This thesis consists of four essays covering two sets of issues linking resources to institutions. Chapter 1 provides a summary of the thesis. Chapter 2 provides a general overview of the resource curse literature, emphasising the role of institutions, the nature of the political regimes in resource-rich countries and the link with civil conflicts. Chapter 3 examines the implications of liberal lending practices of international credit markets to dictators during resource booms. We show that the combination of institutional weaknesses such as unaccountable leadership and unsound lending may give autocrats perverse incentives to loot and destabilise their countries, which impedes economic growth. Chapter 4 investigates what motivates some dictators in resource-rich countries to invest in productivity enhancing public goods while others deliberately choose predatory or repressive policies. We find that the ruler is more likely invest in public goods when the productivity of the non-resource sector is high, and when he is relatively ineffective in controlling the country's resources. Chapter 5 presents an overview of the literature on intellectual property rights focusing on the problems raised by sequential innovations for the design of patents and the role of legal institutions in resolving disputes. Chapter 6 examines the nature of the North-South divide in the bioscience industries as a hold-up problem caused by the lack of coordination between North and South property rights systems. We develop a model of bargaining in a sequential R&D framework that demonstrates the mechanism by which underinvestment in maintaining biodiversity and inefficient flow of information occurs. Chapter 7 assumes that the coordination problem is resolved and investigates the number and placement of the property rights to provide incentives for efficient investment in information generation. We show that the existence of a property right in the genetic resources is necessary for the South to share in the rents from the R&D sector. When traditional knowledge is the South's private information, it is not necessary to establish a separate property right in it to appropriate its return.

This dissertation analyzes the role and determinants of cognitive and non-cognitive skills. A number of papers have stressed that educational and labor market outcomes are largely pre determined by the cognitive and non-cognitive skills accumulated during early childhood. Some of these papers recommend investing in this type of skills to raise educational enrolment and attainment, to reduce disparities between ethnic groups or to weaken the intergenerational trans mission of socio-economic status. Yet a number of questions are still open: Is early investment in skills always the best option Do cognitive and non-cognitive skills account for most of the intergenerational transmission of socio-economic status What are the most important inputs of these skills The first essay compares the efficiency of two alternative policies aimed at fostering educational enrolment. The results indicate that a direct grant in the form of a tuition subsidy is more efficient than an equally expensive unconditional parental income subsidy given when individuals are still in their childhood. The shift in the cognitive skills distribution following the latter subsidy is too small to generate a large increase in college enrolment. The second essay tests for stochastic monotonicity in intergenerational socio-economic mobility tables. The results provide evidence of monotonicity both unconditional and conditional on educational attainment, cognitive and non-cognitive skills. The third essay shifts the attention to the determinants of these skills, and in particular to the effect of using a computer at home on children's development. The results indicate that time spent on the computer has a positive effect on cognitive skills. For the non-cognitive skills the evidence is more mixed, with the direction of the effect depending on the type of skill and the age of the children.

The time value of money (TVM) equation is a key equation in economics and finance. It takes the form of an nth order polynomial having n roots. It is usual to calculate and use only one root (interest rate). The remaining (n-1) roots are mostly complex or negative, and are usually discarded. In this thesis it is shown that the unorthodox roots (interest rates) should not be ignored because they have utility and meaning. New expressions are developed for existing concepts in economics and finance. The concepts include duration in bond mathematics, net present value (NPV) in capital budgeting, the value of a stock of capital in capital theory, and the total charge for credit in loan analysis. The new expressions for these concepts employ all possible interest rates as components. The new expressions provide solutions to puzzles. In bond mathematics, the new equation for duration delivers what previous formulas for duration fail to provide: an accurate measure of the impact of a change in interest rate on the price of a bond. In capital budgeting, the new equation for NPV offers a resolution to the debate about the relative merits of NPV and internal rate of return (IRR) as investment criteria. In economics, a solution is proposed to the reswitching debate in the Cambridge capital controversies. In credit analysis, a new relationship is developed between the total charge for credit and the orthodox measure of the cost of a loan, the annual percentage rate (APR). The result implies that the complicated APR need no longer be the focus of consumer credit legislation; the total charge for credit and its variants suffice. The new analysis not only employs all interest rates, it also endows them with meaning. The suggested interpretation of a complete cluster of interest rates sheds new light on the meaning of orthodox rates such as IRR and APR.

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