This paper develops a theory of the endogenous formation of a common market in a three-country, two-factor political economy model. In the status quo, Home and Foreign implement non-discriminatory policies towards international factor flows, as to maximize the domestic median voter's welfare....

Despite restrictive migration policies, large numbers of undocumented migrants reside in many destination countries. If official migration targets are not enforced, why are they devised? To address this puzzle, we develop a political agency model with uncertainty on the migrants' supply, where...

This paper shows that electoral incentives deter politicians from supporting trade liberalization. We focus on all major trade bills introduced since the early 1970s in the U.S. Congress, in which House and Senate members serve respectively two- and six-year terms and one third of senators face...

In democratic societies individual attitudes of voters represent the foundations of policy making. We start by analyzing patterns in public opinion on migration and find that, across countries of different income levels, only a small minority of voters favour more open migration policies. Next...

This paper analyzes how the sequential formation of free trade areas affects the volume of trade between member countries. In a three--country, three--good model, if two countries have a free trade area, and both sign a similar agreement with the third, trade between the two decreases, and...

Immigration is one of the most hotly debated policy issues in the United States today. Despite marked divergence of opinions within political parties, several important immigration reforms were introduced in the post 1965 era. The purpose of this paper is to systematically analyze the drivers of...

Empirical evidence suggests that sectoral export growth decreases exporters' survival probability, whereas non--exporters are unaffected. Models with firm heterogeneity in total factor productivity predict the opposite. To solve this puzzle, we develop a two--factor framework where firms differ...

Using census data for 1996, 2001 and 2007 we study the labor market effect of immigration to South Africa. The paper contributes to a small but growing literature on the impact of South-South migration by looking at one of the most attractive destinations for migrant workers in Sub--Saharan...

In this paper we contribute to the analysis of the assimilation process of migrants by analyzing the extent to which friendship with natives can be seen as a measure of cultural assimilation and investigating the formation of social ties in the host country. Using novel information from the...

The number of preferential trade agreements has greatly increased over the past two decades, yet most existing arrangements take the form of free trade areas, and less than ten percent can be considered to be fully fledged customs unions. This paper develops a political economy model of trade...