Posted on April 26, 2012 by Ned Shell
Barter, commonly associated with ancient times and micro-level transactions, summons to the mind images of rustic trade routes spanning across Asia, as merchants from the East and traders from the West journey to exchange exotic spices for commodities and metals. What many fail to realize, however, is that barter is far from a phenomenon isolated to the history books. Rather than dying out with the formalization of the world economy and political entities, barter has transformed into a tool practiced on a macro level between large, established companies. Despite being discouraged by entities such as the World Trade Organization, barter has been institutionalized as a practiced form of trade over the past few decades.[i] While the causes and effects of such trade will be examined, the most important implication of barter is the way it not only reflects but transforms business practice and the institutional climate of countries and industries. Russia (especially in the context of Soviet and post-Soviet comparisons) serves as an example of how pre-existing structural problems such as a lack of rule of law, trusted government, and reliable monetary policy, result in dangerous (though sometimes appropriate) cycles of sustained movement towards a shadow economy. It’s a movement that rejects comparative advantage and other accepted doctrines for how modern economies should function in favor of modified rules of conduct that rely on non-economic variables for guidance.
Barter is not alone in the category of condemned trade practices. Countertrade, the exchanging of goods or services that are paid for in whole or in part by reciprocal purchases of products, is a popular yet oft-criticized policy tool among developing nations. It is used as an umbrella term and includes barter as well as counterpurchase, offset, buyback, swap, and others. Its uses vary: sometimes it is employed to alleviate the balance of payment deficit, while at other moments to promote domestic industries by mandating counterpurchases.[ii] In either case, the transaction is typically thought to be on a transnational level and have purely economic causes and effects. Barter, though cited as a sub-category of countertrade, is in fact completely different in terms of both the context of its execution and its consequences. The reasons behind mandating a traditional form of countertrade are economic as are its intended and unintended consequences. However, barter in and among developing countries is almost always motivated by the social context and institutional climate rather than purely economic reasons, and its outcomes can be distinguished between short-term economic response and long-term structural effects. While many examples of large-scale, corporate barter can be seen throughout history and across regions, Soviet and post-Soviet Russia provides an especially interesting frame for examination due to the region’s policies. Before examining barter in this context, however, it is important to understand the other forms of countertrade in order to have a basis for comparison.
Counterpurchase, the most typical form of countertrade, occurs when “a foreign supplier undertakes to purchase goods and services from the purchasing country [often a developing market] as a condition of securing the order.”[iii] Causes are strictly economic and include those previously stated (alleviating the balance of payment deficit and stimulating certain domestic industries). Consequences are also economic in scope. Often, the counterpurchase good is something the importing firm is completely unfamiliar with.[iv] For example, McDonnell Douglas Corp (now part of Boeing), as part of a deal with Yugoslavia, had to buy canned ham as part of the agreement in which it sold the country a number of DC 9 Passenger Jets.[v] Though this gave the firm a competitive advantage over others who were not willing to accept such a provision, it meant it had to dump the random good (ham) at a steep discount. It also meant that in anticipation of the loss the company would take on selling the canned meat, the price for the jets demanded by McDonnell was higher than it would normally have been in a non-countertrade agreement. This highlights the very economic consequences of most forms of countertrade: price distortions and a secondary market for not only the random goods firms like McDonnell Douglas Corp are forced to buy, but also a market for counterpurchase “credits” (if a buyingcountry firm does not want to sell anything back into the emerging market country, it can sell the right to export without normal counterpurchase strings attached).[vi] An additional effect can be the strengthening of certain domestic industries. For example, Yugoslavia could theoretically have wanted to bolster its canned ham industry.
