The Color of Money: Privatization, Economic Dispersion, and the Post-Soviet “Revolutions”

What accounts for the “colored revolutions” of the former Soviet Union? Analysis of postcommunist political economies reveals that states that underwent reform saw the emergence of a new capitalist class whose interests sometimes put them at odds with the regime. Following fraudulent elections, business elites played an active role in financing mobilization and signaling mass discontent, which undermined regime support and hastened regime change. Countries that did not privatize failed to develop an independent capitalist class and therefore faced smaller and weaker oppositions. This argument is demonstrated by analyzing mass protests that toppled regimes in Georgia, Ukraine, and Kyrgyzstan, and by the negative cases of Azerbaijan, Belarus, and Kazakhstan. It has implications for the study of hybrid regimes, social movements, and postcommunist political development. Following the collapse of the Soviet Union, policymakers in several successor states implemented a set of reforms—privatization, liberalization, and stabilization—intended to bring about a market economy and liberal democracy. Their aim was to transfer state assets broadly into the hands of society, creating stakeholders who would defend their newfound wealth, demand property rights, and support the consolidation of a democratic system. Needless to say, it did not always work out as planned. Instead of creating a postcommunist middle class, reforms across the former Soviet Union have weakened the state, impoverished the majority of citizens, and produced a small, kleptocratic elite that uses political connections to serve its interests. There is some disagreement as to how permanent this configuration is, but there is a near consensus among scholars that the economic reform project failed to achieve its major goals. Economic reforms, though disappointing, have also had an unexpected and important political impact. Privatization helped to create a class of capitalists that has sometimes found itself at odds with venal and covetous state officials and irresponsible stewards of the economy. When these new stakeholders have perceived that a change in the status quo would benefit them, they have formed tactical alliances with opposition activists and parties to help unseat the ruling elite. In particular, this materially