New Economics Papers
on Law and Economics
Issue of 2011‒11‒01
two papers chosen by
Jeong-Joon Lee, Towson University

  1. The ownership of industrial land in Russian cities: Explaining patterns of privatization across regions and firms By Pyle, William
  2. Corruption, Rule of Law, and Economic Efficiency: Selected Anecdotic Evidence of Bureaucratic Corruption from the Czech and Slovak Republics By Ladislava Grochová; Tomáš Otáhal

  1. By: Pyle, William (BOFIT)
    Abstract: The voluminous literature on the privatization of Russian industry overlooks, almost completely, the story of enterprise land rights – a story that does not jibe well with the standard narrative of post-Soviet reform. This paper explains the path that has led to significant inter-regional variation in the ownership status of lands underneath urban industrial enterprises. It then introduces unique data from a survey of 359 large industrial firms across several dozen of Russia’s largest cities to explore why some firms have purchased their production plots whereas others continue to lease or hold these lands under the old Soviet system of tenure. In exploring both inter-regional and inter-firm variation in land rights, we find evidence consistent with the proposition that the decisions of regional officials and (the managers and owners of) firms are guided by securing rights over real estate rents.
    Keywords: urban land; property rights; Russia
    JEL: K11 L60 P26 P31 R33
    Date: 2011–10–20
  2. By: Ladislava Grochová (Department of Economics, FBE MENDELU in Brno); Tomáš Otáhal (Department of Economics, FBE MENDELU in Brno)
    Abstract: Can corruption improve economic efficiency? Classical political economists argue that corruption undermines the rule of law (Smith 2001, chap 5). The modern Public Choice proponents argue that corruption might influence the efficiency of the rule of law. While Chicago Public Choice scholars model how corruption improves efficiency of the rule of law and thus the overall economic efficiency, the Virginia Public Choice models explain how corruption reduces efficiency of the rule of law and thus the overall economic efficiency. In this paper, we present a brief survey distinguishing among arguments of the Chicago Public Choice and Virginia Public Choice schools on how corruption influences economic efficiency. We present selected quasi-experimental anecdotic evidence of bureaucratic corruption from the early period of transition in the Czech and Slovak Republics to support the argument that the Virginia Public Choice explanation is more realistic because it includes the influence of bureaucratic corruption.
    Keywords: Bureaucracy, corruption, economic efficiency, Chicago Public Choice, Virginia Public Choice, rent-seeking, rule of law
    JEL: D74 K42 P3
    Date: 2011–10

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