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- W3201766504 abstract "• We examine the effect of international trade on the rule of law. • We consider the role of overall openness to trade, a specialization on institutionally intensive exports, and a dependence on exports of natural resources. • We develop a new measure of institutional intensity of exports at the goods level. • Specialization on institutionally intensive exports helps countries to improve their rule of law. Recent literature has analyzed three main channels regarding the effect of international trade on legal institutions: overall openness to trade, a specialization on institutionally intensive exports, and a dependence on exports of natural resources. Unlike previous literature, we examine all these channels within a single regression framework. Importantly, we develop a new measure of institutional intensity of exports at the goods level based on nearly one hundred million disaggregated bilateral trade flows. Our new measure shows that goods subject to international fragmentation of production are the most institutionally intensive. Using a sample of 144 countries, our regression results show that specialization on institutionally intensive exports, especially on fragmented goods, helps countries to improve their rule of law. In addition, we find that greater openness improves the rule of law, but we fail to find any effect from natural resources exports." @default.
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- W3201766504 date "2021-12-01" @default.
- W3201766504 modified "2023-10-16" @default.
- W3201766504 title "Openness effects on the rule of law: Size and patterns of trade" @default.
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- W3201766504 doi "https://doi.org/10.1016/j.irle.2021.106027" @default.
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