Using recent theories of growth, this paper presents empirical evidence that export diversification promotes economic growth. This result is robust to different specifications of the growth equations and different measures of export diversification. In developing countries, export diversification is associated also with higher investment rates.

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Drawing on insights from economic, political, and cultural theories of governance, this article investigates the determinants of governance for a large sample of countries, both developed and developing. The results indicate that countries with a history of Western European influence and with British common law origins have better governance. In addition to these exogenous and historically predetermined variables, economic factors such as openness to trade, resource-intensity in exports, and levels of economic development have a significant impact on governance. (JEL D73, H11, K42)

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The trade and governance literature suggest a link between the openness of an economy to international trade and the quality of its governance. The paper tests this link using a data set on governance that is multidimensional and broad in cross-country coverage. The results provide evidence that the quality of governance is significantly related to openness in international trade. This association is robust to alternative specifications, different indicators of openness and governance, and prevails for different sub-samples.