Hostname: page-component-77c89778f8-sh8wx Total loading time: 0 Render date: 2024-07-17T02:44:41.876Z Has data issue: false hasContentIssue false
  • English
  • Français

Exports and legal institutions: exploring the connection in transition economies

Published online by Cambridge University Press:  01 April 2009

TANYA WANCHEK
TANYA WANCHEK*
Affiliation:
Weldon Cooper Center for Public Service, University of Virginia, Virginia, USA.
*
*Correspondence to: Tanya Wanchek, P.O. Box 400206, Charlottesville, VA 22904-4206. Tel: 434-982-5819. Email: tnw4j@virginia.edu.
Get access Rights & Permissions [Opens in a new window]

Abstract

Secure property rights, established through court enforcement of contracts, are widely acknowledged to be fundamental to economic exchange. Despite their essential function, weak legal and judicial institutions remain the norm across much of Eastern European and former Soviet Union. Barzel (2002) hypothesizes that the value of contract trade, as opposed to relationships and reputation, increases as products travel further and are more costly to inspect. Combining Barzel's theory with the high cost of searching for foreign buyers (Rauch, 1999), this article presents evidence that international trade played a significant role in the emergence of institutions. Search costs influence the potential to export value-added, or complex, products. The level of potential complex exports in turn influences the intensity with which businesses lobby for more credible legal and juridical institutions. Both a micro-level model and empirical evidence provide evidence consistent with an endogenous link between exports and legal and judicial institutions.

Type
Research Article
Information
Journal of Institutional Economics , Volume 5 , Issue 1 , April 2009 , pp. 89 - 115
Copyright
Copyright © The JOIE Foundation 2009

