Stricter laws require more incisive and costlier enforcement. Because enforcement activity depends both on available tax revenue and the honesty of officials, the optimal legal standard of a benevolent government is increasing in per capita income and decreasing in officials’ corruption. In contrast to the “tollbooth view” of regulation, the standard chosen by a self-interested government is a ...

Recent studies on economic growth focuses on persistent inequality across countries. In this paper we study mechanisms that may give rise to such a persistent inequality. We consider countries that accumulate capital in order to increase the per capita income in the long run. We show that the long-run growth dynamics of those countries can generate a twin-peak distribution of per capita income....

The relationship between per capita income and a number of pollution indicators has been found to display an inverted U-shaped or downward-sloping pattern. Corruption may affect this relationship in two distinct ways: by raising pollution at given income levels (direct effect) and by reducing per capita income (indirect effect). The total effect is ambiguous a priori. Using cross section data f...

The assumptions of declining fertility with rising income and rising per-capita output with rising population imply the existence of a stable demographic equilibrium with a high standard of living and relatively low total population. This Smithian equilibrium differs from the well-known Malthusian equilibrium in its comparative statics: technical progress lowers the Smithian equilibrium populat...