Does Trade Foster Institutions?

Abstract

The field of institutional economics stresses the role of institutions as a possibledeterminant of many economic phenomena (see among many othersNorth, 1990). On the other hand, recent contributions suggest that economicfeatures may determine the development of a country’s institutional setting(Acemoglu and Robinson, 2006). Therefore, the issue of the endogeneity ofinstitutions is well known and widely debated whenever a causal relationshipbetween economic variables and institutions is suggested...