The first chapter of this dissertation studies how campaign contribution laws affect welfare policies. The US political system is highly unequal as policy preferences of high-income citizens are often prioritized compared to low-income groups. It is also widely believed that interest groups employ campaign contributions to exercise bargaining power over political candidates. Evidence shows that stricter campaign contribution laws can reduce the bargaining power of interest groups over candidates and increase the say of low-income groups in policy matters. Thus, the effect of stricter contribution laws should also manifest as a shift towards relatively generous welfare policies. This paper analyzes the relationship between stricter campaign contribution laws and welfare policy across the state-wide legislative races from 1980 to 2018. The empirical results indicate that stricter contribution laws increase state real minimum wage and EITC rates. The effect of relatively stringent laws on welfare policy generosity is also evident when alternative welfare policy proxies are used.

The second chapter investigates how the political ideology of governments, specifically left-right partisanship, affects their decisions to enter into International Monetary Fund (IMF) loan programs and the conditionality requirements attached therein. Additionally, it explores how IMF programs and their conditionality requirements influence the ruling government's political ideology. Using an instrumental variable approach to address the endogeneity of IMF programs and conditions, the empirical analysis reveals that left-wing governments are less likely than right-wing governments to enter into IMF programs, while no significant effect is observed for centrist governments. However, left-leaning governments encounter fewer overall conditionality requirements compared to right-wing ones. The findings also indicate that the presence of an IMF program and a higher burden of conditionality requirements decrease the likelihood of left-wing or centrist parties winning or retaining public office, whereas they increase the probability of a right-wing party gaining power.

The third chapter analyzes the effect of left-wing, right-wing, and centrist political ideologies on productive capabilities across countries. Productive capabilities or export sophistication is the ability of an economy to produce and export a wide variety of highly sophisticated products. It is a strong determination of long-run economic growth and development. The ideology of incumbent political parties can determine a country's policy trajectory, thereby affecting the growth process. The evidence on the effect of political ideology on economic performance is mixed and inconclusive. The two-stage least-squares instrumental variable estimates show that left-wing governments do not affect productive capabilities, right-wing governments are hurt, and centrist ideology boosts a country's productive capabilities in the long run.