Laws without teeth: An overview of the problems associated with corruption in Ukraine

This paper presents an overview of the current problems of corruption in Ukraine. It provides an example of specific corruption practices in the country and describes the general provisions related to the fight against corruption in Ukraine. The paper presents preliminary results of a pilot study of corruption in Ukraine to examine the impact of corruption on thefinancial markets. We support the proposition of Claessens, Djankov, andKlingebiel (2000) that the development of financial institutions and the improvement of financial market services in a nation can be viewed as indicators of the effectiveness of the economic, political, and legal reforms and the dedication of the government to these reforms. The paper ends with a discussion of the role of the international community in the fight against corruption in Ukraine.     

Ex Ante and Ex Post Allocation of Risk of Illegality: Regulatory Sources of Contractual Failure and Issues of Corrective and Distributive Justice

The pursuit of welfare objectives through contract law rules could be exemplified in the case of illegality and subsequent nullity sanctions attached to a contract that violates certain regulatory rules. The effectiveness of contractual allocation of risk of illegality (regulatory prohibitions), therefore, varies, depending on which contract theory prevails. Maintaining the validity of a prohibited and failed contract, and allocation of the relevant risks, is crucially dependent on whether we adhere to a welfare or rights-based theory of contract. In this paper we argue that impossibility of ex ante and ex post allocation of risk of illegality is the logical outcome of the adherence to a welfare theory of contract law, as maintaining even a minimum validity of the failed contract would result in some welfare losses. According to this approach unjust enrichment could not be rectified because it would diminish the optimal enforcement of welfare objectives. On the other hand, and despite such prohibition and illegality, a rights-based theory would resist opportunistic and rent-seeking behaviour and would ensure the validity of the contract and just allocation of losses and gains, which arise from the failure of the prohibited contract.