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Laws for Sale: Evidence from Russia

Author

Listed:
  • Irina Slinko

    () (Stockhold School of Economics)

  • Evgeny Yakovlev

    () (Center for Economic and Financial Research)

  • Ekaterina Zhuravskaya

    () (Center for Economic and Financial Research)

Abstract

How does regulatory capture affect growth? We construct measures of the political power of firms and regional regulatory capture using micro-level data on the preferential treatment of firms through regional laws and regulations in Russia during the period 1992-2000. Using these measures, we find that: 1) politically powerful firms perform better on average; 2) a high level of regulatory capture hurts the performance of firms that have no political connections and boosts the performance of politically connected firms; 3) capture adversely affects small business growth and the tax capacity of the state; 4) there is no evidence that capture affects aggregate growth.

Suggested Citation

  • Irina Slinko & Evgeny Yakovlev & Ekaterina Zhuravskaya, 2004. "Laws for Sale: Evidence from Russia," Economics Working Papers 0046, Institute for Advanced Study, School of Social Science.
  • Handle: RePEc:ads:wpaper:0046
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    More about this item

    Keywords

    Regulatory capture; institutional subversion; Russia; redistribution; special interest politics;

    JEL classification:

    • P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
    • P27 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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