democracy comes to europe franchise extension and fiscal outcomes 1830 1938 abstract this paper examines the relation between public spending and the spread of democracy in western europe during the period 1830 1938 our data set includes measures of the size of the electorate the election rule and electoral participation as well as measures of the size and composition of central government expenditures for 12 countries we estimate panel regressions and find that 1 the gradual lifting of socio economic restrictions on the voting franchise contributed to growth in government spending mainly by increasing spending on infrastructure and internal security 2 the female suffrage had a weak positive effect through spending on health education and welfare 3 the change from majority to proportional rule which took place in 10 of the countries did not contribute to growth in government spending and held back spending on health education and welfare 4 there exists weak complementarity between economic development and the spread of democracy

electoral outcomes with probabilistic voting and nash social welfare maxima abstract this paper provides unexpected support to nash s view of how bargaining determines the social choice we first present a spatial model of electoral competition with probabilistic voting and a very close relation between voters preferences and their choice probabilities the outcome of the electoral competition game is then shown to be precisely the social alternative that maximizes a nash type social welfare function theorem 1 this electoral outcome is also interpreted as a unanimity likelihood maximum corollary 1 within our framework existence and uniqueness of such an outcome are guaranteed corollaries 2 and 3

two stage group rent seeking with negatively interdependent preferences the purpose of this paper is to compare the rate of rent dissipation in a group rent seeking contest in which rent seeking activities take place in two stages with those of a one stage individual contest specifically the effect of the extension by introducing rent seekers with negatively interdependent preferences is analyzed focusing on the relationship between contest structure and preference type we find that rent dissipation given absolute as opposed to relative payoff maximization is lower in a two stage contest than in a one stage contest given players with negatively interdependent preferences we find the reverse

time varying parameters in the almost ideal demand system and the rotterdam model will the best specification please stand up this article assesses the ability of the rotterdam model rm and of three versions of the almost ideal demand system aids to recover the time varying elasticities of a true demand system and to satisfy theoretical regularity using monte carlo simulations we find that the rm performs better than the linear approximate aids at recovering the signs of all the time varying elasticities more importantly the rm has the ability to track the paths of time varying income elasticities even when the true values are very high the linear approximate aids not only performs poorly at recovering the time varying elasticities but also badly approximates the nonlinear aids

legislative organization and pollution taxation the role of political institutions in shaping public policy has been analyzed in isolation from corruption and legislative organization specifically bicameralism has received minimal attention we analyze pollution taxation when decisions are influenced by several veto players such as legislative chambers our theory predicts that an increase in the number of veto players e g moving from uni to bi cameralism pushes the pollution tax towards the social optimum with the effect being conditional on corruption as such dispersion around the optimal tax is lower under bicameralism empirical tests using data from 86 countries support the theory

democratic institutions versus autocratic regimes the case of environmental policy the literature suggests that democracy positively affects environmental policy stringency using the method of propensity score matching we find that this result appears to be largely driven by the parliamentary democracies as opposed to the presidential congressional proportional or majority systems moreover it appears that presidential congressional systems often set environmental policies not significantly different from autocracies these are novel contributions to the literature

tastes skills and local public goods abstract this paper analyzes optimal club configurations in an economy where different types of labor are complementary in the production of private goods extending the work of berglas journal of public economics 6 409 423 1976 the analysis shows that when labor types are nonessential in production a homogeneous club configuration may be optimal despite the presence of labor complementarity the assumption that inputs are essential precluded this outcome in berglas model it is shown that homogeneous clubs are optimal when complementarity is weak or when preferences are substantially different

smooth it like the joneses estimating peer group effects in intertemporal consumption choice recent theoretical contributions have suggested peer group effects as a potential explanation for several puzzles in macroeconomics but their empirical relevance for intertemporal consumption choice is an open question we derive an extension of the standard life cycle model that allows for consumption externalities in this framework we propose a social multiplier approach to distinguish true externalities from merely correlated effects estimating our model using us panel data we find strong predictable co movement of household consumption within peer groups although much of this co movement reflects correlated effects only there is statistically significant evidence for moderate consumption externalities across several plausible peer group specifications

