This paper estimates the effect of access to transportation networks on regional economic outcomes in China over a twenty-period of rapid income growth. It addresses the problem of the endogenous placement of networks by exploiting the fact that these networks tend to connect historical cities....

The direct impact of local public goods on welfare is relatively easy to measure from land rents. However, the indirect effects on home and job location, on land use, and on agglomeration benefits are hard to pin down. We develop a spatial general equilibrium model for the valuation of these...

We describe a model of fundraising in social groups, where private information about quality of provision is transmitted by social proximity. Individuals engage in voluntary provision of a pure collective good that is consumed by both neighbors and non-neighbors. We show that, unlike in the case...

We estimate the income elasticity of government expenditures using variation in the international oil price as a plausibly exogenous source of within-country variation of countries’ permanent income. Our short run elasticity estimates, between 0.25-0.50, are generally somewhat smaller than the...

This paper presents instrumental variables estimates of the effects of GDP per capita volatility on the size of government. We show that for a panel of 157 countries spanning more than half a century rainfall volatility has a significant positive effect on GDP per capita volatility in countries...

Does redistribution in democracies cater to the will of the majority? We propose and apply a simple empirical strategy based on survey data to address that longstanding issue. Differently from previous evaluations of the median-voter theory, ours does not assume that voters are guided by...

We show the existence of a twin peaks relation between trust and the size of the welfare state that stems from two opposing forces. Uncivic people support large welfare states because they expect to benefit from them without bearing their costs. But civic individuals support generous benefits...

Behavioral economics presents a "paternalistic" rationale for a benevolent government's intervention. We consider an economy where the only “distortion” is agents’ time inconsistency. We study the desirability of various forms of collective action, ones pertaining to costly commitment and...

This paper shows that cross country differences in the generosity and the quality of the welfare state are associated with differences in the trustworthiness of their citizens. We show that generous, transparent and efficient welfare states in Scandinavian countries are based on the civicness of...

The paper examines the appropriate domain of the Welfare State by exploring the areas in which free enterprise fails to provide adequate welfare state services. The paper outlines a simple coherent strategy for formulating government welfare state policy by identifying the relevant market...