The paper investigates a model where two parties A and B invest sequentially in a joint project (an asset). Investments and the asset value are nonverifiable, and A is wealth constrained so that an initial outlay must be financed by either agent B or an external investor C (a bank). We show that...

The paper studies a federal system where (a) a region provides non-contractible inputs into the social benefits from a public policy project with spillovers to other regions, and (b) where political bargaining between different levels of government may ensure efficient decision making ex post....

The paper studies a world where a region provides essential inputs for the successful implementation of a local public policy project with spill-overs, and where bargaining between different levels of government may ensure efficient decision making ex post. We ask whether the authority over the...

The paper examines the consequences of the economic integration of factor markets in a model with two countries that redistribute income among their residents. The social benefits in each country are financed by a source based tax on capital which is democratically chosen by its inhabitants. If...

The paper considers a two-tier institution in which government provides public services, but individuals can opt out of public provision (but not taxes). Funding for the public service is chosen endogenously by majority vote, and we first provide necessary and sufficient conditions for a...

We consider a world in which the mode of food production, foraging or agriculture, is endogenous, and in which technology grows exogenously. Within a model of coalition formation, we allow individuals to form co-operative communities (bands) of foragers or farmers rationally. At the lowest...