Culture and Institutions

By Alberto Alesina and Paola Giuliano

Journal of Economic Literature, December 2015

A growing body of empirical work measuring different types of cultural traits has shown that culture matters for a variety of economic outcomes. This paper focuses on one specific aspect of the relevance of culture: its relationship to institutions. We re...

Market-Based Lobbying: Evidence from Advertising Spending in Italy

By Stefano DellaVigna, Ruben Durante, Brian Knight, and Eliana La Ferrara

American Economic Journal: Applied Economics, January 2016

We analyze a novel lobbying channel: firms shifting spending toward a politician's business in the hope of securing favorable regulation. We examine the evolution of advertising spending in Italy during 1993-2009, a period in which Berlusconi was in power...

Betting on Secession: Quantifying Political Events Surrounding Slavery and the Civil War

By Charles W. Calomiris and Jonathan Pritchett

American Economic Review, January 2016

Lincoln's election produced Southern secession, war, and abolition. Using a new dataset on slave sales, we examine connections between news and slave prices for the period 1856-1861. By August 1861, slave prices had declined by roughly one-third from thei...

The Politics of Compromise

By Alessandro Bonatti and Heikki Rantakari

American Economic Review, February 2016

An organization must select among competing projects that differ in their payoff consequences for its members. Each agent chooses a project and exerts effort affecting its completion time. When one or more projects are complete, the agents select which on...

The Politics of Financial Development: A Review of Calomiris and Haber's Fragile by Design

By Peter L. Rousseau

Journal of Economic Literature, March 2016

Fragile by Design by Charles W. Calomiris and Stephen H. Haber introduces a framework for understanding financial crises and credit abundance with politics at its center. Using the historical experiences of five nations to illustrate, the authors...

Presidents and the US Economy: An Econometric Exploration

By Alan S. Blinder and Mark W. Watson

American Economic Review, April 2016

The US economy has performed better when the president of the United States is a Democrat rather than a Republican, almost regardless of how one measures performance. For many measures, including real GDP growth (our focus), the performance gap is large ...

Flip-Flopping, Primary Visibility, and the Selection of Candidates

By Marina Agranov

American Economic Journal: Microeconomics, May 2016

We present an incomplete information model of two-stage elections in which candidates can choose different platforms in primaries and general elections. Voters do not directly observe the chosen platforms, but infer the candidates’ ideologies from ob...

Character Endorsements and Electoral Competition

By Archishman Chakraborty and Parikshit Ghosh

American Economic Journal: Microeconomics, May 2016

When an elite-controlled media strategically endorses candidates in order to promote its own ideological agenda, office-seeking parties may completely pander to the media, under moderate ideological conflict between voters and the elite. Larger ideolog...

Corruption in Procurement and the Political Cycle in Tunneling: Evidence from Financial Transactions Data

By Maxim Mironov and Ekaterina Zhuravskaya

American Economic Journal: Economic Policy, May 2016

We provide evidence of corruption in allocation of public procurement and assess its efficiency. Firms with procurement revenue increase tunneling around regional elections, whereas neither tunneling of firms without procurement revenue, nor legitimate...

Popular Attitudes toward Markets and Democracy: Russia and United States Compared 25 Years Later

By Maxim Boycko and Robert J. Shiller

American Economic Review, May 2016

We repeat a survey we did in the waning days of the Soviet Union (Shiller, Boycko and Korobov, AER 1991) comparing attitudes towards free markets between Moscow and New York. Additional survey questions, from Gibson Duch and Tedin (J. Politics 1992) are a...

War, Inflation, and Social Capital

By Sergei Guriev and Nikita Melnikov

American Economic Review, May 2016

We use weekly data from 79 Russian regions to measure the impact of economic shocks and proximity to war in Ukraine on social capital in Russian regions. We proxy social capital by the relative intensity of internet searches for the most salient dimension...

The New Economics of Religion

By Sriya Iyer

Journal of Economic Literature, June 2016

The economics of religion is a relatively new field of research in economics. This survey serves two purposes--it is backward-looking in that it traces the historical and sociological origins of this field, and it is forward-looking in that it examines th...

Review of Cultural Evolution: Society, Technology, Language, and Religion Edited by Peter J. Richerson and Morten H. Christiansen

By Paola Giuliano

Journal of Economic Literature, June 2016

Peter J. Richerson and Morten H. Christiansen have assembled a compelling picture of the evolution of societies, technology, language, and religion--with culture at the epicenter. The book is a must-have for economists and any other social scientists inte...

The Surprisingly Swift Decline of US Manufacturing Employment

By Justin R. Pierce and Peter K. Schott

American Economic Review, July 2016

This paper links the sharp drop in US manufacturing employment after 2000 to a change in US trade policy that eliminated potential tariff increases on Chinese imports. Industries more exposed to the change experience greater employment loss, increased imp...

The Long-Run Effects of the Scramble for Africa

By Stelios Michalopoulos and Elias Papaioannou

American Economic Review, July 2016

We explore the consequences of ethnic partitioning, a neglected aspect of the Scramble for Africa, and uncover the following. First, apart from the land mass and water bodies, split and non-split groups are similar across several dimensions. Second, the i...

Inducing Leaders to Take Risky Decisions: Dismissal, Tenure, and Term Limits

By Philippe Aghion and Matthew O. Jackson

American Economic Journal: Microeconomics, August 2016

How can a principal (employer or voter) induce an agent (worker or politician) to choose the "right" actions if risky actions reveal the agent's decision making competence and only dismissal can be used as an incentive instrument? We first show that if th...

Can Electronic Procurement Improve Infrastructure Provision? Evidence from Public Works in India and Indonesia

By Sean Lewis-Faupel, Yusuf Neggers, Benjamin A. Olken, and Rohini Pande

American Economic Journal: Economic Policy, August 2016

This paper examines whether electronic procurement (e-procurement), which increases access to information and reduces personal interactions with potentially corrupt officials, improves procurement outcomes. We develop unique datasets from India and Indone...

Capital Taxation under Political Constraints

By Florian Scheuer and Alexander Wolitzky

American Economic Review, August 2016

This paper studies optimal dynamic tax policy under the threat of political reform. A policy will be reformed ex post if a large enough coalition of citizens supports reform; thus, sustainable policies are those that will continue to attract enough politi...

Moderating Political Extremism: Single Round versus Runoff Elections under Plurality Rule

By Massimo Bordignon, Tommaso Nannicini, and Guido Tabellini

American Economic Review, August 2016

We compare single round versus runoff elections under plurality rule, allowing for partly endogenous party formation. Under runoff elections, the number of political candidates is larger, but the influence of extremist voters on equilibrium policy, and he...

Monitoring Corruptible Politicians

By Gustavo J. Bobonis, Luis R. Cámara Fuertes, and Rainer Schwabe

American Economic Review, August 2016

Does monitoring corrupt activities induce a sustained reduction in corruption? Using longitudinal data on audits of municipal governments in Puerto Rico, we show corruption is considerably lower in municipalities with timely audits—before elections....