Institutions and Firms in Transition Economies
37 Pages Posted: 24 Oct 2002
Date Written: September 24, 2002
Prepared for the "Handbook Of New Institutional Economics." Focusing on firm behavior, the paper examines the collapse of socialist institutions, the building of capitalist institutions, changing firm boundaries, transactional governance, corporate governance, and use of the legal system. The contrast between law's use in transactions and its relative ineffectiveness in corporate governance suggests the limits of institutional change. Institutional development has been generally faster than predicted by the NIE. Chinese institutional reform matched the NIE criterion of remediableness, which led to incremental changes. Elsewhere, institutions changed faster than firms, which suggests examining traditional NIE assumptions.
JEL Classification: P3, D23, K1, H1
Suggested Citation: Suggested Citation