“Oligarchs and Entrepreneurship: The Case of Russian Agroholdings”

Abstract

This paper challenges the argument that embedded informal institutions have played a primary role in the formation of Russia’s agro-food business groups. We put forth an Austrian theory of entrepreneurship to confirm the validity of our assertion perceiving Russian oligarchic behavior as entrepreneurial. The theoretical framework encompasses mainly the insights from Ludwig von Mises, Friedrich A. von Hayek and especially Israel M. Kirzner. The latter has been a pioneer and trenchant in highlighting the crucial role of the entrepreneur in the market process. Since agroholdings in Russia are a recent phenomenon, the quantitative data are not yet available. Hence, the empirical evidence will derive strictly from case studies.

Keywords: institutions, entrepreneurship, oligarchs, business groups, agroholdings, transaction costs, property rights, Russia.