Political instability has been emphasized as a major source of uncertainty in Latin America. However,arbitrariness, i.e. the lack of constraints on the government, can also be seen as a major source of uncertainty in developing countries. Two dimensions of political uncertainty are thus...

Can limited government be a driving force of economic development? This idea goes back to Montesquieu, and is closely related to recent research in institutional economics. Measuring limited government with the Henisz political constraints index, and economic development with income per capita,...