We introduce financial constraints in a theoretical analysis of illegal immigration. Intermediaries finance the migration costs of wealth-constrained migrants, who enter temporary servitude contracts to repay the debt. These debt/labor contracts are easier to enforce in the illegal than in the...

Privatization is one of the major economic phenomena in recent economic history. This paper summarizes empirical research on the effect of privatization on the performance of privatized firms and on the society. The extant evidence from privatizations in many developed and developing shows that...

This paper studies the effect of firm and country reputation on exports when buyers cannot observe quality prior to purchase. Firm-level demand is determined by expected quality, which is driven by the dynamics of consumer learning through experience and the country of origin’s reputation for...

We study an incomplete contract model where both contracting parties can invest, and the investments have both self- and cross effects. We analyze the performance of non-contingent contracts, message games, option contracts and property rights. We find that the first best is implemented if (i)...

External shocks may cause a decline in the productivity of fixed capital in certain regions of an economy. Exogenous obstacles to migration make it hard for workers in those regions to reallocate to more prosperous regions. In addition, firms may devise “attachment” strategies to keep...

This article delves into the relationship between newspaper readership and civic attitudes, and its effect on economic development. To this end, we investigate the long-term consequences of the introduction of the printing press in the 19th century. In sub-Saharan Africa, Protestant missionaries...

Paul Samuelson's (1958) overlapping generations model has turned 50. Seldom has so simple a model been so influential. The paper, in spite of its ripe age, still elicits wonder. Starting from the uncontroversial observation that “we live in a world where new generations are always coming...

We develop a model of two-stage cumulative research and development (R&D), in which one research unit (RU) with an innovative idea bargains to license its nonverifiable interim knowledge exclusively to one of two competing development units (DUs) via one of two alternative modes: an open sale...

The paper shows how time considerations, especially those concerning contract duration, affect incomplete contract theory. Time is not only a dimension along which the relationship unfolds, but also a continuous verifiable variable that can be included in contracts. We consider a bilateral trade...

Using a unique dataset, we describe the degree of ownership concentration in Russian economy and its role in shaping economic and political institutions in Russia. In particular, we find that Russian "oligarchs" do control a substantial part of the economy. While the relative weight of their...