We develop a model where firms profit from coercing workers into employment under conditions violating national law and international conventions and where bureaucrats benefit from accepting bribes from detected perpetrators. Firms and bureaucrats are heterogeneous. Employers differ in their...

This paper explores the idea that institutional details matter and that attempts to estimate the economic effects of federalism by employing a simple dummy variable neglect potentially important institutional details. Based on a principal component analysis, seven aspects of both federalism and...

Does international financial integration boost economic growth? The question has been discussed controversially for a long time. As of yet, robust evidence for a positive impact is lacking (Edison et al., 2002). However, there is substantial narrative evidence from economic history that...

Brain drain is a core economic policy problem for many developing countries today. Does relative inequality in source and destination countries influence the brain-drain phenomenon? We explore human capital selectivity during the period 1820-1909.We apply age heaping techniques to measure human...

This work shows the asymmetric effect of the reduction in transportation costs across different sectors in the process of the Great Divergence. Specifically, the analysis indicates that reductions in transportation costs of industrial goods enhance convergence of the growth rates of trading...

This paper shows that Tabellini's recent claim to have provided evidence that culture has a causal effect on economic development is unjustified. Tabellini's claim is based on an instrumental variables analysis in which two instruments are used to identify the supposed causal effect. One of...