EconPapers    
Economics at your fingertips  
 

Trade Implies Law: The Power of the Weak

James Anderson and Leslie Young

No 7702, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Without the rule of law, traders who incur trading costs can be held up by counter-parties who are stronger in anarchic bargaining. The favourable terms which the latter extract can overcrowd that side of the market, dissipating the benefits. We establish plausible necessary and sufficient conditions for a move from anarchy toward the rule of law to benefit all traders. The rule of law might be delayed, not only by the difficulties of setting up legal institutions, but by monopolistic traders that have meantime emerged to address the inefficiencies of anarchic trade. These monopolistic traders must also guarantee atomistic traders against holdup.

JEL-codes: D2 F1 (search for similar items in EconPapers)
Date: 2000-05
New Economics Papers: this item is included in nep-mic
Note: ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.nber.org/papers/w7702.pdf (application/pdf)

Related works:
Working Paper: Trade Implies Law: The Power of the Weak (2000) Downloads
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:nbr:nberwo:7702

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w7702

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2025-03-22
Handle: RePEc:nbr:nberwo:7702