Randi Ryterman

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.

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.

A methodology for testing comparative economic theories: Theory and application to East-West environmental policies

Abstract Many variables of interest to comparative economists are difficult to measure or are unavailable for empirical research. To test for the effects of such variables, we offer a methodology based on examining the bias that is introduced when such variables are omitted from a models estimation. Further, our methodology is able to use data that are available only for some countries, using a procedure to estimate missing observations. We apply the methodology to test whether the high level of environmental damage in East Europe can be explained by a tendency to export commodities intensive in pollution. We find no support for this hypothesis.

A detour on the road to the market: Coordination, queues, and the distribution of income

Abstract We examine the policy choices of a planned economy engaged in economic reform. Problems of coordination characteristic of immature markets—uncertainty in income and economies of scale in the organization of the sector—may limit the governments ability to control the growth of the private sector. Further, the governments constituents, who typically work in the state sector and have time to wait in queues, often prefer that the government levy high taxes on private firms. Although this policy necessitates a low state-sector wage to maintain the sectoral distribution of workers, the implicit wage from waiting in queues rises.