The current economic crisis has led several rich countries to experience severe fiscal deficits. Among other factors responsible for the situation, corruption is considered harmful to public finances and appears closely related to fiscal deficits. This paper opens a new avenue in addressing the effects of corruption on public deficits through fiscal decentralization. Focusing on a sample of 31 OECD countries over the period 1986-2010, we find that fiscal decentralization contributes to mitigating the perverse effects of corruption in public deficits. In addition, our findings indicate heterogeneity in the effect of fiscal decentralization, since it appears related to lower deficits in countries with higher levels of corruption, but not in less corrupt countries. Therefore, the results suggest that bringing the government closer to the people in relatively corrupt countries may lead to a more responsible fiscal management.

The distribution of the common law was conditioned by a colonial strategy sensitive to the colonies' level of endowments, exhibiting a more effective implantation of the legal system in initially sparsely populated territories with a temperate climate. This translates into a negative relationship of precolonial population density and settler mortality with legal outcomes for common law countries. By contrast, the implantation of the French civil law was not systematically influenced by initial conditions, which is reflected in the lack of such a relationship for this legal family. The common law does not generally lead to superior legal outcomes to the French civil law when precolonial population density and/or settler mortality are high. The form of colonial rule in British colonies is found to mediate between precolonial endowments and postcolonial legal outcomes.

Summary This paper shows evidence of strong heterogeneity in the relationship between government size and growth, depending on the quality of public sector institutions. Focusing on a wide sample of developed and developing countries over the period 1981–2005, we find that government size reduces growth when bureaucracy quality is low, whereas no significant effect is observed for sufficiently high levels of bureaucracy quality. The results hold both in cross‐section and panel data analyses and are robust to a large number of robustness checks. These findings have important implications for assessing the role of government size in economic growth.

This paper analyzes the correlation between confirmed cases of COVID-19 and several geographic, meteorological and socioeconomic variables at the province level in Spain. The results indicate that there is a strong and robust negative relationship between average temperature and the rate of cases of COVID-19. The explanatory power of other geographic and socioeconomic variables is much lower. A parsimonious model including population density and temperature is able to explain 67% of variation in cases of COVID. However, the results are inconclusive regarding the existence of a relationship between changes in temperature and changes in COVID cases, casting doubts on the existence of a negative link between temperature and the spread of the virus.

This paper shows that a historical process that ended more than five centuries ago, the Reconquest, is very important to explain Spanish regional economic development down to the present day. An indicator measuring the rate of Reconquest reveals a heavily negative effect on current income differences across the Spanish provinces. A main intervening factor in the impact the Reconquest has had is the concentration of economic and political power in a few hands, excluding large segments of the population from access to economic opportunities when Spain entered the industrialization phase. The timing of the effect is consistent with this argument. A general implication of our analysis is that large frontier expansions may favor a political equilibrium among the colonizing agents that is biased toward the elite, creating the conditions for an inegalitarian society, with negative consequences for long-term economic development.