A THEORY OF THE CORRUPT KEYNESIAN

AbstractWe evaluate the impact of real business cycle shocks on corruption and economic policy in a model of entry regulation in a representative democracy. We find that corruption is pro-cyclical and regulation policy is counter-cyclical. Corrupt politicians engage in excessive stabilization of aggregate fluctuations and behave as if they were Keynesian. We also find that business cycle shocks can induce political instability with politicians losing office in recessions

Workers of the World, Unite! Franchise Extensions and the Threat of Revolution in Europe, 1820-1938

This paper tests the hypothesis that the extension of the voting franchise was caused by the threat of revolution, as suggested by Acemoglu and Robinson [Quarterly Journal of Economics 115, 1167-1199, 2000]. We approximate the threat of revolution in a given country by revolutionary events happening in neighboring countries. We investigate the relationship between this new measure of the threat of revolution and measures of su¤rage reform in two samples of European countries covering the period from 1820 to 1938. We find strong support for the 'threat of revolution theory'. We also find some evidence that war triggered suffrage reform, whereas other theories of the extension of the franchise, including 'modernization theory', receive little support

Distributive Politics and Electoral Incentives: Evidence from Seven US State Legislatures

We study the effect of electoral incentives on the allocation of public services across legislative districts. We develop a model in which elections encourage individual legislators to cater to parochial interests and thus aggravate the common pool problem. Using unique data from seven US states, we study how the amount of funding that a legislator channels to his district changes when he faces a term limit. We find that legislators bring less state funds to their district when they cannot run for re-election. Consistent with the Law of 1/N, this tendency is less pronounced in states with many legislative districts.term limits, electoral incentives, distributive politics, the Law of 1/N, US state legislatures

Capital Taxation and Electoral Accountability

In a representative democracy, voters can use elections to protect their property by holding politicians accountable for the tax policies they implement while in office. This paper demonstrates that performance voting can - partly or wholly - solve the capital levy problem. We characterise the �best� non-expropriating tax policies that can be sustained in a stationary Markov Perfect Equilibrium; show when this coincides with the second best tax policy; and discuss, in detail, the robustness of the result

Unions: Rent Extractors or Creators?

Unions: Rent Extractors or Creators