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Reevaluating the Evidence for Anticommons in Transition Russia

Heller explains the underperformance and informality of retail in transition Russia as the consequence of botched privatization. He calls this outcome anticommons: too many people hold a veto, leading to underuse. Heller argues that the existence of too many overlapping property rights prevents entrepreneurs from opening brick-and-mortar shops in Russia. The ubiquity of kiosks, however, is better explained by other factors. Kiosks are smaller investments than storefronts, hence their ubiquity in a credit-constrained environment. In addition, taxes, corruption, organized crime, and favor-exchange networks all discourage scale. Retail is informal in Russia for the same reasons it is informal in other poor countries.