Policies are typically chosen by politicians and bureaucrats. This paper investigates first the normative criteria with which to allocate policy tasks to elected policymakers (politicians) or non-elected bureaucrats. Politicians are preferable if there is uncertainty about social preferences and flexibility is valuable, or if policy complementarities and compensation of losers is important. Bureaucrats are preferable if time inconsistency and short-termism is an issue, or if vested interests have large stakes in the policy outcome. We then compare this normative benchmark with the case in which politicians choose when to delegate and show that the two generally differ.

In many countries throughout the world, regulators are struggling to determine whether and how to introduce competition into regulated industries. This essay examines the complexities involved in the liberalization process. While stressing the importance of case-specific analyses, this essay distinguishes liberalization policies that generally are procompetitive from corresponding anticompetitive liberalization policies.

The Centre for Market and Public Organisation (CMPO) is a leading research centre, combining expertise in economics, geography and law. Our objective is to study the intersection between the public and private sectors of the economy, and in particular to understand the right way to organise and deliver public services. The Centre aims to develop research, contribute to the public debate and inform policy-making. CMPO, now an ESRC Research Centre was established in 1998 with two large grants from The Leverhulme Trust. In 2004 we were awarded ESRC Research Centre status, and CMPO now combines core funding from both the ESRC and the Trust. Centre for Market and Public Organisation

In this paper we critically review the literature on the political economy of monetary policy emphasizing the questions opened by the recent financial crisis. We begin with a discussion of the issue of rules versus discretion. We then examine the independence of Central banks both in normal times and in crisis and in relation to the political cycles. Finally we address international institutional issues concerning the feasibility, optimality and political sustainabilty of currency unions in which more than one country share the same currency. A brief review of the Euro experience concludes the paper.

We study optimal incentive contracts when commitments are limited, and agents have multiple tasks and career concerns. The agent career concerns are determined by the outside market. We show that the optimal compensation contract optimizes the combination of implicit incentives from both career concerns and ratchet effects. In contrast to existing results, implicit and explicit incentives might be complements, and the principal might want to give strongest explicit incentives for agents far from retirement to account for the fact that career concerns might induce behavior in conflict with the principal’s preferences. Furthermore, we show that maximized welfare might be decreasing in the strength of the career concerns, and that optimal incentives might be both positively and negatively correlated with various measures of uncertainty.

This paper considers a two-sector education model with two novel features. First, contracts have an independent role in sorting workers into different sectors of the economy. Second, education improves workers ’ awareness of their abilities, and hence can improve the allocation of talent by making workers ’ choice of sector better informed. The implication is that the most able skip education, which stands in contrast to results from established theories of education. In the extension, we consider the case when education improves productivity directly, in addition to improving information. Using this extension, we compare the UK and the US undergraduate systems, and moreover analyze hybrid educational systems from Europe, that offer both UK and US types of undergraduate degrees. 1

Policies are typically chosen by politicians and bureaucrats. This paper investigates the normative criteria with which to allocate policy tasks to elected policymakers (politicians) or non elected bureaucrats. Politicians are preferable if ability is less important than effort or there is little uncertainty about whether the policymakers has the required abilities; if there is uncertainty about social preferences and flexibility is valuable; if time inconsistency is not an issue; if vested interests do not have large stakes in the policy outcome; if policy complementarities and compensation of losers is important.

We advance on existing work by exploring the potential mechanisms through which a democratic transition may prompt a government to alter provision of basic services to its citizens. In an environment of weak and uncertain state capacity, which makes it particularly di ¢ cult for voters to attribute outcomes to executive actions, we suggest that electoral competition is most likely to lead to changes in policies where executive action is veri…able so that candidates and voters can form an implicit contract. Considering the context of African primary education as an example, we suggest that electoral competition will therefore give governments an incentive to abolish school fees, but it will have less e¤ect on the provision of school inputs and on school quality, precisely because executive actions on these issues are more di ¢ cult to monitor. To support our claim we use both cross-national and individual level data, including an original data set on primary school fee abolitions. We show that in Africa, democracies have higher rates of school attendance than non-democracies. Moreover, this appears to be

based at the University of Bristol, was established in 1998. The principal aim of the CMPO is to develop understanding of the design of activities within the public sector, on the boundary of the state and within recently privatised entities with the objective of developing research in, and assessing and informing policy toward, these activities. Leverhulme Centre for Market and Public Organisation

The Centre for Market and Public Organisation, a Research Centre based at the University of Bristol, was established in 1998. The principal aim of the CMPO is to develop understanding of the design of activities within the public sector, on the boundary of the state and within recently privatised entities with the objective of developing research in, and assessing and informing policy toward, these activities. Centre for Market and Public Organisation