Law Works in Russia: The Role of Legal Institutions in the Transactions of Russian Enterprises

55 Pages Posted: 13 Mar 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

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.

JEL Classification: K12, L14, K40, P50

Suggested Citation

Hendley, Kathryn and Murrell, Peter and Ryterman, Randi, Law Works in Russia: The Role of Legal Institutions in the Transactions of Russian Enterprises. Available at SSRN: https://ssrn.com/abstract=151132 or http://dx.doi.org/10.2139/ssrn.151132

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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