This study investigates the existence of political rents in bank lending, using a comprehensive loan-level data set of the universe of commercial loans in Mexico from 2003 to 2012. Identification relies on changes in the state of origin of a senate committee chairman as a source of exogenous...

This paper examines the effects of pecuniary compensation on the ability and motivation of individuals inorganizations with non-pecuniary or pro-social missions. In particular, the paper compares flat pay systems, unrelated with ability or effort, to two other systems that are considered...

In many developing countries (and beyond), public sector workers are not just simply implementers of policies designed by the politicians in charge of supervising them -- so called agents and principals, respectively. Public sector workers can have the power to influence whether politicians are...

Does decentralizing the allocation of public resources reduce rent-seeking and improve equity? This paper studies a governance reform in Pakistan's vast Indus Basin irrigation system. Using canal discharge measurements across all of Punjab province, the analysis finds that water theft increased...

This paper examines the relationship between entry regulation and the business interests of former President Ben Ali's family using firm-level data from Tunisia. Connected firms account for a disproportionate share of aggregate employment, output and profits, especially in sectors subject to...

Why is there significant variation in rent extraction among high-income democracies? A large number of political economy investigations into this research question have found that a long period of democratic rule and high per capita income are associated with less rent extraction among public...

Recruiting and retaining leaders and public servants at the grass-roots level in developing countries creates a potential tension between providing sufficient returns to attract talent and limiting the scope for excessive rent-seeking behavior. In China, researchers have frequently argued that...

This paper argues that state weakness is broader than implied previously in the civil war literature, and that particular types of weakness in interaction with natural resources have aggravating or mitigating consequences for the risk of civil war. While in anocracies or unstable regimes natural...

This essay first sets out the "business model" problems entailed by corruption and their effects as well as implications for economic growth. Key issues are the need for secrecy and co-operation with partners in crime. Dealing with these leads to behavior which is ostensibly bizarre and...