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...

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 Institutions and Regimes since 1600: A New Historical Data Set Do national political institutions matter for social developments and changes? If so, how, where, and when do the critical conditions occur, and how long is the causal time lag? What are the patterns of interaction between political regime types and institutional changes from one country to another? These are some of the q...

This paper develops the empirical and theoretical case that differences in economic institutions are the fundamental cause of differences in economic development. We first document the empirical importance of institutions by focusing on two “quasi-natural experiments” in history, the division of Korea into two parts with very different economic institutions and the colonization of much of the w...

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...

Empirically, the formation of political attitudes has been strongly linked to the concept of group identification. Classifications such as race, gender, religion and ethnicity have been shown to be sharp predictors of many aspects of political life including who turns out to vote, how people vote, and the issues that are important to people. Furthermore, many topics that are of interest to poli...

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...