interdependent preferences an econometric analysis the theoretical model of gaertner 1974 and pollak 1976 for the interdependence of preferences in the linear expenditure system is estimated for a cross section of households the interdependence of consumption of different households has implications for the stochastic structure of the model and for the identifiability of its parameters both aspects are dealt with the empirical results indicate a significant role played by the interdependence of preferences one of its implications is that predictions of the effects of changes in a household s exogenous variables differ according to whether the exogenous variable only changes for this household or for all households jointly c 1997 john wiley sons ltd

heterogeneity within communities a stochastic model with tenure choice standard explanations for the income heterogeneity within neighborhoods rely on differences of preferences across households and heterogeneity of the housing stock we propose an alternative and complementary explanation we construct a stochastic equilibrium sorting model where 1 income is the sole dimension of household heterogeneity 2 households form state contingent housing location plans that may involve moves over their lifetimes 3 households choose whether to own or rent depending on the housing expenditure risk associated with each tenure mode and 4 there is a probability that newcomer households move in and compete for homes with native households income mixing within neighborhood arises for two reasons first allowing natives to form state contingent housing location plans breaks the indivisibility of housing consumption implicit in the literature where households choose their location once and for all second natives can insure themselves against rent fluctuations by buying their home prior to the realization of the population shock newcomers cannot as a result poorer natives stay in the more desirable communities and only richer newcomers move in these communities evidence from u s metropolitan areas supports the effects predicted by the model

effectiveness of electoral systems for reducing government corruption a game theoretic analysis abstract a theoretical model is developed for predicting the relative effectiveness of different electoral systems for reducing government corruption we consider voting games in which parties with known corruption levels and known positions on a major policy question compete for legislative seats we find that approval voting and proportional representation are fully effective in the sense that all equilibria exclude corrupt parties from legislative seats plurality voting is partly effective in the sense that there always exist some equilibria that exclude corrupt parties borda voting is ineffective because for some political situations no equilibria can guarantee the exclusion of corrupt parties journal of economic literature classification number d72

on price taking equilibria in club economies with nonanonymous crowding abstract competitive equilibrium in a coalition production economy or a club economy typically does not exist when there is free entry for two reasons first there may be an integer problem as is familiar from club theory with anonymous crowding second optimal groups may have different compositions from the population and then even if there is no integer problem it may be impossible to partition the population into optimal groups i define a notion of approximate equilibrium and show that such an equilibrium always exists in a sufficiently large economy i focus on the optimal size of the economy rather than of clubs

modeling interdependent consumer preferences abstract a consumer s preference for an offering can be influenced by the preferences of others in many ways ranging from social identification and inclusion to the benefits of network externalities in this article the authors introduce a bayesian spatial autoregressive discrete choice model to study the preference interdependence among individual consumers the autoregressive specification can reflect patterns of heterogeneity in which influence propagates within and across networks these patterns cannot be modeled with standard random effect specifications and can be difficult to capture with covariates in a linear model the authors illustrate their model of interdependent preferences with data on automobile purchases and show that preferences for japanese made cars are related to geographically and demographically defined networks

foreign aid and market liberalizing reform market oriented economic policies reflected in limited economic activity by government protection of private property rights sound monetary policy outward orientation regarding trade and efficient tax and regulatory policy have been strongly linked to faster rates of economic growth foreign aid is often provided in the belief that it encourages liberalizing reforms in these areas this paper analyzes the impact of aid on market liberalizing policy reform correcting for the possible endogeneity of aid results indicate that higher aid slowed reform over the 1980 2000 period as measured by a broad index of policies disaggregating policy into five areas aid is significantly linked to slower reform in some policy areas but not in others disaggregating by decade aid s adverse impact on policy reform is much more pronounced for the 1980s than for the 1990s

