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...

Brazil's under-performance in the area of infrastructure is widely recognized by policymakers and country experts. By virtually any metric the country performs poorly in comparison to other countries in the same level of development (Velloso et al 2013). Along with education, deficient...

Traditional wisdom on the effect of reelection on incumbent performance is that first-term politicians refrain from rent extraction because they want to be reelected. We find no evidence to support it. The corruption-reducing effects of reelection may be offset when the expected utility for rent...

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...

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...

This project examines fiscal reforms in Brazil since the 1990s, particularly in taxation, budgeting, and fiscal federalism. While recentralizing fiscal authority and massively expanding the extractive capacity of the state, policymakers chose not to revamp an inefficient tax system that has...

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...