commodity price shocks and civil conflict evidence from colombia how do income shocks aect armed con ict theory suggests two op posite eects if labor is used to appropriate resources violently higher wages may lower con ict by reducing labor supplied to appropriation this is the opportunity cost eect alternatively a rise in contestable income may increase violence by raising gains from appropriation this is the rapacity eect our paper exploits exogenous price shocks in inter national commodity markets and a rich dataset on civil war in colombia to assess how dierent income shocks aect con ict we examine changes in the price of agricultural goods which are labor intensive and natural resources which are capital intensive we focus on coee and oil the two largest exports we nd that a sharp fall in coee prices in the 1990s increased violence dierentially in regions growing more coee by lower ing wages and the opportunity cost of joining armed groups in contrast a rise in oil prices increased violence dierentially in the oil region by in creasing municipal revenue siphoned through rapacity this pattern holds in several other agricultural and natural resource sectors providing robust evidence that price shocks aect con ict in opposite directions depending on the factor intensity of the commodity

axiomatizing ordinal welfare egalitarianism when preferences may vary abstract this paper formulates the principle of ordinal welfare egalitarianism in a general model of collective choice where both the feasibility constraints and the preferences may vary an axiomatization of all choice rules satisfying this principle is presented the key axiom is a solidarity property with respect to changes that may occur possibly jointly in the feasibility constraints and the preferences solidarity with respect to changes in the feasibility constraints and solidarity with respect to changes in the preferences together imply only a weaker form of egalitarianism journal of economic literature classification numbers d63 d70

the need for enemies we develop a model where some politicians have an edge in undertaking a task and this gives them electoral advantage creating an incentive to underperform in the task we test the empirical implications in the context of fighting against insurgents using colombian data the main prediction is that large defeats for the insurgents reduce the probability that these politicians fight them especially in electorally salient places we find that after the largest victories against farc rebels the government reduced its counterinsurgency efforts especially in politically important municipalities politicians need to keep enemies alive in order to maintain their political advantage

new parties and policy outcomes evidence from colombian local governments abstract in many democracies increasing political competition has changed the traditional party system and brought new parties into the political arena this study examines whether the presence of politicians from new parties affects the size of government measured by public spending and tax revenue the study focuses on colombian municipalities where new parties have been numerous and successful in recent years regression discontinuity estimates show that public spending and tax revenues are significantly higher in municipalities governed by a mayor from a new party using information about local politics and the features of the new parties i argue that this result is not associated with new party ideology but instead relates to new parties having lower probability of reelection which raises the incentives to increase short term rent seeking

impartiality priority and solidarity in the theory of justice the ethic of priority is a compromise between the extremely compensatory ethic of welfare equality and the needs blind ethic of income equality we propose an axiom of priority and characterize resource allocation rules that are impartial prioritarian and solidaristic they comprise a class of rules which equalize across individuals some index of resources and welfare consequently we provide an ethical rationalization for the many applications in which such indices have been used e g the human development index index of primary goods etc

internal cocaine trafficking and armed violence in colombia this paper exploits time variations in international cocaine prices and potential trafficking routes within colombia to estimate the effect of the illegal cocaine trade on changes in municipality homicide rates i construct the potential internal cocaine trafficking network and exploit the fact that different regions in colombia have comparative advantages in serving different international markets my results suggest that when cocaine prices increase in either the united states or europe homicide rates increase in municipalities strategically placed to serve each international market jel d74 k42 f19

a new analysis of a simple model of fair allocation in a recent article fragnelli and gagliardo fragnelli v gagliardo s 2012 cooperative models for allocating an object economics letters 117 227 229 propose several procedures to solve a basic problem of fair allocation we scrutinize their proposal and contextualize it into recent developments of the literature on bankruptcy problems our analysis supports two of the procedures they propose namely the shapley and talmud rules

