Explaining individual behavior in politics should rely on the same motivational assumptions as explaining behavior in the market: That’s what Political Economy, understood as the application of economics to the study of political processes, is all about. In its standard variant, those who...

This paper shows why a majority of legislators may vote for a policy that benefits a firm but harms all legislators. The firm may induce legislators to support the policy by suggesting that it is more likely to invest in a district whose voters or representative support the policy. In...

This study is the first to explore long-run trends of numeracy for the 1820-1949 period in 165 countries, and its contribution to growth. Estimates of the long-run numeracy development of most countries in Asia, the Middle East, Africa, America, and Europe are presented, using age-heaping...

Legal provisions that protect politicians from arrest and prosecution exist throughout much of the modern democratic world. Why, and with what effects, do societies choose to place their politicians above the law? We examine the institution of immunity both theoretically and empirically. Our...

We study the role of inter-group differences in the emergence of conflict. In our setting, two groups compete for the right to allocate societys resources, and we allow for costly intergroup mobility. The winning group offers an allocation, that the opposition can either accept, or reject and...

The means of contest design may include differential taxation of the prize. This paper establishes that, given a revenue-maximizing contest designer who faces a balanced-budget constraint, the optimal taxation scheme corresponding to an all-pay auction is appealing in two senses. First, it...

This paper evaluates differential prize taxation and structural discrimination as a means of increasing efforts in the most widely studied contests. We establish that a designer who maximizes efforts subject to a balanced-budget constraint prefers dual discrimination, namely, change of the...

This study explains the observed repeated personal interactions between lobbyists and policymakers. The analysis uses a dynamic model of commercial lobbying in which citizens may hire lobbyists to present policy proposals on their behalf to policymakers. It is shown that repeated interactions...