Ownership Concentration and Wealth Inequality in Russia

Kirill Polovnikov, Nikita Pospelov, Dmitriy Skougarevskiy

Abstract:

Knowledge of beneficial owners of companies is
key to monitoring and managing wealth inequality in any country. Here we propose a robust and
scalable network-based algorithm to reveal hidden
ultimate owners in public ownership data. Our approach is based on the idea of Katz centrality in
complex networks and circumvents the problem of
cyclic ownership used to obscure effective control
through closed chains of intermediaries. When applied to a country-scale directed ownership network
with 6 million nodes, the algorithm identifies ultimate holders of every organisation in 2021’s Russia. The distribution of asset ownership in the country follows a power law, indicating strong wealth
inequality with Gini index of 0.93. 51.7% of net assets of non-financial companies are ultimately held
by the state and state-owned enterprises, 25.0% —
by individuals (incl. 3.4% held by Forbes–200listed individuals), and 11.3% are owned by foreign
entities (incl. 5.7% in tax havens).