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

47 Pages Posted: 26 Jan 1999

See all articles by Kathryn Hendley

Kathryn Hendley

University of Wisconsin-Madison Law School; University of Wisconsin - Madison - Department of Political Science

Peter Murrell

University of Maryland - Department of Economics

Randi Ryterman

World Bank

Date Written: January 1999

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.

JEL Classification: K12, L14, K40, P50

Suggested Citation

Hendley, Kathryn and Murrell, Peter and Ryterman, Randi, Law, Relationships, and Private Enforcement: Transactional Strategies of Russian Enterprises (January 1999). Available at SSRN: https://ssrn.com/abstract=147088 or http://dx.doi.org/10.2139/ssrn.147088

Kathryn Hendley

University of Wisconsin-Madison Law School ( email )

975 Bascom Mall
Madison, WI 53706
United States
301-405-3476 (Phone)
301-405-3542 (Fax)

University of Wisconsin - Madison - Department of Political Science ( email )

1050 Bascom Mall
Madison, WI 53706
United States

Peter Murrell (Contact Author)

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States
301-405-3476 (Phone)
301-405-3542 (Fax)

Randi Ryterman

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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