We propose a model in which economic relations and institutions in advanced and less developed countries differ as these societies have access to different amounts of information. The lack of information in less developed economies makes it hard to evaluate the performance of managers, and leads...

The authors examine the effects of government redistribution schemes in an economy where agents are subject to uninsurable, individual specific productivity risk.

In an analysis of the risk-sharing properties of different types of pension systems, we show that only a fixed-fee pay-as-you-go (PAYG) pension systems can provide intergenerational risk sharing for living individuals. Under some circumstances, however, other PAYG pension systems can enhance the...