2002年-世界发展银行全球_After_the_Big_Bang__Obstacles_to_the_Emergence_of_the_Rule_of_Law_in_Post-Communist_Societies_60页_2mb

Summary: Obstacles to the Emergence of the Rule of Law in Post-Communist Societies

Core Content

This paper, titled "After the Big Bang?" by Karla Hoff and Joseph E. Stiglitz, examines the challenges faced in establishing the rule of law in post-communist societies, particularly in the context of rapid privatization. The authors analyze the assumptions behind the "Big Bang" strategy, which aimed to quickly transfer state-owned enterprises to private individuals to create the conditions for a market economy and legal institutions that protect property rights. However, they argue that this approach has not led to the emergence of the rule of law in countries such as Russia, the Czech Republic, and other former Soviet states.

Main Viewpoints

• The "Big Bang" Strategy: Rapid privatization was expected to generate a political constituency for the rule of law by giving individuals control over property, which would then incentivize them to support legal reforms.

• Weak Political Demand for the Rule of Law: Despite the privatization, many individuals—especially those who benefited from asset stripping—did not support the rule of law. This is because the uncertainty about the future establishment of the rule of law led some to prefer asset stripping over building value.

• The Role of Uncertainty and Incentives: The model highlights that individuals may choose to strip assets if they believe the rule of law is not certain. This behavior can undermine the development of legal institutions, even if the rule of law is ultimately beneficial for the majority.

• Inefficient "Rules of the Game": The paper argues that the assumption that rapid privatization automatically leads to the rule of law is flawed. Inefficient legal frameworks can emerge as a Nash equilibrium, especially in the absence of strong political support for the rule of law.

Key Information

• The Rule of Law: Defined as a legal framework that enforces property rights, ensures broad access to them, and provides predictable rules for resolving disputes.

• No Rule of Law: Characterized by arbitrary confiscation of property, lack of enforcement of contracts, and tunneling of assets by majority shareholders.

• Agents' Strategies: Individuals with control rights over privatized assets can choose between "building value" (which is more beneficial under the rule of law) and "stripping assets" (which is more profitable in the short term if the rule of law is not yet in place).

• Equilibrium Analysis: The model shows that a weak demand for the rule of law can persist in equilibrium if the probability of its establishment is low. The analysis also indicates that the rule of law may not emerge quickly, even if it is the most efficient outcome.

• Empirical Evidence: Data from Russia and other post-communist countries show that property rights were insecure, and that the lack of legal protection led to capital flight, negative net investment, and poor economic growth.

• Pareto Efficiency and Stability: The paper emphasizes that the rule of law is Pareto efficient, but the equilibrium may be unstable. If the externality from asset stripping is strong enough, multiple equilibria can exist, with some being inefficient.

Policy Implications

• Structural Privatization: The authors suggest that policies promoting wealth creation and investment rather than asset stripping are more effective in building political support for the rule of law.

• Monetary and Capital Market Policies: These should be designed to enhance the returns to investment and reduce the incentives for asset stripping, which in turn can support the development of legal institutions.

• Role of the State: The state's role in enforcing legal institutions is critical, but the lack of political will or the presence of corruption can prevent this from happening.

Conclusion

The paper challenges the optimistic view that rapid privatization would automatically lead to the rule of law. Instead, it highlights the complex interplay between economic incentives, political dynamics, and the establishment of legal institutions. The authors argue that the rule of law may not emerge quickly or at all if the political demand for it is weak, and that the process of institutional change is often more gradual and requires careful policy design.

Figures and Data

• Figure 1: Shows the relationship between property rights insecurity and GDP growth across 20 transition economies.
• Figure 2: Illustrates the dilemma faced by agents in choosing between stripping assets or building value.
• Figure 3: Depicts the static model with multiple equilibria.
• Figure 4: Provides a numerical example of the model with specific parameter values.

References

• The paper is part of the World Bank's Policy Research Working Paper Series.
• It draws on empirical data from the EBRD/World Bank survey and other studies on post-communist economies.
• It references the work of economists such as Shleifer and Vishny, who argued that privatization creates a constituency for the rule of law.