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Acemoglu, Johnson and Robins, (2005), ‘The Rise of Europe: Atlantic Trade, Institutional Growth and Economic Growth’, American Economic Review, 95 (3): 546–579.CrossRefGoogle Scholar
Anderson, James E. and Marcouiller, Douglas (1999), ‘Trade, Insecurity, and Home Bias: An Empirical Investigation’, National Bureau of Economic Research Working Paper 7000.Google Scholar
Barzel, Yoram (1989), Economic Analysis of Property Rights, New York: Cambridge University Press.Google Scholar
Barzel, Yoram (2002), A Theory of the State, New York: Cambridge University Press.Google Scholar
Basu, Arnab and Chau, Nancy (1998), ‘Asymmetric Country-of-Origin Effects on Intraindustry Trade and the International Quality Race’, Review of Development Economics, 2 (2): 140–166.CrossRefGoogle Scholar
Berkowitz, David, Moenius, Johannes, and Pistor, Katharina (2006), ‘Trade, Law and Product Complexity’, The Review of Economics and Statistics, 88 (2): 363–373.Google Scholar
Booz-Allen and Hamilton (2000), ‘Commercial Legal Reform Assessments for Europe and Euroasia, Diagnostic Reports for Albania’, Washington, DC: Booz-Allen & Hamilton.Google Scholar
Booz-Allen and Hamilton (2001), ‘Commercial Legal Reform Assessments for Europe and Euroasia, Diagnostic Reports for Armenia’, Booz-Allen & Hamilton Inc.Google Scholar
Booz-Allen and Hamilton (2002), ‘Commercial Legal Reform Assessments for Europe and Euroasia, Diagnostic Reports for Bulgaria’, Washington, DC: Booz-Allen & Hamilton.Google Scholar
Booz-Allen and Hamilton (2000), ‘Commercial Legal Reform Assessments for Europe and Euroasia, Diagnostic Reports for Croatia’, Washington, DC: Booz-Allen & Hamilton.Google Scholar
Booz-Allen and Hamilton (1999), ‘Commercial Legal Reform Assessments for Europe and Euroasia, Diagnostic Reports for Kazakhstan’, Washington, DC: Booz-Allen & Hamilton.Google Scholar
Booz-Allen and Hamilton (2000), ‘Commercial Legal Reform Assessments for Europe and Euroasia, Diagnostic Reports for Macedonia’, Washington, DC: Booz-Allen & Hamilton.Google Scholar
Booz-Allen and Hamilton (1999), ‘Commercial Legal Reform Assessments for Europe and Euroasia, Diagnostic Reports for Poland’, Washington, DC: Booz-Allen & Hamilton.Google Scholar
Booz-Allen and Hamilton (1999), ‘Commercial Legal Reform Assessments for Europe and Euroasia, Diagnostic Reports for Romania’, Washington, DC: Booz-Allen & Hamilton.Google Scholar
Booz-Allen and Hamilton (1999), ‘Commercial Legal Reform Assessments for Europe and Euroasia, Diagnostic Reports for Ukraine’, Washington, DC: Booz-Allen & Hamilton.Google Scholar
Buscaglia, Edgardo (2001), ‘The Economic Factors behind International Legal Harmonization: a Jurimetric Analysis of the Latin America Experience’, Emerging Markets Review, 2: 67–85.CrossRefGoogle Scholar
Center of the Study of Democracy (1999), ‘Bulgaria: Legal and Judicial Reforms, Judicial Assessment’, Sofia, Bulgaria, available at: http://pdc.ceu.hu/archive/00001584/ [accessed 13 February, 2008].Google Scholar
Cviic, Christopher (2001), ‘Building on the Past: History and Transition in the “Other” Europe’, in Law in Transition, London: European Bank for Reconstruction and Development.Google Scholar
Dietrich, Mark (2000), ‘Legal and Judicial Reform in Central Europe and the Former Soviet Union: Voices from Five Countries’, Washington, DC: World Bank.Google Scholar
Egan, Mary Lou and Mody, Ashoka (1992), ‘Buyer–Seller Links in Export Development’, World Development, 20 (3): 321–334.CrossRefGoogle Scholar
EBRD, (1999), Law in Transition, London: European Bank for Reconstruction and Development.Google Scholar
Frankel, Jeffrey and Romer, David (1999), ‘Does Trade Cause Growth?’, The American Economic Review, 89 (3): 379–399.CrossRefGoogle Scholar
Freedom House (2005), ‘Constitutional, Legislative and Judicial Framework Ratings’, in Nations in Transit, Freedom House.Google Scholar
Hemenway, David (1975), Industry-wide Voluntary Standards, Cambridge, MA: Ballinger Publishing.Google Scholar
Hodgson, Geoffrey M. (2006) ‘Institutions, Recessions and Recovery in the Transitional Economies’, Journal of Economic Issues, 40 (4): 875–894.Google Scholar
Huskey, Eugene (2003), ‘National Identity from Scratch: Defining Kyrgyzstan's Role in World Affairs’, Journal of Communist Studies and Transition Politics, 19 (3): 111–138.CrossRefGoogle Scholar
Johnson, Simon, McMillan, John, and Woodruff, Christopher (2001), ‘Courts and Relational Contracts’, Journal of Law, Economics and Organization, 18 (1): 221–277.Google Scholar
Kengyel, Miklos (2001), ‘Current Developments in Various Jurisdictions: Arbitration and State Courts under Hungarian Law’, Croatian Arbitration Yearbook, Croatia: Croatian Chamber of Commerce.Google Scholar
Kimbrough, Philip and Butchers, Judith (2002), ‘Arbitral Awards and Enforcement in Romania’, International Arbitration Law Review, 5 (1): 11–14.Google Scholar
Koford, Kenneth and Miller, Jeffrey (1999), ‘A Model of Contract Enforcement in Early Transition’, University of Delaware.Google Scholar
Lee, Young and Meagher, Patrick (2001), ‘Misgovernance or Misperception? Law and Finance in Central Asia’, in Assessing the Value of Law in Transition ed. Murrell, Peter, Ann Arbor: University of Michigan Press.Google Scholar
Messick, Richard (1999), ‘Judicial Reform and Economic Development: A Survey of the Issues’, The World Bank Research Observer, 14 (1): 117–136.CrossRefGoogle Scholar
Millard, Frances (1999), Polish Politics and Society, New York: Routledge.Google Scholar
Moenius, Johannes (1999), ‘Information versus Product Adaptation: The Role of Standards in Trade’, University of California, San Diego.Google Scholar
North, Douglass C. (1981), Structure and Change in Economic History, New York: Norton.Google Scholar
Olson, Mancur (1965), The Logic of Collective Action; Public Goods and the Theory of Groups, Cambridge, MA: Harvard University Press.Google Scholar
Rauch, James (1999), ‘Networks versus Markets in International Trade’, Journal of International Economics, 48: 7–35.Google Scholar
Rauch, James and Watson, Joel (2003), ‘Starting Small in an Unfamiliar Environment’, International Journal of Industrial Organization, 21 (7): 1021–1042.Google Scholar
Rodrick, Dani (1995), ‘The Dynamics of Political Support for Reform’, Economies in Transition, 9 (4): 403–25.Google Scholar
Roland, Gerard (2000), Transition and Economics: Politics, Markets, and Firms, Cambridge, MA: MIT Press.Google Scholar
Ruck, Sergei (1997), ‘Regional View (II): Developments in Central and Eastern Europe: Arbitration in Belarus’, Croatian Arbitration Yearbook, 73 (4): 73–79.Google Scholar
Slipachuk, Tatiana (2003), ‘International Commercial Arbitration in the Ukraine Legislation and Pradice’, Journal of International Arbitration, 20 (5): 515–521.Google Scholar
Sturzenegger, Federico and Mariano, Tommasi (eds.) (1998), The Political Economy of Reform, Cambridge, MA: MIT Press.Google Scholar
UNDP, (2001), Citizen Participation in Governance: From Individuals to Citizens, Human Development Report, Sofia, Bulgaria: United Nations Development Program.Google Scholar
USAID, (1998), ‘Judicial Strengthening in Bulgaria’, Bulgaria Judicial Strengthening Program, Sofia, Bulgaria: U.S. Agency for International Development.Google Scholar
Uzelac, Alan (1998), ‘A log of the Activities of the Permanent Arbitration Court at the Croation Chamber of Commerce’, Croalion Arbitration Yearbook, 5: 111–119.Google Scholar
Wanchek, Tanya N. (2003), ‘Exports and Legal Property Rights: Exploring the Connection’, Ph.D. University of Washington.Google Scholar
Wanchek, Tanya N. (2008), ‘The Demand for Public Adjudication and Private Arbitration’ Social Science Research Network Working Paper.Google Scholar
Warner, Andrew (2000), ‘Why Transition May be More Successful than You Think It Is’, Draft Report, Consulting Assistance on Economic Reform II, Harvard Institute for International Development.Google Scholar
Weder, Beatrice (2001), ‘Institutional Reform in Transition Economies: How Far Have They Come?’, Washington, DC: International Monetary Fund.Google Scholar
Wei, Shang-Jin (2000), ‘Natural Openness and Good Governance’, National Bureau of Economic Research Working Paper 7765.CrossRefGoogle Scholar
Winiecki, Jan (2004), ‘Determinants of Catching up or Falling Behind: Interaction of Formal and Informal Institutions’, Post-Communist Economies, 16 (2): 137–152.Google Scholar
World Bank (2003), ‘World Development Indicators’, available at http://go.worldbank.org/UOFSM7AQ40.Google Scholar