The theoretical literature on the economics of fiscal federalism has identified several potential effects of government decentralization on economic growth. Much of the traditional literature focuses on the efficiency aspects of a decentralized provision of public services. However,...

This study proposes an analytical framework towards behavioral political economy of institutional change. It considers institutional changes as central government’s choices under uncertainty, which are largely driven by the strategic outcomes in a behavioral coordination game between local...

Institutions are important for proper economic performance, but are replaceable by trust or other social norms. We show that when proper institutions and trust are missing, integrity of the individuals can replace them. We construct a model of a transactions-based economy with contracts...

Using data on a panel of 56 democratic countries in the period 1975-2004, we find evidence of a negative association between political stability and economic growth which is stronger and empirically more robust in countries with high bureaucratic costs. Motivated by these results, which contrast...

In this paper we use a transparent statistical methodology – synthetic control methods – to implement data-driven comparative studies about the impact of autocratic transition on real per capita GDP. The applied methodology compares the growth of countries that experienced a transition to...

We study the impact of barriers to entry on workplace training. Our theoretical model indicates that there are two contrasting effects of deregulation on training. With a given number of firms, deregulation reduces the size of rents per unit of output that firms can reap by training their...

Occasional crises have been shown to be part of growth enhancing mechanism (see Rancière, Tornell and Westermann, 2008). In this paper, we document that neither the stereotypical case study of India vs. Thailand, nor the benchmark growth-regression in this earlier research support this result...

This research advances the hypothesis and establishes empirically that interpersonal population diversity has contributed significantly to the emergence, prevalence, recurrence, and severity of intrasocietal conflicts. Exploiting an exogenous source of variations in population diversity across...

This research explores the economic causes and consequences of language structures. It advances the hypothesis and establishes empirically that variations in pre-industrial geographical characteristics that were conducive to higher return to agricultural investment, larger gender gap in...

Exploiting a novel geo-referenced data set of population diversity across ethnic groups, this research advances the hypothesis and empirically establishes that variation in population diversity across human societies, as determined in the course of the exodus of human from Africa tens of...