Causes of and Reasons Behind Barter
When looking at the causes of barter, history – especially Russian history – tells a different story than what is seen in other traditional forms of countertrade. Whereas government plays a very active role in citing economic concerns when involving itself in counterpurchase agreements, barter lies on the opposite side of the spectrum. Institutional, non-economic and quasi-economic forces are more often at work in causing both domestic and international barter trade agreements.[vii] An example of the way a quasi-economic cause comes into play on a transnational scale is when barter is employed if a country is deemed unfit for credit and does not have enough foreign reserves/liquidity to complete a major transaction (this was true when Russia pegged the ruble to the dollar, making trade difficult between nations). As a result of a poor credit rating (likely due to country mismanagement, obvious corruption, etc.) and subsequent untrustworthiness, large-scale agreements cannot involve money exchanges. Sometimes, there is simply not enough money to go around. In the 1998 Russian currency crisis (partially a reaction to the Asian financial crisis of a year earlier), the Central Bank of Russia was forced to deplete its foreign currency reserves to prop up the failing ruble, which further eroded investor confidence and caused additional undermining. The resulting liquidity shock meant many businesses had to partake in non-monetary trade; barter was an obvious candidate to facilitate this substitution. Ironically, a government working so hard to orient itself with the global economy ended up pushing itself back towards the isolation that characterized Soviet times.[viii]
Money exchanges are further complicated when the trading currency (in this case, the ruble) is not trusted as a means of exchange due to unpredictable or unwise government monetary policy. For example, in 1972, PepsiCo and Stolichnaya vodka formed a barter agreement in which Pepsi syrup and production rights were traded for handles and marketing rights of Stoli.[ix] Because the ruble was being artificially pegged to the dollar, it would have been impossible for the two companies to use currency as a means of exchange. Trading with respective currencies was simply not an option due to an illegitimate government monetary policy.
Such a combination of economic variables (inability to accumulate foreign reserves) and non-economic ones (untrustworthiness) can also be seen when a country is attempting to disguise prices of goods (either to avoid competitor retaliation or because they are breaking a price agreement).[x] While there are clear financial incentives to engage in barter in this example, the institutional context implies complicated forces at work that mandate the need to be discrete in the first place. For example, some OPEC countries have been accused of selling oil directly for goods instead of currency, allowing them to inflate prices in accounting books that would conform to OPEC regulation. Finally, continuing with the theme of trust, a final quasi-economic reason for engaging in barter is what two authors call “superior credit enforcement.”[xi] If a buying company does not trust a supplier company to use advanced payment towards the production of the goods it has promised to exchange later, the buying firm may exchange goods instead even if it has adequate currency resources. Barter makes it easier to earmark how the payment is being used (money, which is fungible, would be harder to track). They could even trade items that only would make sense in producing the end product to be traded back to the buying company. Consider a theoretical example in which Company A is purchasing automobiles from Company B which is, for whatever reason, untrustworthy. Instead of paying for the cars in currency, Company A may pay with car parts and factory inputs that would be hard to use misuse.[xii]
The idea of “trust” (or more exactly, distrust) is a common theme within the quasi-economic reasons to engage in barter above. Distrust is even more central when discussing non-economic causes. The government-business relationship environment is key here. In the Soviet Union, though government was often corrupt and took a dominant role in the affairs of the country’s businesses, its actions were more predictable than in the post-Soviet transition era.[xiii] During the Soviet era, state control over country assets, public ownership, and economic planning characterized the economic climate. Repeated “reforms” made it clear to economic actors what accepted business practices would be, and what relationship with the state would be necessary to maintain (at least on paper).[xiv] After 1991, though, the Russian government pushed harder for a market-oriented economy and attempted to curtail some corrupt practices that had defined business for decades. The result was an exodus of firms into the shadow economy. A European Bank for Reconstruction and Development study reflected the result of the unpredictable government business policy environment when it reported that barter as a percent of Russian industrial sales grew from 20% to 50% between the beginning of the decade and 1998.[xv] Meanwhile, FSU states saw a similar movement towards barter going into the post-Soviet era (see table below). As noted in a comprehensive survey conducted by the EBRD in 1999, it was discovered that “state-owned firms are less likely to engage in barter in CEE countries…” as well as that “difficulties with tax payments are strongly associated with barter.”[xvi] The study included 20 countries and at least 125 surveyed firms in each.
