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Abstract:
We use survey data to examine whether law and legal institutions add value to Russian transactions. Enterprises view legal institutions relatively benignly. Inter-enterprise contacts are important in resolving transactional problems, but courts are used when negotiations fail. Legal strategies affect transactional success, while the potential for hold-up reduces success and the nature of ownership and control affect the ability to sustain relationships. We conclude that law works in Russia because our results show that the economic and institutional environment rewards enterprises that invest effort in constructing contracts, that possess superior legal knowledge, and that orient legal work to new opportunities.

Abstract:
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.

Abstract:
The paper proposes a methodology to obtain evidence on the relative importance of different mechanisms for supporting agreements. A survey question posed to company directors summarizes key aspects of mechanisms and asks for judgments on use. In contrast to existing approaches, the data covers the full complement of mechanisms and much economic activity, offering aggregate numerical judgments. The methodology is applied in Romania. Popular hypotheses are examined. Bilateralism is numerically dominant; the legal system is used extensively; third-party mechanisms are less important. These three mechanisms are non-complementary.

transactions, private ordering, law, networks, transition, Romania

Abstract:
The paper proposes a methodology to obtain evidence on the relative importance of different mechanisms for supporting agreements. A survey question posed to company directors summarizes key aspects of mechanisms and asks for judgments on use. In contrast to existing approaches, the data covers the full complement of mechanisms and much economic activity, offering aggregate numerical judgments. The methodology is applied in Romania. Popular hypotheses are examined. Bilateralism is numerically dominant; the legal system is used extensively; third-party mechanisms are less important. These three mechanisms are non-complementary.

transactions, private ordering, law, networks, transition, Romania

Abstract:
Russia's transition to the market was tortuous. The literature presents the 1990s as a period when contracts were largely irrelevant due to the inadequacies of the substantive law and the inability of courts to protect property rights. This article explores how contracts were, in fact, used by Russian industrial firms through a series of in-depth case studies. At all of the case study firms, management had developed standard form contracts. Their willingness to rely on them when problems arose was dictated primarily by the nature of their relationships with their trading partners, not by a lack of faith in the legal system. Where the relationships were grounded in personal trust, managers were reluctant to invoke their rights under the contract. Where relationships were grounded in calculative trust (mutual need intertwined with mutual suspicion), managers did not shy away from legalistic remedies. Enterprises that relied on in-kind exchanges had little need to rely on written contracts due to the ephemeral character of these transactions. The lack of reliable information about the credit-worthiness of prospective customers combined with the lack of reputational sanctions for contractual violations made life difficult for all of the case study firms.

Contracts, Trust, Russia, Transition

Abstract:
The voices of ordinary Russians have been mostly absent from discussions of the 'rule of law' in Russia. Drawing on 59 interviews conducted during the summer of 2008 in Moscow and Saratov, this article seeks to integrate the views of average citizens. These interviews reveal remarkably little concern over 'telephone law' and/or corruption. The respondents are highly critical of the Russian legal system, but focus their anger on the unwillingness of the state to enforce the existing laws and the slow speed and expense of litigating. Most are open to the idea of going to court for disputes with one another, though not for disputes with the state or other powerful actors. The predictability that underlies the 'rule of law' is present in the sense that ordinary Russians understand when they can and cannot rely on the legal system. Expecting more from Russia is likely unrealistic.

rule of law, Russia, legal culture, courts

Abstract:
The article explores the role of in-house counsel (iuriskonsul’ty) in Russian enterprises in the late 1990s. It builds on an earlier article that analyzed the results from a large-n survey and found that iuriskonsul’ty had a low level of influence within privatized enterprises. It is grounded in a series of six in-depth case studies, chosen from among the surveyed enterprises, and carried out in Moscow, Saratov, and Ekaterinburg. Several patterns of behavior are isolated and explained. The sidelining of lawyers is shown to be less a policy goal of management than a product of inertia. Yet the fact that managers did not have the advantage of sound legal advice as they were making the transition to the market contributed to anything-goes business climate.

legal profession, Russia, enterprise behavior

Abstract:
The article explores the relevance of law to the lives of ordinary Russians. Drawing on the discussion in six focus groups composed of Russians who had recently participated in home repair projects, the analysis traces their behavior using the “disputing pyramid” framework developed by Felstiner, Abel, and Sarat. Few of the homeowners were satisfied with the outcomes of their projects, but less than half made any sort of claim. Their belief that the substantive law would block their claims emerged as a more important explanatory variable than a lack of trust in judicial institutions due to corruption. The initial hypothesis that age (as a proxy for exposure to Soviet-era justice) would be a powerful predictor of behavior was not born out. The research suggests that gender and location may be more robust predictors.

Contracts, Disputes, Housing, Informal norms, Legal culture, Russia

Abstract:
The article explores how Russians react when flooded by their neighbors. Details of 57 incidents that are drawn from focus group discussions and interviews suggest that neighbors are guided by an informal norm in favor of working together to resolve these problems. When culpable neighbors refuse to engage with victims, the result is to "lump" the problem or to turn to third-parties for assistance. Such outcomes are more likely when the culpable neighbors are newcomers to the pod"ezd (entryway to the apartment building). The research shows that those with preexisting relationships were less likely to turn to third-parties, thereby confirming the findings of the classic studies of disputing among neighbors, albeit in a remarkably different institutional and cultural setting. Other factors, such as age, location, and seriousness of the damage, are less significant. The research provides a window into the commitment to fundamental fairness that underlies Russians' legal consciousness.

Russia, Informal Norms, Dispute Resolution, Relationships, Neighbors

Abstract:
What are the sources of business litigation in Russia? How do disputes evolve? Cases filed in arbitrazh courts constitute only the most visible indicator of business disputes -- the tip of the iceberg. Studies of business disputes elsewhere suggest that many -- perhaps most -- disputes never end up in court. Either the disputants reach some accord or a decision is made that the harm suffered is not worth the trouble of going to court. The paper will identify the stages through which business disputes pass in Russia, and will analyze the role of various actors and institutions in their evolution or termination. The disputing process begins with a trading partner expressing any sort of dissatisfaction, and then becomes increasingly serious. The paper will explain what factors tend to cause a dissatisfaction to be perceived as a serious problem that is deserving of broader attention and, ultimately, that only a court can resolve the disagreement. The analysis will draw on a series of six case studies of Russian industrial enterprises in Moscow, Saratov, and Ekaterinburg, undertaken in the first half of 1998.