This study examines the relationships between democratic politics and systematic (or country-specific) financial risk. Low financial risk is crucial to any well-functioning economy, as it encourages capital investment, facilitates growth, and enhances overall economic performance. Up until now,...

Beyond direct damages, terrorism creates fear and insecurity, potentially reducing support for democratic institutions if these are deemed inadequate to tackle the threat, and increasing support for military governments. To investigate this possibility, we use data from Pakistan, a country that...

Why do politicians sometimes pursue policies with uncertain outcomes? We present a model in which politicians are unable to pre-commit to a status quo policy, and where investors and voters face a conflict over the division of output. Politicians may deviate from the status quo and pursue risky...

We build a model of secession crises where voters may wish to accommodate the minority to prevent secession. We show the existence of a majority voting equilibrium with a government's type biased in favor of the minority. We propose a measure of secession risk and perform the comparative static...

Corporate and securities laws are seen to mitigate corporate fraud by 'manipulating the incentives of agents': presenting corporate agents with a probability of being caught and punished if they commit fraud. This article suggests that the same laws also affect corporate fraud in a significant...

This paper studies the effect of individual uncertainty on collective decision-making to implement innovation. We show how individual uncertainty creates a bias for the status quo even under irreversible voting decisions, in contrast with Fernandez and Rodrik (1991). Blocking innovation is...