Cultural groups often differ in how much they trust political institutions. Yet such differences need not reflect culture alone or at all because cultural groups are frequently embedded in distinct institutional environments. I examine this issue in Switzerland, where linguistic diversity overlaps with cantonal federalism and allows language-group differences in trust to be studied across and within institutional contexts. Using pooled cross-sectional survey data, I find that French-speaking respondents report lower trust in cantonal authorities than German-speaking respondents in national comparisons. This gap attenuates sharply within cantons, indicating that much of the national difference is associated with between-canton variation. Consistent with this pattern, the national French–German gap is substantially attenuated when cross-cantonal differences in direct-democratic participation rights are taken into account. Evidence from bilingual cantons further reinforces this contextual interpretation, as language-group differences vary in ways consistent with minority status rather than following a uniform French–German divide.

This paper examines how youth exposure to political repression is associated with long-term trust in public institutions in Chile, drawing on the impressionable years hypothesis. I exploit variation in proximity to pre-1970 military bases as a proxy for local repression intensity. Individuals who were in their critical period (ages 17–25) at the 1973 coup exhibit significantly lower trust in the Carabineros (national police) decades later, with similar effects for those aged 10–16 years. This effect is a relative one: the Carabineros remain the most trusted institution across all cohorts, with exposure creating a persistent trust gap rather than absolute mistrust. Trust in representative institutions (government, presidency) is not significantly affected, indicating institution-specific legacies. Migration, university attendance, and residence in the capital do not account for the results. Early-life exposure to repression is associated with a durable, institution-specific deficit in political trust, underscoring the long shadow of political violence on democratic consolidation.

This paper examines how prosocial motivations shape lying behavior in a strategic setting. Two players each privately choose a color in their mind, then draw a color at random, and report whether the two colors match. Both players receive a high payoff if at least one reports a match, so a single lie secures the payoff for both, making lies strategic substitutes. I develop a theoretical model in which individuals bear a psychological cost of lying but experience a lower cost when their lie increases their partner’s payoff. The model predicts that individuals are less likely to lie when they can rely on their partner to do so, and more likely to lie when their dishonesty benefits their partner. I test these predictions in an online experiment with four treatments that separately vary the opportunity to rely on the partner’s lie and the presence of a benefit to the partner. In this setting, prosocial motives outweigh lying aversion: participants lie more when their dishonesty benefits their partner, and they do not lie less when they can leave the lie to their partner. Lying increases only when a participant’s report is pivotal to the partner’s payoff, indicating that prosocial preferences reduce the net cost of lying when dishonesty is instrumental in generating benefits for others.

We empirically examine the impact of international climate finance transfers on recipient countries’ carbon emissions. We analyse the effect of mitigation and adaptation finance using emission data of 164 non-OECD countries from 2000 to 2017. We use a distributed lag model in first differences, a panel method that allows us to abstract from possible feedback from current emissions to future transfers. We address potential reverse causality while accounting for dynamic effects. We control for other factors that could be correlated with both climate finance flows and emissions. Contrary to expectations, we find that public mitigation finance tends to increase emissions, potentially due to some misreporting of development aid as climate finance. Public adaptation finance appears to drive an even greater increase in emissions. We explain this by the energy-intensive nature of adaptation measures. Transfers under the Clean Development Mechanism reduce emissions modestly after five years.

Childcare has held a place in national and international policy conversations in recent decades as governments seek to expand economic opportunities for women. Germany has passed several policies towards this end since reunification, including a legal right, or guarantee, for all children to have access to subsidised care. Scholars across disciplines have taken note of the regional patterns that persist in citizens’ uptake of subsidised childcare programmes. This article analyses the patterns through an institutional economics lens, applying Boettke, Coyne, and Leeson’s (2008) institutional stickiness framework to policy changes that have exhibited varying levels of success in former East and West Germany. Subsidiarity acts as a channel for institutional stickiness, allowing local values to shape both the supply of and the demand for public childcare.

How do technological breakthroughs alter the governance of common-pool resources? Economists and other social scientists have long studied commons as problems of overuse or of institutional design, dedicating less attention to how resource dynamics themselves can trigger institutional change – even across borders. This work examines a striking nineteenth-century case: Britain’s appropriation of Brazilian rubber (caoutchouc) seeds and their transplantation to Southeast Asia, an episode now widely regarded as biopiracy. Using factual and historical evidence, game-theoretic reasoning, and counterfactual analysis, it shows that vulcanisation, which increased rubber’s commercial value, exposed a vacuum in Brazil’s formal institutions and created incentives for Britain to seize rents that Brazil could not protect. The resulting shift from wild extraction to plantation cultivation expanded global output and reduced prices. Brazil’s dominance was unlikely to be sustainable under any scenario, and the unintended aggregate outcome was positive-sum, albeit with uneven consequences – a Kaldor-Hicks rather than Pareto improvement.

