The literature on safety nets has become technically more precise by drawing on advances in contract theory and optimal governance structure. This paper begins with a treatment of some aspects of the theory. The author's approach draws more on institutional economics, and more precisely on the...

The author sets out a methodology for analyzing episodes of high real interest rates in emerging market economies. He reviews the literature on what determines spreads in deposit rates and loan rates. Then he links the causes of interest rate spreads by explicitly modeling the incentive effect...

Economic policy reform that creates opportunities for new productive activities often shifts wealth from one set of agents toward another, creating reason for political pressure against the reform. The author explores how government financial guarantees secure the political support of the...