a common ground for resource and welfare egalitarianism resource egalitarianism and welfare egalitarianism are two focal conceptions of distributive justice we show in this paper that they share a solid common ground to do so we analyze a simple model of resource allocation in which agents abilities to transform the resource into an interpersonally comparable outcome and starting points may differ both conceptions of egalitarianism are naturally modeled in this context as two allocation rules the two rules are jointly characterized by the combination of three appealing axioms no domination solidarity and composition

a new axiomatic approach to the evaluation of population health in this paper we explore the implications of normative principles for the evaluation of population health we formalize those principles as axioms for social preferences over distributions of health for a given population we single out several focal population health evaluation functions which represent social preferences as a result of combinations of those axioms our results provide new rationale for popular theories in health economics such as the unweighted aggregation of quality adjusted life years qalys or healthy years equivalents hyes and generalizations of the two aimed to capture concerns for distributive justice without resorting to controversial assumptions on individual preferences

international corporate tax avoidance a review of the channels magnitudes and blind spots this paper reviews the rapidly growing empirical literature on international tax avoidance by multinational corporations it surveys evidence on main channels of corporate tax avoidance including transfer mispricing international debt shifting treaty shopping tax deferral and corporate inversions moreover it performs a meta analysis of the extensive literature that estimates the overall size of profit shifting we find that the literature suggests that for the most recent year a 1 percentage point lower corporate tax rate compared to other countries will expand before tax income by 1 5 percent an effect that is larger than reported as the consensus estimate in previous surveys and tends to be increasing over time the literature on tax avoidance still has several unresolved puzzles and blind spots that require further research

tax avoidance with cross border hybrid instruments abstract the rules demarcating debt and equity for tax purposes differ between countries hence the possibility that a hybrid financial instrument is treated as equity in one country and debt in another this may create a scope for tax avoidance by allowing firms that invest in foreign countries to combine tax deductible interest expenses in the host country and tax favored dividend income in the home country in this paper we first develop a formal model of hybrid instruments and show that for a given pair of countries firms in at least one country and sometimes in both can avoid taxes on investment in the other country with a cross border hybrid instrument we then investigate why countries tend to allow the use of hybrid instruments for tax avoidance and show that even if effective anti avoidance rules are available there exists a global policy equilibrium in which no country uses such rules

a core selection for regulating a single output monopoly we consider a single output production economy in which all coalitions of agents have access to the technology under increasing returns to scale the corresponding cooperative game without side payments is convex and hence has a large core we propose a core selection that is obtained by considering the lowest price of output relative to input such that the corresponding vector of indirect utilities is feasible the constant returns equivalent allocation is feasible and achieves this utility vector it satisfied the property of technological monotonicity when the production possibility set expands no agent faces a utility loss technological monotonicity and the core property together characterize the constant returns equivalent solution

politics and economics in weak and strong states abstract while much research in political economy points out the benefits of limited government political scientists have long emphasized the problems created in many less developed nations by weak states which lack the power to tax and regulate the economy and to withstand the political and social challenges from non state actors i construct a model in which the state apparatus is controlled by a self interested ruler who tries to divert resources for his own consumption but who can also invest in socially productive public goods both weak and strong states create distortions when the state is excessively strong the ruler imposes such high taxes that economic activity is stifled when the state is excessively weak the ruler anticipates that he will not be able to extract rents in the future and underinvests in public goods i show that the same conclusion applies in the analysis of both the economic power of the state i e its ability to raise taxes and its political power i e its ability to remain entrenched from the citizens i also discuss how under certain circumstances a different type of equilibrium which i refer to as consensually strong state equilibrium can emerge whereby the state is politically weak but is allowed to impose high taxes as long as a sufficient fraction of the proceeds are invested in public goods the consensually strong state might best correspond to the state in oecd countries where taxes are high despite significant control by the society over the government

the origins of state capacity property rights taxation and politics economists generally assume that the state has sufficient institutional capacity to support markets and levy taxes this paper develops a framework where policy choices in market regulation and taxation are constrained by past investments in legal and fiscal capacity it studies the economic and political determinants of such investments demonstrating that legal and fiscal capacity are typically complements the results show that among other things common interest public goods such as fighting external wars as well as political stability and inclusive political institutions are conducive to building state capacity some correlations in cross country data are consistent with the theory