electoral rules and environmental policy abstract this paper investigates the effect of electoral rules on environmental policymaking using several estimators from the program evaluation literature we find that governments set stricter environmental policies under proportional as opposed to majoritarian systems

life cycle consumption under social interactions abstract in this paper we examine how social interactions affect consumption decisions at various levels of aggregation in a life cycle economy made up of peer groups for this purpose we consider two analytically solvable life cycle models one under certainty equivalent behavior and one under prudence and explicitly allow for three different forms of social interactions in peer groups namely conformism altruism and jealousy we show that whether social interactions have any effects on individuals optimal consumption decisions critically depends on intertemporal rather than static considerations this is true regardless of whether individuals preferences are time separable or exhibit habit formation and whether information within peer groups is homogeneous or disparate it implies that analyzing the effects of social interactions in static rather than intertemporal settings is likely to be misleading we also show that social interactions when coupled with either habit formation or prudence can significantly strengthen the effects of habit formation or prudence in the direction of resolving two well known puzzles in the literature on the permanent income hypothesis namely excess smoothness and excess sensitivity

the size and scope of government comparative politics with rational politicians we try to demonstrate how economists may engage in research on comparative politics relating the size and composition of government spending to the political system a downsian model of electoral competition and forward looking voting indicates that majoritarian as opposed to proportional elections increase competition between parties by focusing it into some key marginal districts this leads to less public goods less rents for politicians more redistribution and larger government a model of legislative bargaining and backward looking voting indicates that presidential as opposed to parliamentary regimes increase competition between both politicians and voters this leads to less public goods less rents for politicians less redistribution and smaller government we confront these predictions with cross country data from around 1990 controlling for economic and social determinants of government spending we nd strong and robust support for the prediction that the size of government is smaller under presidential regimes and weaker support for the prediction that majoritarian elections are associated with less public goods

incumbent performance and electoral control in the pure theory of electoral competition citizens compare the platforms of the candidates and vote for the one whose platform is preferred candidate strategies are identified with promises about future performance in office models of this sort have been developed in both static mckelvey 1975 and dynamic kramer 1977 i settings and all appear to have the property that if the set of alternatives is large enough in some sense equilibrium platforms rarely exist but these models have another feature that is quite as disturbing as their instability in the static setting discussed by mckelvey little attention is paid to the possibility that once in office the politician s preferences may diverge from those of his constituents and that he may therefore choose policies at variance from his platform instead it is simply assumed that promises will be kept whether or not such behavior is congruent with the interest of the officeholder it is sometimes argued that an enforcement mechanism may exist to discipline politicians for failing to keep promises but without a specification of the mechanism it is not obvious that it would be in the interests of the

social interactions in labor supply our research examines the effect of interdependence on estimation and interpretation of earnings labor supply equations we consider the cases of 1 a positive spillover from others labor supplied and 2 a need for conformity with others labor supplied qualitative and quantitative comparative statics results with a stone geary utility function demonstrate how spillover effects increase labor supply uniformly alternatively conformity effects move labor supplied toward the mean of the reference group so that in the limit labor supply becomes perfectly inelastic at the reference group average when there are unmodeled exogenous social interactions conventional wage elasticities are still relatively well estimated although structural parameters may not be omitting endogenous social interactions may seriously misrepresent the labor supply effects of policy however jel d11 j22 z13

comparative politics and public finance we propose a model with micropolitical foundations to contrast different political regimes compared to a parliamentary regime the institutions of a presidential congressional regime produce fewer incentives for legislative cohesion but more separation of powers these differences are reflected in the size and composition of government spending a parliamentary regime has redistribution toward a majority less underprovision of public goods and more rents to politicians a presidential congressional regime has redistribution toward powerful minorities more underprovision of public goods but less rents to politicians the size of government is smaller under a presidential regime this last prediction is consistent with cross country data

