Essays in institutional economics

This dissertation consists of three essays in institutional economics. The first essay examines how ownership of a firm by its customers, as well as nonprofit status, reduce the incentive of the firm to offer contractual terms that exploit the mistakes of consumers by eliminating an outside residual claimant with control over the firm. Evidence for the theory is provided from the consumer financial services market. The second essay investigates the factors that have shaped the institutions governing property in land in West Africa. Using a regression discontinuity design, I find that formal law has played a limited role in property rights institutions and that instead non-state sources of norms shape the de facto rules governing real property. Furthermore, I show that part of the substantial within-country variation in property rights institutions is explained by economic factors, as hypothesized by Demsetz (1967). The third essay presents evidence from India that voters are responsive to exogenous rainfall shocks. However, I show in a formal political agency model that voter rationality alone does not rule out a correlation between observable exogenous economic shocks and support for the incumbent.