public ownership of the external world and private ownership of self liberal political philosophy represented classically by john locke and today by libertarians defends great inequality of economic outcome on the basis that people own themselves and are entitled to establish private property in the external world by virtue of that self ownership contemporary nonlibertarian political philosophers such as john rawls and ronald dworkin achieve their relatively egalitarian conclusion by effectively denying self ownership as a premise an alternative challenge to liberalism which does not take the radical starting point of denying self ownership is to declare that while certain rights to benefit by virtue of superior skill should be protected a degree of self ownership productive assets in the external world be viewed as publicly owned and not privately appropriable what allocation mechanisms on a space of possible economies satisfy axioms that are necessary to guarantee both private ownership of self and public or joint ownership of the external world we propose a

in praise of tax havens international tax planning and foreign direct investment abstract the multinationalization of corporate investment in recent years has given rise to a number of international tax avoidance schemes that may be eroding tax revenues in industrialized countries but which may also reduce tax burdens on mobile capital and so facilitate investment both the welfare effects of and the optimal response to international tax planning are therefore ambiguous evaluating these factors in a simple general equilibrium model we find that citizens of high tax countries benefit from some tax planning paradoxically if tax rates are not too high an increase in tax planning activity causes a rise in optimal corporate tax rates and a decline in multinational investment thus fears of a race to the bottom in corporate tax rates may be misplaced

fair allocation of disputed properties we model problems of allocating disputed properties as generalized exchange economies in which agents have preferences and claims over multiple goods and the social endowment of each good may not be sufficient to satisfy all individual claims in this context we investigate procedural and end state principles of fairness their implications and relations to do so we explore procedural allocation rules represented by a composition of a rights assignment mechanism to assign each profile of claims individual property rights over the endowment and walrasian or other individually rational exchange rule using variants of fairness based on no envy as end state principles we provide axiomatic characterizations of the three focal egalitarian mechanisms known in the literature on rationing problems as constrained equal awards constrained equal losses and proportional mechanisms our results are connected to focal contributions in political philosophy and also provide rationale for market based environ mental policy instruments such as cap and trade schemes and personal carbon trading and moral foundation for the three proposals to allocate ghg emission rights known as the equal per capita sharing the polluter pays principle and the equal burden sharing the victims pay principle

distributional properties of the uniform rule in economies with single peaked preferences abstract we investigate the distributional properties of the uniform rule for the problem of allocating an infinitely divisible commodity among a group of agents with single peaked preferences first we show that the uniform rule is the only subsolution of the convex no envy and pareto solution next we show that the uniform rule offers the greatest upper bound when there is too little of the commodity and the least lower bound when there is too much of the commodity

egalitarianism under earmark constraints agents with single peaked preferences share a resource coming from different suppliers each agent is connected to only a subset of suppliers examples include workload balancing sharing earmarked funds and rationing utilities after a storm unlike in the one supplier model in a pareto optimal allocation agents who get more than their peak from underdemanded suppliers coexist with agents who get less from overdemanded suppliers our egalitarian solution is the lorenz dominant pareto optimal allocation it treats agents with equal demands as equally as the connectivity constraints allow together strategyproofness pareto optimality and equal treatment of equals characterize our solution

the political value of land political reform and land prices in chile in this article we argue that when patron client relations are grounded in economic relationships such as between landlord and worker we should expect clientelism to influence not just how public policy the state and the political system work but also how the economy works we develop a simple model of the economic consequences of electoral clientelism when voting behavior can be observed landlords patrons provide economic rents to workers and in exchange workers vote for parties favored by landlords as votes are used by the landlords to accumulate political rents vote control increases the demand for labor and for land the model implies that the introduction of the australian ballot which destroys this form of clientelism should lead to a fall in the price of land in those areas where patron client relationships are strongest we test the predictions of the model by examining in detail the evolution of land prices in chile around may 31 1958 for which we collected original data a characteristic of rural chile at this time were patron client relations based on the inquilinaje system by which a worker the inquilino entered into a long term often hereditary employment relationship with a landlord and lived on his landlord s estate we show that the introduction of the australian ballot in 1958 led to a fall of about 26 in land prices in the areas where these patron client relationships were predominant

