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Political checks and balances are debated desiderata in the evaluation of democratic systems. We suggest a framework where the pros and cons of checks and balances are, respectively, the reduction of type‐I errors and the increase of type‐II errors in policy decision making. Political checks and balances are less desirable for intermediate levels of competence of the political class when accountability is high. In policy areas where the effects of reforms are harder to evaluate and accountability is low, political checks and balances are always desirable. Positive constitutional design reveals the possibility of constitutional traps, with politicians choosing less desirable regimes. [ABSTRACT FROM AUTHOR]

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jet.2006.02.007 Byline: Maitreesh Ghatak (a), Massimo Morelli (b), Tomas Sjostrom (c) Abstract: We study market inefficiencies and policy remedies when agents choose their occupations, and entrepreneurial talent is subject to private information. Untalented entrepreneurs depress the returns to entrepreneurship because of adverse selection. The severity of this problem depends on the outside option of entrepreneurs, which is working for wages. This links credit, product and labor markets. A rise in wages reduces the adverse selection problem. These multimarket interactions amplify productivity shocks and may generate multiple equilibria. If it is impossible to screen entrepreneurs then all agents unanimously support a tax on entrepreneurs that drives out the less talented ones. However, if screening is possible, e.g., if wealthy entrepreneurs can provide collateral for their loans, then wealthy entrepreneurs do not support surplus enhancing taxes. Author Affiliation: (a) London School of Economics, London, UK (b) Ohio State University, Ohio, USA (c) Rutgers University, NJ, USA Article History: Received 1 August 2001; Revised 23 February 2006

A study, comparing static predictions in legislative bargaining by Baron and Ferjohn and Gamson's Law, is presented. Regression used, is in support of Gamson's Law, but is determined by the selection protocol, which recognizes voting blocks in proportion to the number of votes controlled. Discounting pushes behavior in the direction predicted by Baron and Ferejohn, but has little effect.

A simple theory of the quality of elected officials in terms of competence and honesty is discussed. Investigation regarding the mechanism, that leads to selection of citizen of varying quality into political life is discussed .

The issue of retrading that allows traders to approximate allocations on the Pareto frontier is focused. Myopic retrading is supported along with retrade-proof subgame equilibrium path by converging sequence of allocations in the non-cooperative market game of exchange.

This paper sheds new light on the drivers of civil service reform in US states. We first demonstrate theoretically that divided government is a key trigger of civil service reform, providing nuanced predictions for specific configurations of divided government. We then show empirical evidence for these predictions using data from the second half of the 20th century: states tended to introduce these reforms under divided government, and in particular when legislative chambers (rather than legislature and governor) were divided. [ABSTRACT FROM AUTHOR]