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New spaces of capital: The Real Estate/Financial Complex in Russia and Poland

English Summary
The state-finance-real estate ‘triangle’ found its most spectacular expression in
2007/8 when the collapse of the U.S. mortgage market caused an economic crisis
of global scale. Yet, even though financial news is full of implicit references to the
interaction between the three dimensions, it rarely explicitly addresses it as issue in
its own right. For this reason, Aalbers (2013b:1) has proposed the metaphor of the
‘Real Estate/Financial Complex’ to centre attention on the linkages between these
three realms. The present thesis is part of the Real Estate/Financial Complex
research programme and studies the Russian and Polish cases. My central
objective is to discern dynamics of real estate financialisation and to explain
differences in this phenomenon as it unfolds in the two countries.
The thesis finds that property markets in both Russia and Poland have become
increasingly entangled with the dynamics of financialisation. Yet, the extent of this
process and its form differs in the two countries. Russia has experienced very little
and discontinuous financialisation of its real estate markets in the past three
decades. Here, real estate-financial relations are defined by strong involvement of
domestic capital and state actors and dynamics of global commodity markets.
Poland’s real estate market in contrast has undergone more comprehensive andcontinuous financialisation since the inception of market relations. Specifically, real
estate is inserted into dynamics of financialisation from a position of subordination,
serving as investment outlet for globally mobile capital. In both countries state
socialist legacies enable the commercialisation and (partial) financialisation of real
estate markets.
To explain these differences the thesis foregrounds two dimensions: Russia and
Poland’s respective political regimes and distinct modes of integration in the
hierarchical global economy. In so doing the thesis does not only extend the
literature on the financialisation of real estate to post-socialist geographies, but also
contributes to a more nuanced understanding of the process in general. It shows
how international and domestic power relations are (re)produced and negotiated
through real estate financialisation and, in the process, shape the distinct nature of
the latter.
Moreover, this thesis draws on and contributes to a wider set of literatures. First, it
builds on the core-periphery framework developed by World-systems Analysis and
in particular studies that foreground the role of finance and financialisation in
reproducing and deepening the hierarchies and divisions of the contemporary global
economy. Second, it engages with Jessops’ strategic relational approach to the
state and notions of state-space restructuring and assemblage to account for the
complex constitution of the state and to analyse real estate-financial relations as
one outlet and medium of its power. To better appreciate transformation and the
history of state socialism in shaping dynamics of financialisation, I lastly engage
with critical literature on post-socialism. I suggest that rather than constraining
financialisation, socialist legacies can facilitate its advance and magnify its effects.
The study is based on a mix of mainly qualitative methods that are embedded in a
historical approach to political economy. These methods include open-ended semistructured
interviews and the collection and analysis of a wide range of primary and
secondary data sources. During five research stays between 2013 and 2016, I
conducted 77 interviews with professionals in the real estate industry, the financial
sector, civil servants, urban planners, architects, journalists, and political and urban
In part I of this thesis, I set out the context of Russia and Poland’s political economic
development to help the reader situate the general findings of the dissertation. In
particular, I highlight how different elite constellations, external and internal
pressures and endowments have put the two countries on different transformation
paths, resulting in distinct political regimes and modes of global economic
integration. In part II, I focus on national-level dynamics and examine the interaction
of actors and tools of modern finance with the two countries’ respective commercial
property markets and housing finance systems. Studying Russia and Poland’s
commercial real estate markets, I highlight a common trajectory towards the
increasing economic importance of the property sector and its growing
entanglement with modern finance, but also identify key differences in this process.
In particular, I find that Russia’s commercial real estate market experienced
temporary and partial financialisation, which was linked to domestic processes of
capital switching. Commercial real estate in Poland, in contrast, experienced more
thorough and continuous financialisation as spatial fix for globally mobile capital. I
then explore the realm of housing by examining how mortgage markets in Russia
and Poland have become exposed to and integrated into global processes of
financialisation. I show that even though explicitly embracing securitisation—a key
tool of finanicalisation—the Russian mortgage market remains dominated by state
actors and is isolated from dynamics of financial markets. The Russian mortgage
market is therefore a case of financialisation in form—in terms of the institution of
securitisation—only. While the polish housing finance system was not designed to
attract global investors and produce financial assets, it has experienced more
comprehensive financialisation. The Polish mortgage market is therefore
financialised in form—through FX loans—and effect—in terms of risk transmission
and the transformation of households into investor subjects. I also examine how
Russia and Poland’s states rely on dynamics of real estate internationalisation to
reproduce and negotiate their outward-oriented power, in Russia via geopolitics and
in Poland through economic integration. This foregrounds the state as assemblageof strategic relations, and as more than a regulatory force. In part III, I shed light on
the urban dimension of Russia and Poland’s real estate-financial relations. Towards
this, I first trace the evolution of Warsaw and Moscow’s urban political economies
since the late 1980s, and then offer case studies of business districts in the two
cities. Part IV concludes with a summary of the thesis’ findings and considerations
of future avenues for research.

Date:1 Mar 2013 →  19 Sep 2017
Keywords:Economic Geography
Disciplines:Other social sciences
Project type:PhD project