This paper explores the effect of political accountability on the size of the public sector in a principal-agent model of democratic government. Political accountability is the degree to which the electorate can control politicians through elections, and emphasis is put on the roles of...

We use survey responses by firms to examine the firm-level determinants and effects of political influence, their perception of corruption and prevalence of bribe paying. We find that: (a) measures of political influence and corruption/bribes are uncorrelated at the firm level; (b) firms that...

Do political institutions limit rent-seeking by politicians? To address this question, we study the transformation of petroleum rents into hidden wealth using unique data on bank deposits in tax havens. We find that petroleum rents are associated with increases in hidden wealth, but only when...