Policy makers rely on a mix of government spending and tax cuts to address the imbalances in the economy during an economic crisis, by promoting price stability and renewed economic growth. However, little discussion appears to focus explicitly on the costs of economic crises in terms of human lives, especially the lives of the most vulnerable members of society, infants. This paper quantifies the effect that economic crises, periods of prolonged economic recession, have on infant mortality. Moreover, we investigate whether different levels of public spending on health across advanced industrialized democracies can mitigate the impact of crises on infant mortality. We find that economic crises are extremely costly and lead to a more than proportional increase in infant mortality in the short-run. Substantial public spending on health is required in order to limit their impact.
Fostering cooperation is one of the main tasks of state building in the aftermath of civil wars, yet little is known about the effects of institutions of integration in increasing interethnic cooperation and facilitating peace. We conducted N-person public goods experiments with costly sanctions in the ethnically-divided city of Mostar in Bosnia- Herzegovina to examine whether and how the introduction of institutions of integration affects cooperation both within and across ethnic groups—in our case Catholic Bosnian Croats and Muslim Bosniacs. Our results indicate that even a limited policy intervention such as the creation of an integrated high school can offset the negative effects of ethnic heterogeneity, driving up peoples' willingness to contribute to public goods. We find that the introduction of institutions of integration is distinct from, and may be necessary for, the effectiveness of sanctions in driving up contributions. The results of this experiment suggest that the presence of integrative institutions can bring about cooperation even when increased heterogeneity diminishes it, thus introducing new ways of thinking about the role of institutions in post-conflict divided societies.
Does development lead to the establishment of more democratic institutions? The key to the puzzle, we argue, is the previously unrecognized fact that based on quantitative regime scores, countries over the past 50 years have clustered into two separate, very distinct, yet equally‐common stages of political development—authoritarian states with low levels of freedom on one side and democracies with liberal institutions on the other side of a bimodal distribution of political regimes. We develop a new empirical strategy—exploiting exogenous world economic factors and introducing new panel data estimators—that allows for the first time to estimate the effects of development as well as unobserved country effects in driving democracy at these different stages of political development. We find that income and education have the least effect on democracy when authoritarian regimes are consolidated and that only country effects, possibly accounting for institutional legacies, can lead to political development. Ironically, it is in highly democratic and wealthiest of nations that income and education start to play a role; however greater wealth and better educated citizenry can both help and hurt democracy depending again on what the country’s institutional legacies are. Far from accepting the notion that much of the developing world is cursed by unchanging and poor long‐run institutions, policy‐makers should take note that with democratization we also see country‐specific factors that in turn condition the difference income and education make for democracy.