Economists generally assume the existence of sufficient institutions to sustain a market economy and tax the citizens. However, this starting point cannot easily be taken for granted in many states, neither in history nor in the developing world of today. This paper develops a framework where...

The role of citizens' intitiatives figures prominantly in contemporary debates on constitutional change. A basic question is why are initiatives necessary in a representative democracy where candidates must already compete for the right to control policy? This Paper offers one answer to this...

This paper proposes a simple scheme designed to elicit and reward intensity of preferences in referenda: voters faced with a number of binary proposals are given one regular vote for each proposal plus an additional number of bonus votes to cast as desired. Decisions are taken according to the...

Inspired by current European developments, we study equilibrium fiscal policy under alternative constitutional arrangements in a `federation' of countries. There are two levels of government: local and federal. Local policy redistributes across individuals and affects the probability of...

We examine a stark setting in which security or protection can be provided by self-governing groups of by for-profit entrepreneurs: kings, lords, or mafia dons. Though self-governance is best for the population, it faces problems of long-term viability. Typically, in providing security the...

It is widely recognized that active media can play a role in enhancing political competition by informing voters. Collusion between government and media can, however, undermine this role. We extend the political accountability model to include the presence of media outlets and the possibility...

Economists who believe that government is essentially benevolent tend to regard inter-governmental competition as a source of negative externalities that lower welfare. In contrast the public choice perspective, particularly that motivated by the Leviathan model, sees such competition as...

We propose a general theory that explains the extent of the state and accounts for related institutions as byproducts of the state's extractive technology. We posit further that this extractive technology is determined by the transparency of the production technology. This theory is applied to...

This paper demonstrates the effects of ethnic and religious diversity on the quality of public spaces. Its identification strategy relies on the exogeneity of public housing allocations in France, and thereby eliminates the bias from endogenous sorting. The paper uses micro evidence of social...

We study how the prevailing internal organization of the family affected the initial design of pension systems. Our theoretical framework predicts that, in society with weak family ties, pensions systems were introduced to act as a safety net, while in societies with strong ties they replicate...