To the layperson, the upward trend in European unemployment is related to the slowdown in economic growth. We argue that the layperson’s view is correct. The increase in European unemployment and the slowdown in economic growth are related because they stem from a common cause: an excessively...

An opinion poll on a representative sample of Italian citizens suggests that it does. We focus on reforms that would lengthen retirement age and/or cut pension benefits. After controlling for individual features of the respondent, we find that individuals who are more informed about the costs...

We try to demonstrate how economists may engage in research on comparative politics, relating the size and composition of government spending to the political system. A Downsian model of electoral competition and forward-looking voting indicates that majoritarian---as opposed to...

What explains the range of situations in which individuals cooperate? This paper studies a theoretical model where individuals respond to incentives but are also influenced by norms of good conduct inherited from earlier generations. Parents rationally choose what values to transmit to their...

This paper analyzes a model in which different rational individuals vote over the composition and time profile of public spending. Potential disagreement between current and future majorities generates instability in the social choice function that aggregates individual preferences. In...

Does democracy promote economic development? We review recent attempts to addresses this question, which exploit the within-country variation associated with historical transitions in and out of democracy. The answer is positive, but depends - in a subtle way - on the details of democratic...

We study the joint dynamics of economic and political change. Predictions of the simple model that we formulate in the paper get considerable support in a panel of data on political regimes and GDP per capita for about 150 countries over 150 years. Democratic capital - measured by a nation's...

The internal market in Europe will greatly increase the international mobility of resources. How will this affect fiscal policy in different countries? We first consider taxation of capital in a two-country model, where a democratically-chosen government in each country chooses tax policy....

We test for evidence that US trade policy depends on the degree of government discretion. We do this by studying US tariff choices under two distinct environments. One is that of tariffs set under the Escape Clause (section 201 of the US Trade Act of 1974). The other is the Tokyo Round of GATT...

We present a theoretical model of a parliamentary democracy, where party structures, government coalitions and fiscal policies are endogenously determined. The model predicts that, relative to proportional elections, majoritarian elections reduce government spending because they reduce party...