Institutions and economics

Orazio Attanasio, Costas Meghir, Corina Mommaerts, 01 May 2015

The significance of informal sources of insurance against income risk has important consequences for the design of social insurance programs. A particular concern is that public programs simply crowd out informal institutions. This column uses US household data to investigate whether the extended family acts as such an informal institution. Although there is a large potential for the family to insure against income shocks, no such insurance occurs. 

Andrei Markevich, Ekaterina Zhuravskaya, 28 February 2015

There is a debate among economists about the effects of serfdom on economic development. This column sheds light on this debate using novel dataset from 19th-century Russia. The findings indicate that serfdom was a crucial factor causing economic slowdown. The abolishment of serfdom was followed by a sharp increase in agricultural productivity, the living standards of peasants, and industrial development. 

Brian Pinto, 17 December 2014

Since the Global Crisis, concerns have grown that advanced economies are suffering from secular stagnation. This column discusses the lessons that can be learnt from the economic transition of central and eastern Europe and the emerging-market crises of the late 1990s and early 2000s. Structural reform is particularly costly in the context of a debt overhang and an overvalued exchange rate. However, the crux is not debt restructuring per se, but whether economic governance changes credibly for the better following it.

Claire Célérier, Adrien Matray, 23 September 2014

There is an urgent need to understand why many households in the US do not hold a bank account. This column argues that supply-side factors – standard bank practices that ration certain households – play a role in this. The evidence comes from the staggered interstate branching deregulation after 1994 that provides an exogenous shock on bank competition. Further findings suggest that access to bank accounts improves access to credit without translating into higher ratios of debt to income.

Mercedes Delgado, Christian Ketels, Michael Porter, Scott Stern, 18 September 2014

There is a consensus among economists that ‘deep roots’ – geography, natural endowments, and institutions – are important determinants of prosperity differences across countries. This column argues that deep roots matter, but they are neither the whole story nor an excuse for political inaction today. Current policies are important – especially the broad range of policies that shape the business environment and the sophistication of companies – and they are affected but not determined by the past.

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