sorting by foot travel for local public goods and equilibrium stratification we re examine tiebout s hypothesis of endogenous sorting in a competitive spatial equilibrium framework by considering both income and preference heterogeneity and by allowing agents to decide endogenously the number of visits to a travel for local public good the equilibrium configuration may be completely segregated incompletely segregated or completely integrated depending on relative market rents and income preference local tax parameters a segregated equilibrium may feature endogenous sorting purely by income or by both income and preferences while the rich need not be closer to the local public facility site multiple equilibria may arise when the equilibrium configuration is incompletely segregated jel classification d50 h41 classification par deplacement biens publics locaux accessibles par deplacement et stratification d equilibre les auteurs reexaminent l hypothese de tiebout de classification endogene dans un cadre d equilibre spatial concurrentiel en tenant compte a la fois de l heterogeneite des revenus et des preferences ainsi qu en permettant aux agents de decider de maniere endogene du nombre de visites pour se procurer un bien public local par deplacement il peut s ensuivre des equilibres de segregation complete de segregation incomplete ou d integration complete selon les rentes relatives et les parametres de revenus de preferences ou de fiscalite locale un equilibre de segregation peut entrainer une classification endogene sur la base seulement des revenus ou sur la base des revenus et des preferences alors que les riches n ont pas besoin d etre plus proches du site du bien public local des equilibres multiples peuvent surgir quand la configuration d equilibre en est une de segregation incomplete

comparative politics and environmental taxation abstract in this paper we take a step towards understanding the role of democratic institutions on the level of pollution taxation persson et al j polit economy 108 2000 1121 argue that presidential congressional regimes set lower taxes than parliamentary regimes this conclusion results from the checks and balances built into the former and the higher degree of legislative cohesion in the latter we test this prediction on gasoline and diesel prices using the method of propensity score matching along with data from 86 democratic countries the empirical evidence is consonant with the theory we find that ceteris paribus the average price of super gasoline is 0 14 0 20 less per liter in presidential congressional systems the average price of diesel gasoline is 0 11 0 14 less per liter

decentralization as a constraint to leviathan a panel cointegration analysis this paper extends the empirical literature about the effects of fiscal decentralization on the growth of government along three dimensions it distinguishes between the effects of the level of decentralization from the way local governments finance their expenditures common pool versus own resources it uses a panel cointegration approach to separate the long run effects of decentralization from the short run dynamics and it extends and revises the datasets generally used in these empirical analyses the results show that the amount of revenue raised by sub national governments leads to a long term fall in the size of government but grants have the opposite effect in addition a greater decentralization of expenditure leads to greater overall spending when the short term is considered these influences work slowly as the speed of adjustment towards the desired government size is relatively sluggish in addition in the short run there is also a clear effect from the role of local revenue raising powers that stimulates the growth of government these results appear robust to changes in the composition of the variables countries and periods included the sample

estimating the interdependence of television program viewership between spouses a bayesian simultaneous equation model when making product choices consumers are influenced by the preferences of other consumers such as family members friends neighbors and colleagues preference interdependence among family members is likely to be significant because of cohabitation and strong emotional ties to estimate the preference interdependence we specify a simultaneous equation model and propose a bayesian estimation approach unlike existing models that use a spatial autoregressive structure to capture the interdependence of consumer preferences we are able to estimate the potential asymmetry in the preference interdependence among family members in a more flexible way in a simulation study we show that models that ignore interdependence of preferences yield biased estimates of consumers sensitivity to observed attribute preferences in an empirical application we estimate the interdependence of the viewership of television programs between husbands and wives in 481 households we find that wives viewing behavior depends more strongly on their husbands viewing behavior than husbands viewing behavior depends on their wives viewing behavior there exist significant differences in parameter estimates of dependence across categories of television programs differences in levels of spousal interdependence across households are partially explained by the age and the education level of the spouses

