In most major democracies there are very fewparties compared to the number of possible policy positions held by voters. We provide an efficiency rationale for why it might be appropriate to limit the proliferation of parties. In our model, the larger the number of parties, the greater the...

Employment protection systems are widely believed to generate distortions in firms' hiring and firing decisions. However, much less is known about the impact of these regulations on workers' behavior. In this paper we provide evidence on the latter question using data from a large Italian bank....