Oligarchs and Geopolitical Realignment: Evidence from the Russo-Ukrainian War

Abstract

How do oligarchs respond to geopolitical shocks and under what conditions do they use informal political networks to resist or accelerate geopolitical realignment? I study these questions in a uniquely well-suited context—Ukraine, where oligarchs have long been central to domestic politics, over the period 2012-2024, which includes two major exogenous shocks to the country’s geopolitical orientation: Russia’s limited invasion in 2014 and its full-scale invasion in 2022. The paper advances two core arguments. First, oligarchs exert geopolitical influence through informal networks of legislators who are personally linked to them. Second, oligarchs’ responses to geopolitical shocks are heterogeneous and shaped by their pre-war levels of political and economic exposure to Russia. Oligarchs with substantial political and economic ties to Russia face stronger incentives to resist rapid Euro-Atlantic alignment, while those with limited exposure are more likely to support accelerated Euro-Atlantic alignment following geopolitical shocks. To evaluate these arguments, I leverage an original relational dataset covering 137 oligarchs and more than 1,000 legislators across three parliamentary convocations, and unique legislative and business administrative data, including roll-call voting, bill sponsorship, parliamentary speeches, business ownership, and commercial data. My identification strategy leverages the 2014 and 2022 Russian invasions as exogenous shocks in an event-study difference-in-differences design. The paper aims to deliver the first large-N evidence of how extremely rich businesspeople react to geopolitical shocks, using an innovative measure of oligarchic political influence. More broadly, the paper speaks to institutional and organizational economics by showing how informal networks mediate elite incentives under extreme uncertainty, helping explain why geopolitical realignment is often uneven and contested even in the face of dramatic external shocks.