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South Africa's apartheid system was enormously costly and ultimately collapsed because the inefficiencies created by apartheid policies escalated as the economy's structure changed. Labor market regulation and industrial decentralization policy inhibited efficient resource utilization, especially as the manufacturing sector became dominant. Apartheid educational policies generated skill shortages. A mercantilistic development strategy distorted trade patterns, exacerbated dependence on foreign capital inflows, and created chronic balance of payments difficulties. The administrative and defense costs of implementing apartheid were onerous and rising. These internal weaknesses enhanced South Africa's vulnerability to capital flight, changes in world prices and business cycle conditions, and political changes abroad. Ultimately, apartheid was abandoned because its costs came to exceed its benefits to white South Africans. The internal dynamics of the system dictated the retrenchment of apartheid, which in all probability would have occurred even without foreign sanctions

In 2006, the U.S. Congress passed the Unlawful Internet Gambling Enforcement Act (UIGEA) which prohibited financial institutions from processing transactions arising from online gaming activities, thereby severely hindering U.S. residents from participating in online casino games, primarily poker. Enactment of this legislation followed lobbying and political pressure from a variety of interest groups. By examining House roll call votes, we identify empirically the sources of political influence that resulted in passage of the internet gambling legislation. We find that party affiliation was of primary importance, with Republicans more likely to vote in favor of the bill. The percentage of constituents who are Evangelical Christians and also the number of gambling establishments in the district were positively associated with votes for the bill. However, contributions from the gaming industry decreased the probability a congressman would vote for the bill. (JEL D72, L83)

Consider a state that chooses security levels at two sites (Targets A and B), after which a terrorist chooses which site to attack (and potentially a scope of attack). The state values A more highly. If the state knows which target the terrorist values more highly, he will choose a higher level of security at this site. Under complete information, if the terrorist's only choice is which site to attack, the state will set security levels for which the terrorist prefers to attack A over B if and only if the ratio of the value of B to the value of A is greater for the state than for the terrorist. When the state has incomplete information on the terrorist's target values, the optimal security levels may be such that: a target is completely undefended (but attacked with positive probability); the probability of attack is greater at A than at B; and the expected damage from an attack is greater at A than at B. In total, the results reveal that the state's choice of security is heavily influenced by the terrorist's target valuations.

Divestment pressure is one channel through which those interest groups opposing apartheid have attempted to induce U.S. firms to withdraw from South Africa. This paper investigates empirically the relationship between stockholder influence, disinvestment, and the behavior of South Africa‐active firms. The paper finds that if institutional investors hold a large proportion of a firm's shares, then that firm will be induced to participate in fair employment and social programs to benefit its black labor force. However, the same "socially responsible" firm is also more likely to disinvest—leaving a less progressive employer in its place.