Dana Foarta

Dana Foarta’s primary research focus is to integrate theoretical models of domestic political decision making into the economic analysis of supranational institutions. Once political institutions are taken into account, richer insights emerge as to the types of common economic policies that governments can implement in practice. Her research asks how we can design institutions to limit the negative effects of political inefficiencies. Another research focus is on the agency problems within and between institutions. Specifically, she studies how the incentives of politicians or regulators, stemming from their re-election concerns or their employment contracts, shape the policy proposals they put forward. She focuses on contracting under strict limitations to monetary compensation (inflexible pay scales), an issue especially relevant to political economy. The challenge of selecting and motivating high ability politicians/regulators is closely related to issues confronting firms when selecting employees or investments, leading to broader implications for contracting.