This paper explores the complex interplay between political systems, foreign direct investment (FDI), and income inequality. Building on Acemoglu and Robinson’s Nobel Prize-winning work on institutions, we develop a framework to analyze governments’ political incentives to attract FDI. We argue that highly entrenched autocracies, facing little internal competition for rents, and democracies with strong political competition, eager to secure growth for electoral advantage, exhibit strong incentives to attract FDI. In contrast, weaker autocracies with internal competition for rents and entrenched democracies, where rulers face less pressure to deliver growth, have lower incentives to do so. Rising inequality introduces an additional layer of complexity: while democracies may encounter public resistance to FDI when its benefits are perceived as unevenly distributed, autocracies remain less constrained by public opinion. We analyze data from 144 countries spanning 1990–2018, assessing how political incentives shape FDI inflows and their subsequent impact on economic growth. Our findings suggest that in democracies, robust political competition underpins a country’s incentive to remain attractive to investors, while autocracies require regulatory stability and credible long-term commitments to achieve this outcome. Ultimately, our research underscores a paradox—democratic freedoms, though vital, may at times hinder economic competitiveness relative to autocratic regimes.

Does autonomy in choosing university programs impact on freshmen's academic performance? We exploit a unique dataset derived from a cohort of freshmen enrolled at the University of Messina in Italy. Our results show that students with higher levels of autonomy achieve on average higher academic grades, even after accounting for a comprehensive range of socio-demographic and personality factors. Our findings have significant policy implications for improving the higher education system and its connection to the modern labor market. Addressing student performance and reducing drop-out rates requires targeted programs that begin during the school years. These programs may enhance individual autonomy and self-confidence. By aligning prospective students' attitudes with their chosen courses, we can improve both the quality and quantity of graduates. Furthermore, students who possess autonomy and self-confidence are likely to excel in the labor market, as their chosen educational path enables them to fully utilize their potential, ultimately enhancing their job productivity.

According to the leading literature, the valid enforcement of property rights is a key ingredient for economic development. However, their enforcement can be problematic in international relations, which can be a valid approximation of an anarchic or state of nature environment. In such a context, we do not have a third party that may sanction any illegal behaviour, since the existing international organizations may lack the necessary power to force countries to behave in a specific way. A large variety of papers have attempted to provide a self-enforcing solution to a conflict among players by defining a bargaining range, which may prevent the emergence of a war. Hence, players renounce the fight and leave peacefully, enforcing de facto property rights. In contrast, we propose a model in which contestants decide to solve their dispute by forming a union. The latter can be interpreted in a broad sense, also encompassing the possibility that they form a new political entity. We highlight the welfare implications of that solution and define the non-empty set of parameters, which support such a decision in the long run. Intuitively, from a dual perspective, the model also discloses the circumstances that may lead players to deviate from the union path and split. Therefore, our paper contributes to the literature about the formation and breakdown of countries, although our primary concern is to present a model with an innovative solution to conflicts. Moreover, our work stresses the importance of the enforcement of property rights to guarantee the peaceful development of relations among countries.

Prior studies have largely debated and demonstrated the positive effect of economic liberalization on economic growth, but they have not clarified how and to which extent economic liberalization affects corporate investment, the main driver of a country's economic growth. This paper investigates the relationship between economic liberalization and corporate investment by modelling the microeconomic channels through which economic liberalization affects corporate investment. Our theoretical framework extends the standard neoclassical model of firm value maximization to incorporate the effect of economic liberalization on corporate investment via several microeconomic channels. We test the theoretical predictions of our model by using a large and heterogeneous sample of non-financial US firms for the period 2000–2019. The empirical results support our hypotheses that economic liberalization positively affects corporate investment both directly and indirectly through different channels. These effects hold, although with different intensity, for all dimensions of economic liberalization.

Do freedom and social diversity affect individual preferences for revolutionary action? In this paper, we study the interplay between subjective freedom, defined as autonomy in decision-making, and social diversity, measured through the extent of religious and/or ethno-linguistic fractionalization. Our paper is based on three hypotheses about the impact of the above two variables and their interaction on individual preferences for revolt. Our hypotheses are tested using a dataset containing information on about 44,000 individuals and covering 51 different countries during the 1990-2003 period. Our research suggests that people that define themselves as free individuals are less likely to support revolutionary actions, while the extent of fractionalization mildly affects such a probability. Interestingly, subjective freedom moderates the impact of diversity on the individual preferences for revolt if the extent of fractionalization is below a certain threshold. Instead, when above, subjective freedom enhances the impact of diversity on the taste for revolt.

