The Invisible Hand and the Grabbing Hand

13 Pages Posted: 14 Jun 2000 Last revised: 29 Feb 2012

See all articles by Timothy Frye

Timothy Frye

Columbia University - Department of Political Science; National Research University Higher School of Economics

Andrei Shleifer

Harvard University - Department of Economics; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

Date Written: December 1996

Abstract

Evidence from a survey of 105 shop-owners in Moscow and Warsaw shows that the reliance on private protection, as well as the burden of regulation and corruption, are much greater in Moscow. The evidence suggests that the `invisible hand' model of government better fits the Warsaw local government, and the`grabbing hand' model is more appropriate for Moscow. The evidence implies that the singular focus on the speed of economic reforms to understand the success of transition is misplaced, and that the quality of government may be as essential.

Suggested Citation

Frye, Timothy and Shleifer, Andrei, The Invisible Hand and the Grabbing Hand (December 1996). NBER Working Paper No. w5856, Available at SSRN: https://ssrn.com/abstract=225641

Timothy Frye (Contact Author)

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Andrei Shleifer

Harvard University - Department of Economics ( email )

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