Attempts to maintain prices different from those that would otherwise be determined by supply and demand are virtually guaranteed to result in illegal behaviour, including in the case of laws that determine the salaries of civil servants. In Indonesia, private sector salaries are highly...

We study how natural resource rents affect the selection and behavior of holders of public office. Using global price shocks to thirty-one minerals and nationwide geological and political data from India, we show that local mineral rent shocks cause the election of criminal politicians. We also...

Economists have long recognized the need for durability-enhancing mechanisms to facilitate political exchange, but the focus has been almost entirely on mechanisms that raise the cost of reneging on bargains once they have been struck. What happens if these mechanisms fail? This paper argues...

The aim of this paper is to study whether politicians manipulate fiscal policy to extract private rents. We focus on the local personal income tax (PIT), in the setting of Italian cities, which is a progressive instrument that allows mayors to set different rates to distinct wage groups. We...

We analyze a contest between two groups where group members have differing valuations for the contested rent. Generically the pivotal group member with the median valuation of the rent will not act himself but will want to send a group member that has preferences different to her own into the...

Recent studies in psychology and neuroscience find that fictional works exert strong influence on readers and shape their opinions and worldviews. We study the Potterian economy, which we compare to economic models, to assess how Harry Potter books affect economic literacy. We find that some...

Piotr Kozarzewski and Maciej Bałtowski analyse the causes and manifestations of Poland's recent shift in economic policy towards a more active role of the state, and use privatization policy as an example. The authors examine the effects of the privatization policy and point to a large...

The political resource curse is the idea that natural resources can lead to the deterioration of public policies through corruption and rent-seeking by those closest to political power. One prominent consequence is the emergence of conflict. This paper takes this theory to the data for the case...

We introduce a dynamic model that investigates the persistence and evolution of elite-dominated societies, where inherited political capital determines one's social standing. Our analysis highlights the critical role of the distribution of exit options in the evolution of political inclusiveness...

If the authorities have the opportunity to receive incomes uncontrolled by society, this gives them great freedom of action. Such incomes do not depend on the quality of the public goods delivered, nor on the investment climate. Given a certain minimal level of organization, taxpayers can try to...