Original Sin, Good Works, and Property Rights in Russia: Evidence From a Survey Experiment

Are property rights obtained through legally dubious means forever tainted with original sin or can rightholders make their ill-gotten gains legitimate by doing good works?2 This is a critical question for developing countries (and Russia in particular) where privatization is often opaque and businesspeople may receive property, but remain unwilling to use it productively due to concerns about the vulnerability of their rights to political challenge. Using a survey of 660 businesspeople conducted in Russia in February 2005, I find that the original sin of an illegal privatization is difficult to expunge. Businesspeople, however, can improve the perceived legitimacy of property rights by doing good works, such as investing in the firm and by providing public goods for the region. Finally, managers that provide public goods for their region are more likely to invest in their firms than those who did not. The finding that public goods providers invest at higher rates is at odds with standard economic logic, but fits well with the more political view of property rights developed here. These findings have implications for political economy and contemporary Russia.http://deepblue.lib.umich.edu/bitstream/2027.42/40187/3/wp801.pd

Original Sin, Good Works, and Property Rights in Russia: Evidence From a Survey Experiment

Are property rights obtained through legally dubious means forever tainted with original sin or can rightholders make their ill-gotten gains legitimate by doing good works?2 This is a critical question for developing countries (and Russia in particular) where privatization is often opaque and businesspeople may receive property, but remain unwilling to use it productively due to concerns about the vulnerability of their rights to political challenge. Using a survey of 660 businesspeople conducted in Russia in February 2005, I find that the original sin of an illegal privatization is difficult to expunge. Businesspeople, however, can improve the perceived legitimacy of property rights by doing good works, such as investing in the firm and by providing public goods for the region. Finally, managers that provide public goods for their region are more likely to invest in their firms than those who did not. The finding that public goods providers invest at higher rates is at odds with standard economic logic, but fits well with the more political view of property rights developed here. These findings have implications for political economy and contemporary Russia.Property Rights, Transition, Rule of Law, Privatization

Rackets, Regulation and the Rule of Law

Governments that levy predatory regulation and provide few weak legal institutions draw businesses into the unofficial economy and compel them to hire private protection organizations. Based on a survey of shopkeepers in three cities in Russia, we find that retail shops face very high levels of predatory regulation and have frequent contacts with private protection rackets. In addition, we show that higher levels of regulation are associated with weaker legal institutions and a higher probability of contact with a private protection organization. We also find that shopkeepers view private protection organizations primarily as a substitute for state-provided police protection and state-provided courts. These results emphasize the importance of public sector reform as a component of economic transition.

Partisan Politics in Transition Economies

Research project funded in academic years 2005-06 and 2006-07The University Archives has determined that this item is of continuing value to OSU's history.Partisan Politics in Transition Economies seeks to explain the diversity of politics and economy in 25 post-Communist countries by examining the level of partisan politics. Where either neocommunists or liberals dominate, Frye argues, there is little polarization, and executives can push through pro-business or pro-state policies. Where neocommunists and liberals have roughly equal power, however, there is much more polarization. The book includes surveys of business elites and case studies of Bulgaria, Russia, Poland, and Uzbekistan.Mershon Center for International Security StudiesProject summar

Does Economic Integration Promote Cooperation Abroad

Research project funded in academic years 2005-2006 and 2006-07The University Archives has determined that this item is of continuing value to OSU's history.This project examines the support for economic integration and international cooperation among both business elites and the mass public in Russia.Mershon Center for International Security StudiesProject summar

Cashing In: The Political Economy of Constitutional Stability

The University Archives has determined that this item is of continuing value to OSU's history.This project explores the dynamics of presidential power in 20 postcommunist countries over the last decade. It asks: why have some presidents in the region expanded their powers dramatically, while others have not?Mershon Center for International Security StudiesProject summar

Everyone Hates Privatization, but Why? Survey Evidence from 28 Post-Communist Countries

A 2006 survey of 28,000 individuals in 28 post-communist countries reveals overwhelming support for revising privatization, but also that most respondents prefer to leave firms in private hands. We test whether individuals support revising privatization primarily due to a preference for state property or due to concerns about the legitimacy of privatization. We find that a lack of human capital and privately owned assets affects the support for revising privatization primarily via a preference for state property over private property; whereas transition-related hardships influence support for revising privatization via both a preference for state property and concerns about the illegitimacy of privatization. These results suggest the value of analyses that not only link respondent traits with support for policy, but that also probe the motivations that underpin this support.privatization, revision, nationalization, property rights, demand for property rights, legitimacy of property rights, transition

Who Wants To Revise Privatization? The Complementarity of Market Skills and Institutions

Using survey data from 28 transition countries, we test for the complementarity and substitutability of market-relevant skills and institutions. We show that democracy and good governance complement market skills in transition economies. Under autocracy and weak governance institutions there is no significant difference in support for revising privatization between high and low-skilled respondents. As the level of democracy and the quality of governance increases, the difference in the level of support for revising privatization between the high and low skilled grows dramatically. This finding contributes to our understanding of microfoundations of the politics of economic reform.

Who Wants to Revise Privatization and Why? Evidence from 28 Post-Communist Countries

A 2006 survey of 28,000 individuals in 28 post-communist countries reveals overwhelming public support for the revision of privatization in the region. A majority of respondents, however, favors a revision of privatization that ultimately leaves firms in private hands. We identify which factors influence individuals’ support for revising privatization and explore whether respondents’ views are driven by a preference for state property or a concern for the fairness of privatization. We find that human capital poorly suited for a market economy with private ownership and a lack of privately owned assets increase support for revising privatization with the primary reason being a preference for state over private property. Economic hardships during transition and work in the state sector also increase support for revising privatization, but mainly due to the perceived unfairness of privatization. The effects of human capital and asset ownership on support for revising privatization are independent of a countries’ institutional environment. In contrast, good governance institutions amplify the impact of positive and negative transition experiences on attitudes toward revising privatization. In countries with low inequality,individuals with positive and negative transition experiences hold significantly different views about the superiority of private property, but this difference is much smaller in countries with high inequality.privatization, revision, nationalization, property rights, demand for property rights, legitimacy of property rights, transition