Alesina, Alberto, Philippe Aghion, and Francesco Trebbi. 2004. “Endogenous Political Institutions.” Quarterly Journal of Economics 119: 565-612.Abstract
A fundamental aspect of institutional design is how much society chooses to delegate unchecked power to its leaders. If, once elected, a leader cannot be restrained, society runs the risk of a tyranny of the majority, if not the tyranny of a dictator. If a leader faces too many ex post checks and balances, legislative action is too often blocked. As our critical constitutional choice, we focus upon the size of the minority needed to block legislation, or conversely the size of the (super)majority needed to govern. We analyze both “optimal” constitutional design and “positive” aspects of this process. We derive several empirical implications which we then discuss.
Alesina, Alberto, Reza Baqir, and Caroline Hoxby. 2004. “Political Jurisdictions in Heterogeneous Communities.” Journal of Political Economy 112: 348-96.Abstract
We investigate whether political jurisdictions form in response to the trade-off between economies of scale and the costs of a heterogeneous population. We consider heterogeneity in income, race, ethnicity, and religion, and we test the model using American school districts, school attendance areas, municipalities, and special districts. We find strong evidence of a trade-off between economies of scale and racial heterogeneity; we also find evidence of a trade-off between economies of scale and income heterogeneity. Conversely, we find little evidence that ethnic or religious heterogeneity shapes jurisdictions. To clarify the direction of causality between heterogeneity and jurisdictions, we exploit shocks to racial heterogeneity generated by the two world wars.
Alesina, Alberto, and Roberto Perotti. 2004. “The European Union: A politically incorrect view.” Journal of Economic Perspectives Fall: 27-48.Abstract
In this paper, we present our view of the recent evolution of European integration. We first briefly describe the main features of the institution and decision making process in the European Union, with particular attention to the debate between federalists and super nationalists. We then identify two key issues in the process of European integration: 1) an emphasis on “institutional balance” based on a complex web of institutions with overlapping jurisdiction; 2) A conflict between a dirigiste versus a more laissez faire approach to government. We argue that the first problem leads to a lack of clarity in the allocation of powers between European institutions, confusion in the allocation of prerogatives between national governments and EU institutions, and lack of transparency and accountability. The dirigiste culture also manifests itself in an abundant production of verbose rhetoric, which in our view is far from innocuous and direct set the European policy debate in the wrong direction.We then study how these problems play out in 4 important areas: employment policies, culture and scientific research, foreign and defense policies, and fiscal policy. Finally, we study the implications of the recently proposed European Constitution a potential solution of these two problems.
Fighting Poverty in the US and Europe: A World of Difference
Alesina, Alberto, and Edward Glaeser. 2004. Fighting Poverty in the US and Europe: A World of Difference. Oxford UK: Oxford University Press. Publisher's Version

Translations: French, Italian

Alesina, Alberto, Arnaud Devleeschauwer, William Easterly, Sergio Kurlat, and Romain Wacziarg. 2003. “Fractionalization.” Journal of Economic Growth 8: 155-94. Article

O. Galor (ed.) (2011), Inequality and Economic Development: The Modern Perspective, Edward Elgar, UK.

Alesina, Alberto. 2003. “The Size of Countries: Does It Matter?.” Journal of the European Economic Association Schumpeter Lecture: 301-16.
The Size of Nations
Alesina, Alberto, and Enrico Spolaore. 2003. The Size of Nations. Cambridge, MA: MIT Press. Publisher's Version

