Elite Opportunity in Transitional Economies

Abstract

Command economies gave Communist-era elites administrative control and material Privilege but severely restricted money income and private wealth. Markets and Privatization have injected new value into public assets and create unprecedented opportunities for elite insiders. These opportunities depend on the extent of regime change and barriers to asset appropriation. Regime change varies from the survival of the entire party hierarchy to its rapid collapse and defeat in competitive elections. Barriers to asset appropriation vary with the extent, pace, and form of privatization, and the concentration and liquidity of assets. Different combinations of such circumstances jointly affect the extent to which prior elites obtain ownership or control of Privatized assets, use political office to extract larger incomes, move into salaried elite occupations, or fall out of the elite altogether. Regime change and barriers to asset appropriation affect change at the national level, but outcomes vary across economic sectors because of characteristics of organizations, elite positions, and assets. This elementary theory serves to integrate varied findings from recent research on Central Europe, China, and Russia, and yields predictions for other regions.