Estimates of democracy's effect on the public sector are obtained from comparisons of 142 countries over the years 1960-90. Based on three tenets of voting theory n that voting mutes policy preference intensity, political power is equally distributed in democracies, and the form of voting processes is important n we expect democracy to affect policies that redistribute, or economically favor the political leadership, or enhance efficiency. We do not find such differences. Instead democracies are less likely to use policies that limit competition for public office. Alternative modeling approaches emphasize the degree of competition, and deemphasize the form or even existence of voting processes.

How does the source of political leadership affect public policy? Is the public sector run differently when its leaders are elected "fairly"? How, exactly? These questions are important. Nondemocracies are prevalent around the world. According to data from the POLITY IV (2000) project, which provides a widely used dataset on the authority characteristics of modern polities over the last two centuries, nondemocratic regimes ruled the majority of countries, and the majority of the world's population, until 1991. Even since 1991, more than 40 percent of countries and people were ruled by nondemocratic regimes. Political economy theory devoted to the modeling of democratic institutions might therefore miss much of the world's public sector activity.A comparison of democracies and nondemocracies may also enhance the understanding of democratic institutions by providing an empirical test of some important implications of formal voting models. We begin this paper by contrasting two schools of thought about determinants of policy: one that emphasizes the role of voting mechanisms in determining policy and a second that argues that democracy and other political mechanisms will be (at most) second-order determinants of policy choices once economic and demographic variables are taken into account. This raises the empirical question: are there many public policies that are significantly different between economically similar democracies and nondemocracies and, if so, which types of policies? Looking across countries and over the years 1960 -1990, we answer negatively when it comes to the economic or social policies. However, we do find differences in another policy arena, namely those relating to

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We empirically examine the impact of relationships between contractors and subcontractors on firm pricing and entry decisions in the California highway procurement market using data from auctions conducted by the California Department of Transportation. Relationships in this market are valuable if they mitigate potential hold-up problems and incentives for ex post renegotiation arising from contractual incompleteness. An important characteristic of informal contracts is that they must be self-enforcing, so the value of relationships between firms and suppliers depend on the extent of possibilities for future interaction. We construct measures of the stock of contractors' prior interactions with relevant subcontractors and, most importantly, an exogenous instrument to measure the future value of ongoing relationships that is orthogonal to contractor-subcontractor match-specific productivity. We find that a larger stock of relationships leads to a greater likelihood of entry and to lower bids. Importantly, this relationship does not hold in periods of time and areas with little future contract volume, suggesting that the value of the future is crucial in providing value for informal contracts.

The impact of aggregators on news outlets is ambiguous. In particular, the existing theoretical literature highlights that although aggregators create a market expansion effect when they bring visitors to news outlets, they also generate a substitution effect if some visitors switch from the news outlets to the aggregators. Using the shutdown of the Spanish edition of Google News in December of 2014 and difference-indifferences methodology, this paper empirically examines the relevance of these two effects. We show the shutdown of Google News in Spain decreased the number of daily visits to Spanish news outlets between 8% and 14%, and that this effect was larger in outlets with less overall daily visits and a lower share of international visitors. We also find evidence suggesting that the shutdown decreased online advertisement revenues and advertising intensity at news outlets. We then analyze the effect of the opt-in policy adopted by the German edition of Google News in October of 2014. Although such policy did not significantly affect the daily visits of all outlets that opted out, it reduced by 8% the number of visits of the outlets controlled by the publisher Axel Springer. Our results demonstrate the existence of a net market-expansion effect through which news aggregators increase consumers' awareness of news outlets' contents, thereby increasing their number of visits.