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Laws for Sale: Evidence from Russia

Author

Listed:
  • Irina Slinko

    (CEFIR)

  • Evgeny Yakovlev

    (CEFIR)

  • Ekaterina Zhuravskaya

    (New Economic School/CEFIR and CERP)

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, 2003. "Laws for Sale: Evidence from Russia," Working Papers w0031, Center for Economic and Financial Research (CEFIR).
    • Handle: RePEc:cfr:cefirw:w0031
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    More about this item

    Keywords

    Regulatory capture; institutional subversion; Russia; redistribution; special interest politics;
    All these keywords.

    JEL classification:

    • P26 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Property Rights
    • P27 - Political Economy and Comparative Economic Systems - - Socialist 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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