Publication

This paper examines whether lower policy-induced barriers for international trade promote economic growth in countries with poorly developed institutions. The author explains how several studies have found a general and positive relationship between trade openness and growth on average, but many of them have been marred by methodological shortcomings and considerable unexplained variation in the results. The paper states that good institutions of conflict management are a contingent and mediating factor that can help to explain data heterogeneity. The author states that without developed institutions, countries that integrate with world markets become vulnerable to external shocks, possibly unleashing domestic conflicts and uncertainty detrimental to growth.