This paper examines how Regional Internet Registries (RIRs) function as self-governing institutions for managing Internet address resources and what episodes of stress reveal about the resilience and vulnerabilities of this system. Our analysis offers an institutional assessment of the RIR system and evaluates how it has responded to scarcity, technological change, and market pressures. We argue that the RIR model endures because its rules reflect Ostromian principles, including clearly defined boundaries, community participation, and credible monitoring, that sustain cooperation. Using these principles as normative benchmarks, we identify pathways for reform that preserve the RIRs’ decentralized, member-driven governance institutions while strengthening transparency, adaptability, and cross-regional resilience.

This study examines how institutional trust and governance quality shape citizens’ evaluations of water services. Drawing on psychological and institutional theories, we develop a multilevel framework linking individual trust in public authorities to regional governance performance. Using multilevel logistic models and pooled data from the Italian National Institute of Statistics (ISTAT) Multipurpose Household Survey (2014–2019), combined with a regional Institutional Quality Index, we show that trust in local institutions is the strongest predictor of perceived service quality. At the contextual level, higher government effectiveness and control of corruption are associated with more favourable perceptions. These findings suggest that institutional trust operates as a heuristic under limited observability, while governance conditions shape the context in which such evaluations are formed.

Review systems, including quantitative measures as well as text-based expression of experiences, are omnipresent in today's digital platform economy. This paper studies the existence of reputation inflation, i.e., unjustified increases in ratings, with a special focus of heterogeneity between experienced and non-experienced users. Using data on more than 5 million reviews from an online wine platform we compare consistency between numerical feedback and textual reviews as well as sentiment measures. Overall the wine platform displays strongly increasing numerical feedback over our time period from 2014 to 2020 while the scores predicted by reviewers’ written feedback remain constant. This difference is consistent across both expert and non-expert reviewers. Online platforms as well as potential customers should be aware of the phenomenon of reputation inflation and simplifying feedback to one number might do a disservice to review platforms’ goal of providing a representative quality assessment.

College students gain a considerable amount of weight by consuming unhealthy food. Many universities adopt costly programs to alleviate this problem. We study the effect of a simple, inexpensive option: moving unhealthy items out of sight. The opportunity to investigate this intervention comes from the decision of a dining hall in the University of New Hampshire that relocated cookies from a main section in plain sight to an out-of-the way corner. The cost of cookies did not change, since the dining hall operates as an “all that you can eat” restaurant. Relative to pizza, a product that did not change location, the consumption of cookies dropped by up to 22% relative to their predicted level had the relocation not taken place. We see this as evidence that simple changes in design can nudge students towards healthy eating.

Social scientists are paying attention to the role that knowledge plays in economic phenomena. This focus on knowledge has led to exploring two challenges: first, its governance to reap positive externalities and solve social dilemmas, and second, how we can craft institutions to match the intangible nature of ideas with adequate property rules. This article contributes by elaborating on the different knowledge property regimes and the elements contributing to their classification. This paper first taxonomises knowledge governance regimes based on Ostrom’s work on institutional analysis. Second, it examines why governance structures for managing knowledge production vary across industries, according to (1) the characteristics of knowledge, (2) the attributes of the organisations, and (3) the different rules-in-use to enforce property rights. This is the first study at the intersection of institutional analysis and political economy that highlights the knowledge features, incentive structures, and mechanisms undergirding knowledge governance in different property regimes.

The canonical reading of Jaurès’s L’Armée nouvelle presents this work as an outdated reflection on the establishment of a socialist society supervised by intermediary bodies whose military training would be a major asset. Our reading goes beyond this historically situated approach to Jaurès’s book. We show that The New Army is not just a response to the General Staff, even less a ‘theorisation’ of the transition to socialism, but that its aim is to rehabilitate the founding principles of democratic institutions (ancient and modern), which rest on the constitution of an army of citizens: The ‘proletarian-soldier’ of Jaurès is none other than the ‘farmer-soldier’ of the ancient city and of Year 2 of the French Revolutionary calendar, transposed to the Industrial Age. Relying on a game-theoretical model, we highlight that this defence of democratic institutions is backed by a discourse of the economics of war prevention in terms of self-protection.

Incorporating environmental aspects in monetary and macroprudential policies poses a series of questions in terms of central banks’ effectiveness, independence, neutrality, and legitimacy. Most analyses of this matter rely on a purely economic approach, underestimating the trade-offs it entails and thus being biased in favor of central banks’ interventions. We develop a political-economy setting based on a Walsh contract, which can be interpreted as a memorandum that the government and central bank can implement. Through it, the former legitimizes, or pushes for, the intervention of the latter under the aegis of an elected authority. This setting eliminates the bias, unveiling the trade-offs that could result: accounting for and tackling climate risks could lead central banks to miss their policy targets, not necessarily making “brown” firms greener, and result in welfare distortions. Yet, thanks to this memorandum, the possibility of a green transition favored by the central bank is made possible. We conclude that central banks should keep a cautious stance when deciding to enter the climate arena, and that different evaluations of these risks can be interpreted as a reason why central banks around the world have adopted different degrees of climate interventionism.

