German separation in 1949 into a communist East and a capitalist West and their reunification in 1990 are commonly described as a natural experiment to study the enduring effects of communism. We show in three steps that the populations in East and West Germany were far from being randomly...

Based on official records from the former East German Ministry for State Security, we quantify the long-term costs of state surveillance on social capital and economic performance. Using county-level variation in the number of spies in the 1980s, we exploit discontinuities at state borders to...

This paper investigates whether political competition plays an important role in determining the level of agricultural protection. In order to do so, we exploit variation in political and economic data from 74 developing and developed countries for the post-war period. Our results robustly show...

Nowadays, a solid budget serves as an important quality signal for the electorate. Therefore, politicians might face an incentive to influence tax revenue forecasts which are widely regarded as a key element for budget setups. Looking at the time period from 1996 to 2012, we systematically...

We study whether the number of signatures collected to qualify a popular initiative affects the probability of reforming the status quo. The initiative process is modeled as a sequential game under uncertainty: petitioners make an entry decision and collect signatures to qualify the initiative....

The role of electoral incentives vs. selection is ideally analyzed in a setting where the same legislators are selected to decide on policies under different electoral rules and where voter preferences on policies can be precisely measured. This is the first paper to look at such a situation....

Drawing on panel data from six elections between 1998 and 2017 in Germany, we estimate the causal effect of immigration - described by Germany's interior minister as the "mother of all political problems" - on electoral support for the far right and the far left. Our identification strategy is...

Immigration has become one of the most divisive political issues in the United States, the United Kingdom, France and several other Western countries. We estimate the impact of immigration on voting for far-left and far-right candidates in France, using panel data on presidential elections from...

Expectations of consumers and investors are drivers of consumption and investment, and consequently the business cycle. In this paper, we study whether these expectations, as proxied by economic sentiment indicators, are affected by the political environment. First, we study the impact of...