Predatory Raiding in Russia: Institutions and Property Rights After the Crisis

The Russian economy faces serious challenges when it comes to such issues as legitimacy of property and protection of property rights. This paper considers institutional aspects of raiding, including the role of Commercial Arbitration Courts and bankruptcy procedures in Russia. It concludes that raiding in Russia has a predatory character not because raiders prey on the weakest, failing, bankrupting businesses, but because they attack healthy and profitable enterprises, firms in temporary financial distress. Raiders use unclear ownership structure of attractive firms and buy necessary decisions from corrupt bureaucrats instead of waiting for a financial crisis to come.