NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Does Trade Foster Contract Enforcement?

James E. Anderson

NBER Working Paper No. 14045
Issued in May 2008
NBER Program(s):   ITI   LE

Contract enforcement is probabilistic, but the probability depends on rules and processes. A stimulus to trade may induce traders to alter rules or processes to improve enforcement. In the model of this paper, such a positive knock-on effect occurs when the elasticity of supply of traders is sufficiently high. Negative knock-on is possible when the elasticity is low. Enforcement strategies in competing markets are complements (substitutes) if the supply of traders is sufficiently elastic (inelastic). The model provides a useful structure of endogenous enforcement that gives promise of explaining patterns of institutional development.

download in pdf format
   (349 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w14045

Published: James Anderson, 2009. "Does trade foster contract enforcement?," Economic Theory, Springer, vol. 41(1), pages 105-130, October. citation courtesy of

Users who downloaded this paper also downloaded these:
Anderson w14046 Consistent Trade Policy Aggregation
Anderson and Young w8847 Imperfect Contract Enforcement
Feenstra, Hong, Ma, and Spencer w17728 Contractual Versus Non-Contractual Trade: The Role of Institutions in China
Levchenko w17675 International Trade and Institutional Change
Goldhaber-Fiebert, Blumenkranz, and Garber w16624 Committing to Exercise: Contract Design for Virtuous Habit Formation
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us