a characteristics approach to optimal taxation line drawing and tax driven product innovation real world tax legislation assigns goods to different categories of tax rates on the basis of observable characteristics allowing the tax system to handle a constantly evolving set of available goods we recast the theory of optimal taxation in the language of characteristics and we show how to optimally draw lines that delineate tax rate regimes such lines are associated with notches in tax liability as a function of characteristics creating incentives to introduce goods with new combinations of characteristics in order to reduce tax liability with a restricted set of tax instruments such notches are in general part of the second best optimal tax system

balanced budget redistribution as the outcome of political competition this paper models balanced budget redistribution between socio economic groups as the outcome of electoral competition between two political parties equilibrium is unique in the present model and a sufficient condition for existence is given requiring that there be enough stochastic heterogeneity with respect to party preferences in the electorate the validity of hotelling s principle of minimum differentiation and of director s law are examined under alternative hypotheses concerning administrative costs of redistributions and voter s possibilities both of abstaining from voting and of becoming campaign activists for one of the parties the policy strategy of expected plurality maximization is contrasted with the strategy of maximizing the probability of gaining a plurality incomes are fixed and known so lump sum taxation is feasible however constraints on tax transfer differentiation between individuals are permitted in the analysis

unexpected guests the impact of internal displacement inflows on rental prices in colombian host cities abstract we study the causal impact of internally displaced people idp inflows on rental prices in colombian host cities following an instrumental variables approach we find that as idp inflows increase low income rental prices increase and high income rental prices decrease we provide empirical evidence on two potential mechanisms for these findings excess demand for low income housing puts upwards pressure on rental prices increasing supply of high income housing coupled with rising homicide rates put downwards pressure on rental prices

the role of local officials in new democracies evidence from indonesia this paper shows that the body of appointed officials that a new democracy inherits from the previous regime is a key determinant of the extent of electoral fraud and clientelistic spending in new democracies i develop a model that predicts that appointed officials have stronger incentives to influence voters during national level elections because of their career concerns i test the implications of the model using data from indonesia s transition to democracy both the pattern of alignment of electoral results between village and district levels and the pattern of subsequent turnover of appointed village heads corroborate the predictions of the model

no profitable decompositions in quasi linear allocation problems abstract we study the problem of allocating a bundle of perfectly divisible private goods from an axiomatic point of view in situations where compensations can be made through monetary transfers the key property we impose on the allocation rule requires that no agent should be able to gain by decomposing the problem into sequences of subproblems combined with additional standard properties it leads to a characterization of the rule that shares the total surplus equally hence a traditional welfarist rule emerges as the unique consequence of our axioms phrased in a natural economic environment

asymmetric parametric division rules we describe and characterize the family of asymmetric parametric division rules for the adjudication of conflicting claims on a divisible homogeneous good as part of the characterization we present two novel axioms which restrict how a division rule indirectly allocates between different versions of the same claimant we also show that such division rules can alternately be represented as the maximization of an additively separable social welfare function

division rules and migration equilibria abstract fair division rules are examined in a framework consisting of local environments with fixed non disposable perfectly divisible endowments and possibly different division rules individuals have single peaked preferences and are free to choose the environments where they live given that the rules satisfy various desirable properties such as efficiency strategy proofness or envy freeness the extent to which individuals have incentives to migrate to other environments is explored journal of economic literatureclassification numbers d50 d60