Translations: Catalán

Alesina, Alberto, and Robert Barro. 2002. “Currency Unions.” Quarterly Journal of Economics 117 (2): 409-306. WebsiteAbstract
What is the optimal number of currencies in the world? Common currencies affect trading costs and, thereby, the amounts of trade, output, and consumption. From the perspective of monetary policy, the adoption of another country's currency trades off the benefits of commitment to price stability against the loss of an independent stabilization policy. The nature of the tradeoff depends on co-movements of disturbances, on distance, trading costs, and on institutional arrangements such as the willingness of anchor countries to accommodate to the interests of clients.
Alesina, Alberto, Silvia Ardagna, Roberto Perotti, and Fabio Schiantarelli. 2002. “Fiscal Policy Profits and Investment.” American Economic Review 92: 571-89.Abstract
This paper evaluates the effects of fiscal policy on investment using a panel of OECD countries. We find a sizeable negative effect of public spending—and in particular of its wage component—on profits and on business investment. This result is consistent with different theoretical models in which government employment creates wage pressure for the private sector. Various types of taxes also have negative effects on profits, but, interestingly, the effects of government spending on investment are larger than those of taxes. Our results can explain the so-called “non-Keynesian” (i.e., expansionary) effects of fiscal adjustments.
Alesina, Alberto, and Eliana La Ferrara. 2002. “Who Trusts Others?.” Journal of Public Economics 85: 207-34.Abstract
Both individual experiences and community characteristics influence how much people trust each other. Using individual level data drawn from US localities we find that the strongest factors associated with low trust are: (i) a recent history of traumatic experiences; (ii) belonging to a group that historically felt discriminated against, such as minorities (blacks in particular) and, to a lesser extent, women; (iii) being economically unsuccessful in terms of income and education; (iv) living in a racially mixed community and/or in one with a high degree of income disparity. Religious beliefs and ethnic origins do not significantly affect trust. The role of racial cleavages leading to low trust is confirmed when we explicitly account for individual preferences on inter racial relationships: within the same community, individuals who express stronger feelings against racial integration trust relatively less the more racially heterogeneous the community is.
Alesina, Alberto, and Beatrice Weder. 2002. “Do Corrupt Governments Receive Less Foreign Aid?.” American Economic Review 92: 1126-37.Abstract
Critics of foreign aid programs argue that these funds often support corrupt governments and inefficient bureaucracies. Supporters argue that foreign aid can be used to reward good governments. This paper documents that there is no evidence that less corrupt governments receive more foreign aid. On the contrary, according to some measures of corruption, more corrupt governments receive more aid. Also, we could not find any evidence that an increase in foreign aid reduces corruption. In summary, the answer to the question posed in the title is 'no.'
Alesina, Alberto, Robert Barro, and Silvana Tenreyro. 2002. “Optimal Currency Areas.” NBER Macroeconomic Annual 2002. Cambridge, MA: MIT Press: 301-55.Abstract
As the number of independent countries increases and their economies become more integrated, we would expect to observe more multi-country currency unions. This paper explores the pros and cons for different countries to adopt as an anchor the dollar, the euro, or the yen. Although there appear to be reasonably well-defined euro and dollar areas, there does not seem to be a yen area. We also address the question of how trade and co-movements of outputs and prices would respond to the formation of a currency union. This response is important because the decision of a country to join a union would depend on how the union affects trade and co-movements.
Senso non Comune
Alesina, Alberto. 2002. Senso non Comune. Milan, Italy: EGEA, Università Bocconi Press. Website

In Italian

Alesina, Alberto, and Robert Barro. 2001. “Dollarization.” American Economic Review, Papers and Proceedings 91: 381-85. Article
Alesina, Alberto, Edward Glaeser, and Bruce Sacerdote. 2001. “Why Doesn't the United States Have a European-Style Welfare State?.” Brookings Paper on Economics Activity Fall: 187-278. Article
Alesina, Alberto, Stephan Danninger, and Massimo Rostagno. 2001. “Redistribution Through Public Employment: The Case of Italy.” IMF Staff Papers 48: 447-73.Abstract
This paper examines the regional distribution of public employment in Italy. It documents two facts. The first is that public employment is used as a subsidy from the North to the less wealthy South. About half of the wage bill in the South of Italy can be identified as a subsidy. Both the size of public employment and the level of wages are used as a redistributive device. The second fact concerns the effects of subsidized public employment on individuals’ attitudes toward job search, education, “risk taking” activities, and so on. Public employment discourages the development of market activities in the South.
Currency Unions
Alesina, Alberto, and Robert Barro. 2001. Currency Unions. Hoover Institution. Publisher's Version

Editor and author of one chapter and of Introduction

Alesina, Alberto, Olivier Blanchard, Jordi Gali, Francesco Giavazzi, and Harald Uhlig. 2001. Designing Macroeconomic Policy for Europe. London, UK: CEPR.
Alesina, Alberto. 2000. “Comments on "The Political Business Cycle 25 Years Later" by A. Drazen .” NBER Macroeconomic Annual 2000, 217-24.
Alesina, Alberto, and Romain Wacziarg. 2000. “The Economics of Social Trust.” Disaffected Democracies, edited by S Pharr and R Putnam. Princeton, NJ: Princeton University Press.