From the standpoint of the focus of this article, we need to find a better way to compensate the losers from globalisation so that voters re-engage through the democratic process with openness and benefit from the potential for increased prosperity that this holds.

The authors examine how institutions that enforce contracts between two parties-producers and consumers-interact in a competitive market with one-sided asymmetric information and productivity shocks. They compare an informal enforcement mechanism, reputation, the efficacy of which is enhanced by...