Scorn laws

HOW do people decide whether to trust a country's investment climate, or the quality of its goods and services? Objectively, to a degree: places with skilled workers and high technology tend to make reliable stuff; countries with clear laws and clean politicians are more trustworthy. You might suspect, though, that plain prejudice also affects trade and capital flows. A trio of economists* from the University of Sassari, Northwestern University and the University of Chicago have found evidence of precisely that.