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Governance, trade, and investment

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  • Dixit, Avinash

Abstract

Imperfections in the rule of law create new problems of contractibility, in addition to the familiar one of unverifiability of information. Alternative social institutions for governance of property and contract arise but are also imperfect, and can interact well or poorly with the formal state institutions. Security of property and contract is especially problematic for foreign traders and investors. This paper considers some theoretical analysis of such situations. The game-theoretic ideas and methods range from simple two-stage games with strategic moves to bilateral and multilateral repeated games with added issues of asymmetric information and imperfect communication.

Suggested Citation

  • Dixit, Avinash, 2015. "Governance, trade, and investment," Research in Economics, Elsevier, vol. 69(2), pages 166-179.
    • Handle: RePEc:eee:reecon:v:69:y:2015:i:2:p:166-179
    DOI: 10.1016/j.rie.2014.08.001
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    References listed on IDEAS

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    1. Kreps, David M & Wilson, Robert, 1982. "Sequential Equilibria," Econometrica, Econometric Society, vol. 50(4), pages 863-894, July.
    2. Avinash Dixit, 2011. "International Trade, Foreign Direct Investment, and Security," Annual Review of Economics, Annual Reviews, vol. 3(1), pages 191-213, September.
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    Cited by:

    1. Garfinkel, Michelle R. & Syropoulos, Constantinos, 2015. "Trade openness and the settlement of domestic disputes in the shadow of the future," Research in Economics, Elsevier, vol. 69(2), pages 191-213.
    2. Etro, Federico, 2015. "Research in economics and political economy," Research in Economics, Elsevier, vol. 69(3), pages 261-264.

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