Although the relevance of property rights and transaction costs for trade and innovation are well-known, we still lack a formal framework to think about their origins and interplay. Within trade interactions, fully protecting the original owners' property implies that some high-valuation...

This paper analyzes the political economy of regulatory and judicial appointment rules. I study a model of price-setting by a political principal faced with a firm with unknown costs, and endowed with an information-gathering technology whose efficiency rises with the effort exerted by two...

Despite the economic relevance of strong political and property rights, we still lack an organic and empirically sound theory of their origins and interaction. In our model, the elite can elicit the nonelite's cooperation in investment by enacting a more inclusive political process, which allows...

The paper provides a formal framework identifying both the origins and interaction of a culture of cooperation and inclusive political institutions. When elite members and citizens try to cooperate in sharing consumption risk and joint investment, the elite enacts democracy to convince the...

The focus of archaeologists on reconstructing exchange and communication networks in the past resulted in the enormous improvement of methods for analyzing material flows and detecting trade routes. However, our understanding of the determinants of trade patterns over time and space is still...

To evaluate the relative importance of a culture of cooperation and inclusive political institutions, I divide Europe into 120 km X 120 km grid cells, and I exploit the exogenous variation in both institutions created by medieval history. To illustrate, I document strong first-stage...