Recipient of the Susan Schmidt Bies Prize for Doctoral Student Research on Economics and Public Policy, 2018
Coverage: BBC Brasil
This paper studies how decentralization affects local development. We exploit an episode of a remarkable increase in the number of new municipalities in Brazil to understand the long run impacts of municipal splits. Using a rich panel of spatial and administrative data, we first show that splits are initiated by poor and rural districts motivated by fiscal incentives and neglect from their parent municipality. When using areas whose request to split was never approved as a control group, we find that splitting increases economic activity and public service delivery in new municipalities. Parent municipalities remain unaffected. We document that increases in fiscal revenues and reduced physical remoteness from their administrators are the main channels explaining the results. Our findings suggest that decentralization in the presence of equalizing intergovernmental grants may effectively promote local development in large developing countries.
Benefit analyses of mortality reduction policies typically use multiples of the value of a statistical life (VSL). This approach approximates risk premia for small changes in mortality, but inaccurately characterizes premia for large risk changes because it implies increasing marginal utility and a risk-loving attitude. We propose a method to calculate the benefits of large mortality reductions adjusting for risk aversion. We apply this method to calculate the benefits of social distancing and other mitigation strategies to combat COVID-19 in the US and 42 other countries. Our findings show that the typical approach underestimates the benefits of social distancing in the US by a factor of 4.1 and in other countries by a factor of 2.2 on average.
In the absence of strong incentive schemes, public service delivery depends crucially on bureaucrat selection. Despite being widely adopted by governments to screen candidates, it is unclear whether civil service examinations can predict performance on the job. This paper investigates this question focusing on a highly prestigious and influential set of bureaucrats in Brazil: state judges. We first explore rich data on judges’ monthly output and cross-court movement to separately identify what share of observed performance is explained by judges and courts. We estimate that judges account for at least 23% of the observed variation in the number of cases disposed. Using a novel data set on examinations, we then show that, within cohorts of candidates taking the same exam, those with higher grades perform better than their lower-ranked peers. Our results suggest that competitive examinations can be an effective way to screen candidates, even among highly qualified contenders.
This paper documents that a large number of African American men experienced a change in racial identity to white during 1880 to 1940, while analogous changes were negligible for other races. We provide descriptive evidence that is consistent with the conventional wisdom that “passing” for white was a response to severe discrimination, and came at great personal cost. The findings suggest that contrary to traditional economic thinking, racial identity is neither entirely exogenous nor fixed over the lifetime, and responds to incentives.
The Political Effects of Policy: Evidence from the Brazilian Amazon. New version coming soon! (with Arthur Bragança)
Public policy often generates effects beyond its initial scope by changing the behavior of politicians and voters in response to it. This may be beneficial in a context of decentralized public good provision where individual and social incentives misalign. In this paper we study how a centralized environmental policy, which synced real-time satellite deforestation data with enforcement on the ground, further reduced forest loss by causing pro-agriculture politicians to cut back on effort. We assemble a comprehensive data set covering six electoral terms and show that, before the reform, municipalities governed by pro-agriculture mayors earmarked more resources to agriculture and had higher deforestation rates. However, after the reform, these differences disappear. We provide suggestive evidence that the policy affected political entry by making running for office less attractive for pro-agriculture candidates. Our findings indicate that the decline of the political influence of interest groups representing agriculture was an important mechanism through which the increases in the enforcement of the environmental legislation reduced deforestation.
Work in Progress
Choosing Institutions Locally: Determinants of Legislative Size in Brazil. April 2015 (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.
Genocide and the Demand for Formal Institutions: Evidence from the Legacy of the Khmer Rouge (with Dennis Egger and Joris Mueller)
The Cambodian genocide under the Khmer Rouge regime is remembered as one of the worst human tragedies of the 20th century. This paper examines the social and institutional legacies of this violent episode. We document that spatially more intense violence committed by the Khmer Rouge, proxied by exogenous adverse rainfall shocks during 1975–1977, is associated with a higher fraction of land covered by government-backed land titles in Cambodia today. We provide micro-level empirical evidence that social capital may play a role in explaining this result: Communities that experienced more violence had more of their social capital destroyed, increasing the demand for formal titles. We conclude that social capital may serve as a substitute for formal institutions in a context of weak state capacity. We complement our analysis by discussing several alternative mechanisms.