This paper argues that in the middle ages voting institutions emerged as mechanisms that allowed rulers to cooperate with subjects on mutually profitable projects. In spite of their utility, many of these voting institutions eventually declined. We test the model on the English parliament and...

This paper explores the interdependence between market structure and an important class of extra-rational cognitive biases. Starting with a familiar bilateral monopoly framework, we characterize the endogenous emergence of preference distortions during bargaining which cause negotiators to...

Must the integration of markets be accompanied by the harmonization of societies' institutions? We study a model of heterogenous individuals where a public good directly affects returns from trade. Trade takes place in the market, whereas the public good is provided by the jurisdiction, and...

This article suggests that the new institutionalism contains ambiguous and contradictory notions of change. By setting up a model that explains institutional constraints on decision makers, the new institutionalism correctly points out the limits of a rational choice framework of economic...

German “Ordnungstheorie” (~ system theory, ordo theory) relates essentially to Walter Eucken (Freiburg) who attempted to strike a balance between the economics of the German Historic School, still relevant in Germany of the 1930s, and its opposing neoclassical analysis. The paper starts,...

This paper adopts a historical/new institutionalist perspective to explain why the decline of the American labor movement has been exceptional in comparison to other labor movements, and especially its Canadian counterpart. Under this perspective, national founding conditions and traditions...

Despite the current fashion for issues such as institutional transparency or corruption, the modern policy development literature does too little to integrate the core ideas of modern political economy with standard economic theory. Little is done to distinguish the advice given to developing...

How are constitutional rules sustained? We investigate this problem in the context of how the institutions of federalism are sustained. As Riker (1964) emphasizes, a central design problem of federalism is how to create institutions that at once grant the central government enough authority to...