Trade and Harmonization : If Your Institutions are Good, Does it Matter if They are Different ?

• Tác giả: Roumeen Islam
• Ngôn ngữ: eng
• Ký hiệu phân loại: 330 Economics
• Thông tin xuất bản: World Bank, Washington, DC, 2012
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 307188
• Chủ đề: 1. AGRICULTURE; 2. AUTHORITY; 3. BILATERAL TRADE; 4. CIVIL LAW; 5. CIVIL LAW SYSTEMS

Tóm tắt

Good institutional quality (function) and similar institutional design (form) can promote international trade by reducing transactions costs. The authors evaluate the relative importance of function versus form in a gravity model, using an indicator of different legal systems as a proxy for differences in form, together with indicators of overall institutional quality. They find that good institutions promote trade much more than similar legal systems and have much more explanatory power. This effect is economically large-up to 10 times the effect of different legal systems. Moreover, better infrastructure matters as much as good institutions.