Social contracts about inequality and redistribution are country-specific. We rely on a model of inequality and redistribution where multiple steady states can emerge in given country. We link the model to the recent literature on beliefs and argue that beliefs are a major determinant of which...

Economic and political development are contextual. Nevertheless, there are some general elements in the process of institutional persistence and change. We present a framework that goes beyond the standard institutional analysis and adds the concepts of beliefs, leadership, and windows of...

Critical transitions for a country are historical periods when the powerful organizations in a country shift from one set of beliefs about how institutions (the formal and informal rules of the game) will affect outcomes to a new set of beliefs. Critical transitions can lead a country toward...

We found that the driving force behind policies in Brazil is the strong set of powers given to the President by the Constitution of 1988. To have strong powers does not mean unbridled powers. Several institutions constrain and check the power of the President, in particular the legislature, the...

This paper explores the link between Brazil's political institutions and its disappointing productivity and growth in recent decades. Although political institutions provide the president with incentives and the instruments to pursue monetary stability and fiscal discipline they simultaneously...

We link a model of inequality and redistribution where multiple steady states can emerge, to the recent literature on beliefs, and argue that changes in beliefs may shift the equilibrium over time. We present evidence that beliefs are typically very stable over time, yet argue that Brazil has...

This paper explores the link between Brazil's political institutions and its disappointing productivity and growth in recent decades. Although political institutions provide the president with incentives and the instruments to pursue monetary stability and fiscal discipline they simultaneously...