We exploit the cross-country differences in economic freedom to examine the link between the quality of institutions and subjective well-being. Using Veenhoven's happiness dataset, the evidence suggests countries with better economic institutions and higher level of economic freedom, captured by the security of property rights, open markets and more limited government, are significantly more likely to experience greater subjective well-being after controlling for structural confounders of national subjective well-being such as income, unemployment, inequality, social capital and life satisfaction. The effect of institutions on cross-national happiness is both significant and robust to different model specifications, estimation techniques and possible sources of endogeneity. Furthermore, our panel data analysis reveals that over time higher levels of economic freedom are associated with decreasing subjective well-being after controlling for state dependence and income.

We examine the impact of the trans fat ban on a variety of public health outcomes. To this end, we consider a de facto trans fat ban that was introduced by Denmark in 2001. Using the synthetic control method, parallel trends between Denmark and countries in a control group in the years prior to the ban are used to construct a "synthetic Denmark" without any such trans fat ban. Our synthetic control estimates suggest the ban led to substantial improvements in public health. Following the ban, cardiovascular mortality dropped considerably, while the trends of adolescent and child obesity came to a halt and decreased significantly compared to the synthetic control group. Our findings provide new insights into the benefits for public health arising from the banning of trans fats.

This paper seeks to quantify the impact of transaction costs on cross-country economic growth. Our evidence from a cross-country panel data regression analysis reveals a persistent and robust negative effect of increasing transaction costs on the path of economic growth. The growth-enhancing effects of lower transaction costs are confirmed after controlling for the set of conditioning variables and further demonstrated in a cross-country growth model calibration. The results provide evidence that transaction costs might indeed be central to the study of cross-country productivity differences, suggest the importance of contractual relations and indicate their significant impact on cross-country economic performance over time.

No abstract

This study identifies the impact of Bilateral Investment Treaties (BITs) on foreign direct investments (FDI) by taking advantage of the random timing of 44 unilateral BIT terminations in India between 2013 and 2019. Using quarterly bilateral data of 138 foreign investors’ home countries (FIHCs), our difference-in-differences (DD) estimates uncover a significant reduction in FDI inflows to India in response to BIT terminations by more than 30 percent compared to countries without terminations. We identify the sudden break with investor protection for new investments as the major transmission channel. Further investigations suggest that investors do not necessarily abandon India in response to BIT terminations but apparently reroute FDI via FIHCs with BITs. Evidence from firm-level data reveals that investors revoke or reroute mainly deals (e.g. mergers and acquisitions) rather than own new projects. Moreover, similarity of some legal institutions with India offsets the negative effect of BIT terminations.

On the eve of World War I, the future of Argentina looked bright. Since its promulgation of the 1853 Constitution, Argentina had experienced strong economic growth and institutional modernization, which had propelled it into the ranks of the 10 wealthiest countries in the world by 1913. In the aftermath of the war, Argentina's income per capita fell from a level approximating that of Switzerland to its current middle-income country status. Although numerous theories have been suggested to explain the swift decline, the general consensus highlights the fundamental importance of institutional environment in shaping the path of economic growth and development (North 1990; Weingast 1997). Although the literature has provided a great deal of evidence, the counterfactual scenario to Argentina's path to underdevelopment remains poorly understood. This paper exploits the temporal variation in institutional breakdowns to consistently estimate the contribution of de jure and de facto political institutions to long-run development, drawing on Argentina's extensive historical bibliography (

No abstract

No abstract