New government spending must be approved by a referendum of citizens in many Swiss cantons. This decisionmaking procedure seems like a simple way to address citizen-legislator agency problems, but little systematic evidence is available concerning its effect on spending outcomes. We estimate...

This article develops a dynamic model of a firm in which diversification can be a value-maximizing strategy even if specialization is generally efficient. The central idea is that firms are comprised of organizational capabilities that can be profitable in multiple businesses and that...

This paper tests whether state and local fiscal policy depended on the number of seats in the legislature in the first half of the 20th century. We find that large legislatures spent more, as implied by the quot;Law of 1/nquot; from the fiscal commons/logrolling literature. The same relation...

Shareholder proposals are increasingly important tools for corporate reformers, yet courts, policy makers, and scholars are concerned that proposals may be used "opportunistically" as bargaining chips by activists to extract side payments from management. This paper investigates whether labor...

This paper studies the announcement returns from 4,764 mergers over the last 57 years in order to shed light on the causes of corporate diversification. One prominent view is that diversification is value destroying, either because of agency problems or internal investment distortions, but we...

This paper explores the benefits and costs of the voter initiative, a direct democracy device that allows voters to make policy decisions without involving their elected representatives. Previous research suggests that by introducing quot;competitionquot; into the proposal process, the...

This paper investigates the hypothesis that tough antitrust enforcement in the 1960s led firms to engage in diversification programs by preventing them from growing within their own industries. If true, diversification should have occurred more often when large firms merged than when small firms...