A West–East Perspective
Edited by Hans-Hermann Höhmann and Friederike Welter
Chapter 10: The Effect of Trust in Courts on the Performance of Ukrainian SMEs
10. The effect of trust in courts on the performance of Ukrainian SMEs Iryna Akimova and Gerhard Schwödiauer INTRODUCTION Progressive economic development without private property rights, the assignment of asset control rights and return rights to individuals is hardly imaginable. People would not invest if they could not reap the fruits of their investment. Though it has always been recognised by economists that defining and protecting property rights is one of the prime functions of government, the fulfilment of this task has often been taken for granted. The challenge of guiding the transition of the former socialist economies of Central and Eastern Europe to modern market economies, and the debate on policy reform in developing and emerging economies in general, have brought this topic, in particular the indispensable role of government, again to the forefront of economic theory and policy analysis. The transition from plan to market is fundamentally tantamount to the design and support of an adequate property rights structure by the government. Without the government fulfilling its tasks in this respect (‘good governance’), through its legislative, judiciary and executive branches, property rights cannot be effectively established (for example, Olson 2000; Polishchuk and Savvateev 2004) and efficient market institutions cannot emerge. In transition economics the role of property rights in the restructuring of formerly state-owned firms has been intensely discussed, with an emphasis on ownership structure and corporate governance. The question of the enforcement of commercial and credit contracts is closely related to the design and protection of...
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