Kathryn Hendley

Law, Relationships and Private Enforcement: Transactional Strategies of Russian Enterprises

We examine how Russian enterprises do business with one another, focusing on the strategies used to obtain efficiency and predictability in their transactions. Using survey data, the paper analyzes the relative importance of relational contracting, self-enforcement, enterprise networks, private security firms, administrative institutions, and courts. Enterprise-to-enterprise negotiations are preferred, but courts are used when disputes resist resolution through negotiation. Consistently, little evidence suggests enterprises resort to private enforcement, indicating overstatement in the supposed connection between weakness in law and the mafias rise. Legacies of the old administrative enforcement mechanisms are few, although enterprise networks from Soviet days remain resilient.

'Telephone Law' and the 'Rule of Law': The Russian Case

By conventional measures, Russia lacks the ‘rule of law’. For evidence, we need look no further than the notorious Yukos case, in which its president, Mikhail Khodorkovsky, was railroaded into a criminal conviction and his company was bankrupted, with the proceeds mysteriously ending up in the hands of Kremlin insiders. The Yukos case is only the most infamous example of so-called ‘telephone law’, a practice by which outcomes of cases allegedly come from orders issued over the phone by those with political power rather than through the application of law. The media is replete with such accounts. The conclusion typically drawn by media commentators and social scientists alike is that the omnipresence of ‘telephone law’ makes any reliance on formal law or legal institutions in Russia foolhardy.Generalizing from politicized cases with high stakes for everyone involved, including the state, is, however, problematic. Though the willingness of officials to mobilize ‘telephone law’ in such cases, either to further the interests of the state or for self-aggrandizement, clearly undermines the goal of equality before the law for all, whether it is reflective of practices in non-politicized cases is unclear. If it were, then we would expect to find a reluctance on the part of ordinary Russians to take their disputes to court. Yet the caseload data document just the opposite: the number of civil cases has more than doubled over the past decade. This gives rise to a puzzle: why are Russians willing to use a legal system that is so deeply and patently flawed? More importantly, what does it reveal about the prospects for the ‘rule of law’ in Russia?

Do Repeat Players Behave Differently in Russia? Contractual and Litigation Behavior of Russian Enterprises

We examine whether Galanters repeat player (RP) concept helps in deciphering the law-related behavior of Russian enterprises. We adapt the RP concept to the Russian context defining the Russian repeat player (RRP). Using data from 328 enterprises, we examine whether RRP-ness explains the use of protokols of disagreement, petitioning to freeze assets, contractual prepayment, and litigation activity. RRPs are very different from Galanters RPs, generally exhibiting less aggression and innovativeness, but suing other RRPs frequently. Examination of factors other than RRP-ness suggests the presence of lawyers is important in determining law-related activity, a result no necessarily expected in Russia

Law Works in Russia: The Role of Legal Institutions in the Transactions of Russian Enterprises

We use survey data to examine whether law and legal institutions add value to Russian transactions. Enterprises view legal institutions relatively benignly. Inter-enterprise contacts are important in resolving transactional problems, but courts are used when negotiations fail. Legal strategies affect transactional success, while the potential for hold-up reduces success and the nature of ownership and control affect the ability to sustain relationships. We conclude that law works in Russia because our results show that the economic and institutional environment rewards enterprises that invest effort in constructing contracts, that possess superior legal knowledge, and that orient legal work to new opportunities.

Who Are the Legal Nihilists in Russia

The popular media, both Russian and Western, portray legal nihilism—at its core, a lack of respect for law—as a serious problem for Russia. This article uses data collected in 2004 and 2006 as part of the Russian Longitudinal Monitoring Study of the Higher School of Economics to examine the incidence of legal nihilism in Russia and to investigate who the legal nihilists are and what characteristics tend to be associated with legal nihilism. The effects of a number of characteristics, including political participation, political attitudes, the role of material and emotional well-being, and age, are analyzed.

Are Russian Judges Still Soviet

The Soviet model of judging incorporated an educational and political role for judges. In addition to resolving disputes, judges were expected to use cases as a way of inculcating Soviet values. They could sidestep the law when it conflicted with the interests of the state and/or the Communist Party. In recent years, reforms aimed at raising the status of judges and stripping away their Soviet veneer have been introduced. In theory, the introduction of the principle of adversarialism should shift responsibility away from judge and onto litigants. The article explores how these reforms have played out. It draws on field work in arbitrazh courts, including observations of judicial proceedings, conversations with judges and litigants, and review of case files.

Temporal and Regional Patterns of Commercial Litigation in Post-Soviet Russia

An American lawyer, political scientist, and specialist on Russian law and its application in the business environment examines the evolution of commercial litigation in arbitrazh courts. The research—based on analysis of official statistical forms that individual courts submit annually to the Higher Arbitrazh Court and interviews with business managers—focuses on trends and regional variations in the number and types of cases decided by these courts, including those involving nonpayments, bank services, collateral, commercial paper, damage to business reputation, and participation of foreigners. Coverage also extends to the speed and cost of litigating as well as to the appeals process. Journal of Economic Literature, Classification Numbers: K10, K20, K41. 9 tables, 36 references.

Legal Development and Privatization in Russia: A Case Study

An American attorney and political scientist presents a study focused on managerial efforts to reorganize the corporate structure of a large aviation conglomerate with 14,000 employees. The conversion of properties from state to collective ownership and organizational shifts to a joint-stock company are detailed and analyzed. Managerial strategies to streamline the privatization are traced from corporate documents and procedures designed internally to devise orderly regulations not rooted in parliamentary legislation or presidential decrees. Broader implications are noted in light of possible trends to develop laws at the grassroots level and to establish precedents that may be assimilated. journal of Economic Literature, Classification Numbers: K22, L21, P13, P31.

The Role of In-House Counsel in Post-Soviet Russia in the Wake of Privatization

The mass privatization of Russian industrial enterprises in the early 1990s would seem to have provided an opportunity for in-house lawyers to enhance their role within the enterprise. Drawing on a series of in-depth case studies, the article argues that the shift from state socialism to the market had minimal impact on Russian in-house counsel. The lawyers themselves made little effort to take on new duties in the areas of commercial paper or corporate governance, and were often sidelined even in their traditional areas of competence, such as contractual relations with suppliers and customers. The case studies reveal variation, which are driven by institutional history and barter levels.

Evaluating the Prospects for Young Lawyers to Remake Putin’s Russia

Russian lawyers have traditionally been politically pliant. The paper explores the potential for change. By focusing on the results of a survey of a cohort of 2015 graduates of law faculties across Russia, it asks whether lawyers might be prepared to use their expertise to challenge the Putin regime. About 30 percent of the sample were motivated to study law by a desire to change and improve society. The analysis shows that this group is more supportive of Putin’s policies than the rest of the respondents. This suggests that they are unlikely to lead the charge for greater democracy or spark a resurgence of civil society.