In the search for explanations of foundations of authoritarianism, academic research focuses disproportionately on attributes of regime type, perceived primarily through the lens of the nation-state. This study challenges the mainstream understanding of states as unitary agents and proposes to disaggregate the state analytically into actors at various levels of the decision-making process and state administration. It explores the onset of authoritarian rule through the identification of networks of authority that compete or substitute formal institutions (Helmke and Levitsky 2004) and thus weaken the prospects of democracy. In a novel mixed methods approach, we use network analysis and elite interviews and identify the process through which informal collaborations between business and political elites render state institutions ineffective in Hungary.