Transaction costs are a major reason why international trade flows are much smaller than traditional trade theory would suggest. Trust between trading partners lowers transaction costs and may therefore enhance trade. The empirical analysis of this paper shows that more trust leads to more trade...

This paper discusses various ways to organise these consultations, so that a compromise agreement is reached on the solution of the (re)distribution problem. These institutionalised structures of consultation are referred to as 'matching zones' here. Practical experiences, mainly from the...

This paper discusses various ways to organize these consultations, so that a compromise agreement is reached on the solution of the (re)distribution problem. These institutionalized structures of consultation are referred to as 'matching zones' here. Practical experiences, mainly from the...

This paper reviews three distinct strategies in recent economics for using the concept of social identity in the explanation of individual behavior: Akerlof and Kranton’s neoclassical approach, Sen’s commitment approach, and Kirman et al.’s complexity approach. The primary focus is the...

A pluralist approach to economics is both necessary from anacademic as well a policy point of view. From an academicviewpoint pluralism can be understood as the outcome ofcompetition and specialization in the search for new ideasthat can deal with imperfections of the real world. From apolicy...

We analyze a simple model of local public good provision in a country consisting of a large number of heterogeneous regions, each comprising two districts, a city and a village. When districts remain autonomous and local public goods have positive spillover effects on the neighbouring district,...

This paper provides empirical evidence that campaign contributions arestrongly associated with market expectations of future firm-specific political favors,including preferential access to external financing. Using a novel dataset, we find thatfirms in Brazil providing contributions in the 1998...

This paper studies the equilibrium size of countries. Individuals in smallcountries have greater influence over the nature of political decision mak-ing while individuals in large countries have the advantage of more publicgoods and lower tax rates. The model implies that (i) there exists...

We introduce the notion of a stone age equilibrium to study societies in which property rights are absent, bilateral exchange is either coercive or voluntary, and relative strength governs power relations in coercive exchange. We stress the importance of free disposal of goods which allows for...

This paper studies patenting decisions by firms in relation to the negotiation and signing of the Helsinki and Oslo protocol as part of the Convention on Long-Range Transboundary Air Pollution. We use a uniquely constructed patent data set on SO2 abatement technologies filed in 15 signatory and...