The determinants of government responsiveness to its citizens is a key issue in political economy. Here we develop a model based on the solution of political agency problems. Having a more informed an politically active electorate strengthens incentives for governments to be responsive. This...

This paper studies the impact of the competition between lobbies and voters on policy outcomes under alternative legislative procedures. Lobbies and citizens have opposing interests in a public policy and offer money and votes, respectively, to legislators to obtain their preferred policy....

Economists generally assume that the state has sufficient institutional capacity to support markets and levy taxes. This paper develops a framework where "policy choices" in market regulation and taxation are constrained by past investments in legal and fiscal capacity. It studies the economic...

We present detailed empirical evidence that around Greek elections, misgovernance results in significant increases in wildfires and tax evasion and with important economic implications: the cumulative cost of these effects in recent years has been over 8% of GDP and has therefore been a...

Periodic elections are the main instrument through which voters can hold politicians accountable. From this perspective term limits, which restrict voters’ ability to reward politicians with re-election, appear counterproductive. We show that despite the disciplining effect of elections, term...

The welfare economic method for analyzing the case for government intervention is often critized for ignoring the political determination of policies. The standard method of accounting for this critique studies the case for intervention under the constraint that the level of the instrument in...

Hundreds of studies have failed to establish the effects of decentralization on a number of important policy goals. This paper examines the remarkable case of Bolivia to explore decentralization's effects on government responsiveness and poverty-orientation. I first summarize econometric results...

We report on an on-going project, which asks a number of questions relevant to the study of state capacity. What are the main economic and political determinants of the state’s capacity to raise revenue and support private markets? How do risks of violent conflict affect the incentives to...

One of the key goals of political economy is to understand how institutional arrangements shape policy outcomes. This paper studies a comparatively neglected aspect of this - the forces that shape heterogeneous performance of autocracies. The paper develops a simple theoretical model of...

Governments frequently intervene to support domestic industries, but a surprising amount of this support goes to ailing sectors. We explain this with a lobbying model that allows for entry and sunk costs. Specifically, policy is influenced by pressure groups that incur lobbying expenses to...