[Vortrag Regensburg] Richard Frensch: Trade Patterns and the Rule of Law

16.06.2015 (13:30 - 15:00)

Am Dienstag, den 16. Juni 2015 veranstaltet das IOS einen Vortrag mit Richard Frensch (IOS Regensburg) zum Thema "Trade Patterns and the Rule of Law". Veranstaltungsort ist das IOS, Landshuter Str. 4, Raum 109 (1.Stock rechts).


We examine the effect of patters of international trade on the quality of legal institutions (i.e., Rule of Law). First, we generalize previous results – that countries exporting more institutionally intensive goods exhibit a better Rule of Law – to alternative measures of institutional intensity, based on an extensive industry level global dataset. Second, using differentiation of trade flows on the use side, we go beyond previous results in identifying the sector in the economy responsible for the positive impact of institutionally intensive specialization on the Rule of Law: fragmented processes of production are particularly prone to hold-up problems connected with incomplete contracts, and are thus pre-determined to benefit most from improvements in the quality of legal institutions. We establish a positive relationship that by construction can be understood as causal, between the Rule of Law and a measure of countries’ predetermined openness in capital goods, transport equipment and respective parts and components, all generated by fragmented, Rule-of-Law intensive production processes.

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