UC Berkeley UC Berkeley Electronic Theses and Dissertations Title The Logic of Kleptocracy: Corruption, Repression, and Political Opposition in Post-Soviet Eurasia Permalink https://escholarship.org/uc/item/92g1h187 Author LaPorte, Jody Marie Publication Date 2012 Peer reviewed|Thesis/dissertation eScholarship.org Powered by the California Digital Library University of California The Logic of Kleptocracy: Corruption, Repression, and Political Opposition in Post-Soviet Eurasia By Jody Marie LaPorte A dissertation submitted in partial satisfaction of the requirements for the degree of Doctor of Philosophy in Political Science in the Graduate Division of the University of California, Berkeley Committee in charge: Professor Jason Wittenberg, Co-chair Professor Michael S. Fish, Co-chair Professor David Collier Professor Victoria Bonnell Spring 2012 The Logic of Kleptocracy: Corruption, Repression, and Political Opposition in Post-Soviet Eurasia Copyright 2012 by Jody Marie LaPorte Abstract The Logic of Kleptocracy: Corruption, Repression, and Political Opposition in Post-Soviet Eurasia by Jody Marie LaPorte Doctor of Philosophy in Political Science University of California, Berkeley Professor Jason Wittenberg, co-chair Professor Michael S. Fish, co-chair This dissertation asks why some non-democratic regimes give political opponents significant leeway to organize, while others enforce strict limits on such activities. I examine this question with reference to two in-depth case studies from post-Soviet Eurasia: Georgia under President Eduard Shevardnadze and Kazakhstan under President Nursultan Nazarbayev. While a non- democratic regime was in place in both countries, opposition was highly tolerated in Georgia, but not allowed in Kazakhstan. I argue that these divergent policies can be traced to variation in the predominant source and pattern of state corruption in each country. In Georgia, the primary source of rulers’ illegal income was society itself, which created incentives for the government to tolerate political opposition. In this pattern of corruption, illegal income flowed into the state from society in the form of bribes, and then upward within the state. Private citizens made informal payments to state officials, who in turn were required to channel a percentage of the proceeds to their superiors and to political rulers. This pattern created a state that was dependent on society. Consequently, the elites were constrained: the government was more likely to tolerate political opposition in an effort to continue amassing private profits. In contrast, in Kazakhstan, political leaders faced a dramatically different set of incentives. Rulers embezzled natural resource wealth, which were outside of citizens’ control. As a result, government officials could pursue unpopular policies—including aggressive repression against opposition groups—without jeopardizing the flow of illicit profits. These findings contribute to the growing literatures explaining variation among non-democratic regimes and the sustainability of non-democratic rule. By tracing this cross-national variation to differences in state corruption, this study moves beyond the literature’s current focus on how authoritarian rulers spend resource wealth to sustain authoritarianism. Rather, I emphasize how the variation in the sources of illegal wealth—and its profound effect on the autonomy of state elites vis-à-vis society—influences the regime. 1 Table of Contents Chapter 1 – Introduction 1 1.1 Introduction 1 1.2 The Question: The Toleration of Political Opposition 3 1.3 Situating this Outcome in the Broader Literature 5 1.4 The Explanation: The Logic of Kleptocracy 6 1.5 Research Design and Case Selection 11 1.6 Source Material 12 1.7 Outline of the Dissertation 12 Chapter 2 – The Informal Economy and Informal Politics: 14 Corruption in the Soviet Union 2.1 Introduction 14 2.2 The Supply Side: Who paid bribes? 16 2.3 The Demand Side: Who collected bribes? 19 2.4 Pervasive Bribery in Central Asia and the Caucasus 23 2.5 Absence of Resource Rents in the Soviet Republics 24 2.6 Conclusion 25 Chapter 3 – Bribery and Toleration in Georgia 27 3.1 Introduction 27 3.2 Who was the opposition in Georgia? 28 3.3 High Toleration of Political Opposition 30 3.4 Society as the Source of Illegal Wealth 34 3.5 How Society Constrained Georgia’s Rulers 40 3.6 Conclusion 41 i Chapter 4 – Resources and Repression in Kazakhstan 43 4.1 Introduction 43 4.2 Who is the opposition in Kazakhstan? 44 4.3 Low Toleration of Political Opposition 46 4.4 Resource Profits as the Source of Illegal Wealth 52 4.5 How Resource Wealth Enabled Kazakhstan’s Rulers 56 4.6 Conclusion 58 Chapter 5 – Conclusion 60 5.1 Summary of the Argument 60 5.2 How common is kleptocracy? 