TY  - JOUR
AU  - Johnson,Simon
AU  - McMillan,John
AU  - Woodruff,Christopher
TI  - Courts and Relational Contracts
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8572
PY  - 2001
Y2  - October 2001
UR  - http://www.nber.org/papers/w8572
L1  - http://www.nber.org/papers/w8572.pdf
N1  - Author contact info:
Simon Johnson
MIT Sloan School of Management
100 Main Street, E52-562
Cambridge, MA 02142
Tel: 617/290-9618
Fax: 617/253-2660
E-Mail: sjohnson@mit.edu

John McMillan
E-Mail: N/A user is deceased

Christopher Woodruff
Department of Economics
University of Warwick
Coventry  CV4 7AL
UK
Tel: 44 787 258 2800
Fax: 44 024 7652 3032
E-Mail: c.woodruff@warwick.ac.uk
AB  - Post-communist countries offer new evidence on the relative importance of courts and relationships in enforcing contracts. Belief in the effectiveness of courts has a significant positive effect on the level of trust shown in new relationships between firms and their customers. Well-functioning courts also encourage entrepreneurs to try out new suppliers. Courts are particularly important when specific investments are needed for a relationship to develop. While relationships can sustain existing interactions, workable courts help new interactions to start and develop.
ER  -