Some recent empirical research suggests that the implementation of policy reforms is largely dependent on domestic political economy factors. This finding is taken to suggest that aid and adjustment lending should only be provided to those countries that, on the basis of certain characteristics,...

Is the World Bank’s Development Policy Lending likely to enhance ownership and have greater effectiveness than structural adjustment? We specify a dynamic common agency model in which a government committed to reform faces domestic opposition from interest groups. The dynamic specification,...

"Much economic policy is deliberately shifted away from direct political processes to administrative processes - political pressure deflection. Pressure deflection poses a puzzle to standard political economy models which suggest that having policies to sell is valuable to politicians. The...

Does policymakers’ horizon affect their willingness to support economic reforms? Voting in the U.S. Congress provides an ideal setting to address this question. Differences between the House and Senate, in which members serve two-year and six-year mandates respectively, allow to examine the...

We study how electoral incentives affect policy choices on secondary issues, which only minorities of voters care intensely about. We develop a model in which office and policy motivated politicians choose to support or oppose regulations on these issues. We derive conditions under which...

We describe a simple model in which domestic firms decide whether to serve a foreign market through exports or horizontal foreign direct investment (FDI). This choice involves a trade-off between the higher variable trade costs associated with exports and the higher fixed set-up costs associated...

Over the last decades, the United States has become increasingly integrated in the world economy. Very low trade barriers and comparatively liberal migration policies have made these developments possible. What drove US congressmen to support the recent wave of globalization? While much of the...