The evolution of the Russian crude oil sector during the ongoing transition to a market economy is a fascinating case study in the determinants of state allocation of scarce transport capacity. Under socialism, the crude oil sector was a completely integrated monopoly and the all-Union...

Valid instrumental variables must be relevant and exogenous. However, in practice it is difficult to find instruments that are exogenous in that they satisfy the knife-edged orthogonality condition and at the same time are strongly correlated with the endogenous regressors. In this paper we show...

In previous work (Berkowitz, Moenius and Pistor 2006), we have shown that countries with high quality legal institutions specialize in exporting complex products whose characteristics are difficult to fully specify in contracts. The miracle growth in the Asian Nine (China, Hong Kong, Indonesia,...

China began its gradual economic reform in the late 1970s; Russia initiated radical reform in the early 1990s. During the course of reform, China has enjoyed rapid growth while Russia has contracted. This paper argues that one reason for this difference is that Chinese local governments enjoy...

Small enterprises, whether start-ups or spin-offs from former state owned enterprises, are a growth engine in post-socialist economies. This paper argues that privatization can either enhance or deter small enterprise formation because of its impact of the local business environment. Using the...

We analyze the determinants of effective legal institutions (legality) using data from forty-nine countries. We show that the way the law was initially transplanted and received is a more important determinant than the supply of law from a particular legal family. Countries that have developed...

Russia's impressive growth record since 2000 is driven largely by high world oil prices (Desai, 2006). This rapid growth, however, may be a "flash in the pan" because high oil prices enable the Russian government to engage in rent-seeking and to postpone deep restructuring (Berglöf, et al,...

Several important studies of institutions assume that the quality of institutions is persistent following some formative historic event. The assumption of institutional persistence, however, begs the question of how these institutions persisted. To better understand this issue, this paper...

This paper uses a Ricardian model to generate predictions about the influence of institutions on trade in differentiated (complex) and commoditized (simple) products and then uses a rich international trade data set for empirical tests. The model draws the distinction between the role of...

Using state-level data from the United States, we find that differences in colonial legal institutions have affected the current quality of state legal institutions. These differences in colonial legal institutions arose because some states were settled by Great Britain, a common law country,...