The Perm business advocacy coalition in Russia recognizes that with high demand for bribes, entrepreneurs are often willing suppliers. For individual entrepreneurs paying bribes is usually more cost effective than defending oneself against corrupt bureaucrats through a weak legal system. Therefore, the coalition decided to summon the powers of collective action to utilize norms and legal precedents in the fight for business rights.
Member of the coalition – associations and chambers of commerce – decided to support an entrepreneur whose rights had been violated when city officials fined him for selling goods without a license. Those officials who attempted to fine him were not tax inspectors and exceeded their duties according to the law. Furthermore, the law clearly stated that in this circumstance the entrepreneur was not required to acquire a business permit. The court agreed that the fine was unjust and a precedent had been set for other entrepreneurs to use in defending themselves in similar cases.
Although Russian law does not operate based on precedents, the coalition finds that citing precedents in cases related to business are effective in getting judges to uphold the rule of law and setting norms for business people. The coalition is consolidating documents to be used in the defense of local business people when similar cases come up.
In many cases reminding a bureaucrat that a precedent has already been set, provides sufficient justification for the official to change his/her mind. The coalition has so far supported individual entrepreneurs in 10 cases. Out of these, the coalition won 3 lawsuits. In 6 additional cases, local government conceded that the coalition was right, even before local courts made a judgment.
Setting precedents can be particularly helpful in authoritarian and semi-authoritarian environments where mid-level or even high level bureaucrats are afraid to make decisions. The more authoritarian the environment, the higher up the totem pole we are likely to find a proclivity for inaction. By setting precedents, even in a legal system like Russia’s, which isn’t based on precedents, you give bureaucrats and judges the sense that a norm has been set. Thanks to the characteristically atrophied development of authoritarian systems, once you change something in such a system, it is unlikely to change again. Precedents can therefore be hard to change without directive from above, and the rule of law begins to work for entrepreneurs and other members of society.
Published Date: November 01, 2007