A missing spatial link in institutional quality

Abstract

History tells that institutions evolve gradually over time, pushing new ideas across borders and cultures. Globalisation is argued to accelerate this process. We examine the spatial links of different political institutions across borders. Applying various tests for spatial proximity, we do not find evidence of contemporaneous spatial links. This result is robust to various measures of distance and of cultural proximity across countries. Instead, when we analyse long run dynamics diffusion of institutions seems to occur only gradually.