The economic cost of populism is high. This paper finds that when a populist executive rules alongside a populist majority in the legislature, this reduces a country’s growth rate of real Per Capita Income by 3.7% below its trend, a phenomenon that spans over a 12-year period before returning...

Decades of spectacular economic growth have made China into an important geopolitical player. As Chinese companies improve their capabilities across several areas of advanced technology, including AI, some U.S. policymakers and pundits lament the country’s “unfair trade practices” and...

Why do developing countries protect the intellectual property rights (IPR) of foreign inventors? Does this facilitate technology transfer from the industrial frontier? This paper addresses those questions by telling the story of when and how technology was transferred through patent licensing to...

A huge political economy literature claims “rents” matter. They influence corruption, democracy, and political stability. Researchers assume rents are interchangeable. But Market Power Rents differ fundamentally from Ricardian Rents, and both differ from Quasi-rents. Researchers also assume...

The economic cost of populism is extremely high: after 15 years, GDP per capita is 10% lower compared to plausible non-populist counterfactuals (Funke, Schularick, Trebesch, 2020). We seek to look under the hood, so to speak, and explain the mechanics behind these numbers: we provide a framework...

Recent work has documented a spiraling upward trend in inequality since the 1970s. Most prominently, Thomas Piketty argues in “Capital in the 21st Century” that this is partially due to the fact that capitalism is hardwired to exacerbate the gap between the rich and poor. In seeking to...

Why do some countries indulge in financial repression, harming economic development in the process, whilst others promote financial development? Three main explanations have been put forth. Market failures, due to information asymmetries, mean that credit is rationed even when lenders could...

Does democracy induce financial development? There are good theoretical reasons to believe this to be the case. However, the evidence adduced to support this claim has, to this point, been mixed. In this paper, we try to make sense of this fact by unpacking democracy. We posit that only...

This paper explores how trade and foreign direct investment (FDI) condition the effect of foreign aid on environmental protection in aid recipient countries. We suggest that (1) environmental protection should be viewed as a public good and (2) all else equal, resource flows from abroad (via...

Do the poor soak the rich under democracy? Although social conflict theory predicts that democracies should be more redistributive than autocracies, a burgeoning literature challenges this contention. This paper draws on these dueling approaches to investigate the relationship between regime...