Differential tax analysis is used to show how the optimal mix of inflation tax and direct taxation changes with the relative size of the hidden economy. The larger the relative size of the hidden economy, the smaller the optimal ratio of direct tax to inflation tax. Anecdotal empirical evidence supports this result. JEL Classification: E62, H21, H26, O17.

Analysis of the economic effects of constitutional rules has made substantial progress over the last decade. This survey provides an overview of this rapidly growing research area and also discusses a number of methodological issues and identifies underresearched areas. It argues that the next logical step of Positive Constitutional Economics is to endogenize constitutional rules. JEL classific...

We study voters’ response to marginal changes the fine for electoral abstention in Peru, leveraging variation from a nationwide reform. A smaller has robust, negative effect on voter turnout, partly through irregular registration. However, representation is largely unaffected, as most of lost votes are blank or invalid. also show that an exemption compulsory voting substantially larger than ful...

in this paper, i investigated the determinants of financial development with emphasis on social capital. first, i explain the relationship between financial development and its determinants, then estimate the model with gregory–hansen (1996) and johansen-juselious cointegration techniques in i.r. of iran (1971-2006). the results showed that, inflation and decline in social capital and weak prop...

An Extension of the Blinder-Oaxaca Decomposition to a Continuum of Comparison Groups This paper proposes an extension of the Blinder-Oaxaca decomposition from two to a continuum of comparison groups. The proposed decomposition is then estimated for the case of racial wage differences in urban Peru, exploiting a novel data set that allows the capturing of mestizaje (racial mixtures). JEL Classif...

This paper analyzes an informal financial institution that brings heterogeneous agents together in groups. We analyze decentralized matching into these groups, and the equilibrium composition of participants that consequently arises. We find that participants sort remarkably well across the competing groups, and that they re-sort immediately following an unexpected exogenous regulatory change. ...

Do political elites use armed groups to foster civilian participation in genocidal violence? Are employed strategically? How do they mobilize civilians? I investigate these questions using data from the Rwandan Genocide. To establish causality, exploit exogenous variation groups’ transport costs induced by weather fluctuations: shortest distance of each village main road interacted with rainfal...