Alesina, Alberto, and Richard Holden. 2008. “Extremism and Ambiguities in Two-Candidate Elections”. Abstract

We analyze a model in which voters are uncertain about the policy preferences of candidates. Two forces affect the probability of electoral success: proximity to the median voter and campaign contributions. First, we show how campaign contributions affect elections. Then we show how the candidates may wish to announce a range of policy preferences, rather than a single point. This strategic ambiguity balances voter beliefs about the appeal of candidates both to the median voter and to the campaign contributors. If primaries precede a general election, they add another incentive for ambiguity, because in the primaries, the candidates do not want to reveal too much information, to maintain some freedom of movement in the policy space for the general election. Ambiguity has an option value.


NBER Working Paper No. 14143

Alesina, Alberto. 2008. “Comments on "The Distribution of Total Work in EU and USA‟ by Michael Burda.” Working Hours and Job Sharing in the EU and USA: Are Europeans Lazy? Or Americans Crazy?, edited by T Boeri, M Burda, and F Kramarz. Oxford University Press.
Alesina, Alberto. 2008. “Comments on "When Do Policy Reforms Work?‟ by Daron Acemoglu et al.” Brookings Papers on Economic Activity Spring.
Alesina, Alberto, Philippe Aghion, Francesco Trebbi, and E Helpman. 2008. “Democracy, Technology and Growth.” Institutions and Economic Performance, 511-43. Cambridge, MA: Harvard University Press. Abstract
We explore the question of how political institutions and particularly democracy affect economic growth. Although empirical evidence of a positive effect of democracy on economic performance in the aggregate is weak, we provide evidence that democracy influences productivity growth in different sectors differently and that this differential effect may be one of the reasons of the ambiguity of the aggregate results. We provide evidence that political rights are conducive to growth in more advanced sectors of an economy, while they do not matter or have a negative effect on growth in sectors far away from the technological frontier. One channel of explanation goes through the beneficial effects of democracy and political rights on the freedom of entry in markets. Overall, democracies tend to have much lower entry barriers than autocracies, because political accountability reduces the protection of vested interests, and entry in turn is known to be generally more growth-enhancing in sectors that are closer to the technological frontier. We present empirical evidence that supports this entry explanation.

Attached file:
Initial unpublished version

Alesina, Alberto, Philippe Aghion, and Francesco Trebbi. 2008. “Electoral Rules and Minority Representation in U.S. Cities.” Quarterly Journal of Economics 128: 325-358. Abstract
This paper studies the choice of electoral rules, in particular the question of minority representation. Majorities tend to disenfranchise minorities through strategic manipulation of electoral rules. With the aim of explaining changes in electoral rules adopted by US cities, particularly in the South, we show why majorities tend to adopt “winner-take-all” city-wide rules (at-large elections) in response to an increase in the size of the minority when the minority they are facing is relatively small. In this case, for the majority it is more e
Alesina, Alberto, and Guido Tabellini. 2008. “Bureaucrats or Politicians? Part II: Multiple Policy Tasks.” Journal of Public Economics 92: 426-447. Abstract
Policies are typically chosen by politicians and bureaucrats. This paper investigates first the normative criteria with which to allocate policy tasks to elected policymakers (politicians) or non-elected bureaucrats. Politicians are preferable if there is uncertainty about social preferences and flexibility is valuable, or if policy complementarities and compensation of losers is uncertainty about social preferences and flexibility is valuable, or if policy complementarities and compensation of losers is important. Bureaucrats are preferable if time inconsistency and short-termism is an issue, or if vested interests have large stakes in the policy outcome. We then compare this normative benchmark with the case in which politicians choose when to delegate and show that the two generally differ.
Alesina, Alberto, Filipe Campante, and Guido Tabellini. 2008. “Why Is Fiscal Policy Often Procyclical?” Journal of the European Economic Association 6 (5): 1006-1036. Abstract
Fiscal policy is procyclical in many developing countries.We explain this policy failure with a political agency problem. Procyclicality is driven by voters who seek to “starve the Leviathan” to reduce political rents. Voters observe the state of the economy but not the rents appropriated by corrupt governments. When they observe a boom, voters optimally demand more public goods or lower taxes, and this induces a procyclical bias in fiscal policy. The empirical evidence is consistent with this explanation: Procyclicality of fiscal policy is more pronounced in more corrupt democracies.
La Crisi
Alesina, Alberto, and Francesco Giavazzi. 2008. La Crisi. Il Saggiatore. Website

In Italian

Alesina, Alberto. 2007. “The Choice of Institutions”.

Munich Lectures 2006
November 14
Revised: August 2007

Alesina, Alberto, and Guido Tabellini. 2007. “Bureaucrats or Politicians? Part I: A Single Policy Task.” American Economic Review 97: 169-179. Abstract
This paper investigates the normative criteria that guide the allocation of a policy task to an elected politician versus an independent bureaucrat. The bureaucrat is preferable for technical tasks for which ability is more important than effort, or if there is great uncertainty about whether the policymaker has the required abilities. The optimal allocation of redistributive tasks is ambiguous, and depends on how the bureaucrat can be instructed. But irrespective of the normative conclusion, the politician prefers not to delegate redistributive policies.

