The paper lies at the intersection between the literature on macroeconomics and politics and the literature on coordination. It uses models of political business cycles in an open economy setting to investigate the costs and benefits of forming electoral areas, i.e. regions where countries share...

We analyse risk-sharing and endogenous fiscal spending in a two-region model with sequentially complete markets. Fiscal policy is determined by majority voting. When policy setting is decentralized, regions choose pro-cyclical fiscal spending in an attempt to manipulate security prices to their...

The effect of a contribution cap is analyzed in a political lobbying game where the politician has a preference for the policy position of one of the lobbyists. In contrast to the previous literature where the politician has no preference over policy alternatives, we find that a more restrictive...

Agency problems in economics virtually always entail self-interested agency exhibiting "insufficient" loyalty to principal. Social psychology also has a literature, mainly derived from work by Stanley Milgram, on issues of agency, but this emphasizes excessive loyalty -- people undergoing a...

The number of private bills passed in a year represents the extent with which Congress wants to make administrative decisions instead of delegating these decisions to the bureaucracy. Scandalous behavior by Coongresspersons has affected the number of private bills by changing the voter's belief...

The paper offers a comparative analysis of antitrust or competition law in the European Union and the United States from a public choice perspective. It focuses on how the role of interest groups explains the common features of the two legal systems, although some discussion focuses on the...

We construct objective measures of privatization, internal and external liberalization reform efforts, across countries over time, and investigate their determinants, reversals and macroeconomic impacts. We find that GDP growth determines external liberalization and privatization, concentration...

This Paper analyses the impact of term limits in a political agency model. We find that term limits reduce the value of holding office. This reduction in the re-election incentive can induce politicians to implement policies that are closer to their own private preferences. Such ‘truthful’...

How do foreign interests influence the policy determination process? What are the welfare implications of such foreign influence? In this paper we develop a model of foreign influence and apply it to the study of optimal tariffs. We develop a two-country voting model of electoral competition,...