Despite the lengthy history of legal reform programs, we know very little as to why attempts at legal reform succeed or fail. What facilitates successful legal reform? Why do some laws remain unused on the statute books while others are actively employed and develop into key aspects of a state’s legal system? What is the relationship of economic growth to legal reform initiatives? This project contends that the success or failure of legal reform is dependent upon the level of demand for law and the type of institutional change which takes place. Specifically, I argue that a process of “legal layering” is at the core of successful legal reform initiatives. Legal layering results through the coherent grafting of new elements onto the existing legal system, preserving the predictability necessary to support efficient economic transactions while concomitantly responding to the regulatory needs of firms in an increasingly complex economy. Methodologically, this project utilizes a process tracing approaching building on data obtained from court archives, surveys of litigants, and extensive interviews with policymakers, judges, and attorneys in the transition economies of China, Russia, and Kazakhstan.