Public policies are the outcomes of complex intertemporal exchanges among politicians. The basic institutional characteristics of a country constitute the framework within which those transactions are accomplished. We develop a transactions theory to understand the ways in which political...

This paper links the theory of interest groups influence over the legislature with that of congressional control over the judiciary. We develop a model in which (i) Court’s rulings can be reversed by Congress, and (ii) an Interest Group is privately informed about the realization of a variable...

The architecture of public decision making in the world is being changed through processes of “economic integration” and of “decentralization”. Some policy decisions are now taken at a higher level (i.e., monetary policy in Europe, trade policy in part of South America), while others are...

This paper evaluates the trade-off between the advantages of risk sharing and the perils of common pool problems in federal fiscal arrangements. Under the assumption of asymmetric information we evaluate two alternative regimes of intergovernmental transfers. In one regime, the central...

The traditional principal-agent model assumes that the principal offers an exclusive contract to the agent. This paper shows that the standard results are not robust to the introduction of additional contracting opportunities for the agent. We analyze equilibria of an extended game with the...