How can economists use qualitative evidence – such as archival materials, interviews, and ethnography – to study institutions? While applied economists typically rely on quantitative evidence and statistical estimation, many important aspects of institutions and institutional change appear in the form of qualitative evidence. This raises the question if, and how, social scientists trained in quantitative methods can exploit and analyze this evidence. This paper discusses two qualitative research methods that are both commonly used outside of economics: comparative case studies and process tracing. Drawing on existing research about crime and political revolutions, it discusses these two methods and how to implement them to improve institutional analysis.

Economic analysis is a theoretical approach, not an empirical one. It is a way of thinking, not a way of testing. An analysis that has an empirical component can be economic without being quantitative: economics is not statistics. An atheoretical analysis can never be economic, no matter how impressive its regressions: statistics is not economics.

This comment concurs with Skarbek's paper that much more room should be made for qualitative evidence in economics. However, it raises questions about the modalities through which case studies could carry general lessons when it comes to broad institutional issues. It also suggests the need to extend the set of qualitative evidence beyond case studies and to complement them with formal approaches as well as with quantitative analysis. Persuading economists to open windows to alternative methods is at stake

David Skarbek argues that qualitative research methods can analyze institutions by exploiting complex evidence not accessible through quantitative methods. He suggests that well-done case studies and process tracing can meet some of the same tests of inference as statistical methods. Although Skarbek's critique and proposals mirror those of many other authors, including Ronald Coase, he nonetheless makes an important contribution. The brief, cogent, and instructive way he presents his advice and his defense of qualitative methods as a complement to mainstream methods rather than a confrontation, may be more persuasive than more confrontational arguments. As ‘datafication’ is quickly turning qualitative observations into quantitative data analyzed through machine learning, Skarbek's excellent advice on how to understand what is happening under different institutional settings could not be timelier.

We make a distinction between centralized, decentralized, and distributed payment mechanisms. A centralized payment mechanism processes a transaction using a trusted third party. A decentralized payment mechanism processes a transaction between the parties to the transaction. A distributed payment mechanism relies on the network of users to process a transaction on a shared ledger. We maintain that bitcoin is neither a centralized nor a decentralized payment mechanism. It is, instead, a distributed payment mechanism. We then consider decentralized and centralized aspects of the broader bitcoin payment space.

In many modern nation states, both rich and poor, traditional law to this day plays an important role. Given the almost universal prevalence of traditional law, it is surprising how little we know about it. This is the first study that tries to take stock of traditional law from a cross-country perspective. We are also interested in the compatibility of traditional law with state-enforced law and, in particular, with the basic traits of the rule of law. Based on a sample of up to 134 countries, we find that no ‘typical’ traditional law exists, but that traditional law varies in many dimensions such as its timely enforcement, its impartiality, and its protection of basic human rights. Societies that rely extensively on traditional law score low regarding both the rule of law and per capita income. Historical and geographical factors are important predictors of the contemporaneous reliance on traditional law. State antiquity, for example, reduces the prevalence of traditional law, as does a high share of descendants from European populations.

In-transit cold treatment consists of exposing food commodities – generally fresh agricultural products – to temperatures approaching 0 °C for a variable number of days during shipping in purpose-equipped containers in order to manage the risks of quarantine contamination. In this paper, we show that in-transit cold treatment is frequently required in the international trade of apples potentially affected by Mediterranean fruit fly (Ceratitis Capitata), despite the existence of potentially less costly and equally effective alternative means of applying the same treatment, in particular ‘cold storage’. We then try to understand why these alternative methods do not emerge spontaneously or become more widespread. We suggest that technical aspects and their respective costs are not always the most important factors. Transaction costs may also come into play. In accordance with ‘institutional path dependence’ literature, we suggest that the negotiation costs a country has to bear in order to encourage its trading partners to adopt an alternative treatment are high enough for it to be preferable to continue using the current solution, despite its higher adoption cost.

This paper examines the joint impact of infrastructure capital and institutional quality on economic growth using a large panel dataset covering 99 countries and spanning the years 1980–2015. The empirical strategy involves estimating a simple growth model where, in addition to standard controls, infrastructure, institutional quality, and their interaction are included as explanatory variables. Potential endogeneity concerns are addressed by employing generalized method of moments estimators that utilize internal instruments. We find that the interaction terms between infrastructure capital and institutional quality show a positive and significant impact on economic growth. These results are robust to a variety of alternative specifications and institutional quality measures. Hence, our results suggest that maximizing returns from infrastructure capital requires improving the quality of institutions.

What characteristics of firms give them the confidence to invest in settings rife with expropriation by local officials? Empirically, firms in the developing world often face the threat of expropriation from local agents of the state rather than a centralized autocrat. Because policing local officials is costly, the state cannot easily credibly commit to doing so. This has negative consequences for investment. We argue that one solution is to allow firms to approach the state directly to ask for intervention. Not all firms are equally able to successfully get the attention of the state, however, so this mechanism only works for some. We develop an argument about the firm-level characteristics – large-scale employment, political connections, foreign ownership, and business association membership – that should make the central state more attentive to calls for help. Because firm with these characteristics are more likely to secure intervention against predatory bureaucrats, the latter are less likely to try to expropriate them. These firms' investment decisions should be less sensitive to local expropriation than other firms. We test this argument using data on cases of decentralized expropriation across Russia's regions and firm-level data from a cross-regional, large scale survey of Russian firms.

What do regulations in the developing world tell us about the internet economy? In this paper, we argue that the ways in which developing nation states adjust to and legislate the internet depends upon whether they possess a national planning strategy for international data traffic. Focusing our attention on the global trade of intangible goods in Iran, we aim to demonstrate that digital protectionism causes, to varying degrees, suppression, censorship, and the violation of freedom of speech and other civil rights on the internet. Our results show that digital protectionism generated an emergence of domestic start-ups, with companies, such as Facenema and Soroush, operating in the Iranian market in the absence of global rivals such as Facebook and WhatsApp. Yet, digital protectionism and sanction-induced barriers have triggered social problems, besides the emergence of parastatals, securing the economy to an inefficient social and economic path towards digital development.

We present the theory of the collaborative innovation bloc (CIB), an evolving system of innovation within which activity takes place over time. We show how the application of the CIB perspective can help make institutional and evolutionary economics more concrete, relevant, and persuasive, especially regarding policy prescriptions. Such policy actions should strive to improve the antifragility of CIBs and the economic system as a whole, thus enabling individual CIBs and the broader economic system to thrive when faced with adversity. With this in mind, we develop heuristics to evaluate CIB antifragility before using Sweden's economic and institutional evolution since the 1970s as a backdrop for identifying a set of institutional areas where reform can be undertaken to move in this direction.

Leeson (2020) objects to the conflation of economics with applied econometrics, and argues that economics instead should be thought of as the implications of the assumption that individuals maximize, i.e. rational choice theory. But, narrowly defining economics in terms of method demands that we ignore alternative theoretical frameworks which potentially hold explanatory power about topics thought of as economics, all for the sake of a definition. I suggest that applying rational choice theory and applying econometrics became the comparative advantage for economists relative to other social scientists by accidents of history. These comparative advantages largely persist. It is reasonable to call applications of both rational choice theory and econometrics to topics outside conventional economic topics ‘economics’ simply because these applications remain the comparative advantage of economists.