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

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  • Kathryn Hendley
  • Peter Murrell
  • Randi Ryterman

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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Bibliographic Info

Paper provided by William Davidson Institute at the University of Michigan in its series William Davidson Institute Working Papers Series with number 72.

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

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

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Cited by:
  1. Berulava, George, 2013. "Do Trust-Based Relations Improve Firm’s Performance? Evidence from Transition Economies," MPRA Paper 48430, University Library of Munich, Germany.
  2. Konstantin Sonin, 2002. "Why the Rich May Favor Poor Protection of Property Rights," William Davidson Institute Working Papers Series 544, William Davidson Institute at the University of Michigan.
  3. 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.
  4. Johannes Sauer & Matthew Gorton & John White, 2012. "Marketing, cooperatives and price heterogeneity: evidence from the CIS dairy sector," Agricultural Economics, International Association of Agricultural Economists, vol. 43(2), pages 165-177, 03.
  5. Fafchamps, Marcel & Minten, Bart, 1999. "Property rights in a flea market economy," MTID discussion papers 27, International Food Policy Research Institute (IFPRI).
  6. Pyle, William, 2003. "Reputation flows: Contractual disputes and the channels for inter-firm communication," ZEI Working Papers B 21-2003, ZEI - Center for European Integration Studies, University of Bonn.
  7. 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).
  8. Martha de Melo & Gur Ofer & Plamen Yossifov, 2003. "Transition in Regional Capitals along the Volga," Public Economics 0302010, EconWPA.

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