We thank the associate editors Glenn Otto and Jeffrey Sheen and three anonymous referees for their comments. We also thank the participants of EDGES workshop at the ANU, DEGIT conference at the University of Melbourne, seminars at the Australian Department of Treasury and the Reserve Bank of Australia for their comments. All remaining errors are our own.
Institutions and Trade: Competitors or Complements in Economic Development?*
Article first published online: 15 MAR 2009
© 2009 The Economic Society of Australia
Volume 85, Issue 270, pages 318–330, September 2009
How to Cite
BHATTACHARYYA, S., DOWRICK, S. and GOLLEY, J. (2009), Institutions and Trade: Competitors or Complements in Economic Development?. Economic Record, 85: 318–330. doi: 10.1111/j.1475-4932.2009.00541.x
- Issue published online: 18 AUG 2009
- Article first published online: 15 MAR 2009
This article contributes to the debate over the empirical relationship between trade openness and economic development. Unlike previous studies which treat trade openness and institutions as competitors in economic development, we find evidence that they are in fact complements. We also find that in order for a country to benefit from trade, its institutional quality has to be above a certain threshold level. These results are suggestive of an important complementary role for trade openness and institutions in economic development.