The paper develops a theoretical rationale for a non-linear relationship between the level of democracy and government spending. A model is presented showing why and how political participation influences the spending behavior of opportunistic governments that can choose an optimal combination...

The recent surge in studies analysing spatial dependence in political science has gone hand-in-hand with increased attention paid to the choice of estimation technique. In comparison, specification choice has been relatively neglected, even though it leads to equally, if not more, serious...

Conflicts between European Union (EU) members about enlargement result from its redistributive effects. EU members are more likely to suffer from enlargement if they profit from EU transfers and if they are relatively close to applicant countries in which unemployment is significantly higher...

We argue that the European currency union (ECU) reduced the de facto monetary policy autonomy of EU countries abstaining from introducing the euro. The large share of imports from euro zone countries renders a close alignment of monetary policy to the interest rate set by the European Central...

Most of the literature has treated EU enlargement and the transition of Central and Eastern Europe, two of the most memorable events in recent history, as separate events. We argue that such separation is not warranted; it obfuscates an important fact, namely that the reform process in many...

This paper adopts and develops the "fear of floating" theory to explain the decision to implement a de facto peg, the choice of anchor currency among multiple key currencies, and the role of central bank independence for these choices. We argue that since exchange rate depreciations are...

Economic damage from natural hazards can sometimes be prevented and always mitigated. However, private individuals tend to underinvest in such measures due to problems of collective action, information asymmetry and myopic behavior. Governments, which can in principle correct these market...