Johannes Moenius

Trade, Law, and Product Complexity

How does the quality of national institutions that enforce the rule of law influence international trade? Anderson and Marcouiller argue that bad institutions located in the importers country deter international trade because they enable economic predators to steal and extort rents at the importers border. We complement this research and show how good institutions located in the exporters country enhance international trade, in particular, trade in complex products whose characteristics are difficult to fully specify in a contract. We argue that both exporter and importer institutions affect international as well as domestic transaction costs in complex and simple product markets. International transaction costs are a part of the costs of trade. Domestic transaction costs affect complex and simple products differently, thereby changing a countrys comparative advantage in producing such goods.We find ample empirical evidence for these predictions: countries that have good institutions tend to export more complex products and import more simple products. Furthermore, institutions have a stronger influence on trade via production costs (comparative advantage) than through international transactions costs. International institutions seem to operate as substitutes for domestic institutions, because good domestic institutions are less important for promoting exports in those countries that have signed the New York Convention. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Measuring party linkage across districts: Some party system inflation indices and their properties

In this article we suggest improved measures of ‘party linkage’ across districts. The degree of party linkage, defined as the extent to which parties are uniformly successful in winning votes across districts, is an important but neglected issue in the party politics literature. It is particularly important in understanding the nature of national-level party system formation. Our suggested indices build on the measure of party linkage introduced by Cox (1999), which he named the party system ‘inflation index’ since it measures the inflation from the district-level to the national-level party system size that occurs in the process of party system aggregation. Our measures improve on Cox by making it more intuitive, introducing an appropriate weighting scheme, and suggesting a subnational-level measurement of party linkage. We examine the properties and the usefulness of our measures by numerical simulation and by empirical application to data from Italy, India, Germany, and the United States.

A Lay Mapmaker’s Perspective on the Dilemma of Cartographic Design

Aesthetic, accessible, astounding, and accurate—these four adjectives best describe the value drivers of maps from a lay mapmaker’s perspective. Aesthetics is the marketing of the map, as an unappealing map will not attract readers. It also needs to be accessible: readers need to understand the message correctly and recognize the locations of their interest, otherwise they will turn away quickly. If the content of a map is astounding, readers will get engaged with the map. Accuracy, which refers to the correctness and precise measurement of the data as well as its visual representation, builds reputation—inaccuracy kills it. Frequently there are trade-offs between these four main value drivers to consider, requiring a dilemma approach to cartography.

Law, Trade and the Asian Miracle

In previous work (Berkowitz, Moenius and Pistor 2006), we have shown that countries with high quality legal institutions specialize in exporting complex products whose characteristics are difficult to fully specify in contracts. The miracle growth in the Asian Nine (China, Hong Kong, Indonesia, Japan, Malaysia, Singapore, South Korea, Taiwan and Thailand) during the latter half of the past century has been accompanied by a remarkable increase in complex goods exports and an increase in the ratio of complex to simple goods exports. We test our theory for the Asian Nine and find that good institutions have a substantially stronger than average impact on complex and simple goods trade in those countries. In countries outside the Asian Nine gains in the perceived quality of institutions spur complex exports primarily by lowering the domestic costs of producing complex goods. However, in the Asian Nine good institutions are also important because they lower transactions costs of importing and exporting complex goods.

Chapter 5 Networks, Standards and Intellectual Property Rights

This chapter summarizes the interdependence of network effects, compatibility standards and intellectual property rights (IPR) in the global economy. This interdependence is analyzed at the product market level and at the research and development level. The questions to be examined are: how IPR influence the provision of goods exhibiting network effects; the impact of network effects on the creation, dissemination and protection of intellectual property and of goods with strong intellectual property content; and strategic issues faced by firms and governments in goods that exhibit network effects. We answer these questions by studying how network effects influence the value of IPR and how in turn IPR may influence the size of networks. We highlight the central importance of IPR protection of interface standards for market outcomes, and how different types of IPR generate market power through interface standards. We review similarities of network effects in product markets and research networks as well as impediments to their expansion. We finally discuss alternative outcomes of standardization policies, institutional choices and strategic coordination efforts by firms. We emphasize how the answers to these questions are distinct in an international context.