A fundamental principle of economics with which Adam Smith begins The Wealth of Nations is the division of labor. Some firms, however, have been pursuing a practice called job rotation, which assigns each worker not to a single and specific task but to a set of several tasks among which he or...

Risk and transaction costs often provide competing explanations of institutional outcomes. In this paper we argue that they offer opposing predictions regarding the assignment of fixed and variable taxes in a multi-tiered governmental structure. While the central government can pool regional...