Conceptualising Economic Agency of De Facto States in Patron-Client Relations

Continued non-recognition and contested statehood restrict the economies of de facto states: isolation from formalised international trade leaves them highly dependent on a patron’s support. Economic activities that go beyond the relationship with their patron state tend to be accompanied by illicit trade and organised crime. The usually small sizes of secessionist territories add to their disadvantage in the production of goods subject to economies of scale, hindering their socio-economic development and increasing the asymmetric dependency on their patron. De facto states are hence widely perceived and described by scholars as possessing limited – or even zero – autonomy, especially when it comes to economic questions. Recent research, however, indicates that such perception might be an oversimplification and that the patron-client relations are more complex in nature. In line with this notion, the paper argues that de facto states – despite their dependency – still manage to act in accordance with a certain 'agency' that provides them room for manoeuvre vis à vis their patron. A notable example is Abkhazia’s efforts to restrict Russian investment in the local property market. Proper accounts of economic survival strategies of de facto states and their ways to exert influence, however, have so far been lacking. Little is known about why such agency develops in the first place and why there is a variation in the way de facto states develop coping strategies for long-term economic survival. The paper aims at addressing these questions by developing a model with several dimensions and indicators in order to a) conceptualise economic agency in the context of de facto statehood and b) provide a tool for measuring economic agency. Being able to detect and predict economic agency within patron-client relations of de facto states will add a new perspective to the common understanding of dependency structures and development of counter-strategies as well as economic coping mechanisms in the context of international isolation. The paper proceeds from the assumption that existing economic agency shapes the patron-client relations. For establishing different dimensions that constitute economic agency for de facto states and creating indicators, it will draw on the findings of recent research as well as available data on economic activities and structures of the de facto states in the post-Soviet space. A comparative approach will help to detect different types of economic agency and tell us more about the ways economic preconditions shape patron-client relations. As the breakaway regions in the post-Soviet space are heavily impacted by the war in Ukraine, studying the economic re- and dis-integration processes is more crucial than ever and can help anticipating developments in the region.