A DISSERTATION SUBMITTED TO THE FACULTY OF THE GRADUATE SCHOOL OF THE UNIVERSITY OF MINNESOTA BY
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY
Advisor: Larry E. Jones June 2009
c Simge Tarhan 2009
I would like to thank my advisor Professor Larry E. Jones for his encouragement and advice during the long writing process of this dissertation. I also would like to thank Professor V.V. Chari for patiently listening to my presentations at the Chari-Jones workshop, giving invaluable suggestions to improve my work. I thank Professor Jos´ -V´ctor R´os-Rull for encouraging me to think more critie ı ı cally with his questions and comments. I thank Professor Raymond D. Duvall for giving insightful comments about my research. Parts of this dissertation have been presented at various conferences and seminars. For their suggestions and comments, I would like to thank Kenneth Binmore, Francesca Carapella, Roozbeh Hosseini, Facundo Piguillem, Evsen ¸ T¨ rkay, and the members of the Chari-Jones Workshop, as well as the particiu pants at the III Guanajuato Workshop for Young Economists, the Third Annual Graduate Student Conference at Washington University in St. Louis, the 6th Midwest International Economic Development Conference, the 2009 European School on New Institutional Economics, and the 13th Annual Conference of the International Society for New Institutional Economics. The chapter titled “Self-selection of Politicians and Corruption” is written with Evsen T¨ rkay. ¸ u i
The Department of Economics at the University of Minnesota is blessed with the best staff! They have not only made my life so much easier by taking care of all the bureaucratic processes related to my studies, but also offered me their moral support and encouragement on a daily basis. I especially thank Catherine Bach and Kara Kersteter for all they have done for me from the time I took preliminary exams to the time I was on the job market. I would like to thank Dr. Simran Sahi for her patience and understanding during my training as an instructor. I learned so much about teaching from her! I am grateful for her moral support as well as professional mentorship. I would like to thank the Research Department at the Federal Reserve Bank of Minneapolis for hosting me in the past four years. The work environment they provided helped me be more productive. I thank very much to Dr. Warren Weber for allowing me to have a work space at the Fed and staff members Barbara Drucker, Vicki Reupke, and Wendy Stier for their kindness. As anyone who has ever written a doctoral dissertation would agree, continuous moral support by family and friends is very important during this long and exhausting process. I consider myself very lucky to have many loving and supportive people in my life, who provided me with an unbelievable amount of encouragement and support. First of all, I would like to thank my parents Nevin Tarhan and R. Engin Tarhan for all they have done for me from the moment I
was born. Without their continuous support, both material and emotional, and unconditional belief in me this dissertation could not have been written. They allowed me to chase my dreams and be myself. I am proud to be their daughter. Doktora tezi yazan herkesin kabul edece˘ i uzere, bu uzun ve yorucu s¨ recte g ¨ u ¸ aile ve arkadasların s¨ rekli manevi deste˘ i cok onemli. Hayatımda bana inanıl¸ u g ¸ ¨ maz derecede cesaret ve destek veren bircok sevgi dolu insana sahip oldu˘ um ¸ g icin kendimi cok sanslı hissediyorum. Her seyden once, do˘ du˘ um andan itibaren ¸ ¸ ¸ ¸ g g ¨ benim icin yaptıkları her sey icin annem Nevin Tarhan ve babam R. Engin ¸ ¸ ¸ Tarhan’a tesekk¨ r ediyorum. Hem maddi, hem manevi olarak verdikleri destek ¸ u olmasa ve kosulsuz olarak bana inanmasalardı bu tez yazılamazdı. Hayalleri¸ min pesinden gitmeme ve kendim olmama izin verdiler. Onların kızı oldu˘ um ¸ g...