The ‘Institutions Hypothesis’ and International Trade

According to Douglas North’s ‘Institutions Hypothesis’, powerful groups within a society will manipulate their nation’s economic institutions in their own interests if they are not bound by appropriate constraints, with potentially deleterious effects on economic development. The main focus is on institutions that specify and enforce contracts and property rights to reduce transactions costs. Existing powerful groups block the enforcement of property rights, and with it investment in new technology, in order to protect their economic rents. Societies are able to make technological advances only if they can defeat such groups. The literature on the interaction between economic institutions and international trade shows that poor institutions can be a source of rent for some groups while institutions can also be a source of comparative advantage in trade. Consequently, the welfare consequences of institutional comparative advantage are often ambiguous. Another branch of the literature focuses instead on the interaction between international trade and political institutions, for example studying the effects of constraints imposed by democratic institutions on the executive branch of government. Trade and growth are found to expand far more in countries where the executive cannot use their power to monopolize the gains from trade.

Acemoglu, D., S. Johnson and J.A. Robinson (2005); “The Rise of Europe: Atlantic Trade, Institutional Change and Economic Growth.” American Economic Review, 95(3): 546-579. [Working paper version]

Acemoglu, D. and J.A. Robinson (2000); “Political Losers as a Barrier to Economic Development.” American Economic Review, 90(2): 126-130. [Working paper version]

Besley, T.J., K.B. Burchardi, and M. Ghatak (2012); “Incentives and the De Soto Effect.” Quarterly Journal of Economics, 127(1): 237–282. [Working paper version]

Costinot, A., (2009); “On the Origins of Comparative Advantage.” Journal of International Economics, 77(2): 255-264. [Working paper version]

Do, Q.-T. and A. Levchenko (2009); “Trade, Inequality, and the Political Economy of Institutions.” Journal of Economic Theory, 144(4): 1489-1520. [Working paper version]

Gancia, G. and Zilibotti, F. (2009); “Technological Change and the Wealth of Nations” Annual Review of Economics, 1: 93-120. [Working paper version]

Garfinkel, M., S. Skaperdas and C. Syropoulos, (2008); “Globalization and Domestic Conflict.” Journal of International Economics, 76(2): 296-308. [Working paper version]

Krusell, P. and J.-V. Ríos-Rull (1996); “Vested Interests in a Positive Theory of Stagnation and Growth.” Review of Economic Studies, 63(2): 301-329. [Working paper version]

Levchenko, A., (2007); “Institutional Quality and International Trade.” Review of Economic Studies, 74(3): 791-819. [Working paper version]

Levchenko, A., (2013); “International Trade and Institutional Change.” Journal of Law, Economics, and Organization, 29(5): 1145-1181. [Working paper version]

North (1991); “Institutions.” Journal of Economic Perspectives, 5(1): 97-112.

Nunn, N., (2007); “Relationship-Specificity, Incomplete Contracts, and the Pattern of Trade.” Quarterly Journal of Economics, 122(2): 569-600. [Working paper version]

R.G. Raghuram and L. Zingales (2000); “The Tyranny of Inequality.” Journal of Public Economics 76(3): 521–558. [Working paper version]

Sasakawa Peace Foundation Grant, Japan

The Sasakawa Peace Foundation invites applications for its grants. These offer support for projects addressing problems in the fields of international understanding, exchange, and cooperation. Priority areas are:

•efforts to ensure peace and security in the international community, including peace building and security issues, and non-traditional security issues;

•addressing positive and negative aspects of globalisation, including market and disparities issues, issues involving demographic changes and population movement, and issues at the interface between science and technology and society;

•promotion of mutual understanding between priority regions and Japan, including an exchange programme between Japan and US.

The foundation also has the following special funds: Pacific island nations fund; Japan-China friendship fund; Pan-Asia fund; Middle East Islam fund.

Non-profit organisations and voluntary organisations are eligible to apply for grants. Grants will not be awarded for purely theoretical research, to businesses, or to individuals. There is no upper limit for grants amount, but most awards have previously fallen between US$20,000 and US$100,000 over one to three years.

Click here for the original funding call and further details

Global governance fellowships

The European University Institute, through the Robert Schuman Centre for Advanced Studies, invites applications for the global governance fellowships. These allow postdoctoral research for one to two academic years. Preference is given to proposals within the following domains:

•climate governance;

•cultural pluralism;


•global economics;

•international trade observatory;

•modes of global governance.

