In the case of Russia, this breakdown is part of the burdensome legacy of the Soviet Union. We depend on the rule of law to provide the cornerstone for economic stability by protecting rights to property and by enforcing contracts. A breakdown in the rule of law leaves property vulnerable and makes contracts unenforceable, increasing the likelihood of individuals and businesses losing their assets to unscrupulous buyers and sellers. A less obvious, but equally important, effect of the rule of law is to enhance people's sense that the future is both safe and, to some extent, predictable. If the rule of law does not function, or functions poorly or sporadically, it is more difficult to assess the future, and the probability of instability increases.
Economic choices become more risky and people avoid or reduce economic transactions.
This is the situation in Russia today. It is the relative absence of the rule of law that abets corruption and encourages those with financial capital to make their investments and purchases in other countries. And as the money leaves Russia, so do the chances for building the economy. Yet, given the magnitude of risk, it is hard to blame individual Russians for being unwilling to start new enterprises or invest in Russia's future. Accepting the current level of risk can only be considered foolhardy.