This paper studies optimal dynamic tax policy under the threat of political reform. A policy will be reformed ex post if a large enough political coalition supports reform; thus, sustainable policies are those that will continue to attract enough political support in the future. We find that...

This paper analyses the return intentions of migrant workers. An intertemporal model is developed where the point of return to the home country is endogenous. The analysis emphasizes three explanations of why it should be optimal to migrate only temporarily: differences in relative prices in the...

This paper studies the consumption decisions of agents who face costs of acquiring, absorbing and processing information. These consumers rationally choose to only sporadically update their information and re-compute their optimal consumption plans. In between updating dates, they remain...

Expanding credit access is a key ingredient of development strategies worldwide. Microfinance practitioners, policymakers, and donors have ambitious goals for expanding access, and seek efficient methods for implementing and evaluating expansion. There is less consensus on the role of consumer...

Interest in prediction markets has increased in the last decade, driven in part by the hope that these markets will prove to be valuable tools in forecasting, decision-making and risk management - in both the public and private sectors. This paper outlines five open questions in the literature,...

This paper provides a simple political agency model to explain the effect of political alignment between different tiers of government on intergovernmental grants and election outcomes. Key features of the model are: (i) rational voters interpret public good provision as a signal of incumbent...

How far can the media undermine democratic institutions, and how persuasive can media be in ensuring public support for a dictator’s policies? We study this question in the context of Germany between 1929 and 1939. Using quasi-random geographical variation in radio availability, we show that...

This paper analyzes optimal re-election bars when incumbents gain socially valuable experience in office. We develop a two-period model in which the output of a public good depends on an office-holder's effort, ability and experience. When campaigning for election to an open seat in the first...

We experimentally investigate information aggregation through majority voting when some voters are biased. In such situations, majority voting can have a “dark side”, i.e. result in groups making choices inferior to those made by individuals acting alone. We develop a model to predict how...

We study a political system in which voters can optimally pick between political platforms, but cannot screen the quality of individual politicians associated with these platforms. A bad individual achievement can correspond to either incompetence (adverse selection) or corruption (moral...