Up to 10 fellowships are available each year, two of which are awarded to candidates working on European comparative politics or European comparative history as Vincent Wright fellowships. Fellows work on a selected topic and are expected to participate actively in the research activities of the Centre. The research done during the fellowship should lead to publication. Fellowships are open to candidates who defended their PhD no more than seven years before 31 July of the year of application. There are no restrictions on nationality. The fellowship carries a monthly stipend of €2,000, plus up to €300 per month if the fellow has a cohabiting partner and €200 per month for each dependent child. Fellows, but not their families, receive one return trip from their home town to Florence, worth up to €1,200 for return travel.

For further details see the original post.

IGC Central Call for Proposals

The International Growth Centre at the London School of Economics (IGC) invites researchers to submit proposals for high-calibre research projects relevant to growth policies in developing countries. The deadline is 11:59pm GMT, 30th November 2013.

The IGC is building on previous work and streamlining its research with a sharper focus on key research questions that are relevant for growth within the following four broad themes, where we have also received great interest from policymakers: (i) state effectiveness, (ii) firm capabilities, (iii) cities, and (iv) energy.

Please note that two of the attached documents provide further information on the IGC’s specific research and country areas of focus – ‘IGC Research Priorities’ provides further details of the priority areas within these four themes, while ‘IGC Countries Priorities’ highlights areas of policymaker demand and research opportunities in IGC’s partner countries (currently Bangladesh, Ethiopia, Ghana, India – Central and Bihar –  Liberia, Myanmar, Mozambique, Pakistan, Rwanda, Sierra Leone, South Sudan, Tanzania, Uganda, and Zambia). Included in this call is a special Call for Liberia and Sierra Leone. Please see the attached document ‘IGC Liberia and Sierra Leone Call’.

Please submit all central proposals (i.e. not including those for the special Call for Sierra Leone and Liberia) using the ‘IGC Proposal Form’ (recently revised and attached here). These proposals should be submitted to the Research Programme Committee at  with the following subject line: “Research theme (one of the four mentioned above), Project Title”. The final date for receiving research proposals is 11:59pm GMT, 30th November 2013. Funding decisions will be taken by a Commissioning Board by the end of January 2014. Researchers will be notified of the Boards’ decisions soon after this date, and we expect contracts to be finalized shortly thereafter. Please note that further opportunities to respond to calls for proposals will follow in 2014.

Please also find attached a set of guidelines – ‘IGC Notes for Applicants’ – which will be useful to researchers when drafting proposals for this funding round. The standard terms and conditions, which will form a part of conditions for a successful research award, are also attached (as ‘IGC Terms & Conditions’). Among other issues, this document covers how the IGC will treat requests for Principal Investigator remuneration, and also our procedures and requirements regarding institutional overheads.

The IGC will assess the submitted proposals against the following criteria, which are further discussed in the ‘IGC Notes for Applicants’ (although these are applicable for all IGC projects, special provisions may be in place for individual country calls):

(i) The extent to which the proposed research is innovative and contributes to substantive creation of knowledge, specifically helping to expand and strengthen the existing relevant literature on growth and development.

(ii) Whether and how the proposed research can be used to inform better and more evidence-based policymaking in developing countries.

(iii) The makeup of the research teams and contribution to local capacity.

(iv) Value for money.

This call for proposals encompasses both IGC Research and Country Programmes. While these two do overlap substantially in their remits, their focuses do differ to some extent. While there is some preference for proposals that respond to policy demands in the IGC’s partner countries, the IGC will continue to support frontier research proposals which have policy implications for growth in all developing countries. While funding decisions will be made centrally, projects can be sponsored under the umbrella of either the Country or the Research Programme, or potentially jointly.

Note: several IGC countries have recently issued separate calls for proposals. Applicants who submitted proposals under those country calls cannot resubmit them for consideration here.

Given the number of proposals expected, we are unlikely to be able to respond to individual enquiries regarding the submission process and commissioning processes.  However, we will be updating the ‘IGC Call for Proposals FAQ’ regularly, to ensure all commonly raised queries are addressed.

For further details view the original post.


Centre of excellence on impact evaluation of international development

The Department for International Development (DFID a department of the UK government) invites tenders to establish a centre of excellence on impact evaluation of international development.

The centre will provide a range of services which will develop and strengthen the evidence base for what works and what does not work in international development, as well as developing and strengthening evaluation research capacity within the UK and internationally.

The contracted organisation will need to establish and maintain a high quality centre with strong management structures and commitment to cross-institutional working.

DFID will contribute up to £20 million in core funding over a period of five years. This will represent 80 per cent of income in the first three years, reducing to around 50 per cent in years four and five.

For further details, see the post on the DFID website.