Doing Business Under the Hot Sun: How Small Firms Do Business and Process Conflicts in Kenya

45 Pages Posted: 22 Sep 2011

See all articles by Elin Cohen

Elin Cohen

University of Washington - School of Law

Date Written: September 20, 2011

Abstract

Considerable amounts of money have been spent on reform projects aiming to strengthen institutions supporting business transactions in developing countries. To be able to evaluate the type and extent of reforms needed, this article presents a thick description of business practices among smaller businesses in Nyanza Province, Kenya. Entrepreneurs in developing countries form long-term relational contracts with a very limited number of suppliers, with whom disputes are rare and generally resolved without third party involvement. However, when entrepreneurs are unable to rely upon relational contracts with their customers, disputes are common and often remain unresolved. Due to the limited availability of suitable fora, firms are cautious to expose themselves to riskier transactions. Private mediation options have emerged in certain locations, but have, at present, limited reach. This article expands our understanding of business practices among smaller businesses in Africa and highlights institutional gaps, which if addressed, could prevent disagreements and facilitate dispute processing.

Keywords: dispute resolution, business practices, small businesses, Kenya, Africa, empirical legal studies, contractual relations, jua kali

JEL Classification: D82

Suggested Citation

Cohen, Elin, Doing Business Under the Hot Sun: How Small Firms Do Business and Process Conflicts in Kenya (September 20, 2011). Chicago-Kent Journal of International and Comparative Law, Vol. 11, 2011, Available at SSRN: https://ssrn.com/abstract=1931747

Elin Cohen (Contact Author)

University of Washington - School of Law ( email )

William H. Gates Hall
Box 353020
Seattle, WA 98105-3020
United States

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