BGA Toolbox

Lake: Actors > Interests > Domestic Institutions > International Institutions > Policy

Acemoglu & Robinson: Political Institution  = de jure power, Distribution of resources = de facto power. These shape political + economic institutions. Economic institutions affect the distribution of resources, restarting the cycle.

Production Model: Y* = A * f(K, L): Y = Output, A = TFP, K = Capital, L = Labor. 

Ricardo-Viner: Assume capital is fixed. Comparative advantage industry wins in trade, and vice versa.

Heckscher-Ohlin: Assume capital is mobile. Country specializes in abundant factors.

Stolper-Samuelson: Derived from HO — abundant factor industry wins in trade, and vice versa.

Industry Characteristics:

Trilemma /Monetary Policy: Can choose between two of the three: macro flexibility, currency stability, open capital markets..

Converse: Voters aren’t logically constrained and oftentimes follow the lead of their party elites.

Achen & Bartels: Voter behavior is based on membership in social groups.

Hainmueller + Hiscox: Education is correlated with support for trade. 

Scheve & Slaughter: People make trade decisions based on their long-term winnings + closings. Also, ownership of assets in comparative disadvantage areas matters. The intensive factor in the comparative disadvantage industry will not support free trade. 

Olson: Individuals won’t act to achieve interests due to the free-rider problem.

Baron: Look at the rent chain (who benefits/harmed by status quo) to determine allies.

Kim & Osgood: Big firms overcome collective action problem because a) resources, b) fewer of them

Downs: Rulers in democracy formulate policy with the sole purpose of remaining in power. Normal distribution  = stable, moderators win. Polarized  = polarizing parties, unstable.

Gilens: Policies strongly correlated with affluent voter support, almost no correlation with lower-income support.

Drazen: Policymakers make policies to please the ruling coalition(part of selectorate + companies). 

Rudra: Countries decrease taxes + screw over labor & environment to induce companies to do business in their location.

Wang: Leftist countries lower taxes to avoid enraging labor (their ruling coalition)