We offer a new perspective on the effect of relationship-specific investment on contract complexity, which has broad implications because complex contracts and vertical integration are substitutes. A simple model using transaction cost economics (TCE) predicts that buyer and seller...

Randomized response methods, which were designed to elicit candid answers to sensitive questions, have not succeeded in eliminating reticence in survey responses. We implement a methodology that effectively stands the randomized response technique on its head, using it to identify reticent...

To ascertain the prevalence of soft budgets and to find causes of softness, we surveyed Mongolian enterprises, asking whether state aid was expected when financial difficulties arose. One-quarter of enterprises expected soft-budgets, a large proportion of which have central government ownership....

This paper surveys China's legal system in the economic reform era. We analyze the role of law in the economy, assessing whether China's formal legal system contributed to those expectations of stable and predictable rights of property and contract that are prerequisites for growth. The paper...

We examine spatial spillovers between countries in the development of institutions. Our dependent variables are three measures of institutions that relate to politics, law, and governmental administration. The major explanatory variable on which we focus is a spatial lag of the dependent...

At present, there is no generally accepted accounting of the institutional strengths and weaknesses of the transition economies. The first goal of the paper is to fill this gap by assessing current levels of institutional development. The second is to examine which types of institutional...

Prepared for The New Palgrave Dictionary of Economics, 2nd Edition, this essay examines the evolution of both institutions and economists' thinking on institutions during transition. Early in transition, institutions were virtually ignored in the majority of normative prescriptions, but were...

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...

Organized legal professions are typically viewed by economists as rent-seeking interest groups. Starting from the observation that the legal professions have been central in institutional development in countries with the highest quality institutions, we add a different perspective, developing a...

We revisit the ubiquitous claim that aiding civil society improves institutional outcomes. In our model, a vibrant civil society initiates public debate in a reform process that would otherwise be dominated by partisan interest groups and politicians. By altering the incentives of interest...