While people in democracies can vote their government out when they are discontent with its policies, those in dictatorships cannot do so. They can only attempt to expel the dictator via mass protests or revolutions. Based on a general cause-and-effect mechanism, the author analyzes whether such...

We extend the economic theory of regulation to allow for strategic self-regulation that preempts political action. When political "entry" is costly for consumer, firms can deter it through voluntary restraints. Unlike standard entry models, deterrence is achieved by over-investing to raise the...

We employ a common agency model to examine how green lobbies affect the determination of trade and environmental policy in two large countries that are linked through trade flows and transboundary pollution. We show that, when governments are not restricted in their ability to use trade...

This paper presents new evidence about privatisation processes and their determinants from a panel of 34 countries over the 1977-99 period. The empirical analysis shows that privatisation takes place typically in wealthy and democratic countries, endowed with deep and liquid stock markets, and...

In a society composed of a ruler and its citizens: what are the determinants of the political equilibrium between these two? This paper approaches this problem as a game played between a ruler who has to decide the distribution of the aggregate income and a group of agents/citizens who have the...

International organizations promote privatization as precondition for economic development. But is there really too little privatization? This political economy model asks for the incentives of governments to privatize or restructure a state-owned firm. Different government types are compared to...

In actual environmental policy, the design of actual pollution emission taxes differs significantly with the optimal Pigovian tax. In particular, earmarking prevails and actual taxes are usually combined with regulation. Furthermore tax rates are generally too low to significantly influence...

Countries differ substantially in how they deal with politicians that come from the public sector. Most constitutions include incompatibility and ineligibility rules due to concerns about conflicts of interest and the politicization of the public service. We study how these rules affect the...

Traditional political economy has paid primary attention to the structuring of the principal-agent relationship between citizens and politicians and the role of competition and institutions in disciplining political agents. However, as the electoral control of politicians and the credibility of...

This paper introduces a democratic voting process into an OLG economy in order to analyze the e ffects of a rising old-age dependency ratio on the composition of government spending and endogenous economic growth. Forward-looking agents vote each period on the public policy mix between...