Institutions and Visa Regimes
Abstract: We study the impact on visa restrictions of institutions and social norms in a sending country. To this purpose, we unbundle institutions into “institutions-services”, which complement productive activities and serve as public production inputs, and “institutions-rules”, which strengthen the rule of law and constrain unproductive behavior. We propose a theoretical model which incorporates spillover effects of domestic institutional changes and shows that while stronger institutions-services reduce visa barriers, stronger institutions-rules have the opposite effect. Furthermore, visa barriers are affected by norms and values, which complement formal institutions as factors of visa regimes. We use various empirical models to test and confirm the above conjectures.