The prevailing view in policy circles is that landlockedness is bad for development because it reduces trade. This paper shows that other channels of transmission are likely to be important and, possibly, quantitatively larger and statistically stronger than the trade channel. One such channel is the quality of institutions. Using a system of structural equations and different estimators, the paper finds that landlockedness negatively affects the quality of institutions, which is in turn a fundamental determinant of per-capita income. By comparison, the evidence in support of the trade channel is surprisingly mild.