The aim of this paper is to analyze the institutional economics of co-operation and the political economy of trust. It is reviewed the transactions costs, the principal-agent theory, market power, increasing-returns theory and value creation, strategic management, competitive forces, resource-based theory, organizational knowledge and learning, strategic choice theory and the collective efficie...

I survey the first twenty-five years of economic change in the former communist countries after the fall of the Berlin Wall. While diverging sharply from one another, these countries have converged economically and politically towards their nearest neighbors outside the Soviet bloc. The typical country experienced a spurt of economic reform in the early 1990s, slowing dramatically from around 1...

The paper examines amodel inwhich the number of immigrants allowed into a country is the outcome of a costly political lobbying contest between a firm and a union. The union and the firm bargain over the wage of natives after the number of immigrants that will be permitted is known. I assume that the lobbying contest is an all-pay auction (i.e., the lobbyist with the higher effort wins with cer...

One of the most salient changes in the world economy since 1980 has been the move toward freer trade among countries across the globe. How do existing theories about trade policy explain this puzzle? Three sets of explanations are prominent. First, many focus on changes in trade policy preferences among domestic actors, either societal groups or political leaders. Second, scholars examine chang...

In recent decades, democratic countries have signed hundreds of international environmental agreements (IEAs). Most of these are weak and do not include effective enforcement. To study this puzzle, we propose a positive theory of IEAs in which the political incumbents negotiate in the shadow of reelections. We show that incumbents are prone to negotiate treaties that are simultaneously overambi...

I investigate political uncertainty as a source of regulatory risk. Political parties have incentives to reduce regulatory risk actively through institutionalizing politically independent regulatory agencies. Political parties benefit from fully eliminating regulatory risk when political divergence is small or electoral uncertainty is appropriately skewed. In general, the political system allow...

We study the constrained Pareto efficient allocations in a dynamic production economy in which the group in political power decides the allocation of resources. We show that Pareto efficient allocations take a quasi-Markovian structure and can be represented recursively as a function of the identity of the group in power and updated Pareto weights. For high discount factors, the economy ultimat...

We construct a political equilibrium in which employers and labour unions bargain over labour contracts, wage-earners and profit-earners lobby the government for taxation and labour market regulation, and labour market legislation must be accepted by the majority of voters. We show that the voters rule out profit sharing, because otherwise the government would capture all the gain. Furthermore,...

After a critical review of conventional approaches to sustainability, this paper contrasts orthodox (neoclassical) economic theory with a political economy approach, arguing that such an approach focusing on the historically specific organizational form of production and the inherent characteristics of the capitalist mode of production is crucial for exploring the preconditions, the content and...

Awareness and AIDS: A Political Economy Perspective* Across African countries, prevention policies are unrelated to the prevalence of HIV/AIDS and, even in countries in which they were successful, these policies are often unstable or reversed. To explain these two puzzles, we propose a simple political economy model that examines how prevention policies and the epidemic dynamics are jointly det...