Because energy subsidies affect incentives to invest in energy-saving equipment and technologies, they entail a classic investment hold-up problem: once investment has taken place, policymakers will tend to overuse them, which will in turn depress investment by forward-looking agents. Reforming...

This paper examines whether policy commitment mechanisms, when available, will be used by the elected policymaker in a political-economy equilibrium. We describe a two period repeated voting model where second-period outcomes depend on commitment choices made by an elected policymaker in the...

We consider renegotiation of social earnings insurance arrangements by majority voting in an economy where ex-ante identical individuals make unobservable private investments in education. We show that voting-based renegotiation can result in a higher expected level of investment in comparison...