Why not Africa? – Growth and Welfare Effects of Secure Property Rights

The paper presents the long-run equilibrium and development dynamics in the neoclassical growth model and a simple model of endogenous growth when property rights are absent. The results are compared to the outcome in a corresponding model economy with secure property rights. The main findings are that there exists a considerable gain in level and growth of consumption from establishing secure property rights, that economic performance without property rights worsens with increasing number of competing groups, and that the existence, or absence of property rights explains conditional convergence

Distributive politics and economic growth: the Markovian Stackelberg solution

We generalize the result of Alesina and Rodrik (1994) by showing that their static solution is also a time consistent Stackelberg solution of a differential game between the government and the median voter

A hard nut to crack : regulatory failure shows how rating really works

Credit rating agencies such as Moody’s and Standard & Poor’s are key players in the governance of global financial markets. Given the very strong criticism the rating agencies faced in the wake of the global financial crisis 2008, how can we explain the puzzle of their survival? Market and regulatory reliance on ratings continues, despite the shift from a light-touch to a mandatory system of agency regulation and supervision. Drawing on the analysis of rating agency regulation in the US and the EU before and after the financial crisis, we argue that a pervasive, persistent and, in our view, erroneous understanding of rating has supported the never-ending story of rating agency authority. We show how treating ratings as metrics, private goods, and independent and neutral third-party opinions contributes to the ineffectiveness of rating agency regulation and supports the continuing authoritative standing of the credit rating agencies in market and regulatory practices