Do mandatory spending programs such as Medicare improve efficiency? We analyze a model with two parties allocating a fixed budget to a public good and private transfers each period over an infinite horizon. We compare two institutions that differ in whether public good spending is discretionary...

Tariff bindings and administered protection are two characteristics of the WTO that are little understood. Tariff bindings place a ceiling on tariffs that is not always reached, while administered protection ensures that all sectors have access to some minimum import protection, effectively...

This paper presents a theory of optimal multilateral trade agreements with public political shocks. Optimal multilateral agreements exhibit "forbearance'' – where one country withholds retaliation when its trading partner receives a shock. This provides a rationale for countries not acting on...

The institutions that have sustained global economic cooperation for the past 75 years are under threat. Despite admonitions that global peace and prosperity are at risk, policymakers in important countries are ignoring the rules of the multilateral order and moving down the path of...