As tax practice was reformed, businesses felt the need to engage in more barter since that would permit them to underreport the true value of transactions or even hide transactions altogether from the government’s eye (post-Soviet tax law was seen as excessively harsh to many).[xvii] Low remuneration for civil servants as well as ambiguous tax reform paved the way for evasion incentives. An associated legal culture that tolerated breaking the law both in the public and private spheres was an important non-economic cause of barter’s advancement. Such a culture was not isolated to the scales of justice, as an untrustworthy banking sector caused companies to be wary of not only relying on the courts to enforce contracts, but also of entrusting their capital to banks that may default or have unsustainable lending practices. Firms had to distance themselves from both realms and in some cases hold wealth not in money but in something directly consumable (and securable) that could be traded on short notice.[xviii]
The concept of rule of law is critical when examining the permissible factors in an economy for engaging in barter. Legal theorist A.V. Dicey was the first to define the concept as one in which “(1) no one can be made to suffer punishment or to pay damages for any conduct not definitely forbidden by law; (2) everyone’s legal rights and liabilities are determined by the ordinary courts of the realm…”[xix] These have been interpreted to mean that legal rules must be “publicly known, consistently enforced, and applied fairly and even-handedly by judges or other decision makers to particular cases. In other words, law should be ‘general, knowable, and performable.”[xx] Legal philosopher Lon Fuller amended Dicey’s definition of ‘rule of law’ by adding a moral dimension to it. He stressed that abiding by the rule of the law meant abiding by its spirit – not just the letter.[xxi] When these criteria are breached, engaging in barter becomes not just more advantageous to a company, but also more necessary. In some circumstances where rule of law is weak, like in Russia, one cannot always blame actors for entering the shadow economy. For example, if tax law is publicly one thing but in practice and enforcement another, a firm could be at a disadvantage if it is paying a premium that its competitor is either exempt from or uses a loophole to avoid. Furthermore, if business practice law is either unfair the way it was drafted or in the way it is applied, companies will be prone to bypass it through a number of paths including non-monetary transactions.
Short-term Effects and Consequences of Modern Barter
While many of the reasons to engage in barter paint a picture of a business environment in which trust is key and non or quasi-economic factors dominant, when examining the process of drawing up barter agreements, short-term economic consequences become very noticeable. One example of the complication that arises in the execution of barter deals is seen in time frame and incentive. Whereas normal trade agreements often include instant transaction of goods and money, parties to a barter deal may fulfill their obligations over time. In the context of post-Soviet Russia, external enforcement mechanisms (like a trusted legal system and government) were absent, meaning self-enforcing rules had to exist. The consequences of self-enforcing rules are by nature economic in the short term.[xxii] Contracts that include self-enforcing rules are much more restricted in terms of what they can accomplish – complex trade agreements that involve multiple transactions and fragmented paybacks/credit are often impossible without a trusted court system to insist on adherence. Instead, firms must construct agreements in which a breach of contract would be so blatantly obvious that no excuses could be made. Those types of agreements don’t allow for the flexibility and creativity in business plans that are more common in the West.[xxiii]
Sometimes, economic concerns exist but are derivatives of the more institutional framework for the process of coming to an arrangement. For example, information asymmetries often arise due to the informal legal nature of barter trade and inability to ensure that the goods one is receiving are of acceptable quality (a pound of beef can be spoiled; a dollar bill holds the same value no matter how beat up it is). Though this problem is less of an issue with basic goods (commodities are easier to have standard quality benchmarks for than more complicated products), it is nevertheless an issue in almost any barter transaction.[xxiv]
A very noticeable short-term economic cost is the greater-than-normal search expenses for locating appropriate goods. Searching for and maintaining personalized exchange is necessary due to the business climate that incentivizes (often corrupt) collusion; it is also more expensive than typical exploration costs that often include transparent bidding processes.[xxv] The resulting collusion can be leveraged in a number of ways – to hurt competition, to hurt one another, or to trick the government. In many cases, the true market value of the outputs is concealed. The incentive to form corrupt relationships with trading partners is a cyclical phenomenon. To stay competitive, companies must keep ahead of their rivals by forming more and more exclusive relationships, locking one another out of potential deals and further impeding on open and free trade. The consequence is a shadow economy in which market prices are distorted and the idea of comparative advantage among firms irrelevant since the question of which company can make the best product for the cheapest price is secondary to whether or not the company has a pre-existing relationship which allows for a deal to even be on the table.[xxvi] The role of networks will be discussed later, but is a very serious consequence that can cause extreme economic distress in emerging markets even after stability has returned to the market.
