Comparative Corporate Governance and Russia - Coming Full Circle
Jennifer G. Hill
University of Sydney - Faculty of Law; Centre for International Finance and Regulation (CIFR); European Corporate Governance Institute (ECGI)
LAW, LEGAL CULTURE AND POLITICS IN THE TWENTY FIRST CENTURY - ESSAYS IN HONOUR OF ALICE ERH-SOON TAY, p. 153, Doeker-Mach & Ziegert, eds., Franz Steiner Verlag 2004
LAW AND LEGAL CULTURE IN COMPARTIVE PERSPECTIVE, Doeker-Mach & Ziegert, eds., p. 394, Franz Steiner Verlag, 2004
The collapse of Eastern European socialist economies was a key developments which brought comparative corporate governance issues to the forefront in the early 1990s. It also provided the basis for a unique corporate governance experiment, designed to transform Russia into a US-style market economy. Yet, the transformation did not go according to plan. Russia's privatization process has subsequently been described as "a corporate governance nightmare" and led commentators to search for explanations as to what went wrong.
The paper discusses the Russian privatization experiment through the lens of the convergence-divergence debate in contemporary comparative corporate governance. The "path dependence" strand of this debate, traces differences in corporate governance to divergent historical and social underpinnings of jurisdictions. The Russian privatization experiment demonstrated clearly the dangers identified by Montesquieu - regarded as the father of comparative law - of transplanting legal rules, particularly onto an unwilling recipient. Another important lesson from the saga is that historical, cultural and social norms matter. This paper was written as a contribution to a festschrift in honor of Professor Alice Tay, whose lifelong scholarship on the "complex story" of socialism and the theory of law, emphasized the power and importance of such historical, cultural and social norms.
Number of Pages in PDF File: 17
Keywords: Comparative corporate governance, Russia, privatization, convergence, divergence
JEL Classification: G32, G34, G38, K22, K33, M14, 016Accepted Paper Series
Date posted: February 22, 2006
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