the size of government in majoritarian and consensus democracies this article looks at the effect of democratic institutions on the size of government with the help of the ordinary least squares regression analysis of data from the organization for economic cooperation and development oecd countries from 1974 to 1995 the study provides considerable evidence that the variance in the type of democracy measured by the lijphart index of majoritarian consensus political institutions has a systematic effect on the variance in the size of government measured both by total government outlays as well as total government revenue as a percentage of gross domestic product the article further argues that such institutional effects on the size of government are strengthened by partisan politics more specifically the analysis demonstrates the presence of the multiplicative interaction effect of the mutually reinforcing nature between the institutional structure and partisan composition of government in their association with the size of government

social network structure and status competition in status competition studies the utility of heterogeneous individuals typically depends on an economy wide average indicator of status in our model emulative and jealous agents are embedded in an exogenous network where agent specific reference group is determined by the direct link emanating from the agent similarly to ghiglino and goyal 2010 but in a somewhat different framework we show that individual consumption is proportional to the agent s outbound katz bonacich network centrality measure and equilibrium is generally inefficient more important the negative externality associated with each agent depends on her inbound centrality measure the conspicuousness index a tax based on this index combined with a uniform lump sum transfer attains efficiency

identifying interdependent behaviour in an empirical model of labour supply in this paper we test a particular form of interdependent behavior namely the hypothesis that individuals choices of hours of work are influenced by the average hours of work in a social reference group there are problems to empirically disentangle the effects of interdependent behavior and preference variation across groups we show that panel data or data from several points in time are needed in the empirical analysis we combine cross section data from 1973 1980 and 1990 our results support the hypothesis of interdependent behavior the implication is that conventional tax policy predictions in which preference interdependencies are neglected will tend to underestimate the effect of a tax reform on hours of work our point estimates suggest that conventional calculations would capture only about a third of the actual change in hours of work

opposites attract the effect of the federal income tax code on community composition abstract if houses in two homogeneous but dissimilar communities are reorganized as a single heterogeneous community property tax payments are shifted from owners of small houses to owners of large houses we consider three aspects of the federal income tax code which causes this shifting to raise aggregate property values in the heterogeneous community first the property tax is deductible and the tax rate structure is progressive second some families do not itemize third the restriction on saving in tax deferring assets suggests the use of different interest rates to capitalize future property taxes because of these aspects heterogeneous communities are established provided the different family types desire similar levels of public service

decentralization in replicated club economies with multiple private goods abstract we show that exhaustion of blocking opportunities is a sufficient condition such that every allocation in the core of a replicated club economy can be decentralized as a competitive equilibrium and that a related condition efficient scale is necessary and under an assumption on endowments sufficient such that competitive equilibrium exists and the core is nonempty these results do not require the euclidean structure and monotonicity assumed in lindahl equilibrium do not require convexity of preferences or costs and do not require the strong assumption that private goods are essential journal of economic literature classification numbers d46 d50 d61 h40

the strategic advantage of interdependent preferences in rent seeking contests we study rent seeking contests where the set of players contains two groups of players one with independent preferences and the other with negatively interdependent preferences it turns out that the latter experience a strategic advantage in general two player contests and in n player contests with non increasing marginal efficiency for general n player contests with increasing marginal efficiency the strategic advantage prevails provided convexity of contest technologies is sufficiently weak for strongly convex contest technologies other types of equilibria exist including one where individualists receive strictly higher pay off

a discrete choice model with social interactions with an application to high school teen behavior we develop an empirical discrete choice interaction model with a finite number of agents we characterize its equilibrium properties in particular the correspondence between interaction strength number of agents and the set of equilibria and propose to estimate the model by means of simulation methods in an empirical application we analyze the individual behavior of high school teenagers in almost 500 school classes from 70 schools in our baseline model endogenous social interaction effects are strong for behavior closely related to school truancy somewhat weaker for behavior partly related to school smoking cell phone ownership and moped ownership and absent for behavior far away from school asking parents permission for purchases intra gender interactions are generally much stronger than cross gender interactions in a model with school specific fixed effects social interaction effects are insignificant with the exception of intra gender interactions for truancy copyright c 2007 john wiley sons ltd

