Why do some countries indulge in urban bias, potentially harming economic development in the process, while others promote a vibrant agricultural sector? Two main explanations have been put forth. On the one hand, market failures, due to information asymmetries, mean that farmers who dearly...

Recent work has documented a spiraling upward trend in inequality since the 1970s. Most prominently, Thomas Piketty argues in “Capital in the 21st Century” that this is partially due to the fact that capitalism is hardwired to exacerbate the gap between the rich and poor. In seeking to...

Why do some countries indulge in financial repression, harming economic development in the process, whilst others promote financial development? Three main explanations have been put forth. Market failures, due to information asymmetries, mean that credit is rationed even when lenders could...

Does democracy induce financial development? There are good theoretical reasons to believe this to be the case. However, the evidence adduced to support this claim has, to this point, been mixed. In this paper, we try to make sense of this fact by unpacking democracy. We posit that only...

This paper explores how trade and foreign direct investment (FDI) condition the effect of foreign aid on environmental protection in aid recipient countries. We suggest that (1) environmental protection should be viewed as a public good and (2) all else equal, resource flows from abroad (via...

Do the poor soak the rich under democracy? Although social conflict theory predicts that democracies should be more redistributive than autocracies, a burgeoning literature challenges this contention. This paper draws on these dueling approaches to investigate the relationship between regime...

The new institutionalism arose in the 1980s, in reaction to narrowly individualistic approaches in economics, political science, and sociology. The new institutionalists claim that rules, norms, and customs — often arbitrary and artificial — structure human interaction and can explain major...

Why are some countries rich and others poor? It's not rocket science. It comes down to good governance; more specifically, secure property rights and policies that reduce transaction costs. In turn, this means the rule of law: limits on executive authority and a government that impartially...

A huge political economy literature claims “rents” matter. They influence corruption, democracy, and political stability. Researchers assume rents are interchangeable. But Market Power Rents differ fundamentally from Ricardian Rents, and both differ from Quasi-rents. Researchers also assume...