Higher economic growth was generated during Democratic presidencies compared to Republican presidencies in the United States. The question is why. Blinder and Watson (2016) explain that the Democratic-Republican presidential growth gap (D-R growth gap) can hardly be attributed to the policies...

We analyze whether or not the globalization of capital, ‘disciplines' governments and improves governance. We demonstrate that globalization affects governance, by increasing a country's vulnerability to sudden capital flight. This increased threat of capital flight can discipline governments...

We document that trust in public institutions — and particularly trust in banks, business and government — has declined over recent years. U.S. time series evidence suggests that this partly reflects the pro-cyclical nature of trust in institutions. Cross-country comparisons reveal a clear...

This paper analyzes whether nation-state governments can increase their credibility by becoming members of international organizations. Credibility is an important asset because it determines the real interest rate and is expected to have an important impact on investment and growth. It is...

We show that political booms, measured by the rise in governments' popularity, predict financial crises above and beyond other better-known early warning indicators, such as credit booms. This predictive power, however, only holds in emerging economies. We show that governments in emerging...

Adding to the literature on the effects of government decentralization, this paper uses a large sample of individual responses from more than a hundred countries about public's perceptions of government's performance along various dimensions to study the relative influences of different types of...

Electoral institutions interact through the incentives they provide to policy makers and voters. In this paper divided government is interpreted as the reaction of voters to a systematic control problem. Voters realize that term-limited executives (“lame ducks”) cannot credibly commit to a...

The paper looks at the determinants of fiscal adjustments as reflected in the primary surplus of countries. Our conjecture is that governments will usually find it more attractive to pursue fiscal adjustments in a situation of relatively high growth, but based on a simple stylized model of...

In a country with weak institutional constraints on the executive, the real power might belong to the government bureaucracy rather than to an autocratic leader. We combine the Aghion-Tirole definition of formal and real authority with the Barro-Ferejohn model of political agency to study the...

Using panel data for a maximum of 109 countries over the years 1976-2000, we empirically analyze the impact of decentralization on the occurrence of transnational terror. Our results show that expenditure decentralization reduces the number of transnational terror events in a country, while...