Informal Contracts in Transition Economies: A Dynamic Approach

Anna Ingster ()

EERC Working Paper Series from EERC Research Network, Russia and CIS

Abstract: 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' the employee, paying him a lower salary than he had expected ex-ante. Underdevelopment of the judiciary system and weak enforcement of courts decisions make this problem more serious, and at the same time more difficult to resolve. The current paper provides a positive model of deception at labor markets.

Keywords: Russia; informal contracts; deception; imperfect enforcement; transition (search for similar items in EconPapers)
JEL-codes: K42 L14 (search for similar items in EconPapers)
Pages: 67 pages
Date: 2003-07-01
New Economics Papers: this item is included in nep-eec, nep-law and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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