Many studies have underlined the detrimental impact of local political risk on foreign direct investment inflows. In this paper, we argue that that relationship depends on the global volume of FDI. After providing a simple model and theoretical arguments suggesting that the relationship should...

We investigate the impact of investment on growth in a sample of developed and developing countries, conditioning the marginal effect of investment on institutional quality. The panel structure of our dataset allows controlling for unobserved heterogeneity and dealing with the risk of...

This paper studies the impact of social trust and formal legal and institutional determinants of capital accumulation in a panel of countries. It reports that formal determinants and trust interact, and that the two are substitutes. Specifically, the marginal impact of formal legal institutions...

In this online appendix, we provide extra evidence complementing our paper “Mark My Words: Information and the Fear of Declaring an Exchange Rate Regime”: we control for electoral competitiveness, law and order, and central bank independence; we drop countries with high capital controls, and...

We explore the effect of foreign direct investment on economic growth in developing countries, distinguishing between mergers and acquisitions (“M&As”) and “greenfield” investment. A simple model underlines that, unlike greenfield investment, M&As partly represent a rent accruing to...

In the paper, we argue that trust is the missing link relating education, institutions, and economic development. We argue that increased trust both increases education and improves legal and bureaucratic institutions, which in turn spurs economic development. We substantiate this intuition with...

This paper assesses the relationship between institutions, output, and productivity when official output is corrected for the size of the shadow economy. Our results confirm the usual positive impact of institutional quality on official output and total factor productivity, and its negative...

This paper studies the relationship between the size of the shadow economy and generalized trust, on a cross-section of countries, both developed and developing, and finds that it is significantly negative. That relationship is robust to controlling for a large set of economic, policy, and...

This paper investigates the role of a free press and of the circulation of information on the capacity of a country to declare an exchange regime that is different from the regime it de facto implements. We put forward consistent evidence that increased press freedom and easier access to...

This paper returns to one of the early questions of the literature on social trust, whether trust affects total factor productivity (TFP). Using both development and growth accounting, we find strong evidence of a causal effect of trust on the level and growth of TFP. Using a three-stage...