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...

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...

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...