Within these networks one sees another very conspicuous short-term economic response to barter trade: the proliferation of a new type of economic actor, the middleman.[xxvii]Since barter agreements are not as swift and uncomplicated as equivalent monetary transactions, there is often a need for an entity to broker the trade. Though this concept of a middleman exists in many types of trade agreements, it holds a special position when referring to barter transactions, as they are also often needed to play a niche role in handling trade arrangements in which one party is paid partially with goods it cannot use as inputs into its own production processes. A middleman more equipped to handle such foreign items may buy them at a discount and sell them elsewhere (think back to the McDonnell Douglas Corp example).
The case of Russia provides an example of the short-term economic consequences of engaging in barter trade. In a 1997 World Bank-Russian Academy of Sciences survey of 1,640 Russian managers, it was discovered that over 50% of output in their firms were sold in exchange for barter (see Table 1 below – from Hendley et al.).[xxviii]
As Russia attempted to become a more capitalist-oriented economy after the USSR’s collapse, the chart above shows how the shadow economy grew. In response, the Central Bank of Russia’s direct control over liquidity was weakened, as currency exchange became less prevalent. In addition, though the ability to evade taxes was cited as a reason to engage in barter, it is also a consequence. As firms find loopholes to underreport returns, a cycle is initiated in which the Russian government sees a decline in tax revenue and responds by increasing corporate tax rates. That increase causes even more firms to engage in shadow activity and use money surrogates instead of the ruble. That, on top of a regulatory environment in which tax exemptions are unstandardized and preferential, means a continually deteriorating legal-business culture. Standardization and regulation is necessary. As can be seen from the table, Moscow had a smaller increase in barter engagement. The proximity of firms in that region to regulatory bodies was obviously greater than those in, for example, Barnaul, so this difference while not surprising is telling.
Such a move away from monetary transaction meant severe and immediate repercussions for not just firms but also firm employees. With fewer and fewer rubles being used, the currency’s circulation diminished and people were often paid not with money but with goods they could not use or re-sell for an adequate price. Wage delays could reach months or even years. Provincial governments had to find ways to barter off what they collected in tax from local producers (fish, cars, etc.) for necessitates like medicines and electricity. This was especially severe during the 1998 Russian currency crisis.[xxx]
As a result of the proliferation of a shadow economy focused on barter transaction, there are significant direct costs that arise. Investment in resources to successfully execute the logistics of a barter transaction is substantially greater than what is needed to execute a currency-based agreement. For example, stocking goods, transporting them and providing management to oversee this atypical form of trade all require substantial resources. These are short-term costs but can be substantial. Solving what some call the “double coincidence of wants” (finding a company that wants the goods you have to offer) means large private costs.[xxxi] Indeed, a solution is often impossible to find. In one particular case, Boris Yeltsin arrived in Novgorod to calm fears of the 1998 Russian currency crisis. He arrived not in the Presidential helicopter but in a commissioned one. It turned out his usual ride had to undergo maintenance, and even though all repairs had been made, the Russian government was not able to come up with enough rubles to pay for it. Instead, they offered to barter: trainloads of coal for the fixed helicopter. There was no coincidence of wants, though, and no deal was struck.[xxxii]
Long-term Institutional Effects of Modern Barter
Though the short-term economic consequences of barter are significant and often unique from other forms of countertrade, the truly transforming implications of barter trade can be found in long-term business function and institutional effects.[xxxiii] A few macro effects include the further weakening of the rule of law, generalized trust, and country institutions. Though all of those items are necessarily also causes of engagement in barter, as barter is consistently used, the severity of damage done further increases. In particular is the damage done to the moral spirit of law enforcement (as referenced by legal philosopher Lon Fuller). As the courts become more ineffective and inconsistent at applying the law, businesses become more effective at gaming it. Generalized trust, the trust people and firms hold in strangers, is necessary for a healthy business environment. If one cannot trust a trading partner to fulfill his side of the deal, the contract will never be drafted. The presumption of good will is only possible with a court system and government that will punish those who take advantage when others assume the law will be followed.[xxxiv]Although the concept of generalized trust is an important factor in many economic and social phenomena, its application to barter trade is important to identify.
