This paper proposes a dynamic theory of adjustment of the two contract enforcement mechanisms: use of collateral and coalitions employing multilateral punishment strategies. We show that in the aftermath of transition, both of these mechanisms fail to provide sufficient protection so that not...

In a transition economy, many of employee/employer's contracts are informal, rather than formal. Even in cases when formal contracts concluded, external legal enforcement of a contract often appears to be imperfect and costly. Sometimes, this brings to the employer the opportunity to 'deceive'...

In 1995 three countries of the former Soviet Union (Russia, Belarus and Kazakhstan) established a Customs Union, which Kyrgyzstan and Tadjikistan joined later. After the passage of five years since the Customs Union formation, it is essential to assess the implications of Belarus’ membership...

Although many enterprises in Russia have been privatized, the government still retains its influence over them; they, in turn, also try to attain state guardianship. State patronage over firms often takes the form of privileges (e.g., subsidies, tax discounts or government projects) given to...

This paper considers the problem of determining the optimal taxation for a group of individuals with random, independent and identically distributed incomes. Because a taxpayer's income is private information, it can only be verified through a costly audit. The purpose of this paper is to...

The project is devoted to the analysis of the term structure of interest rates at the Russian GKO market during the period from 1996 to 1998. The sources of inefficiency of the market operation that led to the failure of the pure expectations hypothesis are analyzed. The model with conditional...

The model of competition for investment assumes that regions use individualized tax relief for different projects and produce public goods. The capital market allocates investments among regions, and the labor market adjusts wages and employment. Simulations with the model under different...

The present paper considers two types of models of interaction between a tax authority and a group of taxpayers. The first type of model assumes no corruption, and the strategy of the authority is the probability of auditing a taxpayer depending on his/her declared income and other available...

While the Russian economy as a whole in 1990s was lagging behind other post-communist countries in terms of performance and restructuring, there were considerable variations in the performance of Russian regions. The author tried to examine the effect of policy variables and initial conditions...

The model presented in this paper describes trade in goods between two countries endowed with three exogenous production factors: skilled and unskilled labor, and a stock of natural resource. The number of skills is an endogenous production factor that determines dynamic comparative advantages....