How is economic policy made? In this paper we study a key determinant of the answer to the question: lobbying by firms. Estimating a binary choice model of firm behavior, we find significant evidence for the idea that barriers to entry induce persistence in lobbying. The existence of these costs...

Confronted with a failing firm, a politician sets a bailout to maximize his reelection chances. The voters among the firm’s stakeholders reward him for the bailout, while the remaining voters punish him in the elections since they finance the bailout via taxes. The firm also employs non-voting...

How is economic policy made? In this paper we study a key determinant of the answer to the question: lobbying by firms. Estimating a binary choice model of firm behavior, we find significant evidence for the idea that barriers to entry induce persistence in lobbying. The existence of these costs...

The Global Financial Crisis of 2007-2009 put the spotlight on the problem of too-big-to-fail (TBTF). The research conducted in this context has, however, generally focused on the econometric aspect and the contribution of the TBTF doctrine to the financial crisis of 2007-2009, while the economic...

This paper studies the role of council size on government corruption in Brazil. We leverage on the discontinuous relationship between the population size of municipalities and council size dictated by the law to implement a regression discontinuity design. We document a substantial positive...

As part of a spending-review policy at the beginning of the 2010 sovereign debt crisis, the Italian central government progressively reduced the municipal council size and the number of municipal executive board members. This paper exploits these reforms of the local political system as...