Comparative Corporate Governance and Russia - Coming Full Circle

LAW, LEGAL CULTURE AND POLITICS IN THE TWENTY FIRST CENTURY - ESSAYS IN HONOUR OF ALICE ERH-SOON TAY, p. 153, Doeker-Mach & Ziegert, eds., Franz Steiner Verlag 2004

LAW AND LEGAL CULTURE IN COMPARTIVE PERSPECTIVE, Doeker-Mach & Ziegert, eds., p. 394, Franz Steiner Verlag, 2004

17 Pages Posted: 22 Feb 2006  

Jennifer G. Hill

The University of Sydney Law School ; European Corporate Governance Institute (ECGI)

Abstract

The collapse of Eastern European socialist economies was a key developments which brought comparative corporate governance issues to the forefront in the early 1990s. It also provided the basis for a unique corporate governance experiment, designed to transform Russia into a US-style market economy. Yet, the transformation did not go according to plan. Russia's privatization process has subsequently been described as "a corporate governance nightmare" and led commentators to search for explanations as to what went wrong.

The paper discusses the Russian privatization experiment through the lens of the convergence-divergence debate in contemporary comparative corporate governance. The "path dependence" strand of this debate, traces differences in corporate governance to divergent historical and social underpinnings of jurisdictions. The Russian privatization experiment demonstrated clearly the dangers identified by Montesquieu - regarded as the father of comparative law - of transplanting legal rules, particularly onto an unwilling recipient. Another important lesson from the saga is that historical, cultural and social norms matter. This paper was written as a contribution to a festschrift in honor of Professor Alice Tay, whose lifelong scholarship on the "complex story" of socialism and the theory of law, emphasized the power and importance of such historical, cultural and social norms.

Keywords: Comparative corporate governance, Russia, privatization, convergence, divergence

JEL Classification: G32, G34, G38, K22, K33, M14, 016

Suggested Citation

Hill, Jennifer G., Comparative Corporate Governance and Russia - Coming Full Circle. LAW, LEGAL CULTURE AND POLITICS IN THE TWENTY FIRST CENTURY - ESSAYS IN HONOUR OF ALICE ERH-SOON TAY, p. 153, Doeker-Mach & Ziegert, eds., Franz Steiner Verlag 2004; LAW AND LEGAL CULTURE IN COMPARTIVE PERSPECTIVE, Doeker-Mach & Ziegert, eds., p. 394, Franz Steiner Verlag, 2004. Available at SSRN: https://ssrn.com/abstract=884268

Jennifer G. Hill (Contact Author)

The University of Sydney Law School ( email )

New Law Building, F10
The University of Sydney
Sydney, NSW 2006
Australia
+61 2 9351 0280 (Phone)
+61 2 9351 0200 (Fax)

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

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