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Privatization, State Militarization Through War, and Durable Social Exclusion in Post-Soviet Armenia Anna Martirosyan University of Missouri-St

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Privatization, State Militarization Through War, and Durable Social Exclusion in Post-Soviet Armenia Anna Martirosyan University of Missouri-St University of Missouri, St. Louis IRL @ UMSL Dissertations UMSL Graduate Works 7-18-2014 Privatization, State Militarization through War, and Durable Social Exclusion in Post-Soviet Armenia Anna Martirosyan University of Missouri-St. Louis, [email protected] Follow this and additional works at: https://irl.umsl.edu/dissertation Part of the Political Science Commons Recommended Citation Martirosyan, Anna, "Privatization, State Militarization through War, and Durable Social Exclusion in Post-Soviet Armenia" (2014). Dissertations. 234. https://irl.umsl.edu/dissertation/234 This Dissertation is brought to you for free and open access by the UMSL Graduate Works at IRL @ UMSL. It has been accepted for inclusion in Dissertations by an authorized administrator of IRL @ UMSL. For more information, please contact [email protected]. Privatization, State Militarization through War, and Durable Social Exclusion in Post-Soviet Armenia Anna Martirosyan M.A., Political Science, University of Missouri - St. Louis, 2008 M.A., Public Policy Administration, University of Missouri - St. Louis, 2002 B.A., Teaching Foreign Languages, Vanadzor Teachers' Training Institute, Armenia, 1999 A dissertation submitted to the Graduate School at the University of Missouri - St. Louis in partial fulfillment of the requirement for the degree Doctor of Philosophy in Political Science July 11, 2014 Advisory Committee David Robertson, Ph.D. (Chair) Eduardo Silva, Ph.D. Jean-Germain Gros, Ph.D. Kenneth Thomas, Ph.D. Gerard Libardian, Ph.D. TABLE OF CONTENTS TABLE OF CONTENTS i LIST OF ABBREVIATIONS iv ABSTRACT vi ACKNOWELDGEMENTS viii CHAPTER ONE Introduction 1.1 Why Is the Study of Durable Social Exclusion Important? 1 1.2 The Puzzle of Durable Social Exclusion in Post-Soviet Societies 4 1.3 Organization of the Study 9 1.4 Conclusion 11 CHAPTER TWO Durable Social Exclusion: A Theoretical Framework 2.1 Introduction 14 2.2 History, Definitions, and Durability of Social Exclusion 15 2.3 Economic, Social, and Political Dimensions of Social Exclusion 23 2.4 Causes of Social Exclusion 29 2.1.1 Globalization, Privatization, and Labor Markets 33 2.4.1 Civil Society 38 2.4.2 Natural Resources and Resource Curse 40 2.4.3 Nature of State Elites: Repressive States 41 2.5 Drivers of Social Exclusion in Post-Communist Societies 44 2.6 Theories of State Power, Social exclusion, and Social Movements 50 2.7 Conclusion 54 CHAPTER THREE Durable Social Exclusion in Armenia 3.1 Introduction 56 3.2 Independence and its Challenges: Contradictions of Twin Transition in Armenia 57 3.3 Social Exclusion in Armenia as an Element of Post-Soviet Transition 61 3.4 Economic Exclusion in Armenia 69 3.5 Social Exclusion in Armenia 73 3.6 Political Exclusion in Armenia 78 3.7 Conclusion 82 CHAPTER FOUR Hypotheses and Research Methods 4.1 Introduction 83 4.2 Research Design 84 4.3 Hypotheses 86 4.4 Operationalization of Important Concepts 98 4.5 Conclusion 101 i CHAPTER FIVE Public Perceptions of Exclusion 5.1 Introduction 103 5.2 The Objective and Methodology of Student Surveys 105 5.3 Descriptive and Regression Statistics, Findings and Implications 108 5.4 Conclusion 118 CHAPTER SIX Power, Contentious Politics, and Repressive Capacity of the State 6.1 Introduction 122 6.2 A Comparative Analysis of Conventional Military Power 125 6.3 A Comparative Analysis of Contentious Politics and Coercive States 130 6.3.1 Georgia 131 6.3.2 Ukraine 134 6.3.3 Kyrgyzstan 138 6.3.4 Armenia 139 6.3.5 Azerbaijan 144 6.4 Conclusion 146 CHAPTER SEVEN State Militarization and Social Exclusion 7.1 Introduction 148 7.2 The Karabakh Conflict: Origins, Dynamics, and Perceptions 153 7.2.1 Pre-Soviet Historical Context of the Karabakh Conflict 153 7.2.2 Karabakh conflict during the Soviet Period 158 7.2.3 The Karabakh Movement and the Post-Soviet Dynamics of the Conflict 161 7.3 The Karabakh War, Social Change, and Peace Mediation 168 7.3.1 The War (1991-1994) 168 7.3.2 Socio-Economic Consequences of the Karabakh War 171 7.3.3 An Overview of the Conflict Negotiations 174 7.3.4 "Package" versus "Step-by-Step" Approaches 177 7.4 Post-War Militarization and Social Exclusion 181 7.4.1 Levon-Ter Petrossian’s Resignation 181 7.4.2 The Power Coalition and the "Party of Karabakh" 191 7.4.3 Foundation of Armenian Democracy and Abortion of its Consolidation 203 7.4.4 The Armenian Parliament Attack of October 27, 1999 205 7.4.5 Post-electoral Violence of March 1, 2008 216 7.5 Conclusion 229 CHAPTER EIGHT Privatization and Social Exclusion 8.1 Introduction 236 8.2 History of Privatization in Armenia 253 8.2.1 Land Privatization 255 8.2.2 Large Scale or Mass