health status and health dynamics in an empirical model of expected longevity expected longevity is an important factor influencing older individuals decisions such as consumption savings purchase of life insurance and annuities claiming of social security benefits and labor supply it has also been shown to be a good predictor of actual longevity which in turn is highly correlated with health status a relatively new literature on health investments under uncertainty which builds upon the seminal work by grossman grossman m 1972 on the concept of health capital and demand for health journal of political economy 80 223 255 has directly linked longevity with characteristics behaviors and decisions by utility maximizing agents our empirical model can be understood within that theoretical framework as estimating a production function of longevity using longitudinal data from the health and retirement study we directly incorporate health dynamics in explaining the variation in expected longevities and compare two alternative measures of health dynamics the self reported health change and the computed health change based on self reports of health status in 38 of the reports in our sample computed health changes are inconsistent with the direct report on health changes over time and another 15 of the sample can suffer from information losses if computed changes are used to assess changes in actual health these potentially serious problems raise doubts regarding the use and interpretation of the computed health changes and even the lagged measures of self reported health as controls for health dynamics in a variety of empirical settings our empirical results controlling for both subjective and objective measures of health status and unobserved heterogeneity in reporting suggest that self reported health changes are a preferred measure of health dynamics

social interactions and habit formation in a model of female labour supply this paper investigates the influence of habit formation and preference interdependence on labour supply behaviour of married females a novelty of the paper is that we incorporate direct survey information on reference groups of individuals in a neoclassical labour supply model for that purpose we first estimate a latent variables model relating the direct information to the true but unobserved reference groups one of the most interesting features of the model is that the presence of young children becomes an insignificant factor in the hours equation while it remains a significant factor in the participation decision in addition the labour supply curve is much flatter in a model with habit formation and preference interdependence than in a model without it both habit formation and preference interdependence contribute significantly to the explanation of female labour supply 1998 elsevier science s a all rights reserved

currency unions and trade how large is the treatment effect currency unions and trade what can the data say the impact of a common currency on trade can be grossly mismeasured if countries that belong to currency unions are systematically different from those that do not and if the relationship between trade and its observable determinants is complex i argue that such complications are plausible and likely to distort the empirical results of a recent economic policy paper by andrew rose issue 30 2000 pp 7 45 using techniques designed to be robust in this situation i find that the effects of common currency on international trade are considerably less dramatic and much less precisely estimated torsten persson i have always maintained that the measured effect of a single currency on trade appears implausibly large but i am not convinced by torsten persson s diagnosis and proposed solution i apply a variety of estimation techniques to a new larger data set where many more instances of currency union creation and abandonment make it possible to rely on time series as well as cross sectional evidence the results are similar to my earlier ones the effect of a single currency on trade is large andrew rose

property taxation as incentive for cost control empirical evidence for utility services in norway recent theoretical research suggests that property taxation has incentive effects that can help control cost problems in the public sector the institutional setting in norway allows this first empirical investigation of the incentive effect of property taxation since we can separate between local governments with and without property tax the raw data of the variation in the unit cost level for utilities show that local governments with property tax have about 20 lower unit cost using both linear regression and propensity score matching we are not able to wash out the difference in unit costs our interpretation is that having a visible and controversial local tax related to property stimulates voter interest in local government activities and thereby may help cost control the incentive effect is of interest for the design of fiscal federalism

do constitutions cause large governments quasi experimental evidence abstract how do constitutional rules for elections and legislation affect the size of government we ask this question in a new sample of about 80 countries in the 1990s in addition to conventional regression methods we use quasi experimental matching methods which more convincingly address legitimate criticisms of causal inference from cross country data both sets of estimates suggest that presidential regimes and majoritarian elections produce smaller governments