Reprinted in D. Masciandaro and M. Quintyn (2007), Designing Financial Supervision Institutions: Independence, Accountaiblity and Governance, Edward Elgar, UK.

Alesina, Alberto, and Nicola Fuchs-Schuendeln. 2007. “Good Bye Lenin (or not?) – The Effect of Communism on People‟s Preferences.” American Economic Review 97: 1507-1528. Abstract
Preferences for redistribution and state intervention in social policies, as well as the generosity of welfare states, differ significantly across countries. In this paper, we test whether there exists a feedback process of the economic regime on individual preferences. We exploit the “experiment” of German separation and reunification to establish exogeneity of the economic system. From 1945 to 1990, East Germans lived under a Communist regime with heavy state intervention and extensive redistribution. We find that, after German reunification, East Germans are more in favor of redistribution and state intervention than West Germans, even after controlling for economic incentives. This effect is especially strong for older cohorts, who lived under Communism for a longer time period. We further find that East Germans’ preferences converge towards those of West Germans. We calculate that it will take one to two generations for preferences to converge completely.
Il Liberismo è di Sinistra
Alesina, Alberto, and Francesco Giavazzi. 2007. Il Liberismo è di Sinistra. Il Saggiatore. Website

In Italian, with Francesco Giavazzi

Translation: Bulgarian, Russian.

Alesina, Alberto, and Paola Giuliano. 2006. “Divorce, Fertility and the Shot Gun Marriage”. Abstract
Easier divorce has two effects on marriage rates and fertility. It dilutes the value of marriage, therefore reducing marriage rates and marital fertility and potentially increasing out of wedlock fertility. But easier divorce reduces also the commitment cost of marriage leading women to “try” marriage especially when in child bearing age or even already pregnant. We find that total fertility and out-of-wedlock fertility decline after the introduction of unilateral divorce. Women planning to have children marry more easily with an easier “exit option” from marriage. Thus, more children are born in the first years of marriage, while marital fertility does not change, probably as a result of an increase in divorce and marital instability. Therefore we find strong evidence consistent with the “commitment effect”

NBER Working Paper No. 12375

Alesina, Alberto, Silvia Ardagna, and Francesco Trebbi. 2006. “Who Adjusts and When? On the Political Economy of Stabilizations.” IMF Staff Papers 53: 1-49. Abstract
Why do countries delay stabilizations of large and increasing budget deficits and inflation? And what explains the timing of reforms? We use the war-of-attrition model to guide our empirical study on a vast sample of countries. We find that stabilizations are more likely to occur when times of crisis occur, when new governments take office, when governments are “strong” (that is, presidential systems and unified governments with a large majority of the party in office), and when the executive branch faces fewer constraints. The role of external inducements like IMF programs has at best a weak effect, but problems of reverse causality are possible.

Mundell-Fleming Lecture

Alesina, Alberto, and Enrico Spolaore. 2006. “Conflict, Defense Spending and the Number of Nations.” European Economic Review 50: 91-120. Abstract
This paper provides a formal model of endogenous border formation and choice of defense spending in a world with international conflict. We examine both the case of democratic governments and of dictatorships. The model is consistent with three observations. First, breakup of countries should follow a reduction in the likelihood of international conflicts. Second, the number of regional conflicts between smaller countries may increase as a result of the breakup of larger countries. Third, the size of the peace dividend (the reduction in defense spending in a more peaceful world) is limited by the process of country breakup.
Alesina, Alberto, Torsten Persson, and Guido Tabellini. 2006. “Reply to Blankart and Koester‟s Political Economics versus Public Choice.” Kyklos 59: 201-8.
Alesina, Alberto, and Alexander Wagner. 2006. “Choosing (and Reneging on) Exchange Rate Regimes.” Journal of the European Economic Association 4: 770-799. Abstract
We use data on announced and actual exchange rate arrangements to ask which countries follow de facto regimes different from their de iure ones, that is, do not do what they say. Our results suggest that countries with poor institutional quality have difficulty in maintaining pegging and abandon it often. In contrast, many countries with relatively good institutions display fear of floating, that is, they manage more than announced, perhaps to signal their differences from those countries incapable of maintaining promises of monetary stability.
The Future of Europe: Reform or Decline
Alesina, Alberto, and Francesco Giavazzi. 2006. The Future of Europe: Reform or Decline. MIT Press. Publisher's Version

Translations: Greek, Korean, Italian, Portuguese, Spanish.

Alesina, Alberto, Alberto Carrasquilla, and Roberto Steiner. 2005. “The Central Bank of Colombia.” Institutional Reforms in Colombia, edited by A Alesina. Cambridge, MA: MIT Press.
Alesina, Alberto, Alberto Carrasquilla, and Juan Jose Echevarria. 2005. “Decentralization in Colombia.” Institutional reforms in Colombia, edited by A Alesina. Cambridge, MA: MIT Press.