Laws for Sale: Evidence from Russia

40 Pages Posted: 18 May 2006

See all articles by Irina Slinko

Irina Slinko

Swedbank, Group Risk Control

Evgeny Yakovlev

New Economic School; IZA

Ekaterina Zhuravskaya

Paris School of Economics (PSE)

Abstract

How does regulatory capture affect growth? We construct measures of the political power of firms and regional regulatory capture using micro-level data on the preferential treatment of firms through regional laws and regulations in Russia during the period 1992-2000. Using these measures, we find that: 1) politically powerful firms perform better on average; 2) a high level of regulatory capture hurts the performance of firms that have no political connections and boosts the performance of politically connected firms; 3) capture adversely affects small business growth and the tax capacity of the state; 4) there is no evidence that capture affects aggregate growth.

Keywords: Regulatory capture, institutional subversion, Russia, redistribution, special interest politics

JEL Classification: P26, P27, D71, D72

Suggested Citation

Slinko, Irina and Yakovlev, Evgeny and Zhuravskaya, Ekaterina, Laws for Sale: Evidence from Russia. American Law and Economics Review, Vol. 7, pp. 284-318, 2004 , Available at SSRN: https://ssrn.com/abstract=902825

Irina Slinko (Contact Author)

Swedbank, Group Risk Control ( email )

SE-105 34 Stockholm
Sweden

Evgeny Yakovlev

New Economic School ( email )

Skolkovskoe shosse 45
Moscow, 121343
Russia

IZA ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Ekaterina Zhuravskaya

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

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