This thesis wants to contribute to the understanding of the role of collective beliefs and incomplete information in the analysis of the dynamics of inequality, growth and redistributive politics. Extensive evidence shows that the difference in the political support for redistribution appears to reflect a difference in the social perceptions regarding the determinants of individual wealth and the underlying sources of income inequality. The thesis presents a theoretical framework of beliefs and redistribution which explains this evidence through multiple politico-economic equilibria. Differently from the recent literature which obtains multiple equilibria by modeling agents characterized by psychological biases, my framework is based on standard assumptions. Multiple equilibria originate from multiple welfare maximizing levels of information for the society. Multiplewelfare-maximizing levels of information exist because increasing the informativeness of an economy produces a trade-off between a decrease in adverse selection and an increase in moral hazard. The framework provides a new micro-foundation of incomplete information as an institutional feature and answers various macroeconomic policy questions with different models.

In this thesis, I study the use of regulation as a redistributive policy and its implications on economic and political outcomes. In the first chapter of this thesis, I remark that regulation has distributive and welfare consequences, making it a powerful political tool. I show that when the regulation is on goods for which all of the citizens have similar consumption behaviour, a highly unequal society funds the costs of those goods mostly through general taxation; instead of tariffs charged to users. Importantly, when the poor have access to only the essential goods in the economy, regulation becomes a strong political tool, and it is poverty rather than inequality that determines the use of regulation. In the second chapter, I start with the observation that corporations devote costly efforts to gain access to candidates before elections. These pre-electoral attempts take many forms and commonly result in a welfare loss. Then, I explore the consequences of the access of a monopolistic firm to a candidate on the regulatory policy. I show that when the firm transfers a private interest to a popular candidate, regulation results in gains for both the firm and the candidate; and a welfare loss for the voters. Instead, this welfare loss does not take place when the firm uses campaign contributions as signals to communicate private information. From this perspective, there are benefits in permitting interest groups to fund political campaigns. The third chapter is motivated by the fact that developing countries subsidise the tariffs of public utilities such as electricity or transportation with high costs in terms of the quality and sustainability of the utility provisions. Even when governments repeatedly claim that the main goal of these subsidies is to improve the well-being of the poor, most literature has explained the use of these tools is driven by income inequality rather than the poverty rate. In contrast, I study the effect of the size of the poor on the choice of the mix of regulation and other traditional forms of redistributive policy. I begin by showing that the poor are better characterised by their consumption bundle than their income. Consequently, when the public utilities are essential for the poor, a higher poverty rate leads to a larger amount of subsidies to utilities and a smaller size of income redistribution.

This thesis offers a constructivist framework to set out political features in capitalist diversity that the current literatures on „Varieties of Capitalism‟ and „Comparative Capitalisms‟ have not fully shed light into so far. Taking these scholarly contributions as a starting point, I argue that their investigations are able to highlight the distributional outcomes in terms of which actors relatively benefit from a particular socio-economic setting. However, that they have difficulties to point to the political aspects of different models of capitalism that relate to their constitutive nature. I then suggest a method that is able to underline how the very understandings of the individual economic subject and of the state are themselves political as their definitions marginalise alternatives ways to make sense of these economic concepts. Starting from the indeterminacy of the human mind and the theoretically many ways to interpret the lived environment according to sets of „naïve theories‟, it builds on the recent developments in constructivist institutionalism to present an account that puts the individual-state relationship at its core. As such, it breaks with the focus on production prevalent in the literature, and enables analysis of the normative depiction of a particular ideal-typical type of economic subject that then engages with consumer markets. What becomes essential is the exact ways in which a particular understanding of the state in the eyes of policy-makers leads to the facilitation of certain definitions of economic agency and market mechanisms, and the exclusion of their alternatives. The empirical chapters then apply this framework to the cases of the British and German home ownership and mortgage markets (1997-2007) to explore the discursive framing patterns that were put forward to legitimate a particular definition of the ideal-typical home owner and mortgagee in these two economies. Through the study of parliamentary debates, the findings demonstrate not only that differences exist in the conceptualisations of the economic subject, but hence also the political character of such differences as excluding each other. At the same time, such a process is shown to be deeply political in terms of the policy instruments that are not considered due to particular taken-for-granted conceptions of policy-makers themselves. In short, this constructivist account showcases the multiplicity of political aspects with regards to state interventions in contemporary capitalist economies.

