Public choice analysts have often argued that the level of government spending willreflect voter-taxpayer’s demand for public goods, while the fiscal illusion literature hasargued that certain features of the tax structure affect voter’s perceptions of their taxburden causing them to...

In order to understand inefficient institutions, one needs to understand what mightcause the breakdown of a political version of the Coase Theorem. This paper considersan environment populated by ex-ante identical agents and develops a model of powerand distribution where institutions (the...

We suggest an alternative way of analyzing the canonical Bergstrom-Blume-Varian model of non-cooperative voluntary contributions to a public goodthat avoids the proliferation of dimensions as the number of players is in-creased. We exploit this approach to analyze models in which the...

We present a rigorous, yet elementary, demonstration of the existence of a uniqueLindahl equilibrium under the assumptions that characterize the standard n-player public goodmodel. Indeed, our approach, which exploits the aggregative structure of the public goodmodel, lends itself to a...

We examine whether an economy can have a bad (small or no formal sector, hightaxes) as well as a good (small or no informal sector, low taxes) equilibrium...

Modelling infrastructure as an international public good in a two-country modelof trade where each country’s social planner behaves strategically, we showthat the equilibrium levels of infrastructure are sub-optimal from a globalperspective...

An important literature has made a fundamental link between corporate governanceand corporate strategy. According to agency theory, assigning managersstock options aligns their interests with the interests of the owners of the firm.This paper suggests that this may not apply in the context of...

Recent advances in the economics of knowledge highlight the key role ofpecuniary knowledge externalities in explaining the system dynamics oftotal factor productivity growth. When non-exhaustible technologicalknowledge is an input both in the production of new goods and of furtherknowledge, and...

Endogenous growth models, such as Barro (1990), predict that governmentexpenditure and taxation will have both temporary and permanent effects on growth.We test this prediction using panels of annual and period-averaged data for OECDcountries during 1970-95, isolating long-run from short-run...