Cyclical Strikes and Human Capital Accumulation under Asymmetric Information

Strikes are totally inefficient from an economic point of view. They occur when the two parties that bargain over a contract do not find an agreement and the result is a loss of utility for both. In spite of their clear inefficiency in the real world strikes are very common both in the rich economies as well as in the poor countries. Moreover recent empirical literature found some regularities over time and over countries regarding the strike behavior of the Trade Unions. The aim of this paper is to develop a theory that could explain this apparent economic paradox as well as some of the most known regularities. At the same time we also aim to link the analysis of the strikes with the investment decisions of employers and workers in that particular kind of capital good known as Human Capital. This kind of approach can put under a new light the role played by the Trade Unions in the process of economic growth

Democracy, education and the quality of government

This paper looks at how the interaction between democracy and education affects the quality of government. It models an economy in which politicians of heterogeneous quality can run for office and shows that education has a positive effect on the quality of selected officials only if democratic institutions are in place. The model also fi…nds that democracy has positive effect on the quality of government in countries with high levels of education but that political institutions are not correlated with the quality of government in countries with low levels of education. Cross-country and panel data regressions confirm that the interaction between democracy and education is positively associated with the quality of government.

Voting over Redistribution: The Occurrence of Polarized Outcomes

The basic insight of the literature concerning the Median Voter Theorem and its applications, dating back to Black (1948), is that the policies implemented by different parties once in o¢ce should approach the median voter’s preferred policy if they run in a single-dimensional and democratic electoral space. This strong prediction has been challenged in recent years using arguments related to the observation that usually the political spaces concern much more than one single dimension and that, once we consider such a space, the Median Voter Theorem cannot be applied. Our idea is that one can challenge the median voter predictions even if we keep considering just one single dimension. Infect also in electoral competitions characterized by a very important issue seen by voters as "salient" is almost impossible to observe in reality the convergence predicted by the Black’s theorem. In the present model we introduce a simple assumption over the process of opinions’ formation of the voters and we show as in equilibrium strategic considerations lead the parties to choose polarized platforms

A Dynamic Theory of Endogenous Constitutions

Endogenous Constitutions, Democratic Transition, Public Goods, Redistribution

Democratization and Civil Liberties: The Role of Violence During the Transition

This paper investigates the role of violent civil conflicts during the process of democratization for the quality of emerging democracies, and in particular, the protection of civil (political and economic) liberties. A simple theory in which different groups may engage in violent conflict in order to become the ruler predicts a crucial role of the democratization scenario. A peaceful democratization leads to democracies with a high degree of civil liberties, reflecting a social contract according to which all groups are politically represented and the rulers deliberately abstain from wasteful rent extraction. A transition to democracy under a violent conflict is less likely to lead to a system with a high degree of civil liberties. Empirical evidence from the third wave of democratization based on a difference-indifference methodology supports the theoretical predictions. The findings suggest that violent conflicts during the democratic transition have persistent negative effects on the quality of the emerging democracies.

Democratization and Civil Liberties: The Role of Violence During the Transition

This paper investigates the role of violent civil conflicts during the process of democratization for the quality of emerging democracies, and in particular, the protection of civil (political and economic) liberties. A simple theory in which different groups may engage in violent conflict in order to become the ruler predicts a crucial role of the democratization scenario. A peaceful democratization leads to democracies with a high degree of civil liberties, reflecting a social contract according to which all groups are politically represented and the rulers deliberately abstain from wasteful rent extraction. A transition to democracy under a violent conflict is less likely to lead to a system with a high degree of civil liberties. Empirical evidence from the third wave of democratization based on a difference-in-difference methodology supports the theoretical predictions. The findings suggest that violent conflicts during the democratic transition have persistent negative effects on the quality of the emerging democracies.democratization, civil conflict, violent democratization, civil liberties

Democratization and civil liberties: The role of violence during the transition

This paper investigates the role of violent civil conflicts during the process of democratization for the quality of emerging democracies, and in particular, the protection of civil (political and economic) liberties. A simple theory in which different groups may engage in violent conflict in order to become the ruler predicts a crucial role of the democratization scenario. A peaceful democratization leads to democracies with a high degree of civil liberties, reflecting a social contract according to which all groups are politically represented and the rulers deliberately abstain from wasteful rent extraction. A transition to democracy under a violent conflict is less likely to lead to a system with a high degree of civil liberties. Empirical evidence from the third wave of democratization based on a difference-in-difference methodology supports the theoretical predictions. The findings suggest that violent conflicts during the democratic transition have persistent negative effects on the quality of the emerging democracies

Are all democracies equally good? The role of interactions between political environment and inequality for rule of law

Using cross-country data, we find evidence for a significant negative interaction effect between democracy and inequality in determining the quality of growth-promoting institutions like rule of law. Democracy is associated with institutions of higher quality when inequality is lower

Consensual and conflictual democratization

We study the process of endogenous democratization from inefficient oligarchic systems in an economy where heterogeneous individuals can get involved in predation activities. The features of democracies are shown to be crucially related to the conditions under which democratization initially takes place. The political regime and the extent of redistribution implemented under it depend on the allocation of de facto political power across the different social groups. The cost of public enforcement of property rights depends on the extent of predation activities in the economy. The theory highlights the importance of inequality in natural resources and availability of human capital for endogenous democratic transitions. Multiple politico-economic equilibria can be sustained conditional on expectations about property rights enforcement. This generates history dependence. Democratic transitions supported by a large consensus serve as coordination device and lead to better protection of property and more stable political systems than democratic transitions imposed in conflictual environments. We test the novel predictions using available cross-country data. The link between the type of democratic transition and the outcomes under democracy is also investigated using novel data on constitutional principles. The findings support the theoretical predictions