Poor institutions as a comparative advantage

Cortney Rodet

Constitutional Political Economy, 2017, vol. 28, issue 2, No 4, 167-192

Abstract: Abstract Classic theories of comparative advantage point to factor productivity and factor abundance as determinants of specialization and trade. Likewise, geography and topography can determine trade patterns. Institutions, however, are increasingly seen as important sources of comparative advantage. A global drug prohibition regime implies that institutional quality matters more than traditional sources in the drug trade. This paper theoretically models trade patterns of illicit goods and confirms the role of institutions empirically with respect to the drug trade. In particular, illicit enterprises gain force in countries where resources are scarce, drug enforcement is uncertain, and institutions are weak in absolute terms and relative to neighboring countries. I propose several policy alternatives that emphasize economic opportunity for the poor and institutional quality that complement drug prohibition.

Keywords: Institutions; Trade patterns; Drug trade; Comparative advantage (search for similar items in EconPapers)
JEL-codes: F5 H1 K14 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://link.springer.com/10.1007/s10602-016-9224-8 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:copoec:v:28:y:2017:i:2:d:10.1007_s10602-016-9224-8

Ordering information: This journal article can be ordered from
http://www.springer. ... ce/journal/10602/PS2

DOI: 10.1007/s10602-016-9224-8

Access Statistics for this article

Constitutional Political Economy is currently edited by Roger Congleton and Stefan Voigt

More articles in Constitutional Political Economy from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().