A large empirical literature claims that …fiscal policy in developingcountries is procyclical, in contrast to high-income countries where it is countercyclical. Some authors, however, have questioned this …finding because theliterature has typically ignored endogeneity problems. To settle this...

Economists generally assume that the state has sufffcient institutional capacityto support markets and levy taxes, assumptions which cannot be taken forgranted in many states, neither historcally nor in today’s developing world.Our paper develops a framework where "policy choices" in market...

This paper uses data on elected village councils in South India to examinethe political economy of public resource allocation. We find that the patternof policy-making reflects politicians' self-interest. Elected councillors benefit from improved personal access to public resources. In addition,...

This paper explores the consequences of creating and improvingproperty rights so that …xed assets can be used as collateral. Thishas become a cause célèbre of Hernando de Soto whose views areinfluential in debates about policy reform concerning property rights.Hence, we refer to the economic...

This lecture is not in any sense a survey of the …field. It is a highlyselective and personal view of the motivation behind the fi…eld and some ofthe key themes that link the literature. Thus, it represents a manifestopresented in the hope that somebody who encounters these ideas for the...

Joe is one a small group of influential economists who brought theorizing aboutdevelopment processes to a new level. In trying to understand the reasons why low pooreconomies remain so, he was among the first to appreciate the importance of informationand contracting issues. His seminal...

There are N citizens who have to make a social decision about a set policies denotedby x ∈ A, where A denotes the set of feasible policies. Citizen’s preferencesover policy are denoted V i (x, j) ( where i = 1, ...,N) ,and j denotes the identityof the policy maker. This specification allows...

[...]The analysis of competitive markets culminated in the fundamental theorems of welfare economics which elucidated the (restrictive) conditions under which resource allocation by markets would achieve Pareto efficiency. The first fundamental theorem says that all perfectly competitive...

A key issue in political economy concerns the accountability structures put in place to select public officials. While the principle that legislators are to be elected is now a defining feature of modern democracies, there are some offices where a plurality of selection methods survive. A key...

A weakening dependence on rain-fed agriculture has been a hallmark of the economictransformation of countries throughout history. Rural citizens in developing countries to-day, however, remain highly exposed to fluctuations in the weather. This exposure affectsthe incomes these citizens earn and...