BAKU. I imagine that an economic liberal, which these days means a conservative, visiting Azerbaijan might conclude that the end of Communism and the departure of the Soviets had done wonders for Baku. A right-wing columnist searching for the touching examples of markets in action that are the leimotif of stories on post-Communist Eastern Europe can find them easily. In Fountains Square in the heart of Baku, there is even a guy with a microwave who will whip up a batch of Pop Secret popcorn. If that is not entrepreneurship in action, what is?

Except that Azerbaijan, like many of the republics of the former USSR, is run by characters who would feel right at home in the world of The Sopranos. There is, after all, a reason that Azerbaijan is one of the bottom feeders in tables measuring government transparency and corruption. Our brave little entrepreneur in Fountains Square is there because he cannot afford a store. And he will only stay there as long as he keeps paying off someone to keep his permit to operate. The guy who sold him the permit must similarly pay his boss and so on up the Azerbaijani food chain.

If the popcorn seller decides to stop paying, the universally despised police will harass him. Don't feel too angry at the police. They undoubtedly have to pay to keep their jobs too. And if they don't carry out their orders with enthusiasm, they will soon be pursuing other interests. Or more likely, they will end up joining the approximately two million Azerbaijanis who have left the country in search of work. A perfect example of "rent seeking" as economists would say.

However, even though the per capita income of Azerbaijan is very low, there is a lot of money in this country. Baku grew rich on oil wealth over century ago and it still generates a great deal of money for this small nation and its wealthy elite. If you are expecting quaint stalls selling shish kabab and carpets in the center of Baku, you will be disappointed. The young people who walk around Fountains Square at night favor Dolce & Gabbana rather than either Azerbaijani or Soviet styles. It is the expats, not the Azerbaijanis, who tend to dress down.

Well-dressed people hold positions of power (or are their relatives) that result in their receiving "gifts" from grateful people that enable them to afford their wardrobe. Take the Central Election Committee. At a meeting there, I met a nattily dressed man who was wearing a suit that seemed a tad expensive for him to afford on the salary of a government employee of a country with an average income of under $1000 per year. His Armani tie alone must have cost more than the monthly salary of the average Azerbaijani.

However, I imagine that he has to make many difficult decisions about who should serve on district electoral commissions or work in the central office in Baku. Or even get a job as a janitor cleaning the building. And why not hire more janitors than necessary since people are so grateful?

I suppose that I should not be too churlish about the Azerbaijani responsiveness to power. As a guest of the Embassy of the top dog country on the planet, it has served me rather well while I have been here. I doubt the chief of the Central Election Committee would have met with me if I had attempted to set up the meeting myself.

Sometimes my meetings took on a surreal Soviet quality. Before I gave a talk at the Baku Academy of Public Administration, I met with the Rector, the local equivalent of university president. The Rector, a former Communist ideologue, had all of the accoutrements of a local top dog. The door to his enormous office was doubled so you had to open two doors to enter. Then there was the semi-circle of around fifteen students standing around the Rector's desk who could only have been there to impress me (read: the Embassy) of his importance since they said nothing.

The Rector capped off this display with platitudes about having much to learn from America about democracy and elections. Apparently, this thirst for knowledge did not to extend to the students on this particular occasion as the talk was attended only by faculty even though the Embassy had arranged for me to speak with students. (Exposure to Americans talking politics may warp impressionable young Azerbaijani minds.) Some of the professors were probably dragooned to fill the hall as Soviet logic dictates that important people, or their representatives, do not speak to partially filled halls.

This type of reception reflects that the general tendency on the part of the Azerbajani government is to appease America. Azerbaijanis understand the concept of power very well, far better than Americans, and appear willing to accept their place in the world vis-à-vis the United States as long as we do not threaten the hold of the current elite on power. It is not accidental that the new oil pipeline is going through Georgia and Turkey rather than Iran. Indeed, I suspect that the Azerbaijani government would feel far more comfortable if our relations with them were conducted on this basis.

Rumor has it that our repeated calls for free elections have led Azerbaijani government officials to ask the American Ambassador how many seats the opposition should win in the next election. Like other similar regimes, Azerbaijan is perfectly happy to create authoritarianism with a democratic face if it will keep us happy and them in power. Nothing perplexes the Azerbaijani government more than when Americans claim that we do not care who wins as long as the election is free and fair. From their perspective, this makes no sense because only idiots think this way.