This paper reconsiders Persson and Tabellini’s (2003,2004) analysis of the causal effect of constitution type on government size, it addresses the concerns of Acemoglu ( 2005) and makes some further refinements to argue that there is a qualitatively large, and statistically significant...

In this paper we study learning procedures when counterfactuals (payo s of not-chosen actions) are not observed. The decision maker reasons in two steps: First, she updates her propensities for each action after every payo experience, where propensity is de ned as how much she prefers each...

We put forward a modern version of the ‘developmental’ view of government-owned banks which shows that the combination of information asymmetries and weak institutions creates scope for such banks to play a growth-promoting role. We present new cross-country evidence consistent with our...