Coalitions in Exchange for Loyalty? Relationships between Government and Construction Business in Large Russian Cities (Cases of Perm and Yekaterinburg)

Abstract

The article is devoted to studying political foundations of interaction between business and government in large cities. The authors study construction sector in two Russian cities with a population over one million — Yekaterinburg and Perm — and show that political considerations play an important role even in those areas where the government’s position towards business, as it would seem, should be determined solely by economic factors. Relationships between government and construction sector are usually viewed through the prism of coalitions, when cooperation with developers is a priority and a winning strategy for the government. Thus, in the logic of the theory of “growth machines”, the mutual interest of the construction sector and the government is based on the mutual need for the development of the urban economy. However, the observed public conflicts between the government and large developers indicate that this logic has flaws and the government is guided not only by the economic interests when selecting coalition partners. In the article the authors employ the method of qualitative comparative analysis using data from Yekaterinburg and Perm and try to explain why, contrary to the expectations, the relationships between business and government can be uncooperative and conflicting. According to their hypothesis, the authoritarian context and the formation of the management vertical change stimuli and incentivize government to prioritize political loyalty when dealing with business. Their research confirms that it is the demonstration of political loyalty, which signals consent to invest into maintaining political regime, that allows business to avoid conflicts with the government. If there is no loyalty, one cannot guarantee administration’s friendly attitude even if business participates in implementing social projects. Moreover, in such circumstances high business activity, especially in combination with the local registration, increases the likelihood of a conflict with the government.