How do governments decide where and when to spend their resources? Most scholarly work has considered whether ruling parties target swing voters or their core supporters separately from the question of when governments disburse funds. In contrast, this article offers a new theory of distributive politics in which electoral timing is a key parameter affecting ruling parties’ incentives to target core supporters or swing districts. It tests these theoretical predictions using an original budgetary dataset from the Ghana Education Trust Fund. Consistent with the theory’s predictions, I find that the ruling party disproportionately targets core districts during non-election years, but spends more across all types of districts during election years.
When acquiring information about potential buyers is costly, sellers will be unable to make the best possible match. We capture the consequences of this in a model where producers make investment decisions anticipating their future response to search costs. When one good has higher information frictions than another, decreasing those frictions increases production of that good along the extensive and intensive margins, and with specialization constraints production of the other good will decrease. Using a novel dataset on the roll-out of free postal delivery in rural communities in the US at the turn of the 20th century, we find evidence in line with the predictions of the model, as investment in manufacturing significantly increased in counties which got more free delivery routes, and agricultural investment weakly decreased. We use newspaper subscriptions as a proxy first stage, finding that access to new post office services did increase newspaper circulation. We also extend our basic model to show how cheaper communication can lead to the dispersion of production and consumption, an effect which is magnified by access to cheaper transportation, and find support for this prediction as well.
Most emerging market sovereign borrowing is now denominated in local currencies. We introduce a new measure of sovereign risk, the local currency credit spread, defined as the synthetic dollar spread on a local currency bond after using cross currency swaps to hedge the currency risk of promised cash flows. Compared with traditional sovereign risk measures based on foreign currency denominated debt, we find that local currency credit spreads have lower means, lower cross-country correlations, and are less sensitive to global risk factors. We rationalize these findings with a model allowing for different degrees of integration between domestic and external debt markets.
This article examines the long term consequences of the early introduction of the printing press in the 19th century on newspaper readership and other civic attitudes in sub-Saharan Africa. In sub-Saharan Africa, Protestant missionaries were the first both to import the printing press technology and to allow the indigineous population to use it. We build a new geocoded dataset locating Protestant missions in 1903. This dataset includes, for each mission station, a geographic location and its characteristics, as well as the amount and nature of all the investments done by the mission. We show that proximity to a historical missionary settlement endowed with a printing press significantly increases newspaper readership today within regions located close to historical mission settlements. We also find a positive impact on other civic attitudes such as political participation at the community level and behavior toward political discussion. Results are robust to a variety of identification strategies striving against potential endogenous selection of missions into printing and externalities on education and literacy.
This paper questions the common wisdom whereby more competition in the media industry leads necessarily to more information. I investigate the impact of a change in the intensity of competition in the media market on the provided quantity of news and within news on the relative shares of information and entertainment. I show that when the heterogeneity in the consumers' taste for news is low and there is a fixed cost of news production, competition leads to a decrease in the total production of news compared to the monopoly situation due to a "business stealing effect'. Moreover, I find that when newspaper buyers differ less in their taste for information than in their taste for entertainment, competition leads to less information and more entertainment even when the cost of producing information and entertainment is the same. An interesting implication is that in a model in which voters vote strategically media competition can lead to a decrease in turnout. I confirm these predictions empirically using a new panel of local daily newspapers and turnout at local elections in France from 1945 to 2011. I show that, due to an important business stealing effect, an increase in competition leads to a decrease in incumbent newspapers' operating expenses and in particular the number of journalists. Through this channel, I find that an increase in competition leads to (i) a lower provision of total news and, within these news, (ii) a lower share of information and a higher share of entertainment. I also show that more competition leads to an increase in newspaper differentiation. Finally I find that an increase in newspaper competition has a robust negative impact on turnout at local elections.
Why are contracts incomplete? Transaction costs and bounded rationality cannot be a total explanation since states of the world are often describable, foreseeable, and yet are not mentioned in a contract. Asymmetric information theories also have limitations. We offer an explanation based on “contracts as reference points”. Including a contingency of the form, “The buyer will require a good in event E”, has a benefit and a cost. The benefit is that if E occurs there is less to argue about; the cost is that the additional reference point provided by the outcome in E can hinder (re)negotiation in states outside E. We show that if parties agree about a reasonable division of surplus, an incomplete contract can be strictly superior to a contingent contract.
Was economic mobility high during the first half of the twentieth century in the United States? I combine two historical data sources to estimate intergenerational income mobility between 1915 and 1940. I match fathers from the Iowa State Census of 1915 to their sons in the 1940 Federal Census, the first state and federal censuses with data on income and years of education. In my sample of fathers and sons, I estimate a lower intergenerational elasticity of income than is found in modern studies of the United States, suggesting higher levels of income mobility. Intergenerational mobility of education is higher in my sample than in modern measures as well. I find sons in rural counties in 1915 to have more mobility of both income and education than urban sons. Lacking data on income, past studies of historical intergenerational mobility have relied on occupation transition data for fathers and sons to measure mobility. When I compute standard measures of occupational mobility for my sample, I find statistically similar levels of mobility between 1915 and 1940 and modern estimates, which contrasts with the higher mobility I find in income measures. This suggests that the standard estimates of historical occupational mobility may not be accurate substitutes for measures of income mobility.
We present new evidence on the relationship between teacher productivity and job experience.
Econometric challenges require identifying assumptions to model the within-teacher returns to
experience with teacher fixed effects. We describe the bias introduced by violations of different
identifying assumptions, including a new approach that we propose. Consistent with past
research, we find that teachers experience rapid productivity improvement early in their careers.
However, we find suggestive evidence of returns to experience later in the career, indicating that
teachers continue to build human capital beyond these first years.
Courts have articulated a number of legal tests to distinguish
corporate transactions that have a legitimate business or
economic purpose from those carried out largely, if not solely, for
favorable tax treatment. We outline an approach to analyzing the
economic substance of corporate transactions based on the
property rights theory of the firm, and describe its application in
two recent tax cases.
How accurate are people when predicting whether they will vote? These self-predictions are used by political scientists, public opinion researchers, and psychologists. Responses from phone surveys over three elections are compared to administrative voting records to determine pre-election vote intention and actual voting behavior (N=29,403). Unsurprisingly, many who predict that they will vote actually do not vote. However, many who predict that they will notvote actually do (29% to 56%). Records of past voting behavior predict turnout substantially better than self-prediction. Self-prediction inaccuracy is not caused by lack of cognitive salience of past voting or by inability to recall past voting. Moreover, self-reported recall of turnout inone past election predicts future turnout slightly better than self-prediction of future turnout. Wediscuss implications for political science research, behavioral prediction, election administrationpolicy, and public opinion.
The adoption of voter identi cation (ID) requirements has raised concerns that these
laws di erentially reduce turnout among minorities. We use a eld experiment to
investigate one mechanism by which these laws could reduce turnout: di erential in-
formation provision about voting requirements to minorities. We contact over 7,000
local election administrators in 48 states and observe that they provide di erent in-
formation about ID requirements to voters of di erent putative ethnicities. Emails
sent from Latino aliases are signi cantly less likely to receive any response from local
election ocials than non-Latino white aliases and receive responses of lower quality.
This raises concerns about the e ect of voter ID laws on access to the franchise and
about bias in the provision of information by local bureaucrats more generally
