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Contract Enforcement, Corruption Controls and Other Institutions Affect Trade, Too
The role of institutions in international trade has been getting increasing attention from economists. While traditional theories have focused on differences in labor, land, capital and other factor endowments in explaining international trade patterns, recent research has highlighted the role of institutions. Well-established and high-quality institutions that lay down the rules, procedures and guidelines for trade in a clear and transparent manner, as well as institutions that protect traders from predation, are now viewed to be essential requirements for prosperous trade. For example, a 2003 study by economists ... (full story)