The introduction of a new real estate taxes in Italy in 2011 generated a natural ex- periment, which is useful to test political budget cycles, i.e. the strategic choice of fiscal variables in relation to elections. We do find substantial evidence of political budget cy- cles, with municipalities choosing lower tax rates when close to elections. We observe this budget cycle only for smaller municipalities where the tax was more likely to be the single most important issue for
the local government. Cities close to elections with large deficits did not set lower rates before elections, probably because they felt the binding constraints
of budget rules.

We show that the correct experiment to evaluate the effects of a
…scale adjustment is the simulation of a multi year …fiscal plan rather
than of individual …scale shocks. Simulation of …scale plans adopted
by 16 OECD countries over a 30-year period supports the hypothesis that the effects of consolidations depend on their design. Fiscal
adjustments based upon spending cuts are much less costly, in terms
of output losses, than tax-based ones and have especially low out-
put costs when they consist of permanent rather than stop and go
changes in taxes and spending. The difference between tax-based and
spending-based adjustments appears not to be explained by accompanying policies, including monetary policy. It is mainly due to the
different response of business confidence and private investment.

Nations stay together when citizens share enough values and preferences and can communicate with each other. Homogeneity amongst people can be built with education, teaching a common language to facilitate communication, but also by brute force such as prohibiting local cultures. Democracies and non-democracies have different incentives when it comes to choosing how much and by what means to homogenize the population. We study and we compare both regimes in a model where the size of countries and the degree of active homogenization in endogenous. We also offer some historical discussions of cases which illustrate our theoretical results.

Flexible labor markets require geographically mobile workers to be efficient. Otherwise firms can take advantage of the immobility of workers and extract rents at the expense of workers. In cultures with strong family ties, moving away from home is costly. Thus, to limit the rents of firms and avoid moving, individuals with strong family ties rationally choose regulated labor markets, even though regulation generates lower employment and income. Empirically, we do find that individuals who inherit stronger family ties are less mobile, have lower wages, are less often employed and support more stringent labor market regulations. We find a positive association between labor market rigidities at the beginning of the twenty-first century and family values prevailing before World War II, and between family structures in the Middle Ages and current desire for labor market regulation. Both results suggest that labor market regulations have deep cultural roots.

We study the role of the most primitive institution in society: the family. Its organization and relationship between generations shape values formation, economic outcomes and influences national institutions. We use the World Values Survey to measure the strength of family ties and economic attitudes, controlling for country fixed effects. We study several economic attitudes, toward working women, society, generalized morality and civic engagement. Individuals with strong family ties have more traditional beliefs about the role of women in society, are more reluctant to accept changes in society and innovation and show a lower level of trust. We also uncover interesting correlations at the country level, where the strength of family ties is associated with lower GDP and lower quality of institutions. These results remain valid if one exploits the correlation between inherited family values and current institutions and level of development, indicating a strong persistence in family values. The quality of family relationships, on the positive side, increases happiness, life satisfaction, and self-reported health.

We propose a test of bias based upon patterns of judicial errors. We model the trial court as minimizing a weighted sum of type I and II errors. We define racial bias as a situation where the weight depends on defendant/victim race. If the court is unbiased, the error rate should be independent of the combination defendant/victim race. We test this prediction using an original dataset on all capital appeals in 1973-1995. We find that in the first and last stages of appeal the probability of error is 3 and 9 percentage points higher for minority defendants who killed white (versus minority) victims.

The study examines the historical origins of existing cross-cultural differences in beliefs and values regarding the appropriate role of women in society. We test the hypothesis that traditional agricultural practices influenced the historical gender division of labor and the evolution of gender norms. We find that, consistent with existing hypotheses, the descendants of societies that traditionally practiced plough agriculture today have less equal gender norms, measured using reported gender-role attitudes and female participation in the workplace, politics and entrepreneurial activities. Our results hold looking across countries, across districts within countries, and across ethnicities within districts. To test for the importance of cultural persistence, we examine the children of immigrants living in Europe and the United States. We find that even among these individuals, all born and raised in the same country, those with a heritage of traditional plough use exhibit less equal beliefs about gender roles today.