This article examines the paradox that a supermajority rule in a legislature promotes excessive government spending. We propose a simple conjecture: If rent-seeking coalitions dominate legislative politics and if individual legislators' demands for rent-seeking activities are priceinelastic, a change of legislative rules from simple majority to a supermajority will lead to greater public spending, other things equal. Using data from U.S. state legislatures, 1970 to 2007, we find that the adoption of a supermajority rule has a robust, positive impact on various types of tax revenues and government expenditures.

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This article uses Russian regional data to estimate the determinants of the informal economy and to examine the relationship between the informal economy and the growth of legally registered small private enterprises during the transition period. After obtaining an estimate of the size of the informal economy in each Russian region from 1992 to 1999, an analysis is performed to find whether reform progress and institutional qualities account for the informal economy. An evaluation of the links between the informal economy and the growth of small enterprises within Russia is then carried out. The findings suggest that Russia's informal economy resulted from a delay in reform and low qualities of institutions. It was found that the growth of small enterprises is positively affected by the informal economy. These results imply that the informal economy helped entrepreneurial activities to grow in the face of government failure, but these informal activities tend to become official over time.JEL classifications: O17, O47, P31, P37.

This paper argues that the extent of learning by exporting (LBE) depends on which pay system a new exporting firm pre-adopts. This is because performance-related pay enhances the absorptive capacity of new exporting firms by meeting the increased demand for labor quantity and quality. To empirically examine the argument, I use the Korean firm-level survey of business activities from 2006 to 2015, which provides information that identifies the export status, classifies pay-system types, and estimates total factor productivity. To control for self-selection into export markets, I use a combination of matching techniques and difference-in-differences. Empirical results reveal that the LBE exists instantaneously in the overall sample. Interestingly, new exporting firms pre-adopting a merit bonus are more likely to obtain significant and sizeable productivity gains from exporting than are ones without a merit bonus, regardless of whether a basic salary ties employee's performance or not, i.e., merit pay or seniority-based pay. The results from various robustness checks support the main results.

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