Post-Soviet small businesses in Azerbaijan: the legacies of the Soviet second economy

Abstract

This article explores the legacies of Soviet second economy among entrepreneurs in Azerbaijan. Although many scholars have linked postsocialist informality with the practices of the Soviet second economy, the extent of the continuity between Soviet and post- Soviet informality is rarely examined empirically. Drawing on a number of in-depth interviews, two case studies – of one successful and one failed small enterprise – are used to illustrate the continued influence of second economy practices in the post-Soviet period. The dependence of the post-Soviet private sector on the state bureaucracy and the mechanisms of this engagement show many similarities with Soviet second economy practices. It is further argued that the operations of Soviet second economy can be helpful in understanding post-Soviet informality.