Crime and growth convergence: Evidence from Mexico

Scholars have often argued that crime hinders growth, but the empirical literature assessing such an effect is scarce. By exploiting cross-municipal income and crime data for Mexico, in this study we find evidence indicating that drug-related crime indeed deters growth.     

Poverty, political freedom, and the roots of terrorism in developing countries: An empirical assessment

We find that political freedom has a significant and non-linear effect on domestic terrorism, but has no statistically significant effect on transnational terrorism. Geography and fractionalization limit a country’s ability to curb terrorism, while strong legal institutions deter terrorism.     

Always Poor or Never Poor and Nothing in Between? Duration of Child Poverty in Germany

Abstract. This paper analyses the duration of child poverty in Germany. Observing the entire income history from the individuals' birth to their coming of age at age 18, we are able to analyse dynamics in and out of poverty for the entire population of children, whether they become poor at least once or not. Using duration models, we find that household composition, most importantly single parenthood, and the labour market status as well as level of education of the household head are the main driving forces behind exit from and re‐entry into poverty and thus determine the (long‐term) experience of poverty.     

War, peace, and the size of countries

This paper studies the relationship between international conflict and the size distribution of countries in a model in which both peaceful bargaining and nonpeaceful confrontations are possible. We show how the size distribution of countries depends on the likelihood, benefits, and costs of conflict and war. We also study the role of international law and show how better defined international ‘property rights’ may lead to country breakup and more numerous local conflicts.     

A Theory of Civil Conflict and Democracy in Rentier States*

The effects of resource rents on the political equilibrium have been studied in two main types of models. The first tradition uses models of conflict, and studies how resource rents affect the intensity and duration of civil conflict. The second tradition uses political economy models, where resource rents affect the political equilibrium due to changes in the costs and benefits of buying votes. Although they provide considerable insight, these traditions have little to say about when democracy emerges, and about when conflict emerges. In this paper, by integrating the earlier model traditions, we suggest the simplest possible framework we can think of to study the choice between conflict and democracy. We show how factors such as resource rents, the extent of electoral competition, and productivity affect economic and political equilibria.     

Disentangling political and institutional determinants of budget forecast errors: A comparative approach

This paper provides a unique comparison between French and Portuguese local governments with respect to the nature and determinants of budget forecast errors. It starts by documenting and comparing their statistical properties. The results point at biased and inefficient budget forecasts, which seem to have been more cautious in French departments than in Portuguese municipalities. Second, we examine the political, institutional and economic determinants of forecast biases. Overall, we find that they are essentially driven by electoral motivations and by institutional differences across the two countries. In particular, opportunistic forecasting is more prevalent where governments enjoy greater margin of maneuver, and there is evidence of conservatism in French departments where fiscal autonomy is greater.     

Anthropometric failure and persistence of poverty in rural India

Recent studies have drawn attention to the high prevalence of stunting among children in rural India. In fact, these estimates point to more pervasive deprivation than conventional measures of poverty based on income or consumption expenditure shortfalls imply. Since stunting reflects cumulative nutritional and health deprivation, it is likely to persist despite higher incomes. With a view to shedding some new light on this issue, an analysis of the determinants of stunting is carried out, based on a recent all‐India survey of rural households. While income matters, other factors acting independently of it matter too. These include household size, whether household head is male, caste affiliation, mother’s age at marriage, mother’s age, age composition of children, male–female wage differences, hygiene and sanitation facilities, and prices of food items. So, while higher incomes will help mitigate stunting, careful attention must also be given to enhancing women’s autonomy through more remunerative employment opportunities for them, enabling households to improve hygiene and sanitation facilities, and facilitating more competitive local markets for food.     

Public provision of health insurance and aggregate saving in an overlapping generations model with endogenous health risk: The South Korean case

This paper examines the effect of expanding public health insurance in South Korea on medical expenditures and aggregate saving using an overlapping generations model with endogenous health risk. South Korea had a substantial underinsured population, which is aging rapidly. Higher public health insurance benefits reduce individual medical expenditure and health risks but lead to a modest decline in individual and aggregate saving. Even after the expansion, the medical care coverage remains incomplete, and the elderly face a substantial risk of out-of-pocket medical expenditures.     

Pragmatism to Dogmatism: The Laissez Faire Myth and the Disabling of the American Fisc

The authors argue that the recent upsurge in anti-tax sentiment has its roots evolving social conditions and adherence to the laissez faire myth. Content analysis reveals that political anti-tax rhetoric increased in the late 1970s and early 1980s, a time of social distress in the US. This increased political attention provided a rhetorical punctuation whereby a substantial portion of Americans moved toward a much more dogmatic adherence to the laissez faire myth. The result has been to convert the laissez faire myth into a disabling myth that severely limits open discussion of fiscal issues and reduces the options in public finance decisions.