Is inequality harmful for growth? The authors suggest that it is. In a society where distributional conflict is important, political decisions produce economic policies that tax investment and growth-promoting activities in order to redistribute income. The paper formulates a theoretical model...

We investigate the effect of electoral rules and forms of government on fiscal policy outcomes in a large sample of democracies. We rely on different estimation methods to address prospective problems of statistical inference, due to nonrandom selection of these constitutional rules. The...

The authors present a new solution to the time-consistency problem that appears capable of enforcing ex ante policy i n settings where other enforcement mechanisms do not work. The soluti on involves a social contract that specifies the optimal ex ante poli cy and is effectively sold by...

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...

This paper studies the effect of additional government revenues on political corruption and on the quality of politicians, both with theory and data. The theory is based on a political agency model with career concerns and endogenous entry of candidates. The data refer to Brazil, where federal...

The importance of seigniorage relative to other sources of government revenue differs markedly across countries. This paper tries to explain this regularity by studying a political model of tax reform. The model implies that countries with a more unstable and polarized political system will have...

This paper proposes a positive theory of tariff formation based on the idea that the optimal trade policy may be time inconsistent. A benevolent government, with redistributive goals, may have an incentive to provide unexpected protection, since the redistributive effects of trade policy are...