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

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Author Info
Kathryn Hendley
Peter Murrell
Randi Ryterman

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Abstract

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.

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File URL: http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp72.pdf
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Publisher Info
Paper provided by William Davidson Institute at the University of Michigan Stephen M. Ross Business School in its series William Davidson Institute Working Papers Series with number 72.

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Date of creation: 01 Nov 1998
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Handle: RePEc:wdi:papers:1998-72

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Related research
Keywords: law; contracts; transactions; contract governance; Russia; Transition;

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Find related papers by JEL classification:
K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
P50 - Economic Systems - - Comparative Economic Systems - - - General

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  1. Martha de Melo & Gur Ofer & Plamen Yossifov, 2003. "Transition in Regional Capitals along the Volga," Public Economics 0302010, EconWPA. [Downloadable!]
  2. repec:bep:thetop:v:7:y:2007:i:1:p:1353-1353 is not listed on IDEAS
  3. Beckmann, Volker & Boger, Silke, 2003. "Courts And Contract Enforcement In Agricultural Transition - Theory And Evidence From Poland," 2003 Annual meeting, July 27-30, Montreal, Canada 22213, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  4. Beckmann, Volker & Boger, Silke, 2003. "Courts And Contract Enforcement In Transition Agriculture: Theory And Evidence From Poland," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25878, International Association of Agricultural Economists. [Downloadable!]
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