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Laws for Sale: Evidence from Russia

  • Irina Slinko

    (CEFIR)

  • Evgeny Yakovlev

    (CEFIR)

  • Ekaterina Zhuravskaya

    ()

    (New Economic School/CEFIR and CERP)

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.

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Paper provided by Center for Economic and Financial Research (CEFIR) in its series Working Papers with number w0031.

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Length: 40 pages
Date of creation: Mar 2003
Date of revision:
Handle: RePEc:cfr:cefirw:w0031
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