This Paper studies the relationship between political wealth redistribution and the allocation of firm-ownership when production requires an unobservable input. The economy's wealth distribution affects the equilibrium interest rate and the allocation of entrepreneurial rents because wealth...

This paper introduces state-owned enterprises into an endogenous-growth model with an expanding variety of inputs. It shows that, if state firms are less efficient than private firms in organizing labour and also in adopting new technology, the rate of innovation and, hence, also the rate of...

The enterprise sectors of Eastern Europe are undergoing fundamental reform. This article evaluates alternative forms of corporate restructuring. It emphasizes differences in the sequence in which reforms are undertaken in different countries. In some countries, restructuring is being undertaken...

We present a simple model to analyse law enforcement problems in transition economies. Law enforcement implies coordination problems and multiplicity of equilibria due to a law abidance and a fiscal externality. We analyse two institutional mechanisms for solving the coordination problem. A...

Over the last millennium, the clan and the city have been the locus of cooperation in China and Europe respectively. This paper examines - analytically, historically, and empirically - the cultural, social, and institutional co-evolution that led to this bifurcation. We highlight that groups...

We build a general equilibrium macroeconomic model of a transitional economy to reflect five stylized facts. Among these are that central planning has left a legacy of highly concentrated industry and a residue of price controls and rationing. An `almost Classical' dichotomy obtains in the...

This Paper provides a game theoretic extension of Radner's (1993) model of hierarchical information aggregation. It studies the role of the hierarchy design for the speed and quality of a collective decision process. The hierarchy is described as a programmed network of agents. The programme...

A key feature of Soviet-type economies is the excessive concentration of production and the skewed size distribution of enterprises. This is the root cause of the `soft budget constraint' and a natural outcome of the political economy of these countries. Given entrenched political support for a...

Fiscal reform is central to the process of transforming a Soviet-type economy to a market economy, for with the emergence of a significant private sector, the boundaries between the public and private sectors needs to be more sharply drawn. The paper draws lessons from the experience of the...

The objective of this paper is to assess whether and to what extent the cost of patenting affects the demand for patents. The empirical analysis, which focuses on the patent systems of the USA, Japan, and Europe during the year 2003, leads to the following methodological and empirical...