Even when efficiency gains can be expected from contracting out municipal services, it surprisingly rarely occurs. Political pressure by interest groups, especially unions, is usually assumed responsible. We argue that the effectiveness of such pressure is actually a function of a service's...

Legal, scholarly, and public discussion of work force diversity has proceeded largely without benefit of microeconomic theory. Existing analysis relies on incomplete information to explain why firms might have "unrepresentative" work forces. I build a model in which work force composition...