Like rule of law and generalized trust, the state of certain government institutions while a cause of barter trade is also an effect. Though the legal system was just discussed, the centralized banking system – in Russia’s case, the Central Bank of Russia – is also an important institution that is weakened by engaging in barter.[xxxv] By engaging in barter, firms decrease the Bank’s ability to directly control liquidity in the economy, making its monetary policy decisions more irrelevant, as ruble exchange rates mean less to a firm that is primarily using non-monetary methods to form agreements. Other administrative branches of the Russian government, like the Ministry of Economic Development (tasked with “analysis and forecasting of socioeconomic and business development” among other things) and the Ministry of Internal Affairs (which houses the Main Office for Combating Economic and Tax Crimes), will face less flexibility and be unable to fulfill their duties as a result of this as well.[xxxvi][xxxvii]
The role of government in trade is an interesting topic to explore when comparing forms of countertrade. While counterpurchase is often explicitly used by governments to support a centrally-planned economy (it can help bolster industries the leadership is trying to gain an advantage in), barter is often detrimental to government policy and rule. Furthermore, though it will not be explored here, the role of local government is important as well. Oftentimes, firms have connections to regional policymakers that aid their business in a way that breaches rule of law and trust.
On a more micro level, barter distorts firm behavior. This was especially apparent in Russia and Ukraine.[xxxviii] When companies use non-monetary methods to trade with one another, normal business-economic incentives, such as devoting resources and energy to improving products to gain a competitive advantage or committing oneself to attracting top talent, are lost to other incentives, such as maintaining relationships with trading partners. Instead of looking to enter new markets and expand, many will seek to strengthen their pre-existing agreements in order to stay afloat. Indeed, authors Guriev and Ickes did a statistical analysis of barter arrangements and found that the higher the degree of market concentration, the greater the level of barter in sales. In other words, market entrenchment is a self-fulfilling prophecy (see graph below: from Guriev and Ickes page 17 – Share of barter in sales as a function of number of sellers in the industry).
It has been argued that Russian firms, more so than those in other countries, tend to experience higher market concentration than their peers. Data has also shown that a high level of competitiveness leads to the dissolution of barter as an accepted trade practice. It would make sense, therefore, that Russia – a country in which competition was not a hallmark of the Soviet and post-Soviet economy – would be a nation experiencing much of this non-monetary trade.[xxxix]
Market entrenchment means reinforcing relationships with trading partners. This causes – both in the short term but especially in the long-term – networks to form between and among businesses. Successful firms have multiple, established partners that in turn connect them to other companies. Russia in particular had dense networks, meaning some actors who were less proactive about making contacts were excluded and doomed to fight an uphill business battle. The denser the network is, the less adherence there is to comparative advantage, since actors are relying on previously-established relationships to make business decisions rather than basing decisions on product superiority and value.[xl] Some go so far as to describe barter as a “network phenomenon” itself. A significant effect of this is its multilateral nature, with deals involving goods that trade multiple hands in a single contract, even if the transactions are not simultaneous. This implication of barter – the multilateral aspect of agreements – alters the fundamental way in which typical businesses make deals. Rather than being a deviant byproduct of the network phenomenon, it is actually a natural response to the problem of the double coincidence of wants. The more contacts a company has, the more likely it is that a firm is willing to receive particular goods another firm produces.[xli]
The role of third parties is an important implication of barter. Although the rise of middlemen has been discussed, third party here is used in the context of the trading partners themselves. Though an actor often has to exist to facilitate a trade, a trade as stated often involves more than one buying and selling party, and those parties may contribute to the composition of what and how much is exchanged. In economic terms, this means that barter gives rise to externalities. As time passes, these externalities may diminish, but only because the involved companies alter their production and organization to match the new pattern of trade. In reality, there may be a hidden opportunity cost in terms of a path given up. This in turn causes a phenomenon called lock-in, which refers to the fact that companies may habitualize by choosing inferior technologies or production processes because of network constraints.
