This paper provides a general framework for analyzing political (in)stability in comparative political systems. It distinguishes different subgroups of a society, some of which have a potential for pursuing a redistribution of wealth in its broadest sense via constitutional or non-constitutional...

Partisan conflict and policy uncertainty are frequently invoked as factors contributing to slow post-crisis recoveries. Recent events in Europe provide ample evidence that the political aftershocks of financial crises can be severe. In this paper we study the political fall-out from systemic...

In a multiperiod setting, decision-makers can learn about the consequences of their decisions throughexperimentation. In this paper we examine how in a two-party system polarization and political instability affectlearning through experimentation. We distinguish two cases:the decision to be made...

We analyze the influence of IMF and World Bank programs on political regime transitions. We develop an extended version of Acemoglu and Robinson's [American Economic Review 91, 2001] model of political transitions to show how the anticipation of new loans from international financial...

I investigate how political uncertainty influences corporate investment decisions employing a unique panel dataset of German manufacturing firms. I use data on firms' self-reported investment realizations, plans and revisions. The firm-specific user cost of capital captures the current...

Using microdata that serve as the foundation of the ifo Business Climate Index, Germany's leading business cycle indicator, I examine whether political uncertainty influences how firm owners perceive their present state and future development of business. I use state election months as...

We estimate the effect of electorally induced policy uncertainty on investment in the manufacturing sector. Because state governors exercise considerable influence over legislation and considerable discretion over regulation and permitting, and because the policies relevant to business...

We analyze the influence of IMF and World Bank programs on political regime transitions. We develop an extended version of Acemoglu and Robinson's (American Economic Review 91, 2001) model of political transitions to show how the anticipation of new loans from international financial...

This paper studies the determinants of the distribution of the national budget amongst Argentinean provinces. We evaluate the relevance of the alternative theories of budget allocation using the Arellano-Bond dynamic panel technique. Our results confirm our presumption that Federal funds...

We analyze the political stability of welfare enhancing privatization of the social security. We consider an economy populated by overlapping generations, who vote on abolishing the funded system and replacing it with the pay-as-you-go scheme, i.e. "unprivatizing" the pension system. We show...