How do businesses cope with the lack of reliable institutions in countries with weak rule of law? There are many studies on the effect of unreliable institutions on business and economic development, however most of them do not take into account how the world economy has changed in the past 20-30 years.
There has been an unprecedented increase in international integration, in terms of capital markets as well as international institutions. While the progress of WTO integration has stalled, thousands of bilateral investment agreements have been made. The number of international arbitrage cases, business-business, but also investor-state disputes, has increased rapidly. What does this mean for business which is operating in states that do not have reliable protection of property rights?
I am interested in the economies of developing and emerging countries in general, and in particular in the political and economic developments in Russia and the other countries which used to be called the “transition economies”.
Research project: Determinants of political risk
The aim of this project is to update theoretical explanations for political risks. This project is concluded. The results were presented at the April International Academic Conference at the Higher School of Economics and were published in an article in New Political Economy in July 2016.
Research project: Importing the rule of law
International economic institutions are not only changing border-crossing investment and trade, but also domestic business relations. Companies in states with a weak rule of law are looking for ways to secure their contracts by using foreign law and reliable foreign dispute resolution. In this project, these ways are explored and the effects of this “import of the rule of law” are analyzed. A short German report was published as a first result of this project. A draft has been presented at the HSE-ICSID conference in June 2016.
Research project: Shadow economy policies in Russia
Policies that are working well in Western rule-of-law countries have often failed to be effective in the developing world. This project asks how the state can reign in the shadow economy, if the very reason for the shadow economy are predatory bureaucrats and corruption. It compares the effectiveness of sanctions and subsidies for formalisation in a subnational study on Russia. It finds that while sanctions are implemented effectively by the Russian state, subsidies do not reduce informal economic activity.