Is there a causal link between corrupt machine politics and informality? Historical and empirical evidence support a positive answer to this question. The first paper offers a theoretical perspective, which more generally asks how redistributive politics in a democracy affects the allocation of factors in a dual economy with a modern and a traditional sector. A model of electoral competition with endogenous group size and output shows that electoral political agency through targeted redistribution (sector-specific tax rates) can either promote or discourage the growth of the modern sector. However, the effect of changes in sector size on total output is ambiguous and depends on parameter combinations. These insights contrast with traditional models in redistributive politics in which group sizes are exogenous and allocation effects are overlooked. In this framework, economic forces at work that come from productivity differentials and endowment distribution are able to outweigh the effects of the ideological density. The second paper explores evidence from 64 democracies through an instrumental variable approach. The hypothesis is that machine politics shapes institutional quality in democracies and thereby determines informality. The conceptual framework is based on the political exchange space and the portfolio theory of electoral investment. Machine politics is proxied by electoral risk, and institutional quality is measured by the index of the rule of law. Instruments of machine politics are searched for among de-jure political institutions. This analysis confirms results already discussed in the related literature on government quality, determinants of informality and the effect of electoral rules on corruption, however, the main contribution of this research is to bring political structure into the picture, here the party system, insofar as it is a key intermediating mechanism between political institutions (de-facto and de-jure) and social outcomes (political and economic). In other studies the political structure is a black box that readily disappears when estimating reduced-form equations.

This thesis analyses the interactions between politics, institutions, and policy outcomes using a political agency framework with incomplete information. After an introductory chapter, we develop a political agency model that is consistent with the empirical evidence on politically-induced fiscal cycles, and especially budget deficit cycles. We find that electoral concerns create, on average, a rising budget deficit prior to elections. The net welfare effect of elections is ambiguous: although they give rise to a deficit bias, they increase the quality of office-holders. The next chapter uses this microfounded model to study the incentive and welfare effects that the imposition of fiscal constraints has on policy makers' decision to create excessive deficits. Three types of constraints are investigated: deficit ceilings, a Golden Rule of public investment, and a balanced-budget rule. We find that constraints are effective in reducing excessive budget deficits - although at the expense of unconstrained instruments. Only one can yield higher welfare than the fully discretionary case. No appropriately designed fiscal constraint can achieve the first-best. In Chapter 4, we show that two key results in the political agency literature are not robust. The first is that a cutoff rule followed by voters in re-electing an incumbent always motivates the latter. The second is that this cutoff rule is an optimal incentive mechanism. Under symmetric incomplete information, the first result can be reversed since elections can reduce the experimentation effect of office-holders (i. e. the incentive to raise effort so that performance becomes a more accurate signal of ability). This reduction may more than offset the positive effect of elections on effort. When incentives to stand for office are modelled, result two can be overturned since a revealing equilibrium at the candidate entry stage can always be designed. This screens out low-ability citizens from policy making and therefore eliminates the adverse selection problem. If this latter is more important than moral hazard issues, the cutoff rule at the policy stage is no longer an optimal mechanism. In Chapter 5, we investigate in more details whether relevant (private) information about citizens' competence in political office (ability, honesty, etc. ) can be revealed by their entry and campaign expenditure decisions. We find that this depends on whether voters and candidates have common or conflicting interests; only in the former case can entry be revealing in equilibrium. We apply these results to Rogoff's (1990) Political Budget Cycles model, allowing for candidate entry: as interests are common, low-ability candidates are screened out at the entry stage, and so there is no signalling via fiscal policy. In a variant of the Rogoff model where citizens differ in honesty, rather than ability, interests are conflicting, and so the political budget cycle can persist in equilibrium. The final chapter concludes the thesis.

