No more mr. NIS guy: Investigating corrosive capital in the Serbian energy industry

Abstract

This paper examines the question: what does corrosive capital mean, and what enables it in Serbia? Through the design of an analytical framework and robust literature review, this paper adds value to an understudied topic in International Political Economy by giving rigidity to a term that is generally used as an ostensive buzzword. This paper deter-mines that projects are corrosive to the extent that they benefit elites at the public's expense. Corrosive elements can exist in both a project?s preliminary phases and post-completion. This paper hypothesizes that corrosive elements are introduced to projects via both domestic and foreign elites. This paper applies its framework to an analysis of Serbia?s infamous 2008 omnibus energy agreement with Russia (the Naftna Industrija Srbije (NIS) deal). This paper finds the NIS deal contained a plethora of corrosive elements (political, legal, ethical, economic, ecological) that are still consequential, even today. These elements appear at different points in the NIS deal?s life-cycle. Each element generates additional corrosive elements. The positively reinforcing nature of corrosive capital suggests that upstream action can possibly avert devastating consequences, but only when critical, elite actors can be identified and controlled. This paper peels back a layer of existing knowledge surrounding corrosive capital and state capture. It demonstrates that synergistic cooperation between foreign and domestic elites infects projects with corrosive elements that generate reverberating corrosive consequences. Like a cancer, corrosiveness spreads horizontally (across social, political, and economic spaces) and vertically (overtime). Prevention is preferable to mitigation.