An example of how a deal with multiple parties and networks works can be seen in Chernogorneft’s deal with Kurgan oil and gas. Instead of paying for oil and gas equipment directly, Chernogorneft made an agreement with Sidanko (also an oil company) to become a payee. However, Sidanko shifted the problem to E-Frass which supplied diesel fuel to an automobile plant (called GAZ). GAZ used cars to pay the local telephone station and an electric company, Kurganenergo, which in turn provided services to Kurgan.[xlii] In a full-monetized economy, this intricate network would never have needed to form since bilateral contracts could have been made based on money exchange. However, due to a lack of liquidity, trust in the country’s institutions, and strength of pre-existing relationships, multilateral barter was opted for instead. It is interesting to note that an equivalent framework would probably be impossible, illegal, or prohibitively expensive in the developed world. As the chart on page 6 shows, though, there are many permissible factors that allowed it to happen in Russia and FSU states.
Eventually, continued use of barter can lead to the adoption of commodity currencies.[xliii]These are basic goods that are accepted in lieu of a state-sanctioned currency like the ruble, and are often traded without the intention of using them for direct consumption. Rather, they may exchange hands often and not be incorporated into a production process. For example, a leather supplier could accept shoes as payment. Those shoes could then be used to pay a supplier of animal hides. Commodity currencies also reinforce the formation of networks since they can only be exchanged among networks of related producers.
The long-term institutional and business environment consequences of barter are not necessarily bad. Although they may not be ideal, there are relatively few environments in the world today where trade is undertaken in an “ideal” fashion. Many countries face unfortunate macroeconomic circumstances, while others an ill-functioning banking system. Barter in these contexts is hardly foolish.[xliv] Furthermore, as barter becomes more entrenched in an economy, the trade inefficiencies decrease as actors become more familiar with one another and align their processes to meet each other’s needs at a lower cost. Although it may not be efficiency in the pure sense, it is this adapted efficiency that over time may cause a further weakening of certain institutions while strengthening the facilitation of barter trade among firms.[xlv] The fact remains, however, that restraining monetary interaction may mean that in future times of economic prosperity and relaxed currency restriction, firms will continue to barter in their traditional networks rather than shift to adapt to a more flexible, monetized economy.
Barter in a Global Context
When one thinks of the word “barter,” images come to mind of ancient Babylonian times when sprawling markets in Central Asia were fueled by trading commodity for commodity, or staple product for artisan good. Micro-level, hand-to-hand trade was the most prevalent means of exchange and on the surface bared little resemblance to what is seen in today’s context of shadow economies and large-scale corporate deals. However, the two worlds do share interesting characteristics. Foremost among them are the institutional and social arrangements that cause barter and result from it. A lack of generalized trust meant relying on pre-existing relationships to engage in trade. Giving a bulk of goods to a sailor who promised to return in 6 months with something else at fair value meant trusting him. Today, though modern technology allows for tracking shipments, there is still a necessary level of faith required, as purposeful price distortion or default are possible means of taking advantage of a trading partner. Furthermore, networks operate in similar ways today as they always have: an entrenchment of trade contacts means business decisions are often based on who one knows will complete a transaction fairly and appropriately, rather than who can offer the most superior product at the best value. The only difference is that yesterday’s individual merchants are today’s corporate buying and selling arms.
