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

Center for Economic and Financial Research (CEFIR)

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

Center for Economic and Financial Research (CEFIR) ( email )

47 Nakhimovsky Prospect, Office #720
117418 Moscow
Russia
+7 095 3105 5002 (Phone)
+7 095 3105 5003 (Fax)

Ekaterina Zhuravskaya

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

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