Can Russia's state-managed, network capitalism be competitive?: Institutional pull versus institutional push

In the fall of 2005, former chairman of Yukos Oil, Mikhail Khodorkovsky, was sentenced to prison, after being found guilty of fraud and tax evasion. Many viewed the trial as the government's attempt to gain control of the energy sector which Putin had declared as strategically crucial to the country. This article examines the role of the state and the type of capitalism that is evolving in Russia. We view this system as consisting of three forms of network capitalism that coexist in this transition economy – market, oligarchic, and siloviki – and the relationships among them, all existing within the pervasive environment of the Russian state. We argue that the Russian economy will continue to be based for some time on the cognitive institutional pillar rather than the regulative pillar. The article concludes with implications of government policy decisions for the various forms of capitalism, for the country's competitiveness and attractiveness for foreign investment, and for Russian managers.