The Politicization of Growth Theory

In this essay I review the main features of neoclassical growth theory, with an eye to seeing what it has to say about the causes of wealth and poverty among nations. I argue that outside the OECD and a comparatively small circle of other countries, neoclassical models contribute little to identifying the deeper sources of cross-national patterns in growth and productivity. I then discuss recent advances in the empirical analysis of economic performance that feature the influence of politics, policy and institutional arrangements on entrepreneurship, innovation, investment and the efficiency with which factor inputs are transformed to output.neoclasssical growth theory; institutions and economic development and growth; politics and economic development and growth

Biogeography and Long-Run Economic Development

The transition from a hunter-gather economy to agricultural production, which made possible the endogenous technological progress that ultimately led to the industrial revolution, is one of the most important events in the thousands of years of humankind’s economic development. In this paper we present theory and evidence showing that exogenous geography and initial condition biogeography exerted decisive influence on the location and timing of transitions to sedentary agriculture, to complex social organization and, eventually, to modern industrial production. Evidence from a large cross-section of countries indicates that the effects of geographic and biogeographic endowments on contemporary levels of economic development are remarkably strong.Geography biogeography and growth; Economic development; Agricultural revolution; Institutions and growth; Plants animals and growth

Tax Toleration and Tax Compliance: How Government Affects the Propensity of Firms to Enter the Unofficial Economy

We propose a model of how government-supplied institutional benefits and the taxation and regulation of producers affect the propensity of private firms to enter the unofficial economy and evade taxation. Our analysis implies that the incentive of firms to produce underground depends on tax rates relative to firmspecific thresholds of tax toleration that are decisively affected by quality of governance — in particular by the presence of high-grade institutions delivering services that profit-maximizing firms deem worth paying for. Some key predictions of the model concerning the determinants of firms’ tax toleration and tax compliance receive broad support from empirical analyses of enterprise-level data from the World Bank’s World Business Environment Surveys.-

Labor market regimes and monetary policy

In this paper we propose straightforward extensions of multi-union, monopolistic competition models appearing in the recent literature on the macroeconomic effects of monetary policy. We extend these models from the Stackelberg equilibrium to the Nash equilibrium under variations in labor market regime in order to evaluate propositions about non-neutrality of monetary policy.policy game monetary policy neutrality trade union monopolistic competition

The Politicization of Growth Theory

In this essay I review the main features of neoclassical growth theory, with an eye to seeing what it has to say about the causes of wealth and poverty among nations. I argue that outside the OECD and a comparatively small circle of other countries, neoclassical models contribute little to identifying the deeper sources of cross-national patterns in growth and productivity. I then discuss recent advances in the empirical analysis of economic performance that feature the influence of politics, policy and institutional arrangements on entrepreneurship, innovation, investment and the efficiency with which factor inputs are transformed to output

Voting and the Macroeconomy

Forthcoming in The Oxford Handbook of Political Economy Barry R. Weingast and Donald Wittman,eds. Oxford University Press,200

Bread and Peace Voting in U.S. Presidential Elections

this paper was supported by HSFR grant F0382/9