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The Invisible Hand and the Grabbing Hand

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  • Timothy Frye
  • Andrei Shleifer

Abstract

Evidence from a survey of 105 shop-owners in Moscow and Warsaw shows that the reliance on private protection, as well as the burden of regulation and corruption, are much greater in Moscow. The evidence suggests that the `invisible hand' model of government better fits the Warsaw local government, and the`grabbing hand' model is more appropriate for Moscow. The evidence implies that the singular focus on the speed of economic reforms to understand the success of transition is misplaced, and that the quality of government may be as essential.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5856.

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Date of creation: Dec 1996
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Publication status: published as American Economic Review, Papers and Proceedings, May 1997.
Handle: RePEc:nbr:nberwo:5856

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