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The effectiveness of property rights - and the rule of law more broadly - is often depicted as depending primarily on rulers' 'supply' of legal institutions. Yet the crucial importance of private sector "demand" for law is frequently overlooked. This book develops a novel framework that unpacks the demand for law in Russia, building on an original enterprise survey as well as extensive interviews with lawyers, firms, and private security agencies. By tracing the evolution of firms' reliance on violence, corruption, and law over the two decades following the Soviet Union's collapse, the book clarifies why firms in various contexts may turn to law for property rights protection, even if legal institutions remain ineffective or corrupt. The author's detailed demand-side analysis of property rights draws attention to the extensive role that law plays in the Russian business world, contrary to frequent depictions of Russia as lawless

Studies of property rights overwhelmingly focus on whether states expropriate or protect property, overlooking the crucial issue of whether private sector actors willusestate 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.

The importance of property rights to economic and political development is widely recognized. Yet it remains unclear why institutions for protecting property rights often fail to emerge. Many scholars focus on leaders' incentives and assume that if institutions are "supplied," then firms will automatically use them. By contrast, this study emphasizes that firms often circumvent or subvert newly created institutions. Consequently, theories of property rights formation should not focus exclusively on whether or not leaders create institutions. They must also explain the conditions under which firms actually use formal institutions for protection.This study analyzes firms' strategies for protecting property rights in Russia and identifies conditions under which firms rely on state institutions. Observers of Russia frequently focus narrowly on high-profile property rights disputes and mistakenly conclude that the lawlessness of the 1990s persists. However, my original survey of Russian enterprises and in-depth interviews with firms, lawyers, and private security agencies reveal a remarkable shift in firms' strategies over time: Whereas Russian firms in the 1990s used illegal coercion — such as mafia rackets — to protect property, today they increasingly utilize law and formal institutions. To examine this shift in firms' strategies, I develop an analytical framework based on evolutionary game theory. The framework draws attention to several key characteristics of institutional development: (1) The expected payoffs to firms' strategies for protecting property depend on the interplay of direct effects (i.e., exogenous factors that determine the benefits and costs of a given strategy) and interactive effects (i.e., the extent to which other firms in an economy use a given strategy). (2) Over time, more effective strategies become predominant, due to mechanisms such as natural selection or adaptive learning. (3) A tipping point exists, at which society begins to break from a vicious cycle to a virtuous cycle. Relatively small changes can therefore initiate self-reinforcing cycles with large effects. Based on this analytical framework, the study investigates the sources of change in firms' strategies. Over the past decade, an incentive transformation has occurred. Firms now recognize that law is a more effective tool for protecting property than alternatives, such as private security agencies or informal connections with government officials. Three types of factors have shifted the benefits and constraints of illegal versus legal strategies in favor of law: (1) organizational changes within firms, such as the evolution of firm ownership structures; (2) changes in other institutional spheres, including the development of the tax administration and banking sector; and (3) changes from outside the domestic political and economic system, including the inflow of foreign investment. Incentive structures also explain variation across firms' strategies for protecting property. The nature of threats and available resources shape the relative benefits and constraints of using illegal versus legal strategies. Analysis of these two factors predicts the types of firms most likely to use legal strategies: (1) medium-sized firms rather than small or large firms; (2) firms that produce physical products rather than services; (3) firms that operate in large-scale rather than exclusively local markets; and (4) firms that lack informal connections to government officials. This study's conclusion explores pathways to the rule of law in transition and developing countries, with specific reference to Russia. Whether the rule of law will take root in Russia depends on the outcome of two conflicting tendencies: (1) increasing demand for law by firms; and (2) decreasing supply of law by predatory state officials.

Prominent scholars in recent years have expressed alarm about political polarization, weakened civil liberties, and growing support for authoritarianism in the United States. But discussions of democratic backsliding pay short shrift to the value citizens place on one of the most fundamental democratic institutions: the act of voting. Drawing on nationally representative survey data, we show that despite traditional portrayals of the U.S. as the embodiment of a democratic "civic culture," a substantial share of Americans express readiness to sell their votes for cash: 12% of respondents would do so for just $25, as would nearly 20% for $100. Citizens who place low importance on living in a democracy are significantly more willing to sell their votes. We argue that heightened attention to US voters' attitudes toward clientelism would provide an additional barometer of democratic skepticism, help to integrate the study of American and comparative politics, and stimulate novel research agendas about the historic decline of vote buying in the United States.

This article explores the relationship between economic reforms and democracy in Latin America between 1970 and 1995. Existing theories suggest divergent effects across time horizons. The implementation of reforms- economic liberalization-may initially destabilize democracy due to popular backlash or overzealous reformers' usurpation of democratic institutions. However, the potential outcome of reforms-greater economic liberalism- may later foster or reinforce democracy by dispersing economic assets, making rulers more susceptible to international constraints, or demobilizing social groups that may otherwise make politically destabilizing redistributive demands. Time-series cross-section analyses using an error correction model provide evidence of this J-curve relationship. Although countries engaging in economic reforms may experience a temporary deterioration of democracy, they tend to become more democratic in the long run. Findings are robust to numerous control variables, country and time fixed effects, and specifications using either Polity IV or Freedom House democracy indicators. [Reprinted by permission of Sage Publications Inc., copyright 2008.]

This article explores the relationship between economic reforms and democracy in Latin America between 1970 and 1995. Existing theories suggest divergent effects across time horizons. The implementation of reforms— economic liberalization—may initially destabilize democracy due to popular backlash or overzealous reformers' usurpation of democratic institutions. However, the potential outcome of reforms—greater economic liberalism— may later foster or reinforce democracy by dispersing economic assets, making rulers more susceptible to international constraints, or demobilizing social groups that may otherwise make politically destabilizing redistributive demands. Time-series cross-section analyses using an error correction model provide evidence of this J-curve relationship. Although countries engaging in economic reforms may experience a temporary deterioration of democracy, they tend to become more democratic in the long run. Findings are robust to numerous control variables, country and time fixed effects, and specifications using either Polity IV or Freedom House democracy indicators.