How and why do politicians’ preferences about monetary policy differ from the interest rates set by independent central banks? Looking at the European Central Bank, the paper shows that politicians, on average, favor significantly lower interest rates. Three factors explain the different...

Multi-product firms create value by integrating functional activities such as manufacturing across business units. This integration often requires making functional managers responsible for implementing standardization, thereby limiting business-unit managers’ authority. Realizing synergies...

This paper surveys alternative approaches to the emergence and evolution of institutions. The challenge is to develop frameworks capable of capturing both stability and change. We follow a “descaling” approach to show how founding assumptions about economics—namely, alternative assumptions...

This paper surveys alternative approaches to the emergence and evolution of institutions. The challenge is to develop frameworks capable of capturing both stability and change. We follow a “descaling” approach to show how founding assumptions about economics—namely, alternative assumptions...

There are many situations in which a principal delegates decisions to a better-informed agent but does not choose to give full discretion. This paper discusses one reason why this might be desirable: the agent may have tastes that differ from those of the principal. Limiting the agent's...