"Developing countries are known for having weak institutions. It thus comes as no surprise that relational contracts serve as the basis for significant economic activity."
And the fact that the majority of trading happens via referrals & networking, this is something I witnessed frequently.
Institutions many times aren't just "weak", they either don't offer comprehensive solutions, are unregulated/overpriced or exploitative enough that the institutions themselves wouldn't use their own services.
"Developing countries are known for having weak institutions. It thus comes as no surprise that relational contracts serve as the basis for significant economic activity."
And the fact that the majority of trading happens via referrals & networking, this is something I witnessed frequently.
Institutions many times aren't just "weak", they either don't offer comprehensive solutions, are unregulated/overpriced or exploitative enough that the institutions themselves wouldn't use their own services.