In a period of rapid integration and accelerated growth in emerging markets, three striking trends have been (1) a large and persistent increase in the private savings rate in emerging markets and fall in advanced economies, (2) large net capital outflows away from emerging markets, and (3) a...

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