The emergence of the rule of law in Russia

This paper challenges an empirical claim about the commercial courts (arbitrazhnye sudy) made by Kathryn Hendley and her co-authors in their paper “Law, Relationships and Private Enforcement: Transactional Strategies of Russian Enterprise” in Vol. 52, No. 4, Europe-Asia Studies in 2000. Basing their case on a quantitative survey of Russian firms, they conclude that economic actors in the 1990s relied on ‘the law and legal institutions’ because the commercial courts were relatively effective. In order to test this claim about the link between individual behaviour and the judiciary, I ask: What type of belief about corruption was held by Russian economic actors who trusted the commercial courts for conflict resolution at the end of the 1990s? The data set is drawn from a survey of 227 Russian firms made in 1997. I use self-reported data on economic actors’ preference for using or not using the commercial court (in case of a hypothetical conflict about a considerable amount of money) as a proxy for trust . A binary logistic regression model shows that economic actors who accepted corruption as a fact of life at the time of market entry were three times more likely to trust the commercial courts for conflict resolution than economic actors who rejected corruption. This finding contradicts any reasonable definition of the rule of law and suggests that the neo-liberal reformers should have paid more attention to the content -- rather than merely to the speed -- of reform.