We describe a dynamic model of costly information sharing, where private information affecting collective-value actions is transmitted by social proximity. Individuals make voluntary contributions towards the provision of a pure public good, and information transmission about quality of...

This paper studies how society votes on the payroll taxes of a basic income and a social health insurance scheme. Individuals differ along the two most important dimensions when it comes to the design of the two welfare schemes, namely, income and risk. Even though the introduction of a basic...

How should we evaluate the welfare implications of improvements to safety technologies in the presence of offsetting behavior? We model this problem as a symmetric game in which each player’s payoff depends on his own action and the average action of the other players, and analyze under which...

There is an intensive dispute in political economics about the impact of institutions on income redistribution. While the main focus is on comparison between different forms of representative democracy, the influence of direct democracy on redistribution has attracted much less attention....

According to the Leviathan-Model, fiscal federalism is seen as a binding constraint on a revenue-maximizing government. The competitive pressure of fiscal federalism is supposed to reduce public sector size as compared to unitary states. However, empirical results concerning the Leviathan...

In most Western economies, the flourishing of the Welfare State has coincided with a decline of the role of the family: divorce has been introduced, and the number of marriages has decreased. We suggest that a taboo against divorce was part of the informal safety net in a period when social...

We consider a general equilibrium model where groups operating in a competitive market environment can have several members and make efficient collective consumption decisions. Individuals have the option to leave the group and make it on their own or join another group. We study the effect of...

We examine how a shift of bargaining power within households operating in a competitive market environment affects equilibrium allocation and welfare. If price effects are sufficiently small, then typically an individual benefits from an increase of bargaining power, necessarily to the detriment...

We analyze a simple model of local public good provision in a region comprising two districts, a city and a village. When districts remain autonomous and local public goods have positive spillover effects on the neighboring district, there is underprovision of public goods in both the city and...

We examine how socio-political conflict in Bolivia has affected its economic performance since the 1970s. Such conflict includes strikes, demonstrations, road blockades, and conventional rent-seeking. Since conflict has costs, it diverts resources away from production, tends to reduce investment...