American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 43 3 September 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=43&issue=3&issue_date=September 2005 Journal Article Corporate Governance, Economic Entrenchment, and Growth RandallMorck DanielWolfenzon BernardYeung 655 720 Outside the United States and the United Kingdom, large corporations usually have controlling owners, who are usually very wealthy families. Pyramidal control structures, cross shareholding, and super-voting rights let such families control corporations without making a commensurate capital investment. In many countries, a few such families end up controlling considerable proportions of their countries' economies. Three points emerge. First, at the firm level, these ownership structures, because they vest dominant control rights with families who often have little real capital invested, permit a range of agency problems and hence resource misallocation. If a few families control large swaths of an economy, such corporate governance problems can attain macroeconomic importance—affecting rates of innovation, economywide resource allocation, and economic growth. If political influence depends on what one controls, rather than what one owns, the controlling owners of pyramids have greatly amplified political influence relative to their actual wealth. This influence can distort public policy regarding property rights protection, capital markets, and other institutions. We denote this phenomenon economic entrenchment, and posit a relationship between the distribution of corporate control and institutional development that generates and preserves economic entrenchment as one possible equilibrium. The literature suggests key determinants of economic entrenchment, but has many gaps where further work exploring the political economy importance of the distribution of corporate control is needed. http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=43&issue=3&article=1&issue_date=September 2005 10.1257/002205105774431252 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 43 3 September 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=43&issue=3&issue_date=September 2005 Journal Article Allocation under Dictatorship: Research in Stalin's Archives PaulGregory MarkHarrison 721 761 We survey recent research on the Soviet economy in the state, party, and military archives of the Stalin era. The archives have provided rich new evidence on the economic arrangements of a command system under a powerful dictator including Stalin's role in the making of the economic system and economic policy, Stalin's accumulation objectives and the constraints that limited his power to achieve them, the limits to administrative allocation, the information flows and incentives that governed the behavior of economic managers, the scope and significance of corruption and market-oriented behavior, and the prospects for economic reform. http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=43&issue=3&article=2&issue_date=September 2005 10.1257/002205105774431225 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 43 3 September 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=43&issue=3&issue_date=September 2005 Journal Article Ethnic Diversity and Economic Performance AlbertoAlesina Eliana LaFerrara 762 800 We survey and assess the literature on the positive and negative effects of ethnic diversity on economic policies and outcomes. Our focus is on communities of different size and organizational structure, such as countries, cities in developed countries, and villages and groups in developing countries. We also consider the endogenous formation of political jurisdictions and highlight several open issues in need of further research, in particular the endogenous formation of ethnic identity and the measurement of ethnic diversity. http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=43&issue=3&article=3&issue_date=September 2005 10.1257/002205105774431243 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 43 3 September 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=43&issue=3&issue_date=September 2005 Journal Article Reviews of the 2005 Economic Report of the President JosephFarrell JonathanGruber Robert E.Hall Gordon H.Hanson JoelSlemrod 801 822 http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=43&issue=3&article=4&issue_date=September 2005 10.1257/002205105774431261 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 43 3 September 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=43&issue=3&issue_date=September 2005 Journal Article Book Reviews 823 854 http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=43&issue=3&article=5&issue_date=September 2005 10.1257/002205105774431216 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 43 3 September 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=43&issue=3&issue_date=September 2005 Journal Article Annotated Listing of New Books 855 942 http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=43&issue=3&article=6&issue_date=September 2005 10.1257/002205105774431234 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 43 3 September 2005 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=43&issue=3&issue_date=September 2005 Journal Article JEL Classification System 943 954 http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=43&issue=3&article=7&issue_date=September 2005 10.1257/002205105774431207