We study management decisions made jointly and independently by countries affected by an invasive species that is also a profitable fishery. The Red King Crab, introduced in Russian waters of the Barents Sea, spread into Norwegian waters. Management by Russia and Norway reflects differing markets and invasion damages. Our spatial dynamic bioeconomic model evaluates management of the crab and optimal game strategies integrating varied incentives from market prices, ecosystem values, and spatial connectivity. Our empirical application characterizes stock changes responding to different model components. This research shows economic and ecological trade-offs in Arctic waters with differing net benefits for sovereign stakeholders.

The underpricing of initial public offerings (IPO) is a well-documented fact of empirical equity market research. Theories explain this underpricing with market imperfections. We study three empirically relevant IPO mechanisms under almost perfect market conditions in the laboratory: a stylized book building approach, a closed book auction, and an open book auction. We report underpricing in each of these IPO mechanisms. Uncertainty about the aftermarket behavior may partly explain IPO excess returns but underpricing persists even in the repeated setting where uncertainty is negligible and despite the equilibrium adjustment dynamics, that we observe in the data. The data reveal a market-wide impact of investors’ reluctance to sell in the aftermarket at a price below the offering price. We conclude that a behavioural bias similar to the disposition effect fosters IPO underpricing in our setting.

We investigate the effects of centrality on cooperation in groups. Players with centrality keep a group together by having a pivotal position in a network. In some of our experimental treatments, players can vote to exclude others and prevent them from further participation in the group. We find that, in the presence of exclusion, central players contribute significantly less than others, and that this is tolerated by those others. Because of this tolerance, groups with centrality manage to maintain high levels of cooperation.

Nothing is known about the effectiveness of defaults when moving the target outcomes requires substantial effort. We conduct two field experiments to investigate how defaults fare in such situations: we change the university exam sign-up procedure in two study programs to “opt-out” (a) for a single exam, and (b) for many exams. Both interventions increase task uptake (exam sign-up). Concerning the outcomes which require effort, we find no effects for many exams. For a single exam, the opt-out increases task completion (exam participation) in the study program where the default arguably entails stronger endorsement. Within this program, the effects on successful task completion (exam passing) are heterogeneous: treated students who in the past were willing to communicate with the university (responsive individuals) invest more effort into exam preparation and are more likely to pass the exam than their control counterparts.For non-responsive individuals, we find increased sign-ups but no effects on the target outcomes. Defaults can thus be effective and may be an attractive policy option even when the target outcome requires substantial effort provision. It is, however crucial that the interventions target the appropriate individuals.

Ostracism is practiced by virtually all societies around the world as a means of enforcing cooperation. In this paper, we use a public goods experiment to study whether groups choose to implement an institution that allows for the exclusion of members. We distinguish between a costless exclusion institution and a costly exclusion institution that, if chosen, reduces the endowment of all players. We also provide a comparison with an exclusion institution that is exogenously imposed upon groups. A significant share of the experimental groups choose the exclusion institution, even when it comes at a cost, and the support for the institution increases over time. Average contributions to the public good are significantly higher when the exclusion option is available, not only because low contributors are excluded but also because high contributors sustain a higher cooperation level under the exclusion institution. Subjects who vote in favor of the exclusion institution contribute more than those who vote against it, but only when the institution is implemented. These results are largely inconsistent with standard economic theory but can be better explained by assuming heterogeneous groups in which some players have selfish and others have social preferences.

Leadership mechanisms provide a potential means to mitigate social dilemmas, but empirical evidence on the success of such mechanisms is mixed. In this paper, we explore the institutional frame as a relevant factor for the effectiveness of leadership. We compare subjects’ behavior in public-goods experiments that are either framed positively (give-some game) or negatively (take-some game). We observe that leader and follower decisions are sensitive to the institutional frame. Leaders contribute less in the take-some game, and the correlation between leaders’ and followers’ contribution is weaker in the take-some game. Additionally, using a strategy method to elicit followers’ reactions at the individual level, we find evidence for the malleability of followers’ revealed cooperation types. Taken together, the leadership institution is found to be less efficient in the take- than in the give-frame, both in games that are played only once and repeatedly.

Many democratic decision making institutions involve quorum rules. Such rules are commonly motivated by concerns about the “legitimacy” or “representativeness” of decisions reached when only a subset of eligible voters participates. A prominent example of this can be found in the context of direct democracy mechanisms, such as referenda and initiatives. We conduct a laboratory experiment to investigate the consequences of the two most common types of quorum rules: a participation quorum and an approval quorum. We find that both types of quora lead to lower participation rates, dramatically increasing the likelihood of full-fledged electoral boycotts on the part of those who endorse the Status Quo. This discouraging effect is significantly larger under a participation quorum than under an approval quorum.