The Cold War division of Korea, regarded as a natural experiment in institutional change, provides a unique opportunity to examine whether institutions affect social preferences. We recruited North Korean refugees and South Korean students to conduct laboratory experiments eliciting social...

Much of the political economy analysis of reform focuses on the conflict of interest between groups that stand to gain or lose from the competing policy proposals. In reality, there is also a lot of disagreement about the working of the policy: in addition to conflicting interests, conflicting...

Markets are ubiquitous in our daily life and, despite many imperfections, they are a great source of human welfare. Nevertheless, there is a heated recent debate on whether markets erode social responsibility and moral behavior. In fact, competitive pressure on markets may create strong...

We revisit the role of Capital Fundamentalism, in the context of the Government of Indonesia's Inpres Desa Tertinggal (IDT or Left Behind Village) Program, which injected capital into poor village economies. We evaluate the impact of the program on village welfare and structural transformation...

It has been claimed that the market fosters selfishness and thereby undermines the moral basis of society. This thesis has been developed with an emphasis on market exchange. Everyday life is, however, predominantly shaped by interactions in the workplace rather than by shopping behaviour. This...

Consider an economy populated by males and females, both rich and poor. The society has to choose one of the following marriage institutions: polygyny, strict monogamy, and serial monogamy (divorce and remarriage). After having identified the conditions under which each of these equilibria...

The paper presents a model of educational production which tries to make sense of recent evidence on effects of institutional arrangements on student performance. In a simple principal-agent framework, students choose their learning effort to maximize their net benefits, while the government...

Formal or informal institutions have long been adopted by societies to protect against opportunistic behavior. However, we know very little about how these institutions are chosen and their impact on behavior. We experimentally investigate the demand for different levels of institutions that...

Why do some societies fail to adopt more efficient political and economic institutions in response to changing economic conditions? And why do such conditions sometimes generate conservative ideological backlashes and, at other times, progressive social and political movements? We propose an...

Throughout human history, informal sanctions played a key role in the enforcement of social norms and the provision of public goods. However, a considerable body of evidence suggests that informal peer sanctions often cause large efficiency costs. This raises the question whether alternative...