This paper provides a theoretical analysis of the relationship between public sector motivation and development. We analyze a simple two sectors model: a public and a private sector in which the returns are increasing in the quality of the public good produced by the public sector. The main...

This article reviews an emerging body of evidence on relational contracts, defined as informal arrangements sustained by the value of future interactions. We focus on developing and international markets, which are often characterized as contexts with weak formal contract enforcement. We...