In many situations the individuals who can generate some output must enter a contest for appropriating this output. This Paper analyses the investment incentives of such agents and the role of incumbency advantages in the contest. Depending on the advantages, an increase in the productivity of...

Why are some countries so much richer than others? Development Accounting is a first-pass attempt at organizing the answer around two proximate determinants: factors of production and efficiency. It answers the question ‘how much of the cross-country income variance can be attributed to...

Lack of access to finance is often cited as a key reason for why poor people remain poor. This Paper uses data on the Indian rural branch expansion programme to provide empirical evidence on this issue. Between 1977 and 1990, the Indian central bank mandated that a commercial bank could open a...

Unlike what is commonly believed, the last two decades have not witnessed the twilight of industrial policy. Instead, incentives and subsidies have been refocused on exports and direct foreign investment, in the belief that these activities are the source of significant positive spillovers. The...

This paper starts from the observation that despite their very high levels of unemployment, major European countries have devoted few resources to reducing it. This suggests that there is little political concern about high unemployment. I develop a model where the government tries to increase...

Leaders compensate supporters not just for performing their duties but also in order to preempt an overthrow by the same supporters. We show how succession rules affect the power of leaders relative to supporters as well as the resources expended on possible succession struggles. We compare two...

We study an all-pay contest with multiple identical prizes ("lifeboat seats"). Prizes are partitioned into subsets of prizes ("lifeboats"). Players play a two-stage game. First, each player chooses an element of the partition ("a lifeboat"). Then each player competes for a prize in the subset...

We study how norms can solve distributional conflict inside a clan and the efficient coordination of collective action in a conflict with an external enemy. We characterize a fully non-cooperative equilibrium in a finite game in which a self-enforcing norm coordinates the members on efficient...

The conventional wisdom in political science is that for a democracy to be consoliated, all groups must have a chance to attain power. If they do not then they will subvert democracy and choose to fight for power. In this paper we show that this wisdom is, if not totally incorrect, seriously...

How do foreign interests influence the policy determination process? What are the welfare implications of such foreign influence? In this paper we develop a model of foreign influence and apply it to the study of optimal tariffs. We develop a two-country voting model of electoral competition,...