The emergence between 1965 and 1973 of a crisis of over-accumulation and over-capacity, rooted in international manufacturing yet affecting the overall private business economies of the advanced capitalist countries, inaugurated a developmental context whose profound contradictions were brought home by the Great Recession of 2008-9 and the continuing Long Depression. The intervening period has seen profound economic, political and social crisis in the advanced capitalist world and has simultaneously been treacherous for under-developed economies forced to navigate rocketing energy costs and international commodity price and currency exchange rate turbulence under the continual threat of debt-levered expropriation. The struggle to locate the causes – proximate and ultimate – of the present crisis is at the same time a battle to map the basic economic and political coordinates of the continuing long downturn. In this connection it is contended that efforts have been undermined by the epistemological underdevelopment conditioned by a crisis of knowledge-formation which has unfolded in parallel with the long downturn. The dominance of neoclassical economics (‘unworldly’ since the marginal revolution) on the right and the displacement of Marxism on a structurally weakened and autodidactic left in the context of the ascent of postmodernism as an intellectual and cultural dominant has opened a space between the material and discursive realities of global capitalist development. This work is an attempt to deploy the method developed by the classical Marxist tradition to approach the significance of the state and law in the historically-conditioned reproduction of capitalist social relations. It is contended in the first place that the dualism which obtains between national and global spheres in much theorisation of neoliberal ‘globalisation’ obscures the dialectical interrerelation of state and world market – the institutional and regulatory environment of international trade, money and finance being both the creation of states and the developing context which frames their – necessarily path-dependent and reflexive – projects of domestic economy making. As against popular notions of state decline, following Gowan the state-political content of the centring of private financial markets in the mediation of international monetary relations is recalled, while the embeddedness of the state in circuits of capital accumulation is emphasised (Tony Smith), the concept of ‘regime of accumulation’ being deployed to capture the nexus of monetary, fiscal and regulatory policy which articulates historically-conditioned development strategies. In this respect, we depart from the work of the Bolshevik jurist Pashukanis, who despite significantly advancing the materialist analysis of the juridical form, identified in his most significant work a largely derivative role for the state. It is argued that the methodological weakness represented by Pashukanis’ disproportionate emphasis on commodity exchange – his failure to proceed from the basis of the capitalist economy as a contradictory unity of production and circulation – prevents him from fully apprehending the role of the state in the production and reproduction of capitalist social relations. As the discussion unfolds, there is developed in conversation principally with Gramsci an understanding of the state as the specific material condensation of a relationship of forces among classes and class fractions. Upholding the notion of the ‘integral state’ as a differentiated unity of civil society and political society upon which terrains the capitalist class forms alliances with proximate classes as the prerequisite for and correlate of its domination of labour, the developmental context represented by neoliberalism is conceived in terms of the transition of interest-bearing capital from leading to dominant fraction of the capitalist class in parallel with its tendential contradictory disaggregation from productive capital. Such a process has necessitated a transformation in the character of bourgeois political supremacy involving a dismantling of the civil rights and social protections accumulated during the period bookended by Americanism and the welfare state and increasing dependence upon an expanded machinery of coercion. Proceeding from this basis, it is considered how in specific developmental contexts the state by way of the legal form maps the social totality, achieving distinctive couplings (and de-couplings) of wealth production and social reproduction. There is asserted the second-order integration of public and private spheres in terms of the fundamental unity of capitalist reproduction, the first-order public/private metabolism being evaluated in view of the facilitation and rationalisation of social reproduction in the context of a productive economy structured around dissociated private producers. The legal form is further interrogated in view of its role in structuring the productive antagonism between capital and labour, a relation which on the basis of its form comes to expresses various contents – from consensual integration to casuistic assimilation – as domestic social relations are (in-)validated by the operation of the law of value at the level of the world market. In this connection, the unproductive theoretical polarisation obtaining between approaches which consider law to be epiphenomenal and those which pursue its relative autonomy is enriched by a historicised conception in terms of which law, concretising specific relationships of forces within particular regimes of accumulation, appears as ‘sword’, as ‘shield’ and as ‘fetter’. This framework is particularly useful for evaluating the opportunities for the deployment of legal strategies by labour and groups oppressed under capitalism – a question in relation to which Pashukanis, following Lenin, demonstrated a remarkable political astuteness.