Coping with Uncertainty: The Role of Contracts in Russian Industry during the Transition to the Market

In the decade following the collapse of the Soviet Union, Russia earned a reputation for being a chaotic environment for business. Some commentators went so far as to label it as the Wild East, a scary place where law was largely irrelevant and criminal gangs held sway. In a series of articles, I have begun to fill this gap in the literature by exploring the day-to-day reality of life for industrial enterprises in Yeltsin\u27s Russia. The picture that emerges is more nuanced than the stereotype of industry beholden to the mafia that the popular media has perpetuated. In this article, I turn my attention to the role of contracts

The Puzzling Non-Consequences of Societal Distrust of Courts: Explaining the Use of Russian Courts

Russians\u27 lack of trust in courts as an institution has been repeatedly documented through public opinion polling. Yet the caseload data show a steady increase in the use of courts by both individuals and firms in Russia. But these data cannot explain why Russians choose to use the courts. The Article makes use of two publicly available datasets grounded in representative surveys of Russian citizens and firms to investigate this puzzle. The existing literature assumes that the lack of legitimacy of courts in Russia forestalls use. While confirming the societal disdain for courts, the analysis reveals that this attitude has little effect on behavior. Instead, a complicated mixture of need and capacity drives the use of the courts. Two publicly available datasets were used: the EBRD-World Bank Business Environment and Enterprise Performance Survey and the Russian Longitudinal Monitoring Survey, RLMS-HSE

The Puzzling Non-Consequences of Societal Distrust of Courts: Explaining the Use of Russian Courts

Russians\u27 lack of trust in courts as an institution has been repeatedly documented through public opinion polling. Yet the caseload data show a steady increase in the use of courts by both individuals and firms in Russia. But these data cannot explain why Russians choose to use the courts. The Article makes use of two publicly available datasets grounded in representative surveys of Russian citizens and firms to investigate this puzzle. The existing literature assumes that the lack of legitimacy of courts in Russia forestalls use. While confirming the societal disdain for courts, the analysis reveals that this attitude has little effect on behavior. Instead, a complicated mixture of need and capacity drives the use of the courts. Two publicly available datasets were used: the EBRD-World Bank Business Environment and Enterprise Performance Survey and the Russian Longitudinal Monitoring Survey, RLMS-HSE

Developing commercial law in transition economies : examples from Hungary and Russia

Implementing decentralized legal frameworks requires reasonable laws, adequate institutions, and market-oriented incentives. All three must exist together. In transition economies, not only must new laws be drafted but they must be accompanied by the growth of supportive institutions. And they must be accompanied by economic reforms - whether privatization or banking reforms - that separate actors from the state and reinforce market-based incentives. The authors of this paper use two case studies - Hungarian bankruptcy law and Russian company law - to illustrate the interaction of these three elements in practice. These cases illustrate their general view that Central Europe is somewhat further along on all three dimensions than Russia. As for incentives, in both countries relevant actors exert weaker demand for proper implementation of thelaws on the books than one would expect in more mature market economies. The cases belie any simplistic notion that the rule of law can be mechanically dictated from above. Top-down reform of bankruptcy law in Hungary appears to have been at least marginally successful in changing expectations and behavior, partly because it stimulated the growth of new supporting institutions. Finally, top-down reform of company law in Russia has had little impact to date on either institutional development or firm behavior.Legal Institutions of the Market Economy,Legal Products,Environmental Economics&Policies,Banks&Banking Reform,Judicial System Reform,Legal Products,Banks&Banking Reform,Environmental Economics&Policies,National Governance,Legal Institutions of the Market Economy

Resistance, Indifference or Ignorance? Explaining Russians' Nonuse of Mediation

Published in cooperation with the American Bar Association Section of Dispute Resolutio

Law, Relationship, and Private Enforcement: Transactional Strategies of Russian Enterprise

We examine how Russian enterprises do business with one another, focusing on the strategies used to obtain efficiency and predictability in their transactions. Using survey data, the paper analyzes the relative importance of relational contracting, self-enforcement, enterprise networks, private security firms, administrative institutions, and courts. Enterprise-to-enterprise negotiations are preferred, but courts are used when disputes resist resolution through negotiation. Consistently, little evidence suggests enterprises resort to private enforcement, indicating overstatement in the supposed connection between weakness in law and the mafia's rise. Legacies of the old administrative enforcement mechanisms are few, although enterprise networks from Soviet days remain resilient.http://deepblue.lib.umich.edu/bitstream/2027.42/39462/3/wp72.pd

Law, Relationship, and Private Enforcement: Transactional Strategies of Russian Enterprise

We examine how Russian enterprises do business with one another, focusing on the strategies used to obtain efficiency and predictability in their transactions. Using survey data, the paper analyzes the relative importance of relational contracting, self-enforcement, enterprise networks, private security firms, administrative institutions, and courts. Enterprise-to-enterprise negotiations are preferred, but courts are used when disputes resist resolution through negotiation. Consistently, little evidence suggests enterprises resort to private enforcement, indicating overstatement in the supposed connection between weakness in law and the mafia's rise. Legacies of the old administrative enforcement mechanisms are few, although enterprise networks from Soviet days remain resilient.law, contracts, transactions, contract governance, Russia, Transition