A Crooked Mirror

The study examines the evolution of heterogeneous illegal markets, including markets for homemade alcohol, counterfeit alcohol, and illegally manufactured alcohol in Russia. A variety of statistical sources and survey data is used to demonstrate that the compositions of these markets have come through four different stages since late socialism, depending on the constellation of political, legislative, and economic factors. At each stage, some of these markets prevail, whereas others remain undeveloped. Overall, illegal alcohol markets tend to grow in periods of exogenous political or economic shocks and shrink in periods of economic growth. Changes in the structure of illegal markets are backed by a continuous requalification of products, organizations, and transactions contesting the boundaries between legality and illegality. Some illegal activities retain their legitimacy due to the ignorance or tolerance of enforcement agencies and final consumers.