Administrative Unit Proliferation and Development: Evidence from Brazilian Municipalities [SSRN] (with Christiane Szerman)
We exploit a period of proliferation of new administrative units in Brazil between 1988 and 2010, in which 1,146 municipalities were created (an increase of 35%), to investigate the short- and medium-term effects of secessions on socio-economic outcomes. We first argue that elite capture and fiscal incentives play an important role in secessions. Because the decision to secede is not random, we collect data on municipalities that had secession requests denied due to a Constitutional Amendment that curbed the formation of new municipalities after 1996 to create a control group for municipalities that seceded. Using past tract-level Census data to reconstruct outcomes for new boundaries, we find that secession is associated with better education, health, wealth, and public service outcomes. We document that the positive effects are mostly driven by new municipalities, while old municipalities present negligible changes. We show that increases in revenues do not fully explain our findings and we discuss further mechanisms, such as changes in state capacity, infrastructure, and migration.
The Fluidity of Race: “Passing” in the United States, 1880-1940 [pdf] (with Emily Nix and Nancy Qian), NBER Working Paper 20828
This paper quantifies the extent to which individuals experience changes in reported racial identity in the historical U.S. context. Using the full population of historical Censuses for 1880-1940, we document that over 19% of black males “passed” for white at some point during their lifetime, around 10% of whom later “reverse-passed” to being black; passing was accompanied by geographic relocation to communities with a higher percentage of whites and occurred the most in Northern states. The evidence suggests that passing was positively associated with better political-economic and social opportunities for whites relative to blacks. As such, endogenous race is likely to be a quantitatively important phenomenon.
Is Economics a Science? Well, Not Yet. [SSRN]
Is economics a science? Answering this question is not only necessary for philosophical clarity, but also crucial for knowing how seriously to take economists’ claims and advice about public policy. Nevertheless, even among practitioners and academics, consensus is nonexistent. This paper resolves the conundrum in two steps. First I discuss some epistemology of science, defining clearly various concepts necessary to the debate. Several fallacies are clarified, such as "a theory may never be proved true, but only not falsified", "a model is useful because it simplifies reality" or "data mining is bad". In light of solid philosophical ground, I then discuss the practice and methodology of modern economics. The answer to the title question is a perhaps disappointing, but realistic, not yet. I conclude with prescriptions for a path towards a more scientific discipline.
Choosing Institutions Locally: Determinants of Legislative Size in Brazil (available upon request)
How are institutions determined? This paper studies how legislators locally choose an important dimension of local electoral systems, namely legislative size. To achieve this end, I construct a novel data set comprised of seat proposals and individual legislators’ votes to increase or not legislative size during the pre-2012 election period for a sample of municipalities in Brazil. I then outline and estimate a structural discrete choice model of legislative vote, in which legislators play a strategic game and also decide whether to run for reelection or not. I find that legislators weigh on average approximately 34% reelection payoffs and 66% social welfare when choosing seats. With these results, I run some counterfactual analyses varying the population caps’ function that federal government chooses.
Work in Progress
- The Technology Frontier and the Rise and Fall of Cities (with Enrico Berkes and Marti Mestieri)