While structural and institutional weaknesses often cause barter to become a more practiced form of trade, the more it is used, the more these weaknesses deepen. If barter really did result in a self-perpetuating cycle of delegitimized trade and shadow economic dealings, however, Russia and similarly positioned countries at the turn of the 21st century would certainly have been a lot different than what exists today. One might have expected to see a world in which corporations traded only with clients they knew and trusted to deliver on goods that were unable to be guaranteed by a reliable legal and government complex. In fact, what is seen is a constant struggle – tides that pull barter in and out of widely practiced use. One external factor that determines its use is the state of the global economy. The current economic crisis has witnessed a large retreat to barter, even among U.S. firms. Commodity-for-commodity trade has become a popular option. Last year, Pakistani President Asif Ali Zardari met with Sri Lanka’s President, Mahinda Rajapakse, to discuss trading cement for tea.[xlvi]
Macroeconomy aside, however, there are still other forces that determine the fate of barter. Instead of specific initiatives to illegalize barter or condemn it to the past, efforts to strengthen institutions necessary for a stable country and social structure are associated with a decline in barter trade. As governments and legal systems are overhauled through reform, as consequences for unfair business practice are enforced on a consistent basis, and as international actors standardize trade norms, the need for barter diminishes. During the Soviet era and 1990s, the informal orientation of Russian institutions meant barter became a widely practiced form of trade. Though stabilization has occurred since then, the long-term effects discussed in this paper can be seen today in the way many Russian firms select business partners and the effectiveness of the Russian government in trying to control sectors of the economy.
[i] Robert Howse, “Beyond the countertrade taboo,” University of Toronto Law Journal 60 (2010): 289-314.
[ii] John Grabow, “Negotiating and Drafting Contracts in International Barter and Countertrade Transactions,” North Carolina Journal of International Law and Commercial Regulation 9 (1983): 255-271
[iii] London Countertrade Roundetable. What are the Various Forms of Countertrade?(2007).
[iv] Matt Schaffer, “Countertrade as an Export Strategy,” Journal of Business Strategy 11 (1990): 33-38.
[v] Gunter Endres, McDonnell Douglas DC-10, (London: Airlife Publications, 1998).
[vi] “Decades of Deals keep Mr. ‘OPEC’ Thriving,” Los Angeles Times, May 17, 1987, http://articles.latimes.com/1987-05-17/business/fi-810_1_oil-market.
[vii] Dalia Marin and Monika Schnitzer, “The Economic Institution of International Barter,” CEPR Discussion Paper no. 1658, (London: Centre for Economic Policy Research, 1997).
[viii] Homi Kharas, Brian Pinto and Sergei Ulatov, Brookings Papers on Economic Activity, (2001).
[ix] PepsiCo Company History, (1972).
[x] Sergei Guriev and Barry Ickes, Barter in Russia, (2000), 148.
[xi] Marin & Schnitzer, “The Economic Institution of International Barter.”
[xii] Kathryn Hendley, Barry Ickes, Randi Ryterman, Remonetizing the Russian Economy,(1998).
[xiii] Rawi Abdelal, National Purpose in the World Economy, (2001).
[xiv] Stephen Whitefield, Industrial power and the Soviet state (Pennsylvania State University: Oxford University Press, 1979).
[xv] “Transition Report 1998: Financial Sector in Transition,” (European Bank for Reconstruction and Development).
[xvi] Wendy Carlin, Steven Fries, March Schaffer and Paul Seabright, Barter and non-monetary Transactions in Transition Economies (2000), 251.
[xvii] Simon Commander and Christian Mummsen, Non-monetary transactions in Russia,(2000).
[xviii] Alena Ledeneva and Paul Seabright, Barter in post-Soviet Socities (2000), 104-108.
[xix] A.V. Dicey, Introduction to the Study of the Law of the Constitution, (1885).
