Social democracy, it is often said, is nice but pricey. Whatever its merits in the rich countries of Western Europe, social democracy is frequently dismissed as an infeasible model for developing countries. Based on generosity towards the poor and protection against market competition, the...

Mancur Olson's Logic of Collective Action has provided the dominant framework for understanding the impact of encompassing unions and employers confederations on wage-setting in Western Europe. In particular, scholars have drawn upon Olson's writing to descripe corporatism as a means for...

The welfare state is generally viewed as either providing redistribution from rich to poor or as providing publicly-financed insurance. Both views are incomplete. Welfare policies provide both insurance and redistribution in varying amounts, depending on the design of the policy. We explore the...

We investigate the effects of the compression of wage differentials through centralized wage-setting in a context where growth depends on the continual reallocation of labor from older, less productive plants to new, more productive plants. We first compare plant-level and centralized wage...

This paper compares the political support for a targeted and a universalistic welfare policy in a model in which incomes are stochastic (so that welfare policies have an insurance benefit) and unequal ex ante (so that welfare policies have a redistributive effect). With self-interested voting,...