"economic institutions", which in turn reflect past investments in legal and fiscal state capacity. We study the economic and … political determinants of these investments. The analysis shows that common interest public goods, such as fighting external …

-specific investments, both in an integrated firm and in an arm’s-length relationship. We describe an equilibrium in which firms with …

ventures. We consider a variation of the standard hold-up problem where two parties make relationship-specific investments … sequentially in order to generate a joint surplus in the future. In many interesting cases, including investments in human and in … physical capital, the following ownership structure implements first-best investments: one party owns the firm initially, while …