the demand for tax haven operations what types of firms establish tax haven operations and what purposes do these operations serve analysis of affiliate level data for american firms indicates that larger more international firms and those with extensive intrafirm trade and high r and d intensities are the most likely to use tax havens tax haven operations facilitate tax avoidance both by permitting firms to allocate taxable income away from high tax jurisdictions and by reducing the burden of home country taxation of foreign income the evidence suggests that the primary use of affiliates in larger tax haven countries is to reallocate taxable income whereas the primary use of affiliates in smaller tax haven countries is to facilitate deferral of u s taxation of foreign income firms with sizeable foreign operations benefit the most from using tax havens an effect that can be evaluated by using foreign economic growth rates as instruments for firm level growth of foreign investment outside of tax havens one percent greater sales and investment growth in nearby non haven countries is associated with a 1 5 to 2 greater likelihood of establishing a tax haven operation

organised crime institutions and political quality empirical evidence from italian municipalities this article assesses how legal institutions affect the influence of politically active criminal organisations on the human capital of elected politicians using data from over 1 500 southern italian municipalities in the period 1985 2011 it exploits municipal government dissolutions imposed by the national government for presumed mafia infiltration as a source of exogenous variation in the presence of politically active criminal organisations the results support theoretical predictions that the average education level of local politicians significantly increases when active mafia infiltration of local politics is remedied through the implementation of a stricter legal institutional framework

welfarism in economic domains abstract in economies with public goods and agents with quasi linear preferences we give a characterization of the welfare egalitarian correspondence in terms of three axioms pareto optimality symmetry and solidarity this last property requires that an increase in the willingness to pay for the public goods of some of the agents should not decrease the welfare of any of them journal of economic literature classification numbers d63 h41

monopolizing violence and consolidating power governments in weak states often face an armed opposition and have to decide whether to try to accommodate and contain that adversary or to try to consolidate power and monopolize violence by disarming it when and why do governments choose to consolidate power and monopolize violence how fast do they try to consolidate power when does this lead to costly fighting rather than to efforts to eliminate the opposition by buying it off we study an infinite horizon model in which the government in each period decides how much to offer the opposition and the rate at which it tries to consolidate its power the opposition can accept the offer and thereby acquiesce to the government s efforts to consolidate or it can fight in an attempt to disrupt those efforts in equilibrium the government always tries to monopolize violence when it has coercive power against the opposition where roughly coercive power is the ability to weaken the opposition by lowering its payoff to fighting whether the government consolidates peacefully or through costly fighting depends on the size of any contingent spoils which are benefits that begin to accrue from an increase in economic activity resulting from the monopolization of violence and the higher level of security that comes with it when contingent spoils are small the government buys the opposition off and eliminates it as fast as is peacefully possible when contingent spoils are large the government tries to monopolize violence by defeating the opposition militarily jel codes d02 d74 h1 copyright 2013 oxford university press

mafia elections and violence against politicians organized crime uses political violence to influence politics in a wide set of countries this paper exploits a novel dataset of attacks directed towards italian local politicians to study how and why criminal organizations use violence against them we test two complementary theories to predict the use of violence i before elections to affect the electoral outcome and ii after elections to influence politicians from the beginning of their term we provide causal evidence in favor of the latter hypothesis the probability of being a target of violence increases in the weeks right after an election in areas with a high presence of organized crime especially when elections result in a change of local government

reward patterns of fair solutions abstract the solutions proposed in the literature on fair allocations are sensitive to the preference profiles of the agents as a consequence each of them displays a specific distribution pattern which may be interpreted as rewarding certain kinds of preferences at the expense of others in the basic models with private goods and decreasing returns the equal income competitive equilibrium tends to favor the eccentric preferences whereas most egalitarian equivalent solutions tend to reward the agents who like particular resources the identification of the rewarding pattern of each mechanism sheds light on its ethical content and may help select the adequate solution in concrete applications in this analysis a preference monotonicity property turns out to be satisfied by many solutions

the power of financial transparency an event study of country by country reporting standards we show that recent european legislation requiring oil gas and mining companies to disclose their tax payments on a country by country basis was associated with significant decreases in firm value this suggests that tax evasion creates considerable rents for firms in extractive industries and that disclosure rules have the potential to reduce these rents

