Evidence from firms in 47 countries shows that companies with political connections have higher leverage and higher market shares, but they underperform compared to non-connected companies on an accounting basis. Differences between connected and unconnected firms are more pronounced when...

We contribute to the literature on the political risk of social security by extending Feldstein and Ranguelova's (2001) methodology for measuring risk in a funded pension system to a pay-as-you-go system. We use the methodology to assess the risk over indexation of benefits in the Czech Republic...

A motivation for central bank independence (CBI) is that policy delegation helps politicians manage diverse coalitions. This paper develops a model of coalition formation that predicts when delegation will occur. An analysis of policy preferences survey data and CBI indicators supports the...

Bazaar governance tries to describe how market power is exercised. It involves a study of cooperation and coercion in bazaar. It is about solidarity, monopoly, networking and hierarchies. The informal nature of bazaar avoids the need to have any size distribution of governance. In other words,...

This paper analyses the functioning of the European Exchange Rate Mechanism (ERM). To that end, we apply duration models to estimate an augmented target-zone model, explicitly incorporating political and institutional factors into the explanation of European exchange rate policies. The...

We present a theory of endogenous political regimes that emphasizes overseas investments and that foreign governments may either induce regime transitions or promote regime consolidations. In our theory, foreign intervention is driven by the interaction between strategic foreign investments and...

Equilibrium strategies are explicitly derived for a family of two-bidder common-value first-price auctions in which players have ex ante different information represented by finite partitions of the set of possible values for the object being sold. The distribution of bids for the ex post strong...

It is a commonplace of American law that corporations are fictional. This is silly - corporations are all too-real (after all, most of us work for one, most of the physical goods on which we depend are made by them, the quality (and lack of quality) of our physical environment is dependent on...

This paper investigates how uncertainty about the adoption of a redistribution policy affects political support for redistribution when individuals can trade policy contingent securities in the stock market. We show that the demand for redistribution is always smaller than in the case where no...