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Law, Relationships, and Private Enforcement: Transactional Strategies of Russian Enterprises

  • Kathryn Hendley


    (University of Wisconsin-Madison)

  • Peter Murrell


    (Department of Economics, University of Maryland)

  • Randi Ryterman


    (The World Bank)

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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Paper provided by University of Maryland, Department of Economics in its series Electronic Working Papers with number 98-001.

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Length: 47 pages
Date of creation: Sep 1998
Date of revision:
Handle: RePEc:umd:umdeco:98-001
Contact details of provider: Postal: Department of Economics, University of Maryland, Tydings Hall, College Park, MD 20742
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Order Information: Postal: Ms. Elizabeth Martinez, Department of Economics, University of Maryland, Tydings Hall, College Park, MD 20742

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