Motivated by China's experience in the reform era, we study the fiscal relations between central and local governments embedded in a vertical control system with local officials appointed by the central government. The probability of their re-appointment depends, in part, on how well they...

This paper examines some positive aspects of a two-sector model of a hypothetical less developed country, in which the state exercises control over the relative prices of agricultural and industrial goods, and workers behave according to the generalized efficiency wage hypothesis. It is shown...