endogenous fiscal policies environmental quality and status seeking behavior abstract this paper analyzes endogenous fiscal policy in an endogenous growth model where agents care about social status and environmental quality the quest for a higher status is assimilated to a preference for capital wealth the government uses income tax to finance infrastructure and environmental protection we find that accounting for preferences for social status and environmental quality may lead to an allocation of tax revenue in favor of a cleanup effort to the detriment of infrastructure economic growth is not necessarily and negatively affected by this allocation as it is partly explained by an excessive accumulation of capital wealth due to the quest of status status seeking can however harm economic growth and environmental quality when its motive is important enough finally we show that economic growth may be consistent with environmental preservation but is not necessarily welfare improving as in the case of absence of status seeking behavior

credit constraints cyclical fiscal policy and industry growth this paper evaluates whether the cyclical pattern of fiscal policy can affect growth we first build a simple endogenous growth model where entrepreneurs can invest either in short run projects or in long term growth enhancing projects long term projects involve a liquidity risk which credit constrained firms try to overcome by borrowing on the basis of their short run profits by increasing firms market size in recessions a countercyclical fiscal policy will boost investment in productivity enhancing long term projects and the more so in sectors that rely more on external financing or which display lower asset tangibility second the paper tests this prediction using rajan and zingales 1998 s diff and diff methodology on a panel data sample of manufacturing industries across 17 oecd countries over the period 1980 2005 the evidence confirms that the positive effects of a more countercyclical fiscal policy on value added growth productivity growth and r d expenditure are indeed larger in industries with heavier reliance on external finance or lower asset tangibility

relative concerns for consumption at the top an intertemporal analysis for the uk abstract this paper investigates whether the consumption of rich households provides a reference point in the intertemporal consumption choices of non rich households using uk household data on food consumption we estimate the euler equation implied by a life cycle model incorporating relative concerns for the consumption of rich households according to both our ols and gmm estimates for the population of non rich households as a whole there is no evidence of such relative concerns we also examine an alternative model of relative concerns in which households overconsume when exposed to higher reference group consumption and find correlational evidence that this may be the case for food consumed away from home finally we investigate the presence of heterogeneous relative concerns across county and household characteristics in both models finding evidence of relative concerns for consumption at the top in counties with relatively low income inequality this mechanism seems to operate for food consumed away from home

tiebout economies with differential genetic types and endogenously chosen crowding characteristics abstract we consider a tiebout economy with differential crowding and public projects in which agents are distinguished by their tastes and genetic endowments agents choose which crowding characteristic for example a skill they wish to express and this affects their value to other members of their jurisdiction club firm etc an agent s choice is influenced both by his genetic endowment which affects his cost of acquiring crowding characteristics and by his preferences over which crowding characteristic he expresses we show that if small groups are strictly effective the core is equivalent to the set of anonymous competitive equilibrium outcomes but that the core generally contains taste homogeneous jurisdictions journal of economic literature classification numbers h41 h72

equivalence of the core and competitive equilibrium in a tiebout economy with crowding types abstract we propose a new model of a local public goods economy with differentiated crowding the new feature is that taste and crowding characteristics of agents are distinguished from one another we prove that if the economy satisfies strict small group effectiveness then the core is equivalent to the set of tiebout equilibrium outcomes equilibrium prices are defined to depend solely on crowding characteristics this implies that only publicly observable information and not private information such as preferences is needed to induce agents to sort themselves into efficient jurisdictions thus our model allows us to satisfy bewley s 6 anonymity requirement on taxes in his well known criticism of the tiebout hypothesis

why are there serial defaulters evidence from constitutions abstract presidential democracies were 4 9 times more likely than parliamentary democracies to default on external debts between 1976 and 2000 in this article i argue that the explanation for the serial defaults by a number of sovereign borrowers lies in their constitutions ceteris paribus parliamentary democracies are less likely than presidential democracies to default on their liabilities because the confidence requirement creates a credible link between economic policies and the executive s political survival this link tends to strengthen the repayment commitment when politicians are opportunistic i show that this effect is large in the contemporary world even when the comparison is restricted to countries that are similar in terms of colonial origin geography and economic variables since a country s form of government is typically chosen at the time of independence and is highly persistent over time constitutions can explain why debt policies in developing countries are related to individual