An incumbent's drive for reelection can lead to political budget cycles. The distortion cycles cause in economic policy may be offset by the information they indirectly provide about the incumbent's competency. The informative content of cycles depends on the sophistication of voters, i.e. on...

Can limited government be a driving force of economic development? This idea goes back to Montesquieu, and is closely related to recent research in institutional economics. Measuring limited government with the Henisz political constraints index, and economic development with income per capita,...

Political instability has been emphasized as a major source of uncertainty in Latin America. However,arbitrariness, i.e. the lack of constraints on the government, can also be seen as a major source of uncertainty in developing countries. Two dimensions of political uncertainty are thus...