A theory is introduced to systematically explain autocracies' diverse experiences with taxation. State power relative to citizens' capacity for violence determines the limit of taxation, the highest tax rate that citizens will tolerate and pay. Rulers can spend resources on coercion to increase...

This study explores the manner in which the availability of natural resources wealth, foreign aid or corruption potential constrains institutional improvements. By providing a framework, where rulers, bureaucracy and the citizens act endogenously, we show that the rents from these resources can...

Freedom of movement is one of the great issues of our time. Expanding opportunities for both international and internal migration can greatly expand freedom and opportunity for hundreds of millions of people. The same goes for expanding freedom of choice in the private sector. “Voting with...

It is not immediately apparent why a state would willingly abolish the death penalty and thereby lose a powerful political instrument. The fact that some states abolish capital punishment while others retain it has thus far been explained by systematic differences in the values of politicians or...

This study used the most recent World Values Survey dataset to determine whether Christian and Muslim views on the acceptability of taxing the rich and subsidizing the poor was an essential feature of democracy. The sample size included more than 23,000 individuals from more than 50 countries....

This paper analyzes the institutional conditions affecting the establishment and effectiveness of independent central banks and of budgetary institutions. It draws on the recent theory developed by North, Wallis and Weingast on the transition from a closed and fragile state to an open economic...

We consider the problem of finding sufficient conditions for political support of liberal, growth-enhancing policy in a quality-ladders model with heterogeneous agents differing in their endowment of wealth and skills. The policy set is two-dimensional: Agents vote for the level of...

Prohibition of riba (as part of the Riba-Interest equation) is one of the key dimensions of Islamic economics and finance. While it is recognized that riba is a form of unjust and unearned income or gain, the focus on riba is too narrow to capture the wider implications of unearned income or...

This essay accepts the normative vision Richard Epstein sets forth in The Classical Liberal Constitution, but refracts that vision through some considerations of positive political economy. In response to a questioner who asked at the conclusion of the Constitutional Convention what kind of...

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...