This research advances the hypothesis that resource abundant economies characterized by a socially cohesive workforce and network externalities triggered the emergence of efficiency-enhancing inclusive institutions designed to restrict mobility and to enhance the attachment of community members...

Governments in advanced and developing economies allocate capital subsidies to firms in a discretionary fashion through industrial policy or state aid. Do such discretionary policies mitigate or exacerbate the misallocation of resources across firms? This paper analyzes a typical EU policy using...