Rackets, Regulation and the Rule of Law
44 Pages Posted: 26 Mar 2001
There are 2 versions of this paper
Rackets, Regulation and the Rule of Law
Date Written: March 2001
Abstract
Governments that levy predatory regulation and provide few weak legal institutions draw businesses into the unofficial economy and compel them to hire private protection organizations. Based on a survey of shopkeepers in three cities in Russia, we find that retail shops face very high levels of predatory regulation and have frequent contacts with private protection rackets. In addition, we show that higher levels of regulation are associated with weaker legal institutions and a higher probability of contact with a private protection organization. We also find that shopkeepers view private protection organizations primarily as a substitute for state-provided police protection and state-provided courts. These results emphasize the importance of public sector reform as a component of economic transition.
Keywords: Government, racket, regulation, transition
JEL Classification: H39, K20, K42
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Contract Enforcement in Transition
By Christopher M. Woodruff, John Mcmillan, ...
-
Taxation and Evasion in the Presence of Extortion by Organized Crime
By Michael Alexeev, Eckhard Janeba, ...