ABSTRACT
This chapter focuses on a specific example of commercial law reform in each of two transition countries, Hungary and Russia. It illustrates the process and requirements for developing rule of law in transition economies. In Hungary the focus is on bankruptcy law, which has taken center stage as a means to change enterprise behavior in that country since the adoption of the transition world’s most modern and aggressive bankruptcy law in late 1991. Hungary’s experience with bankruptcy reform since 1992 is unique among the transitional economies. Hungary adopted a tough new bankruptcy law in late 1991 that took effect January 1, 1992. In Hungary the principal creditors are government agencies, trade creditors, and banks, each holding roughly equal proportions of the debt of the large problem enterprises. Russia presents a somewhat different case from Hungary. Its experience with state socialism was twice as long and infinitely more intense.
