Large public bureaucracies are usually less efficient than modern private corporations. This paper explains how the degree of discretionary power might account for this difference in efficiency. In fact, increasing the discretionary power of the intermediate layers of an organization can enhance...

The paper develops and discusses a two-sector general equilibrium growth model of a "transit economy" which is subjected to an external price shock. The assumed behavioural charactertistic of such an economy is the presence of a distributional rigidity rather than the more commonly assumed...

We view a contract as a list of outcomes. Ex ante, the parties commit not to consider outcomes not on the list, i.e., these are "ruled out". Ex post, they freely bargain over outcomes on the list, i.e., the contract specifies no mechanism to structure their choice; in this sense outcomes on the...