We investigate the effects of short-term political motivations on the effectiveness of foreign aid. Donor countries ́political motives might reduce the effectiveness of conditionality, channel aid to inferior projects or affect the way aid is spent in other ways, reduce the aid bureaucracyś...

This paper explores the role of information transmission and misaligned interests across levels of government in explaining variation in the degree of decentralization across countries. Within a two-sided incomplete information principal-agent framework, it analyzes two alternative...

As is now well documented, aid is given for both political as well as economic reasons. The conventional wisdom is that politically-motivated aid is less effective in promoting developmental objectives. We examine the ex-post performance ratings of World Bank projects and generally find that...

Preferences about the vertical distribution of power in federal systems are not well understood. I argue that negative historical experiences with higher-level governments can plausibly raise demands for exit strategies and a devolution of power. But integration, for instance delegating power...

A major theory from social psychology claims that external threats can strengthen group identities and cooperation. This paper exploits the Russian invasion in Ukraine 2014 as a sudden increase in the perceived military threat for eastern European Union member states, in particular for the...

There is little causal evidence about deep-rooted sources of support for shifting power from nation-states to international organizations. Focusing on the European Union, this paper develops the hypothesis that citizens appreciate the role of international organizations in constraining member...

Although regional resources have been shown to influence secessionist conflicts in developing countries, their effect in established democracies has largely been neglected. We integrate regional resource value and inter-regional transfers in a model on the optimal size of nations, and show that...

IMF programs are often considered to carry a "stigma" that triggers adverse market reactions. We show that such a negative IMF effect disappears when accounting for endogenous selection into programs. To proxy for a country's access to financial markets, we use credit ratings and investor...

We exploit the quasi-exogenous division of the French regions Alsace and Lorraine after the Franco-Prussian War in 1870 due to disagreements in the German leadership to provide evidence of group identity formation within historically homogeneous regions. People in the treated area, which was...

We exploit the fact that disagreements in the German leadership after the Franco-Prussian War in 1870 led to a quasi-exogenous division of Alsace and Lorraine to provide rare evidence of group identity formation within historically homogeneous regions. In line with the rejection-identification...