Future Design of Political Institutions

Proposal Powers, Veto Powers, and the Design of Political Institutions

Decentralization and Political Institutions

Does fiscal decentralization lead to more efficient governance, better public goods, and higher economic growth? This paper tests hypotheses of the theoretical literature that results of decentralization depend on features of political institutions. Using data from up to 95 countries for 25 years we show that the effect of fiscal decentralization strongly depends on two aspects of political cen...

Happiness and Political Institutions

The study of individual happiness has enriched economics with many new and sometimes challenging (preliminary) insights.1 More and more often, it is asked about the policy consequences that are to be derived from these insights. We observe that economic research on happiness has an explicit or implicit tendency to follow a “benevolent dictator” approach where the government, and individual poli...

Political Economy of Fiscal Institutions

We discuss two essential problems of the political economy of public finances: The principal agent problem between voters and elected politicians and the common pool problem arising from the fact that money drawn from a general tax fund is used to pay for policies targeting more or less narrow groups in society. Three institutional mechanisms exist to deal with these problems, ex-ante rules con...

Political Institutions and Monetary Policy

Susanne Lohmann for data used in an earlier version of the empirical analysis and participants in the Harvard Seminar in Positive Political Economy for useful comments. None of them is implicated in what follows. Abstract The degree to which voters respond to the macro-economy when deciding their vote is known to depend on institutional factors, including whether the government in power is a co...