In many countries. social security is a large fraction of the government budget. Why is it, given that at any moment in time the number of recipients of social security benefits is smaller than the number of contributors? Kore generally, what determines the size of social security? To answer...

This paper studies the political-economic equilibrium of a two-period model with overlapping generations. In each period the policy is chosen under majority rule by the generations currently alive. The paper identifies a "sustainable set" of values for public debt. Any amount of debt within this...

This paper studies empirically the effects of and the interactions amongst economic and political liberalizations. Economic liberalizations are measured by a widely used indicator that captures the scope of the market in the economy, and in particular of policies towards freer international...

Policies are typically chosen by politicians and bureaucrats. This paper investigates the e fficiency criteria for allocating policy tasks to elected policymakers (politicians) or non elected bureaucrats. Politicians are more efficient for tasks that do not involve too much specific technical...

We present a theoretical model of a parliamentary democracy, where party structures, government coalitions and fiscal policies are endogenously determined. The model predicts that, relative to proportional elections, majoritarian elections reduce government spending because they reduce party...

The paper studies the effect of additional government revenues on political corruption and on the quality of politicians, both with theory and data. The theory is based on a version of the career concerns model of political agency with endogenous entry of political candidates. The evidence...

We estimate the effect of political regime transitions on growth with semi-parametric methods, combining difference in differences with matching, that have not been used in macroeconomic settings. Our semi-parametric estimates suggest that previous parametric estimates may have seriously...

We study the joint dynamics of economic and political change. Predictions of the simple model that we formulate in the paper get considerable support in a panel of data on political regimes and GDP per capita for about 150 countries over 150 years. Democratic capital -- measured by a nation's...

Does democracy promote economic development? We review recent attempts to address this question, which exploit the within-country variation associated with historical transitions in and out of democracy. The answer is positive, but depends -- in a subtle way -- on the details of democratic...

Many countries, especially developing ones, follow procyclical fiscal polices, namely spending goes up (taxes go down) in booms and spending goes down (taxes go up) in recessions. We provide an explanation for this suboptimal fiscal policy based upon political distortions and incentives for...