According to standard economic theory, human beings are expected to work more and better when benefits in the form of lower costs or higher reward increase. Principal–agent theory applied to the theory of the firm relies on this relationship and states that employees should be paid according to how well they perform their tasks. In this framework, monitoring devices are introduced to control employees’ performance and determine salaries. In this paper we construct a principal–agent model to describe the relationship between citizens/voters and elected representatives in which monitoring devices are introduced to control the performance of the latter. We demonstrate that tighter controls may produce better performance but also may produce a reduction in the intrinsic motivations of elected representatives, resulting in a reduction of their work effort. These results are interpreted in the light of the motivation crowding theory.

Why do some people believe that social mobility may result in a fair distribution of income? We hypothesize that people who enjoy higher levels of free choice and control over life outcomes are more likely to consider the income distribution process to be fair, and as a consequence be less supportive of redistribution. We test this claim using a triangular system to endogenize fairness in the process that determines income distribution. The empirical results support our hypothesis. Our findings represent a development in the empirical literature on the determinants of people’s preferences concerning income redistribution, in that until now analysis has generally treated the level of fairness in social mobility exogenously.

A substantial literature finds that freedom in the sense of an expanded opportunity set is positively related to happiness. A contrasting literature, however, finds that an excess of choice can have socially undesirable outcomes. We test the effect of two types of freedom—autonomy and political—on happiness using five waves of World Values Survey data (1981–2008). We find evidence supporting the claim that equipping people with the tools to direct the course of their lives (i.e. increasing autonomy freedom) incentivizes the desire to investigate alternatives (e.g. political parties) before making a decision. The effect of freedoms on happiness is diminished in contexts where individuals have less experience with evaluating alternatives, such as in authoritarian or transitional countries.

In this paper we present a kinetic model with stochastic game-type interactions, analyzing the relationship between the level of political competition in a society and the degree of economic liberalization. The above issue regards the complex interactions between economy and institutional policies intended to introduce technological innovations in a society, where technological innovations are intended in a broad sense comprehending reforms critical to production. A special focus is placed on the political replacement effect described in a macroscopic model by Acemoglu and Robinson (AR-model, henceforth), which can determine the phenomenon of innovation 'blocking', possibly leading to economic backwardness. One of the goals of our modelization is to obtain a mesoscopic dynamical model whose macroscopic outputs are qualitatively comparable with stylized facts of the AR-model. A set of numerical solutions is presented showing the non monotonous relationship between economic liberization and political competition, which can be considered as an emergent phenomenon of the complex socio-economic interaction dynamic.

While the study of international entrepreneurship has been dominated by studies of international new ventures, the study of comparative international entrepreneurship has received relatively little attention. We argue that since such international differences are often the underlying drivers for entrepreneurship that crosses borders, this area of research has a rich potential to improve our understanding of international entrepreneurship. In this paper, we develop a theoretical framework to examine the effects of the external business environment (the soil) on the entrepreneurial entry by individuals (the seeds). This leads us to fundamental predictions regarding differences in the extent of entrepreneurship in different national contexts. While in developed economies business ventures are more likely to be launched when the turnover rate of incumbent firms is high, the opposite is true in developing economies. Estimates generated using a large-scale data set provide empirical support for our theoretical predictions. Our findings suggest important avenues for new research regarding the role of factors such as the liability of newness and the stigma of failure in different national contexts, as well as the manner in which entrepreneurial dynamics evolve over time.

We empirically compare the thesis of Acemoglu and Robinson (2006) that the impact of political competition on economic growth is non-monotonic with that of Besley et al. (2010) that it is monotonically increasing, using data on 119 economies in the period 1980-2010. The results are in accord with Acemoglu and Robinson (2006). (c) 2015 Elsevier B.V. All rights reserved.

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This book is about the relationship between different concepts of freedom and happiness. The book's authors distinguish three concepts for which an empirical measure exists: opportunity to choose (negative freedom), capability to choose (positive freedom), and autonomy to choose (autonomy freedom). They also provide a comprehensive account of the relationship between freedom and well-being by comparing channels through which freedoms affect quality of life. The book also explores whether the different conceptions of freedom complement or replace each other in the determination of the level of well-being. In so doing, the authors make freedoms a tool for policy making and are able to say which conception is the most effective for well-being, as circumstances change. The results have implications for a justification of a free society: maximizing freedoms is good for its favorable consequences upon individual well-being, a fundamental value for the judgment of human advantage.