Hanna Smith
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Tuomas Forsberg
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Maarit Elo-Valente
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2013
The Aleksanteri Institute

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Balmaceda, Margarita

The FSU de facto states between formal isolation, geopolitics and globalization: rent-seeking and relations with patron and parent states, 1991-2013

De facto states (including FSU de facto states) have been traditionally analyzed through the prism of their ostensible economic isolation and overwhelming dependency on patron states. This perspective, however, leaves unanswered key questions concerning they sources of counter-power vis-à-vis patron states. This article proposes a closer look at the interface between geopolitical interests, broader economic links, and domestic processes in the de facto states. In particular, three crucial factors not addressed by the literature are taken into account: a) the ways in which de facto states participate in regional and global economic processes; b) how the nature itself of a de facto state situation provides unique opportunities for rent-seeking; and, c) how rent-seeking within de facto entities affects the preferences of both local actors and actors in the patron state. The analysis is carried out on the basis of a case study of the Transnistrian Moldovan Republic (PMR), and Abkhazia, 1991-2013. Particular emphasis is paid to how local rent-seeking strategies both at the macro (survival of the entity) and micro levels (enrichment of well-connected players) affected relations with both the patron state (Russia) and the parent states (Moldova and Georgia, respectively). The central hypothesis is that the above local rent-seeking strategies,  synergizing with some of the key features of a de facto state, were able to turn key elements of Russian  support (such as targeted aid programs and leniency towards unpaid gas debt) into an opportunity for rent-seeking and counter power by the de-facto states.    

This paper fits in well with the following topics and sub-topics noted in the Conference website: 

• Russia as a player in world politics Russia as a neighbor • Foreign Policy towards East, West, South and North Russia and the post-Soviet space • Security challenges Russia and the frozen conflicts • Economic relations and foreign policy Russia’s energy foreign policy