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Specialization and trade rest on institutions that protect property rights and enforce agreements. Frequently, in economic analysis institutions are just assumed to exist, or it is implicitly supposed that the political game can establish them. Once this assumption is done, the invisible hand does its work properly. It doesn't matter if humans beings are benevolent or selfish for the gains from specialization and trade be realized. However, it is not easy to build institutions, neither are they a free lunch. The paper shows that ideology, understood as a self-imposed code of conduct, contributes to reduce the cost of instituting an industrious society, inducing people to assign their time and effort to productive activities rather than to theft.

AbstractWe explore the political economy of trade and migration policies in several models of international trade. We show that in a Ricardian world, free trade and no international labour mobility is a Nash equilibrium outcome, but free trade and free international labour mobility is not. The result holds under different assumptions about the set of goods, preferences and the number of countries. An analogous result also holds in multifactor economies such as a version of the standard two‐sector Heckscher–Ohlin model, the Ricardo–Vinner specific factors model and a three‐sector model with a non‐tradeable sector. We also study several extensions of our model in which free trade and at least partial labour mobility is a Nash equilibrium outcome. One extension introduces increasing returns to scale. Another an extractive elite. Finally, we allow the recipient country to charge an immigration fee in the form of an income tax and distribute the proceeds among domestic workers, which induces a Pareto improvement for the global economy.

Politicians have multiple principals. We investigate the weights that politicians put on the revealed preferences of their constituents, special interest groups and party when deciding on legislative proposals. Preferences of constituents, special interest groups and parties are directly observed in our setting and they are positively correlated among each other. The empirical findings suggest that constituent preferences are assigned the lowest weight. Holding constant the preferences of other principals, constituent preferences are assigned a weight of only 10.0%. Party preferences are assigned the highest weight of all principals and special interest groups lie in between. A politician's personal ideology plays no substantial role in legislative decisions. We explore conflict among principals as well as heterogeneity among politicians. Our results cast doubt on the empirical relevance of the median voter model and suggest that more principals need to be considered to explain legislative decisions.

AbstractThis paper combines the property rights approach of Barzel with models from renewable resource and evolutionary economics to examine the domestication of wild animals. Wild animals are governed by weak property rights to stocks and individuals while domesticated animals are governed by private ownership of stocks and individuals. The complex evolutionary process of domestication can be viewed as a conversion of wild populations into private property, as well as a transition from natural selection to economic selection controlled by owners of populations and individuals. In our framework domestication is not the explicit goal of any economic agent, but it emerges as a long-run outcome of an innovation in hunting strategies in a hunter–gatherer society. Our formal model also suggests that the domestication process moves slowly at first but then proceeds rapidly, and is aligned with the archeological evidence on domestication events.