In Localizing Development, Mansuri and Rao survey theory and evidence for development strategies based on local community empowerment. This note extends their theoretical argument by focusing on local government as a vital source of new leadership. Local leaders who provide better public service...

This paper considers a simple model of credit cycles driven by moral hazard in financial intermediation. Financial agents or bankers must earn moral-hazard rents, but the cost of these rents can be efficiently spread over an agent's entire career by promising large late-career rewards if the...

Success and failure of democracy are interpreted as different equilibria of a dynamic political game with cost of changing leadership and incomplete information about politicians' virtue. Unitary democracy can be frustrated when voters do not replace corrupt leaders, because any new leader would...