To investigate the relation between trust and formal institutions, we analyze bilateral trade patterns in a sample of 16 European countries between 1996-2009. Trust in trading partners has a significant positive effect on bilateral trade. However, our results suggest that trust and formal...

"This collection carefully selects some of the most influential papers focusing on the relationship between economic and political institutions and economic development. Economic institutions shape economic incentives, such the incentives to become educated, to save and invest, to innovate and...

Recommended readings (Machine generated): 1. Daron Acemoglu and Simon Johnson (2005), 'Unbundling institutions', Journal of political economy, 113 (5), October, 949-95 1 -- 2. Daron Acemoglu, Simon Johnson and James A. Robinson (2001), 'The colonial origins of comparative development: an...