[xx] Eric Orts, “The Rule of Law in China,” Vanderbilt Journal of Transnational Law (2001).
[xxi] Lon Fuller, Morality of Law (1964).
[xxii] Canice Prendergast and Lars Stole, Barter Relationships, (2000), 35.
[xxiii] Bernard Black, Reiner Kraakman, Jonathan Hay, Corporate Law from Scratch,(1994), 17-24.
[xxiv] D. Marin and M. Schnitzer, “The Economic Institution of International Barter’” CEPR Discussion Paper no. 1658 (London, Centre for Economic Policy Research, 1997).
[xxv] Dalia Marin, Daniel Kaufmann and Bogdan Gorochowskij, Barter in Transition Economies, (2000), 210-213.
[xxvi] Robert Jackson, “Quasi-States, Dual Regimes, and Neoclassical Theory: International Jurisprudence and the Third World,” International Organization (1987), 519-549.
[xxvii] Canice Prendergast and Lars Stole, Barter Relationships, (2000), 35.
[xxviii] Kathryn Hendley, Barry Ickes, Randi Ryterman, Remonetizing the Russian Economy, (1998).
[xxix] “Transition Report: Financial Sector in Transition,” (European Bank for Reconstruction and Development, 1998), 57
[xxx] David Woodruff, Money Unmade: Barter and the Fate of Russian Capitalism,(Cornell University Press, 1999).
[xxxi] Alena Ledeneva and Paul Seabright, Barter in post-Soviet Socities, (2000), 104-108.
[xxxii] David Woodruff, Money Unmade: Barter and the Fate of Russian Capitalism,(Cornell University Press, 1999).
[xxxiii] Caroline Humphrey, An Anthropological View of Barter in Russia, (2000), 71.
[xxxiv] Eric Uslaner,Generalized Trust and Why It Matters for Business in the Age of Globalization.
[xxxv] Kathryn Hendley, Barry Ickes, Randi Ryterman, Remonetizing the Russian Economy, (1998).
[xxxvi] http://www.economy.gov.ru/wps/wcm/connect/economylib4/en/home/about
[xxxvii] Hugh Chisholm, Encyclopedia Britannica, 11th ed., (Cambridge University Press, 1911).
[xxxviii] Wendy Carlin, Steven Fries, March Schaffer and Paul Seabright, Barter and non-monetary Transactions in Transition Economies, (2000), 247-251.
[xxxix] Sergei Guriev and Barry Ickes, Barter in Russia, (2000), 16-17, 21-22.
[xl] Canice Prendergast and Lars Stole, Barter Relationships, (2000), 55.
[xli] Alena Ledeneva and Paul Seabright, Barter in post-Soviet Societies, (2000), 101-102.
[xlii] Ledeneva and Seabright, Barter in post-Soviet Societies, 102.
[xliii] Ibid., 94.
[xliv] Ibid., 110-111.
[xlv] Ibid., 110-111.
[xlvi] “Pakistan’s president seeks barter trade with Sri Lanka,” Dawn.com, November 29, 2010, http://dawn.com/2010/11/29/pakistans-president-seeks-barter-trade-with-sri-lanka/.
References
Alena Ledeneva and Paul Seabright, Barter in post-Soviet Socities,(2000).A.V. Dicey,Introduction to the Study of the Law of the Constitution, (1885).
Bernard Black, Reiner Kraakman, Jonathan Hay, Corporate Law from Scratch, (1994).
Canice Prendergast and Lars Stole, Barter Relationships, (2000).
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About Ned Shell
Ned Shell is a graduating senior majoring in International Relations and minoring in Consumer Psychology. While at Penn he served as President of the Epsilon Chapter of Sigma Iota Rho, the International Relations honors society. In addition, he served as Editor-in-Chief of the Penn Political Review (PPR). He will join Bain & Company's New York City office in the fall of 2012 as an Associate Consultant. Given his meaningful experiences working for a variety of NGOs and microfinance banks in Latin America, Ned hopes to soon re-enter the International Development sector.
