We model the political process as consisting of voting on the issue considered salient, public expenditure, with a subsequent consensus over size of government and income taxation. We prove that for each majoritarian choice there is a unique consensus policy on progressivity and government size....

This paper examines the impact of ethnic divisions on conflict. The empirical specification is informed by a theoretical model of conflict (Esteban and Ray, 2011) in which equilibrium conflict intensity is related to just three distributional indices of diversity: ethnic polarization, ethnic...

This paper studies a model of announcements by a privately informed government about the future state of the economic activity in an economy subject to recurrent shocks and with distortions due to income taxation. Although transparent communication would ex ante be desirable, we find that even a...

In this paper we propose the infimum of the Arrow-Pratt index of absolute risk aversion as a measure of global risk aversion of a utility function. We show that, for any given arbitrary pair of distributions, there exists a threshold level of global risk aversion such that all increasing...

In this paper we examine the link between ethnic and religious polariza- tion and conflict using interpersonal distances for ethnic and religious attitudes obtained from the World Values Survey. We use the Duclos et al (2004) polar- ization index. We measure conflict by means on an index of...

We set up a signaling game where individuals differ in ability and wealth. Higher ability means larger benefit supported by the government. Costly signals are used to transmit information regarding own deservingness. However, capital market imperfections may perturb the signals by limiting the...

The purpose of this paper is two-fold. First, we develop the measurement theory of polarization for the case in which income distributions can be described using density functions. Second, we provide sample estimators of population polarization indices that can be used to compare polarization...

We present a novel approach to N-person bargaining, based on the idea that the agreement reached in a negotiation is determined by how the direct conflict resulting from disagreement would be resolved. Our basic building block is the disagreement function, which maps each set of feasible...

We present a model of conflict in which discriminatory government policy or social intolerance is responsive to various forms of ethnic activism, including violence. It is this perceived responsiveness captured by the probability that the government gives in and accepts a proposed change in...