typically used. Once the data exist, the possibility of new discoveries arises, one that simply is not possible from the existing studies that focus on one mechanism or one particular economic environment. For example, pure bilateralism (i.e., reliance on trust and mutual interest to enforce agreements) is the most common governance structure that we observe and all governance structures use bilateral enforcement mechanisms. Thus, we find no evidence for the presence of pure arm's length transactions, with firms relying on impersonal mechanisms and formal institutions to support their transactions. A corollary is that bilateralism and formal institutions are never substitutes, and for many firms, they are complements. Additionally, while much attention has been paid in the literature to various unpaid, third-party, mechanisms of supporting agreements, such as networks, social clubs, and culturally defined groups, our economy-wide, cross-country data suggest they are of minor importance. In fact, we conclude that networks are no more important in transactional governance than is the help of government officials, a group whose role in supporting inter-firm transactions has invariably been ignored in the literature.<sup>6</sup> The purpose of collecting new data is not only to examine existing hypotheses but also to generate new facts that surprise and therefore stimulate new avenues for research. Here we mention two. First, the data suggest that inter-regional variation in the use of legal institutions is more important than cross-country variation. In the countries analyzed, this is unexpected because institutional rules relevant to transactions are set at the national level, and because standard data sources suggest much variation in the strength of legal institutions across our sample of countries. Secondly, but in the same vein, we find that the use of legal mechanisms in Bolivia is comparatively greater than would be predicted using the standard country-level indicators of the strength of legal institutions. The fact that the respondents in the poorest country in our six, Bolivia, rate the use and effectiveness of legal institutions as greater than that in the richest country, Uruguay, is surely a puzzle in need of further investigation.

Section II details the process of data collection, discussing the logic of our new survey question and examining its validity. Section III introduces LCA, describing the data-generating process underlying LCA and introducing the criteria that we use to choose a particular model specification. Section IV considers the characteristics of each of the four estimated governance structures, showing how their features resonate with ideas in the transaction-cost and contracttheory literature. Section V presents illustrative examples of the use of the information generated by our method, providing descriptive statistics on the variation in the use of governance structures across subsets of firms. Section VI concludes by considering direct extensions of this research. We pose questions that our findings directly kindle and detail how others can use the data we have generated.

> <sup>6</sup> Hendley et al. (2000) and Hendley and Murrell (2003) are exceptions, but these papers are focused on ex-socialist countries.

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