This paper analyzes whether political outcomes in local democracies are determinedby the preferences of the median -typically poor- agents or whether they reflect thewishes of the wealthy elites. A model shows that when politicians belonging to differentgroups can form coalitions, the wealthy...

The theme of this year's WDR is how to structure institutions to bring about an effectively functioning market economy. There is no question that political institutions play a key role here. In most countries political institutions determine the rules of access to considerable discretionary...