Privatization 257 8.2.3 Decelerated and Case-by-Case Privatization 266 8.3 Social Impact of Privatization of Energy Sector and Telecommunications 269 8.4 Privatization and Administrative Barriers to Foreign Investment 277 ii 8.5 Privatization and Oligarchs 287 8.6 Conclusion: Results of the Private Sector 307 CHAPTER NINE Conclusion 9.1 Theoretical Implications 311 9.2 Summary of Findings 315 9.3 Key Findings and Contributions 325 9.4 Limitations 329 9.5 Future Research and Prospects of Greater Social Inclusion 333 BIBLIOGRAPHY 339 APPENDIX 388 iii LIST OF ABBREVIATIONS Armenian Development Agency (ADA) Armenian Constitutional Legal Protection Centre (ACPRC) Armenian Dram (AMD) Armenian National Movement (ANM) Armenian Revolutionary Federation (ARF) Azerbaijani Popular Front Party (APF) Broadcasting Board of Governors (BBG) Central and South Eastern Countries and the Baltic States (CSB) Commission on Security and Cooperation in Europe (CSCE) Commonwealth of Independent States (CIS) Department for International Development (DFID) Department of Economic and Social Affairs (DESA) Economic and Social Council (ECOSOC) Europe and Central Asia (ECA) European Bank of Reconstruction and Development (EBRD) European Union (EU) Foreign Direct Investment (FDI) FSU (Former Soviet Union) Gross Domestic Product (GDP) Gross National Product (GNP) Internally Displaced Person (IDP) International Center for Human Development (ICHD) International Displaced Monitoring Center (IDMC) International Federation for Human Rights (FIDH) International Labor Organization (ILO) International Monetary Fund (IMF) Management and Employee Buyout (MEBO) Millennium Challenge Corporation (MCC) Moral Underclass Discourse (MUD) Nagorno-Karabakh Autonomous Oblast (NKAO) Nagorno-Karabakh Republic (NKR) National Democratic Union (NDU) National Security Service (NSS) Organization for Security and Cooperation in Europe (OSCE) Purchasing Power Parity (PPP) Radio Free Europe / Radio Liberty (RFE/RL) Redistributionist discourse (RED) Republic of Armenia (RA) Social Exclusion Knowledge Network (SEKN) Social integrationist discourse (SID) Stockholm International Peace Research Institute (SIPRI) Union for National Self Determination (UNSD) Union of Soviet Socialist Republics (USSR) United Nations Children's Fund (UNICEF) United Nations Development Program (UNDP) iv United Nations United Nations High Commissioner for Refugees (UNHCR) United States Dollar (USD) United States Agency for International Development (USAID) World Bank (WB) World Economic Forum (WEF) World Health Organization (WHO) v ABSTRACT In the literature focusing on various aspects of the twin transitions from socialism, development and social well-being are mainly analyzed with respect to privatization process (Stark and Bruszt 1998, Applegate 1994); economic growth and institutional design (North 1990; Elster, Offe, and Preuss 1998; Kolodko 1999; Norgaard 2000); party and election politics, the development of social networks and deliberative associations (Stark and Bruszt 1998); and the bargaining power of labor (Bandelj and Mahutga 2005). While the importance of these factors is not underestimated, this study addresses a significantly understudied theme – social exclusion as a consequence of overweening state power. The problem of social exclusion cuts to the core of the distribution of power in society; and in most of the post- Soviet societies, there has occurred predominantly negative change in societal power after 1990s, with vast power concentrated in the hands of governing elites. In the case of Armenia, the problem is specifically striking. This dissertation centers around durable social exclusion in post-Soviet Armenia generated as a consequence of the twin transition and explores the conditions that explain the high degree of social exclusion in contemporary Armenian society. It aims to answer the following research question: what factors contributed to the development of durable social exclusion in post-Soviet Armenia from 1988-2008? As an exploratory case study based on the examination of recent socio-economic and, more notably, political developments of post-Soviet Armenian state, this dissertation generates new hypotheses to study social exclusion. Appending to the mainstream literature that focuses on primarily the socio-economic drivers of social exclusion, I emphasize that not only consequences of economic reform affect the level of social exclusion, but also, and more significantly, the historic trajectory of the society. I argue that privatization was an important but not a sufficient factor in the emergence of social exclusion in post-Soviet Armenia. State militarization through war was another necessary and largely overlooked condition for the persistence of social exclusion in Armenia. The assessment of these hypotheses provides evidence that allows a test of whether privatization and militarization are plausible factors for the persistence of
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