Since efforts by industrial countries to increase the amount of foreign aid they provide have been on the rise recently, it is important to understand the determinants involved. This paper examines the factors affecting support for foreign aid among voters in donor countries. The theoretical...

This paper presents theory and evidence on the relationship between inequality and institutional quality. We propose a model in which the two dynamically reinforce each other and set out to test this relationship with a broad array of institutional measures. We establish double causality between...

This paper presents theory and evidence on the determinants of the size of the informal sector. We propose a simple theoretical model in which the informal sector`s size is negatively related to institutional quality and positively related to income inequality. These predictions are then...

This paper revisits the effects of a country's institutional framework on individual firms' behavior, in particular focusing on their propensity to comply with legal rules. The theoretical model presented here suggests that these effects may be of paramount significance-contrary to the recently...

A growing body of recent macroeconomic evidence suggests that volatility is detrimental to economic growth. The channels through which volatility affects growth, however, are less clear; substantive evidence based on disaggregate data is almost non-existent. This paper offers a framework in...

This paper's model suggests that a strong leader, sometimes with little legislative oversight, may nevertheless benefit from public support. The argument is that this support is induced as an attempt by the poor to counter the subversion of public protection of property rights by the rich, and...

This paper studies the joint effect of economic and political inequalities on redistributive taxation and institutional quality. The theoretical model suggests that income inequality, coupled with political bias in favor of the rich, decreases redistribution and lowers institutional quality. The...

This paper examines the causal link between education and democracy. Motivated by a model whereby educated individuals are in a better position to assess the effects of public policies and hence favor democracy where their opinions matter, the empirical analysis uses World Values Surveys to...

To what extent do imposed institutions shape preferences? We consider this issue by comparing the market-versus-state attitudes of respondents from a capitalist country, Finland, and an ex-communist group of Baltic countries, and by arguing that the period of communist rule can be viewed as an...

Poorer countries have a much smaller public sector and correspondingly a smaller tax burden than richer countries, yet, their economic performance has not been necessarily better. Using a simple model, this paper suggests that the growth and welfare effects of taxation are mediated through...