Law in Transition and Development: The Case of Russia
AbstractThe rise of barter and non-cash payments has become a dominant feature of the Russian transition to a market economy. This paper confronts with empirical evidence two approaches to explain barter in Russia: the â€™illusion viewâ€™ and the â€™trust viewâ€™ of barter. The â€™illusion viewâ€™ suggests that barter allows the parties to pretend that the manufacturing sector in Russia is producing value added by enabling this sector to sell its output at a higher price than its market value. The â€™trust viewâ€™ sees barter as an institution to deal with the absence of trust and liquidity in the Russian economy. We confront the prediction of both explanations with actual data on barter in Ukraine in 1997. The data reject the â€™illusion viewâ€˜ in favor of the â€˜trust viewâ€˜ of barter.
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Bibliographic InfoPaper provided by Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich in its series Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems with number 78.
Date of creation: Apr 2004
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imperfect input and capital markets; the virtual economy; trade credit; trust; contract enforcement;
Find related papers by JEL classification:
- D20 - Microeconomics - - Production and Organizations - - - General
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- P30 - Economic Systems - - Socialist Institutions and Their Transitions - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-12-20 (All new papers)
- NEP-FIN-2005-12-20 (Finance)
- NEP-REG-2005-12-20 (Regulation)
- NEP-TRA-2005-12-20 (Transition Economics)
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