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Post-communist predation: modeling reiderstvo practices in contemporary predatory states

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  • Bálint Madlovics

    (Financial Research Institute)

  • Bálint Magyar

    (Financial Research Institute)

Abstract

While the economics of predatory states has been at the center of an emerging discussion, a rich body of literature on predation already exists in the scholarship on post-communist regimes. This paper offers a glimpse into that literature, developing (1) a typology of coercive corporate raiding (“reiderstvo”) and (2) a model for understanding the logic of contemporary predatory states. The typology starts from the original form of reiderstvo, carried out by criminal groups (“black raiding”), and introduces the concepts of “grey” and “white raiding”. We identify “centrally led corporate raiding” as a form of state predation not considered in public choice models, despite the fact that it exemplifies the functioning of contemporary authoritarian regimes. Expanding the models of Leeson (J Inst Theor Econ (JITE) 163:467–482, 2007) and Vahabi (Public Choice 168:153–175, 2016), we show how centrally led corporate raiding can be incorporated into the discussion of predatory states. We provide illustrations by offering two examples from the predatory state of contemporary Hungary, the case of an outdoor advertising company (ESMA) and the case of the banking sector.

Suggested Citation

  • Bálint Madlovics & Bálint Magyar, 2021. "Post-communist predation: modeling reiderstvo practices in contemporary predatory states," Public Choice, Springer, vol. 187(3), pages 247-273, June.
    • Handle: RePEc:kap:pubcho:v:187:y:2021:i:3:d:10.1007_s11127-019-00772-7
    DOI: 10.1007/s11127-019-00772-7
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    More about this item

    Keywords

    Coercive appropriation; Predatory state; Corporate raiding; Reiderstvo; Post-communism; Hungary;
    All these keywords.

    JEL classification:

    • H1 - Public Economics - - Structure and Scope of Government
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights

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