Yang Jiao (Dartmouth Post-doc) will present:
"Intrinsic Openness and Endogenous Institutional Quality"
***Paper Not Available***
at 12:15pm on Tuesday, October 9, 2018 in (051 Buchanan) Volanakis - TUCK
Lunch will be served at noon.

If you will be attending the Lunch Seminar please RSVP to Galen Muskat at TUCK so he can order the appropriate amount of food.
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ABSTRACT:
We propose a novel theory of endogenous institutional quality that links a country's incentive to invest in good governance with its intrinsic level of openness (due to population size, geography, or exogenous trade opportunities). We also provide extensive empirical evidence both on the key assumption of the theory - cross-border trade is more sensitive to institutional quality than within-country trade-and the key predictions - countries with a higher level of intrinsic openness tend to have better public institutions in equilibrium. Openness to goods that are more dependent on contracting institutions generates a bigger response. Our story suggests an indirect but important channel for globalization to improve welfare by raising the quality of institutions.




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