where the policy process is responsive to individual preferences. With a reasonably responsive political system, wide-scale evasion is a force that promotes the efficiency of policies. Evasion of "good" rules (such as those against violent crimes) will be met with tighter enforcement, whereas the political cost-benefit ratio favors the abandonment (or massive reform) of socially inefficient policies.

A further consideration in the relationship between rule evasion and reform is the extent to which evasion is visible or understood by policymakers. While individual acts of evasion tend to be hidden, the existence of widespread evasion often becomes common knowledge—as was the understanding of the informal economic system in the Soviet Union. Widespread evasion of rules, then, is likely to come to the attention of policymakers. There is thus a two-stage process through which wide-scale evasion contributes to better policies.⁸ First, widely evaded policies are likely to be disproportionally represented among those policies that come under reconsideration; second, political economy considerations are likely to favor socially desirable changes—either stricter enforcement of good rules or a change or liberalization of bad policies.

In the case of the Soviet Union, high levels of evasion also served to erode the communist regime's ideological underpinnings. The departure from Marxist-Leninist principles was so severe that it could not help but be noticed. It "had all gone rotten," as Shevardnadze said to an agreeing Gorbachev in 1984, and thanks to their privileged positions, they may have been among the last to know.⁹

The history of lawbreaking in the Soviet Union is not a promising legacy for a country interested in developing respect for its new rules. The credibility of reforms requires a belief not only that new policies will be sustained, but also that they will be enforced. The toleration of widespread evasion in the prereform period could lead to a general distrust in the government's commitment to any proposed rule change. Both the desire and the capability of the government to implement reform may be called into question.

Liberalization during the Russian transition has resulted in substantially loosened controls on private economic behavior. Forms of rule breaking that were prevalent in the prereform system, such as circumvention of price con-