of powerful industrialists and financiers that is by definition atypical.3 In addition, analyses of lobbying tend to focus on sectors or regions rather than firms.4 Most important, discussions of business-state relations in the region tend to concentrate on successful lobbyists and ignore firms that are not influential. By examining only cases where firms influence policy, observers risk distorting perceptions of the extent and significance of lobbying. Many questions remain about lobbying in Russia. What types of firms are successful lobbyists and at what levels of government can they exercise influence? What means do they employ? Are business-state relations closer to a form of capture in which powerful firms have great sway over the state and bear little cost for their influence? Or are they better seen as a form of elite exchange in which firms receive favourable treatment in return for providing benefits to state agents? These questions are hardly unique to Russia. Observers have expressed concern over the tight links between business and the state in other post-communist countries as well.5 Privatisation in the Czech Republic often led to opaque ownership structures that allowed state-owned banks, their related voucher funds and industrial holding companies to serve as powerful lobbies.6 In Bulgaria the parastatal association of firms known as Multi-Group used its privileged access to state officials to gain control over state assets, which were then largely used for personal consumption.7 The close relations between business and the state that mark many post-communist countries smack of the crony capitalism that contributed to the collapse of the Asian economies in 1998.8 Indeed, good governance has become a mantra of international financial organisations.9 This article examines business lobbying in Russia using an original survey of 500 firms conducted between October and December 2000 in eight cities and presents three findings. First, the sources of lobbying power vary by level of government and by type of firm. While large firms claim to be able to influence legislation at all levels of government, the impact of property type-whether a firm is state-owned, privatised