Unlike previous empirical studies that focus on barriers to entry in international trade, we focus on barriers to exit as measured by passport costs for a crosssection of countries. We test four common theories on the determinants of such exit barriers and find that macroeconomic and brain-drain...

A growing body of recent macroeconomic evidence suggests that volatility is detrimental to economic growth. The channels through which volatility affects growth, however, are less clear; substantive evidence based on disaggregate data is almost non-existent. This paper offers a framework in...

To what extent do imposed institutions shape preferences? We consider this issue by comparing the market-versus-state attitudes of respondents from a capitalist country, Finland, and an ex-communist group of Baltic countries, and by arguing that the period of communist rule can be viewed as an...

This paper revisits the effects of a country's institutional framework on individual firms' behavior, in particular focusing on their propensity to comply with legal rules. The theoretical model presented here suggests that these effects may be of paramount significance-contrary to the recently...

Language serves two key functions. It enables communication between agents, which allows for the establishment and operation of formal and informal institutions. It also serves a less obvious function, a reassuring quality more closely related to issues linked with trust, social capital, and...

This paper compares non-enforceable and enforceable measures of labor rigidities as a measure of the quality of labor institutions, and tests whether such labor rigidities are conducive to long-run growth. We find that non-enforceable labor regulations do not have a bearing on economic growth,...

The recent wave of terrorist attacks has increased the attention paid to money laundering activities. Using several methodologies, this paper investigates empirically the determinants of money laundering and its regulation in over 80 countries by assembling a cross-country dataset on proxies for...

This paper analyzes recent trends of Latin America's institutional development regarding investor protection. In spite of the underdevelopment of the region's financial markets, there is slow movement towards legal reforms intended to protect investors and make regional markets more attractive...