This paper analyses potential internal and external determinants of institutional change as measured by the World Bank Governance Indicators (WBGI) based on a panel of 25 transition countries for the period from 1996 to 2005. We show that natural resources and capital inflows exert an insignificant or negative influence and that economic policy allows to break path-dependency. Most importantly, however, we are able to show that incentives provided by NATO membership are important for institutional development and even more robust than variables measuring the integration into the EU. This allows for some optimism about the effectiveness of ENP policies and supports the argument that NATO, offering regional security, may provide significant additional incentives for good governance.

an der Christian-Albrechts-Universität zu Kiel

ISSN print edition 1433-0210 ISSN electronic edition 1619-4535 Available for free downloading from the DIW Berlin website. Discussion Papers of DIW Berlin are indexed in RePEc and SSRN. Papers can be downloaded free of charge from the following websites:

This paper quantifies the impact of incentives related to potential membership on institutional change as measured by the World Bank Governance Indicators (WBGI). Based on a panel of 25 transition countries for the period from 1996 to 2008 we show that pre-accession incentives provided by EU and NATO clearly matter for institutional development. In addition, path-dependency determined by cultural norms may be overcome by economic liberalization while foreign aid seems to hamper institutional development.

ABSTRACT. African societies exported more slaves in colder years. Lower temperatures reduced mortality and raised agricultural yields, lowering slave supply costs. Our results help explain African participation in the slave trade, which predicts adverse outcomes today. We use an annual panel of African temperatures and port-level slave exports to show that exports declined when local temperatures were warmer than normal. This result is strongest where African ecosystems are least resilient to climate change. Cold weather shocks at the peak of the slave trade predict lower economic activity today. We support our interpretation using the histories of Whydah, Benguela, and Mozambique. 1.