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Evidence from the International Crime Victimization Survey and the World Business Environment Survey suggests that actual corruption experience is a weak predictor of reported corruption perception, and that some of the factors commonly found to "reduce" corruption, such as economic development, democratic institutions or Protestant traditions, systematically bias corruption perception indices downward from corruption experience. In addition, perception indices are influenced by absolute (as opposed to relative) levels of corruption, which tends to penalize large countries, and they exhibit diminishing sensitivity to both absolute and relative corruption, indicating that they may better capture differences among countries with low levels of corruption than among highly corrupt ones. Individual characteristics such as education, age, or employment status, and firm‐level characteristics such as the number of competitors are also found to influence corruption perceptions holding experience constant.

Many countries place restrictions on the political rights of government workers. This includes limitations on political activities such as taking an active part in political campaigns. Are such restrictions desirable? We present a formal welfare analysis of this question. Bureaucrats' political activities affect voter perceptions of the government and this can have informational benefits. However, they can also induce policy mistakes and are susceptible to 'noise' from some bureaucrats' innate desire for political expression. When politicians have limited control over bureaucrats and successfully coordinate with voters, bureaucrats' political activities can be desirable. In most cases, however, banning political activities is optimal.

We consider a model where firms differ in their productivity and workers are differentiated by skill and gender. A reduction in tariffs induces more productive firms to modernize their technology and enter the export market. New technologies involve computerized production processes and lower the need for physically demanding skills. As a result, the relative wage and employment of women improves in blue-collar tasks, but not in white-collar tasks. We empirically confirm these theoretical predictions using a panel of Mexican establishments and the tariff reductions associated with the North American Free Trade Agreement (NAFTA).