I examine the role of political instability as a potential explanation for the lack of capital flows from rich countries to poor countries (i.e. the `Lucas Paradox'). Using panel data from 1984 to 2014, I document the following: (i) developed countries exhibit larger inflows of foreign direct...

This paper documents that countries with low political turnover exhibit larger inflows of foreign direct investment. This correlation is rationalized with a model of redistribution, where policymakers have access to an expropriation technology that can be used to extract resources from foreign...

We analyze the welfare implications of introducing budget rules, composed by a tax code and an entitlement program, in a dynamic infinite horizon political-economy model featuring disagreement over the distribution of resources. Poor agents want expansive entitlement programs, whereas rich...

We analyze the problem of optimal public investment when government purchases of productive capital assets are financed through income taxes. Virtually all previous work in this literature has prescribed a share of public investment in GDP that is both constant and time consistent. This paper...