Explores the role of law in nations making the transition to market democracies

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Copyright © 2000, University of Michigan. All rights reserved. Posted May 2001.

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Does law play a role in the economies that are moving from Soviet-style socialism to market capitalism? The essays in this book examine that question, providing a vivid picture of how the new institutions of capitalism affect the lives of business people, legal practitioners, investors, and bureaucrats. They analyze the determinants of successful institutional reform, suggesting that law can influence economic behavior even in inhospitable environments.
Contributors--including economists, political scientists, and legal and business scholars--examine the pathways through which legal and institutional reforms affect behavior and identify the circumstances under which such reforms add value. They ask: What are the microeconomic mechanisms by which law contributes to the activities of economic agents? How do the characteristics of economic agents affect their ability to use the law? Which spheres of the economy are most affected by institutional reforms and where does law fail? What are the preconditions for effective legal and institutional reforms? Which types of political processes produce a workable system of economic legislation? The focus throughout is on the analysis of the individual economic agent who is subject to the new institutions, and thus the decisions of the individual actor, the shopkeeper, the lawyer, the court, the legislator-politician, the enterprise, the bureaucrat, the regulatory authority, and the outside investor.
There are lessons on research methodology, on the economic role of institutions, and on the practice of institutional development. The focus is on the transition economies, but the conclusions and methodologies are pertinent when understanding the role of law in any context. The book will be important reading for scholars and practitioners with a wide range of interests and in a wide range of disciplines and of interest to all those concerned with economic, legal, and institutional development, economists, political scientists, lawyers, and development specialists alike.
Peter Murrell is Professor of Economics, University of Maryland, College Park.

Peter Murrell is Professor of Economics, University of Maryland, College Park.

"A scholarly, informative, and fascinating collection of essays on legal reform in Russia and other transition economies."
--Andrei Shleifer, Harvard University

- Andrei Shleifer, Harvard University

"This book is an important contribution to the profound understanding of the most significant lesson of postsocialist transition, which is that without the appropriate transformation of the legal infrastructure and the enforcement of law, a market economy cannot function properly."
--János Kornai, Harvard University and Collegium Budapest

- János Kornai, Harvard University and Collegium Budapest

"Contains the kind of empirical research missing from so much of the work on law in transition countries, or indeed on law and development generally. The wealth of data and richness of analysis will ensure a warm reception by scholars and policymakers alike."
--Richard E. Messick, Co-Director, Legal Institutions Thematic Group, World Bank

- Richard E. Messick, Co-Director, Legal Institutions Thematic Group, World Bank

". . . A valuable collection with some fascinating highlights. . . ."
--Patrick Schmidt, Law and Politics Book Review, Volume 11, No. 11

- Patrick Schmidt