question was asked within a regular cycle of the World Bank Enterprise Surveys (WBES, described in more detail in the next subsection). The form and phrasing of the question were therefore framed to fit the approach of the WBES, an important element of which is asking busy top managers or owners of firms a large set of questions on a collection of heterogenous topics. This means that questions must be terse and understood in a natural way by businesspeople, leading to budget constraints on words and concepts embodied in questions.<sup>27</sup> Question design begins with the choice to use 'agreements', and not 'contracts', since contracts are only one type of agreement. Then one must decide whether to ask firms about their agreements with transactional partners in general, or to ask about one specific partner, since the transactioncost and contract-theory literatures suggest that relationships may differ across different partners. Focusing on a specific partner is conceptually and practically complicated. First, the question must suggest to respondents which specific partner they should focus upon.<sup>28</sup> A possible solution is asking respondents to choose a partner when answering questions, as when Mike and Kiss (2019) suggested choosing a 'typical' supplier and buyer.<sup>29</sup> But this solution invites selection bias: Mike and Kiss (2019) found that respondents equated typical business partners with those having longstanding ties, implying that the resultant data set characterized relationships in which

> 27 Terseness in wording has benefits for the whole survey. Longer questions cause problems because they place a greater cognitive burden on respondents (Yan and Tourangeau 2008). This affects respondent comprehension (Holbrook et al. 2006), adding complexity without altering the distribution of responses (Shaeffer et al. 2005), leading to respondent satisficing and decreased measurement reliability (Alwin and Beattie 2016). It also leads to a potential bias as respondents with more cognitive resources will answer complex questions differently than those with fewer (Oberski 2016). Contrast our terse questions with those of Hendley and Murrell (2003), on which they are based, but which faced fewer constraints on question length as their survey covered only one country, did not use a representative sample, and could fully focus on issues of transactional governance and the law.

> 28 This approach originated in McMillan and Woodruff (1999) who asked respondents to reflect on their firm's first and most recently added customers and suppliers. However, McMillan and Woodruff (1999) were interested in exploring the determinants of trade credit, for which a focus on highly specific transactions is necessary. Note that a case-study approach can be applied as well. For example, Mahapatra et al. (2010), chose the organizations whose interactions they studied in great detail. However, this approach would be impossible to undertake on the scale required for the current investigation, which is economy-wide in multiple countries.

> 29 Notably, the questions can be made even more granular by asking about a specific transaction, though the strategies that firms employ to ensure fulfillment of agreements in a transaction likely transcends the particular transaction at hand (e.g., Parmigiani and Mitchell 2010), diminishing the value of such granularity.

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