It is now well established that highly developed countries tend to score well on measures of social capital and have higher levels of generalized trust. In turn, the willingness to trust has been shown to be correlated with various social and environmental factors (e.g. institutions, culture) on...

With corruption, prohibition is better at curtailing consumption than taxation. Prohibition enforcers are incentivized to enforce against illegal producers to extract bribes from them, while the latter willingly pay the bribes to keep supplying the market. In equilibrium, total quantity is...

The political economy of medieval Europe was shaped by alliances between lords and vassals, forged through peaceful and violent means. We model coalition formation through bargaining or by conquest, and where members can rebel against their coalition. We derive conditions under which a realm...

The growth of the modern regulatory state is often explained in terms of an unambiguous increase in regulation driven by the actions of central governments. Contrary to this traditional narrative, we argue that governments often strove to weaken the autarkic tendencies of regional laws, thereby...

A recent line of research demonstrates that cognitive skills - IQ scores, math skills, and the like -have only modest influence on individual wages, but are strongly correlated with national outcomes. It this largely due to human capital spillovers? This paper argues that the answer is yes. It...

We provide evidence that individuals selected from societies with high human capital are more likely to cooperate when placed in an environment comparable to the state of nature: The world of New York City diplomatic parking. National average IQ, a robust predictor of economic growth, is found...

In the cross-country literature, cognitive skills are robust predictors of economic growth. We investigate claims by psychologists that the same is true at the state level. In a variety of specifications using four proxies for average state IQ used in the psychology literature, little evidence...

Differences in worker skill cause modest differences in wages within a country, but are associated with massive differences in productivity across countries (Hanushek and Kimko, 2000). I build upon Kremer’s (1993) O-ring theory of production to explain this stylized fact. I posit that there...

National measures of cognitive skill, including IQ tests, have received attention recently as a possible driver of cross-country productivity differences. In a parallel literature, national measures of entrepreneurial activity and pro-entrepreneurship policies have received similar attention....

Social science research has shown that intelligence is positively correlated with patience, while growth theory predicts that more patient countries will save more. In a closed economy, that means high average IQ countries will become more capital-­intensive. In an open economy, high average IQ...