The ability to cooperate in collective action problems — such as those relating to the useof common property resources or the provision of local public goods — is a key determinant ofeconomic performance. In this paper we discuss two aspects of collective action problemsin developing...

We introduce a model of redistributive income taxation and public expenditure. Thisjoint treatment permits analyzing the interdependencies between the two policies: onecannot be chosen independently of the other. Empirical evidence reveals that partisanconfrontation essentially falls on...

A substantial literature examines second-best environmental policy, focusingparticularly on how the Pigouvian directive that marginal taxes should equalmarginal external harms needs to be modified in light of the preexistingdistortion due to labor income taxation. Additional literature is...

Recent research has demonstrated that while government expenditures are countercyclical inmost industrialized countries, they tend to be procyclical in developing countries. We develop adynamic political economy model to explain this phenomenon. In the model, public expendituresprovide insurance...

Both conventional wisdom and leading academic research view pork barrel spendingas antithetical to responsible policymaking in times of crisis. In this paper we presentan alternative view. When agents are heterogeneous in their ideology and in theirinformation about the economic situation,...

The determinants of government responsiveness to its citizens is a key issue in politicaleconomy. Here, we develop a model based on the solution of political agency problems.Having a more informed and politically active electorate strengthens incentives for governmentsto be responsive. This...

We discuss political economy mechanisms which can explain the resource curse,in which an increase in the size of resource rents causes a decrease in the economy’stotal value added. We identify a number of channels through which resource rentswill alter the incentives of a political leader....

The key element of models of contest is the Contest Success Function (CSF) which specifiesthe winning probabilities of agents. The existing axiomatizations of CSFs assume thatcontestants can make only one type of investment. This paper generalizes these axiomatizationsto the case where each...

The key element of models of contest is the Contest Success Function (CSF) whichspecifies the winning probabilities of agents. We provide an axiomatization of two parametricfamilies of CSF’s. In the first, the winning probability of each agent depends onthe investments and a vector of...

We apply the property rights theory of Grossman-Hart-Moore in the musicindustry and study the optimal allocation of copyright between the artistswho create music and the labels who promote and distribute it. Digital tech-nology opens up a role for new intermediaries. We …nd that entry of...