This paper provides a direct test of the causal link from electoral rules to economic policy. Our theoretical model delivers unambigous predictions on the interaction between institutions and a time varying event, namely the unemployment rate in pivotal and non-pivotal districts. We use local...

We document the presence of a trade-off between unemployment benefits (UB) and employment protection legislation (EPL) in the provision of insurance against labour market risk. Different countries’ locations along this trade-off represent stable, hard to modify, politico-economic equilibria....

We document the presence of a trade-off between unemployment benefits (UB) and employment protection legislation (EPL) in the provision of insurance against labour market risk. The mix of quantity restrictions and price regulations adopted by the various countries would seem to correspond to a...

This Paper presents a tractable dynamic general equilibrium model that can explain cross-country empirical regularities in geographical mobility, unemployment and labour market institutions. Rational agents vote over unemployment insurance (UI), taking the dynamic distortionary effects of...

The extent of political and fiscal centralization in Russia has experienced dramatic changes since the end of the Soviet era. The heavily centralized, both politically and economically, federal structures became dysfunctional and unstable until the introduction of the Budget and Tax Codes over...

Using a model of probabilistic voting, we analyse the impact of aid on the political equilibrium in the recipient country or region. We consider two kinds of politicians: the benevolent one is interested in promoting social welfare whereas the other one is clientelistic, his only goal being to...

Why does the largest US welfare programme select its recipients by their age, rather than by their earnings or wealth? In a dynamic efficient overlapping generation economy with earnings heterogeneity, we analyze a welfare system composed of a within-cohort redistribution scheme and an unfunded...

We show that a transfer targeting a minority of the population is sustained by majority voting, however small the minority targeted, when the probability to receive the transfer is decreasing and concave in income. We apply our framework to the French social housing program and obtain that...