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Presented in the 18th Annual Conference of The International Society for New Institutional
Economics (ISNIE) held at Durham, NC, USA, 2014.
Guide
1. Brief Summary
2. General Comments
Motivation
Motivation
Main questions
What are the consequences of the regulation of exit?
Costs of obtaining a passport
Emigration issues
Main argument
It is expected that (As in Djankov et. al, 2002) Costs of
obtaining a passport depend on regulatory quality and
government effectiveness.
Main argument
Argument of the paper: there is an association between Level
of Democracy and the Regulation of Exit.
Main argument
Main Argument
Why?
LD = Level of democracy (0 = Strongest; 1 = Weakest)
From 0 to LD* (max cost of obtaining a passport): traditional
explanation
Bureaucrats, politics:
Strong democracies no room for Rent Extraction
LD increases Extraction of rents increases
Then, costs of passport increases.
Main Argument
Why?
LD = Level of democracy (0 = Strongest; 1 = Weakest)
From LD* to 1:
Very weak democracy:
Organized Business groups Lobbies to decrease exit
barriers Costs of passport decrease Emigration
increases
Calibrate High-skilled vs. Low-skilled labor force
press the price factors down
Control political risks unions, poverty
Main Argument
General comments
Interesting approach
General comments
They use only costs of passport (fees).
What about other costs (time, procedures etc.)? Could it
give a different result?
They argued that, usually, there is a positive correlation
among them. Is it true?
They do not make clear the threshold (poor vs. Rich countries).
The model the authors present lacks of clarity and proofs.
Some results seem reasonable but there is not much
detail about it.
Recommendation
Promising idea. Good potential.
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