the monopoly of violence evidence from colombia many states in latin america africa and asia lack the monopoly of violence even though this was identified by max weber as the foundation of the state and thus the capacity to govern effectively in this paper we develop a new perspective on the establishment of the monopoly of violence we build a model to explain the incentive of central states to eliminate nonstate armed actors paramilitaries in a democracy the model is premised on the idea that paramilitaries may choose to and can influence elections since paramilitaries have preferences over policies this reduces the incentives of the politicians they favor to eliminate them we then investigate these ideas using data from colombia between 1991 and 2006 we first present regression and case study evidence supporting our postulate that paramilitary groups can have significant effects on elections for the legislature and the executive next we show that the evidence is also broadly consistent with the implication of the model that paramilitaries tend to persist to the extent that they deliver votes to candidates for the executive whose preferences are close to theirs and that this effect is larger in areas where the presidential candidate would have otherwise not done as well finally we use roll call votes to illustrate a possible quid pro quo between the executive and paramilitaries in colombia language en

tax evasion in new disguise examining tax havens international bank deposits abstract recent efforts to reduce international tax evasion focus on information exchange with tax havens using bilateral bank data for 1397 countrypairs in a balanced quarterly panel from 2003 i to 2017 iv we first show that information on request treaties with tax havens reduce bank deposits in tax havens by 27 5 second also deposits from tax havens in high tax countries decline after such treaties are signed giving authorities a second angle to detect tax evasion both reactions dissipate overt time and treaties signed after 2010 trigger no further reactions these results cannot be explained by deposit shifting alone and we find no evidence of transitioning into legality third recent policy initiatives based on the automatic exchange of bank information lead to very similar initial reactions as earlier treaties consistent with adjustments on the part of tax evaders this suggests that tax evaders adapt to established information exchange treaties by using new disguises to hide their true income and react again to new measures these results cast doubt on the effectiveness of current forms of information exchange to tackle international tax evasion

firms off balance sheet and hybrid debt financing evidence from their book tax reporting differences we match large u s corporations tax returns during 1989 2001 to their financial statements to construct a firm level proxy of firms use of off balance sheet and hybrid debt financing we find that firms with less favorable prior period standard poor s s p bond ratings or higher leverage ratios in comparison to their industry report greater amounts of interest expense on their tax returns than to investors and creditors on their financial statements these between firm results are consistent with credit constrained firms using more structured financing arrangements our within firm tests also suggest that firms use more structured financing arrangements when they enter into contractual loan agreements that provide incentives to manage debt ratings specifically we find that after controlling for s p bond rating and industry adjusted leverage our sample firms report greater amounts of interest expenses for tax than for financial statement purposes when they enter into performance pricing contracts that use senior debt rating covenants to set interest rates furthermore we find that the greatest book tax reporting changes occur when firms become closer to violating these debt rating covenants these latter findings are consistent with firms contractual debt covenants influencing their use of off balance sheet and hybrid debt financing

the replacement principle in public good economies with single peaked preferences abstract we study the implications for a simple public good model with single peaked preferences of a replacement principle we apply the principle to situations when the preferences of one of the agents may change then the principle results in a condition used by moulin in the context of binary public decision as a consequence of the replacement all other agents should be affected in the same direction they all gain or they all lose we characterize the family of efficient solutions satisfying the property it is a subfamily of the family of strategy proof solutions introduced by moulin under the name of generalized condorcet winner solutions

the replacement principle in economies with single peaked preferences abstract our objective is to investigate the implications of the replacement principle for the fair allocation of an infinitely divisible commodity among agents with single peaked preferences the principle says that when one of the components of the data entering the description of the problem to be solved changes all of the relevant agents should be affected in the same direction they all gain or they all lose we apply it to situations in which the preferences of one of the agents may change under the name ofwelfare domination under preference replacement we show that there is no selection from the no envy and pareto solution satisfying it then we weaken it by limiting its application to situations in which the change is not so disruptive that it turns the economy from one in which there is too little of the commodity to one in which there is too much or conversely we show that there is only one selection from the no envy and pareto solution satisfying this property andreplication invariance it is the uniform rule a solution that has played a central role in previous analyses of the problem journal of economic literatureclassification numbers d51 d63 d70