61 5.3 Conclusion 64 References 67 Appendix A: List of Author’s Interviews 82 Appendix B: Major Political Parties in Georgia, 1995-2003 86 Appendix C: Major Political Parties in Kazakhstan, 1995-2010 88 ii Acknowledgements I have incurred many debts while researching and writing this dissertation. My first debt is to the many people in Georgia, Kazakhstan, Azerbaijan, Ukraine, and Belarus who made time in their busy schedules to speak with me about politics in their country. Through these interviews, I gained a much deeper understanding of the dynamics of post-communism and the way that both elites and average citizens experience politics in non-democratic regimes. I also remain eternally grateful to the host families, friends, and research assistants who kept me safe and sane when I was far from home. Though they remain nameless here, their generosity is not forgotten. My research has benefited from the guidance of many advisors, especially my dissertation co-chairs, Jason Wittenberg and Steve Fish. I value their incisive comments, constructive criticism, and key insights into the nature of post-communism. The dissertation is much better as a result of their input. David Collier took me under his wing at a crucial point in my graduate training and has served as a persistent cheerleader throughout the research process. I deeply appreciate his willingness to adopt someone who studies the “Stans” as an honorary Latin Americanist, as well as his theoretical, methodological, and cross-regional perspectives on the project. Ruth Collier, Leo Arriola, Peter Lorentzen, Kevin O’Brien, and Pauline Jones Luong, and Kelly McMann generously commented on earlier chapter drafts. I also received valuable input on the project from Henry Brady, Ned Walker and Victoria Bonnell. I have been fortunate to have been a part of the graduate student community at Berkeley, where I have found both inspirational colleagues as well as dear friends. Margaret Boittin, Betsy Carter, Miguel de Figuereido, Jon Hassid, Veronica Herrera, Maiah Jaskoski, Wendy Sinek, Marcy McCullaugh, Dann Naseemullah, Neal Richardson, Regine Spector, and Bart Watson provided invaluable comments on the larger project and/or specific chapter drafts. Lindsay Mayka edited the entire draft. Diana Kapiszewski provided professional development advice at critical points. I particularly appreciate the good cheer offered by my officemates—Susanne Wengle, Sarah Garding, Adam Cohon, and Marcy McCullaugh—who made writing a much less lonely process. And finally, Danielle Lussier has served as a thoughtful sounding board through multiple versions of the project, as well as a brilliant collaborator and a selfless friend. The research for this project would not have been possible without the generous financial support of the Social Science Research Council and the Foreign Language and Area Studies Fellowship Program. ACTR/ACCELS provided key logistical support during my fieldwork. I also have benefited from ongoing funding from the University of California, Berkeley’s Department of Political Science, Institute of International Studies, and Program in East European and Eurasian Studies. I am blessed to be surrounded by truly wonderful friends who have provided much- needed perspective along the way. Tom Stout and Alexis Rieger offered both humor and emotional support from afar, especially in the darkest days of writing. Emily Wright ensured that I had a social life through this long process. Sarah Cowan provided regular reminders of what really matters in life; I will miss having her as my office neighbor. Alexis Peri and Alina Polyakova showed me that one need not be dull in order to be a serious academic. All of these friends reminded me that I have worth outside of this dissertation, and for that I am very grateful. It is safe to say that this dissertation would never have been completed without the support of three people in particular. Keith Darden has been a mentor in the truest sense. He has offered sage advice and unwavering support since my undergraduate days at Yale. He saw the iii vision of this project even before I did. Sarah Merriman provided hilarious commentary, regular encouragement, and a careful non-academic editorial eye on several chapters. Her loyalty is unparalleled, and my life is richer for having her in it. Jessica Rich has been a dissertation- writing partner extraordinaire, as well as an impromptu life coach. Her detailed comments made the manuscript more coherent, while her limitless enthusiasm, good humor, and brilliant study break schemes made the past many months more enjoyable. My final debt is to my family, especially my late father Frank, my mother Jeanne, my sister Bonnie, and my aunt Mary. They have remained ever supportive of my academic endeavors, even when those pursuits have taken me across the country and halfway across the world. I know that no matter how far I may journey, they are always waiting to welcome me home. It is to them that I dedicate this dissertation. iv Chapter 1 Introduction 1.1 Introduction The fifteen countries that emerged from the Soviet Union in 1991 were saddled with some very high expectations. Western observers and many post-Soviet citizens themselves optimistically heralded the end of communism as a sign that these societies were eager to embrace human rights, open politics, and free market economies.