Revisiting the Emergence of the Rule of Law in Russia

21 Pages Posted: 6 Dec 2013

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

Date Written: December 4, 2013

Abstract

In an extended comment on work by this paper's authors, Gustafsson (2013) reaches scathing judgments on Russia's arbitrazh (or commercial) courts and draws strong conclusions about the prospects for the rule of law in Russia. He concludes that litigants use the courts because they can bribe the judges. His paper revives old tales about the 1990's that we showed previously were myths. We examine Gustafsson’s argument both conceptually and empirically. We demonstrate that this argument rests on two erroneous assumptions: that the use of legal institutions equates with trust in these institutions and that strategies for use of law are not context dependent. We show that Gustafsson's empirical specification is not uniquely related to a single theory and indeed that one interpretation of his results is that enterprises use the courts because they perceive less corruption there than in other venues, a theory diametrically opposite to the one Gustaffson chose emphasize. Using a rich data set collected in Russia in 1997, we are led to the tentative conclusion that firms turned to the arbitrazh courts because of the relative quality of this institution.

Keywords: arbitrazh courts, Russia, rule of law, corruption, legal institutions

JEL Classification: K41, K42, P37, P52, P48

Suggested Citation

Hendley, Kathryn and Murrell, Peter, Revisiting the Emergence of the Rule of Law in Russia (December 4, 2013). Available at SSRN: https://ssrn.com/abstract=2363627 or http://dx.doi.org/10.2139/ssrn.2363627

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)

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