(APSR) Studies of property rights overwhelmingly focus on whether states expropriate or protect property, overlooking the crucial issue of whether private sector actors will use state institutions. By contrast, I argue that the “supply” of formal legal institutions often fails to ensure firms will rely on the state for property rights protection. Instead, firms frequently avoid formal legal institutions and turn to illegal strategies based on violence or corruption. Whether firms adopt legal strategies depends on: (1) firm-level practices and beliefs that impede the use of law, (2) the effectiveness of illegal strategies, and (3) coordination problems resulting from firms’ expectations about each other’s strategies. Drawing on interviews with firms, lawyers, and private security agencies, as well as an original survey of Russian enterprises, I illustrate how “demand-side” factors led to a surprising increase in Russian firms’ reliance on formal legal institutions over the past two decades. The findings suggest that comprehensive understanding of property rights and the rule of law requires not only attention to state institutions’ effectiveness, but also to private actors’ strategies.
See the Article © American Political Science Review (APSR)
The article is from the May issue of APSR. In this issue, also see: Henry Hale and Tim Colton, "Who Defects? Unpacking a Defection Cascade from Russia's Dominant Party 2008–12."
Property Rights in Post-Soviet Russia: Violence, Corruption, and Demand for Law
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