equality of resources implies equality of welfare if one is an egalitarian should one try to equalize resources available to agents or to equalize their welfares with a suitably general conception of what resources are these two conceptions cannot be distinguished an allocation mechanism is defined on a space of economies and is required to satisfy various axioms that are necessary conditions for equalizing resources among a population the unique mechanism satisfying these axioms on a large domain of economies is the one that allocates commodities so as to equalize utilities of the agents methodologically the theorem is a generalization of bargaining theory because the mechanisms are defined on commodity space

scarcity without leviathan the violent effects of cocaine supply shortages in the mexican drug war abstract this paper asks whether scarcity increases violence in markets that lack a centralized authority we construct a model in which by raising prices scarcity fosters violence guided by our

solidarity in preference aggregation improving on a status quo abstract working in the arrowian framework we search for preference aggregation rules with desirable solidarity properties in a fixed population setting we formulate two versions of the solidarity axiom welfare dominance under preference replacement although the stronger proves incompatible with efficiency the combination of efficiency and our second version leads to an important class of rules which improve upon a status quo order these rules are also strategy proof which reveals a further connection between solidarity and incentive properties allowing the population to vary we again characterize the status quo rules by efficiency and a different solidarity axiom population monotonicity this extends a similar characterization of a subclass of these rules by bossert and sprumont 2014

institutions and growth in limited access societies we build a dynamic political economy model with a two class society workers and the elite in which the elite formation the innovation rate and fiscal policy are endogenous the model generates a mapping between institutions and patterns of growth consistent with empirical evidence ex ante when facing constraints in choosing institutions the elite may delegate policy control to some of its members even though such delegation exacerbates the conflict within the elite and causes policy failures committing to such institutional arrangements prevents more harmful outcomes such as rapid entry and subsequent deterioration of the elite s economic and political power

egalitarian equivalent cost sharing of a public good in an economy with one public and one private good egalitarian equivalent cost sharing consists of finding the highest public good level x such that consuming x for free yields a feasible utility distribution the corresponding feasible allocation typically unique called egalitarian equivalent is in the core of the economy conversely any cost sharing method satisfying pareto optimality cost monotonicity nobody suffers a utility loss if the production technology improves upon ceteris paribus and individual rationality no single agent coalition objects or no private transfers no agent receives a positive amount of private good must select an egalitarian equivalent allocation in every economy copyright 1987 by the econometric society

small aggregates big manipulation vote buying enforcement and collective monitoring vote buying is widespread in developing democracies despite the secret ballot what explains its resilience i argue that brokers condition future payments on published electoral results to enforce these transactions and that this is effective at inducing voters compliance only when the results of small voting groups are available using monitors and citizens reports of electoral manipulation and survey data from colombia i find a robust negative correlation between the average polling station size and various measures of vote buying evidence from a variety of identification strategies suggests that this relationship can be attributed to aggregate monitoring sustaining these transactions and not to the brokers increased ability to identify compliers or other characteristics of places where polling stations are small replication materials the data code and any additional materials required to replicate all analyses in this article are available on the american journal of political science dataverse within the harvard dataverse network at http dx doi org 10 7910 dvn k6zoow

independence of allocative efficiency from distribution in the theory of public goods when is the pareto optimal amount of public goods independent of income distribution subject to some regularity conditions the answer is when preferences of every individual i can be represented by a utility function of the form u x i y a y x i b i y where x i is i s consumption of private goods and y is the amount of public goods

axiomatic bargaining theory on economic environments abstract axiomatic bargaining theory is reexamined by focusing upon the economic exhange environment instead of the traditional utility possibility set it is argued that the axioms of the traditional theory impose stronger restrictions than can be supported by their motivating economic intuitions weaker alternative axioms making explicit use of economic information are used to characterize the standard bargaining solutions a key idea is to impose consistency of the solution with respect to changes in the dimension of the commodity space even these weaker economic axioms however may be unrealistic restrictions to impose on the bargaining solution in the context of many economic bargaining problems

