Publications

2001
Blanchard, Olivier, and Andrei Shleifer. 2001. “Federalism With and Without Political Centralization: China versus Russia.” Transition Economies: How Much Progress?, 171-179. IMF Staff Papers. Abstract

In China, local governments have actively contributed to the growth of new firms. In Russia, local governments have typically stood in the way, be it through taxation, regulation, or corruption. We argue that the difference can be traced to lies in the degree of political centralization present in China, but not in Russia. In China the central government has been strong and disciplined enough to induce local governments to favor growth. In Russia, it has not. We agree, but with an important caveat. We believe the experience of Russia indicates that another ingredient is crucial, namely political centralization.

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Glaeser, Edward L, and Andrei Shleifer. 2001. “Not-for-Profit Entrepreneurs.” Journal of Public Economics 81 (1): 99-115. Abstract

Entrepreneurs who start new firms may choose not-for-profit status as a means of committing to soft incentives. Such incentives protect donors, volunteers, consumers and employees from ex post expropriation of profits by the entrepreneur. We derive conditions under which completely self-interested entrepreneurs opt for not-for-profit status, despite the fact that this status limits their ability to enjoy the profits of their enterprises.We also show that even in the absence of tax advantages, unrestricted donations would flow to non-profits rather than for-profit firms because donations have more significant influence on the decisions of the non-profits.

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Glaeser, Edward, Simon Johnson, and Andrei Shleifer. 2001. “Coase versus the Coasians.” Quarterly Journal of Economics 116 (3): 853-899.
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2000
Johnson, Simon, Rafael LaPorta, Florencio Lopez-de-Silanes, and Andrei Shleifer. 2000. “Tunneling.” American Economic Review Papers and Proceedings 90 (2): 22-27.
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LaPorta, Rafael, Florencio Lopez-de-Silanes, Andrei Shleifer, and Robert Vishny. 2000. “Investor Protection and Corporate Governance.” Journal of Financial Economics 58 (1-2): 3-27. Abstract

Recent research has documented large differences among countries in ownership concentration in publicly traded "rms, in the breadth and depth of capital markets, in dividend policies, and in the access of "rms to external "nance. A common element to the explanations of these di!erences is how well investors, both shareholders and creditors, are protected by law from expropriation by the managers and controlling shareholders of firms. We describe the di!erences in laws and the e!ectiveness of their enforcement across countries, discuss the possible origins of these di!erences, summarize their consequences, and assess potential strategies of corporate governance reform. We argue that the legal approach is a more fruitful way to understand corporate governance and its reform than the conventional distinction between bank-centered and market-centered financial systems

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LaPorta, Rafael, Florencio Lopez-de-Silanes, Andrei Shleifer, and Robert W Vishny. 2000. “Agency Problems and Dividend Policies Around the World.” Journal of Finance 55 (1): 1-33.
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Clarendon Lectures: Inefficient Markets
Shleifer, Andrei. 2000. Clarendon Lectures: Inefficient Markets. Oxford University Press. Publisher's Version
Without a Map: Political Tactics and Economic Reform in Russia
Shleifer, Andrei, and D Treisman. 2000. Without a Map: Political Tactics and Economic Reform in Russia. MIT Press. MIT Press. Publisher's Version
1999
LaPorta, Rafael, Florencio Lopez-de-Silanes, and Andrei Shleifer. 1999. “Corporate Ownership Around the World.” Journal of Finance 54 (2): 471-517.
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LaPorta, Rafael, Florencio Lopez-de-Silanes, Andrei Shleifer, and Robert Vishny. 1999. “The Quality of Government.” Journal of Law, Economics and Organization 15 (1): 222-279.
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1998
LaPorta, Rafael, Florencio Lopez-de-Silanes, Andrei Shleifer, and Robert W Vishny. 1998. “Law and Finance.” Journal of Political Economy 106 (6): 1113-1155.
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Shleifer, Andrei. 1998. “State versus Private Ownership.” Journal of Economic Perspectives 12 (4): 133-150.
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Barberis, Nicholas, Andrei Shleifer, and Robert Vishny. 1998. “A Model of Investor Sentiment.” Journal of Financial Economics 49 (3): 307-343. Abstract

Recent empirical research in finance has uncovered two families of pervasive regularities underreaction of stock prices to news such as earnings announcements, and overreaction of stock prices to a series of good or bad news. In this paper, we present a parsimonious model of investor sentiment, or of how investors form beliefs, which is consistent with the empirical findings. The model is based on psychological evidence and produces both underreaction and overreaction for a wide range of parameter values.

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Hay, Jonathan R, and Andrei Shleifer. 1998. “Private Enforcement of Public Laws: a Theory of Legal Reform.” American Economic Review Papers and Proceedings 88 (2): 398-403.
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The Grabbing Hand
Shleifer, Andrei, and R Vishny. 1998. The Grabbing Hand. Harvard University Press. Publisher's Version
1997
Lakonishok, Josef, Andrei Shleifer, and Robert Vishny. 1997. “What Do Money Managers Do?”.
Shleifer, Andrei. 1997. “Agenda for Russian Reforms.” Economics of Transition 5 (1): 227-231.
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Johnson, Simon, Daniel Kaufmann, and Andrei Shleifer. 1997. “The Unofficial Economy in Transition.” Brookings Papers on Economic Activity 1997 (2): 159-239.
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LaPorta, Rafael, Florencio Lopez-de-Silanes, Andrei Shleifer, and Robert W Vishny. 1997. “Legal Determinants of External Finance.” Journal of Finance 52 (3): 1131-1150.
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Hart, Oliver, Andrei Shleifer, and Robert W Vishny. 1997. “The Proper Scope of Government: Theory and an Application to Prisons.” Quarterly Journal of Economics 112 (4): 1127-1161. Abstract

When should a government provide a service in-house, and when should it contract out provision? We develop a model in which the provider can invest in improving the quality of service or reducing cost. If contracts are incomplete, the private provider has a stronger incentive to engage in both quality improvement and cost reduction than a government employee has. However, the private contractor’s incentive to engage in cost reduction is typically too strong because he ignores the adverse effect on noncontractible quality. The model is applied to understanding the costs and beneŽts of prison privatization.

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