This award provides funds for the establishment of a Research Training Group in Positive Political Economy. The faculty group is composed of 12 distinguished Political Scientists and Economists from the Government and Economics Departments and the Kennedy School at Harvard University and from the Political Science and Economics Departments of the Massachusetts Institute of Technology. The funds will provide stipends for graduate students and postdoctoral trainees, purchase computers needed for trainee research, aid with costs of trainee recruitment and provide part-time secretarial assistance. Institutional commitments will aid in purchase of equipment and in other aspects of the group's efforts. Addressing issues and problems at the interface of political science and of economics, research in positive political economics shows, in general, how observed differences among institutions affect political and economic outcomes in various social, economic, and political systems, and how the institutions themselves change and develop in response to individual and collective beliefs. More rigorous than traditional political science and more concerned with nonmarket institutions than traditional economics, positive political economics focuses on how political and economic institutions constrain, direct and reflect individual behavior in attempting to explain social outcomes such as production, resource allocation and public policy.