We analyze investment decisions when information is costly, with and without delegation to an agent. We use a rational-inattention model and compare it with a canonical signal-extraction model. We identify three "investment conditions". In "sour" conditions, no information is acquired and no...

The empirical literature on economic growth and development has moved from the study of proximate determinants to the analysis of ever deeper, more fundamental factors, rooted in long-term history. A growing body of new empirical work focuses on the measurement and estimation of the effects of...

In this paper, we revisit the relationship between educational and income inequalities in a historical perspective, using a newly developed annual dataset of average years of education in Europe. Theoretically one would expect a reduction in educational inequality should, given the positive...

The transition from a hunter-gather economy to agricultural production, which made possible the endogenous technological progress that ultimately led to the industrial revolution, is one of the most important events in the thousands of years of humankind’s economic development. In this paper...

Rural areas often have more than one regime of property rights and production. Large, private-property farms owned by powerful landowners coexist with subsistence peasants who farm small plots with limited property rights. At the same time, there is broad consensus that individual,...

This paper argues that openness to goods trade in combination with an unequal distribution of political power has been a major determinant of the comparatively slow development of resource- or land-abundant regions like South America and the Caribbean in the nineteenth century. We develop a...

This paper develops a general equilibrium model of fertility and human capital investment under uncertainty. Uncertainty exists in the form of a probability that a young adult does not survive to old age. Parents maximize expected utility arising from own consumption, their fertility, and the...

This review essay critically interrogates the discourse and practice of development. It is argued that models of alternative development remain imprisoned in the ontological categories of the development project, an ideological and institutional devise to consolidate the hegemony of the West...

In recent years, there has been a plethora of econometric literature on the determinants of growth. However, the lack of a theory that integrates economic, political and cultural factors does not allow an adequate interpretation of these new results. This article proposes a conceptual framework...

We study the evolution of belief systems that suppress productive effort. These include concerns about the envy of others, beliefs in the importance of luck for success, disdain for competitive effort, and traditional beliefs in witchcraft. We show that such demotivating beliefs can evolve when...