Well-designed decentralization can deepen democracy and strengthen the state in five key ways. Decentralizing below the level of social cleavages should undermine secessionism by peeling away moderates from radical leaders. The "fragmentation of authority" critique is mistaken; decentralization...

This paper explores the transmission of non-capital shocks through banking networks. We develop a methodology to construct non-capital (idiosyncratic) shocks, using labor productivity shocks to large firms. We document a change in the relationship between foreign idiosyncratic shocks and...