monotonic solutions to general cooperative games etude de jeux cooperatifs qui sont des jeux a plusieurs joueurs mis sous la forme de coalition dans lesquels l utilite n est pas supposee etre transferable

weak states causes and consequences of the sicilian mafia we document that the spread of the mafia in sicily at the end of the 19th century was in part caused by the rise of socialist peasant fasci organizations in an environment with weak state presence this socialist threat triggered landowners estate managers and local politicians to turn to the mafia to resist and combat peasant demands we show that the location of the peasant fasci is significantly affected by a severe drought in 1893 and using information on rainfall we estimate the impact of the peasant fasci on the location of the mafia in 1900 we provide extensive evidence that rainfall before and after this critical period has no effect on the spread of the mafia or various economic and political outcomes in the second part of the article we use this source of variation in the strength of the mafia in 1900 to estimate its medium term and long term effects we find significant and quantitatively large negative impacts of the mafia on literacy and various public goods in the 1910s and 20s we also show a sizable impact of the mafia on political competition which could be one of the channels via which it affected local economic outcomes we document negative effects of the mafia on longer term outcomes in the 1960s 70s and 80s as well but these are in general weaker and often only marginally significant one exception is its persistent and strong impact on political competition

emergence and persistence of inefficient states we present a theory of the emergence and persistence of inefficient states based on patronage politics the society consists of rich and poor the rich are initially in power but expect to transition to democracy which will choose redistributive policies taxation requires the employment of bureaucrats by choosing an inefficient state structure the rich may be able to use patronage and capture democratic politics so reducing the amount of redistribution in democracy moreover the inefficient state creates its own constituency and tends to persist over time intuitively an inefficient state structure creates more rents for bureaucrats than would an efficient one when the poor come to power in democracy they will reform the structure of the state to make it more efficient so that higher taxes can be collected at lower cost and with lower rents for bureaucrats anticipating this when the society starts out with an inefficient organization of the state bureaucrats support the rich who set lower taxes but also provide rents to bureaucrats we obtain that the rich bureaucrats coalition may also expand the size of bureaucracy excessively so as to generate enough political support the model shows that an equilibrium with an inefficient state is more likely to arise when there is greater income inequality when bureaucratic rents take intermediate values and when individuals are sufficiently forward looking jel p16 h11 h26 h41

should countries control international profit shifting we present a fiscal competition model with two policy instruments the level of corporate taxation and the tightness of control of profit shifting by multinational firms mnf we show that a country may optimally decide not to monitor the mnf for two reasons firstly this country becomes an attractive location for mnf activity despite a high corporate tax secondly as the profits of the mnf become mobile the focus of tax competition is shifted taxation then influences both an mnf s location and the place where it declares its profits

the pure compensation problem egalitarianism versus laissez fairism a binary choice problem with side payments and quasi linear utilities is considered we study two compensation rules called social choice functions the egalitarian rule divides equally the surplus above the average utility level the laissez faire rule chooses an efficient decision but performs no transfer egalitarianism is characterized by a monotonicity axiom called agreement no two agents ever disagree in comparing two distinct preferences of a third one laissez fairism is characterized by the no subsidy axiom a coalition would not be worse off if the other agents were not present

electoral competition with informed and uninformed voters i present a model of electoral competition in which candidates raise campaign contributions by choosing policies that benefit interest groups and then expend those contributions to influence voters who are uninformed about the policies informed voters however vote based on those policies so candidates face a trade off between choosing a policy to generate funds to attract the uninformed vote and choosing a policy to attract the informed vote electoral equilibria are characterized for two categories of policies particularistic and collective in the case of particularistic policies the equilibrium policies of the candidates are separated if the proportion of uninformed voters is sufficiently high and the degree of separation is an increasing function of that proportion the model is extended to include the public financing of elections and incumbency advantages for the case of collective policies the candidates locate at the median of the ideal points of the informed voters and contributions are zero