Publications

2015
Alesina, Alberto, Omar Barbiero, Carlo Favero, Francesco Giavazzi, and Matteo Paradisi. 2015. “Austerity in 2009-2013.” Economic Policy Journal.
Download paper
Alesina, Alberto, and Matteo Paradisi. 2015. “Political Budget Cycles: Evidence from Italian Cities”. Abstract

The introduction of a new real estate taxes in Italy in 2011 generated a natural ex- periment, which is useful to test political budget cycles, i.e. the strategic choice of fiscal variables in relation to elections. We do find substantial evidence of political budget cy- cles, with municipalities choosing lower tax rates when close to elections. We observe this budget cycle only for smaller municipalities where the tax was more likely to be the single most important issue for
the local government. Cities close to elections with large deficits did not set lower rates before elections, probably because they felt the binding constraints
of budget rules.

Upload paper

NBER WP 20570

Alesina, Alberto, and Paola Giuliano. 2015. “Culture and Institutions.” Journal of Economic Literature.
Download paper
Alesina, Alberto, Carlo Favero, and Francesco Giavazzi. 2015. “The Output Effect of Fiscal Consolidations.” Journal of International Economics. Abstract

We show that the correct experiment to evaluate the effects of a
…scale adjustment is the simulation of a multi year …fiscal plan rather
than of individual …scale shocks. Simulation of …scale plans adopted
by 16 OECD countries over a 30-year period supports the hypothesis that the effects of consolidations depend on their design. Fiscal
adjustments based upon spending cuts are much less costly, in terms
of output losses, than tax-based ones and have especially low out-
put costs when they consist of permanent rather than stop and go
changes in taxes and spending. The difference between tax-based and
spending-based adjustments appears not to be explained by accompanying policies, including monetary policy. It is mainly due to the
different response of business confidence and private investment.

Download paper
Alesina, Alberto, and Bryony Reich. 2015. “Nation Building”. Abstract

Nations stay together when citizens share enough values and preferences and can communicate with each other. Homogeneity amongst people can be built with education, teaching a common language to facilitate communication, but also by brute force such as prohibiting local cultures. Democracies and non-democracies have different incentives when it comes to choosing how much and by what means to homogenize the population. We study and we compare both regimes in a model where the size of countries and the degree of active homogenization in endogenous. We also offer some historical discussions of cases which illustrate our theoretical results.

nation_building_feb_2015.pdf

NBER WP 18839

Alesina, Alberto, Yann Algan, Pierre Cahuc, and Paola Giuliano. 2015. “Family Values and the Regulation of Labor.” Journal of the European Economic Association. Abstract

Flexible labor markets require geographically mobile workers to be efficient. Otherwise firms can take advantage of the immobility of workers and extract rents at the expense of workers. In cultures with strong family ties, moving away from home is costly. Thus, to limit the rents of firms and avoid moving, individuals with strong family ties rationally choose regulated labor markets, even though regulation generates lower employment and income. Empirically, we do find that individuals who inherit stronger family ties are less mobile, have lower wages, are less often employed and support more stringent labor market regulations. We find a positive association between labor market rigidities at the beginning of the twenty-first century and family values prevailing before World War II, and between family structures in the Middle Ages and current desire for labor market regulation. Both results suggest that labor market regulations have deep cultural roots.

Download paper
2014
Alesina, Alberto, and Paola Giuliano. 2014. “Family Ties.” Handbook of Economic Growth, edited by Philippe Aghion and Steven N Durlauf, 2A: 177-215. The Netherlands: North Holland. Abstract

We study the role of the most primitive institution in society: the family. Its organization and relationship between generations shape values formation, economic outcomes and influences national institutions. We use the World Values Survey to measure the strength of family ties and economic attitudes, controlling for country fixed effects. We study several economic attitudes, toward working women, society, generalized morality and civic engagement. Individuals with strong family ties have more traditional beliefs about the role of women in society, are more reluctant to accept changes in society and innovation and show a lower level of trust. We also uncover interesting correlations at the country level, where the strength of family ties is associated with lower GDP and lower quality of institutions. These results remain valid if one exploits the correlation between inherited family values and current institutions and level of development, indicating a strong persistence in family values. The quality of family relationships, on the positive side, increases happiness, life satisfaction, and self-reported health.

Download paper
Alesina, Alberto, and Francesco Passarelli. 2014. “Regulation versus Taxation.” Journal of Public Economics 110: 147-156. Abstract
We study which policy tool and at what level a majority chooses in order to reduce negative externalities, such as pollution. We consider three instruments: a rule that sets an upper limit to the activity which produces the negative externality, a quota that forces a proportional reduction of the activity, and a proportional tax on it. For all instruments the majority chooses levels which are too restrictive when the activity is performed mainly by a small fraction of the population, and when costs for reducing activities or paying taxes are quite convex. Also, a majority may choose an instrument that is different than what a social planner would choose; for instance, a rule when the social planner would choose a tax.
Download Paper
Alesina, Alberto, and Eliana La Ferrara. 2014. “A Test for Racial Bias in Capital Punishment.” American Economic Review 104 (11): 3397-3433. Abstract

We propose a test of bias based upon patterns of judicial errors. We model the trial court as minimizing a weighted sum of type I and II errors. We define racial bias as a situation where the weight depends on defendant/victim race. If the court is unbiased, the error rate should be independent of the combination defendant/victim race. We test this prediction using an original dataset on all capital appeals in 1973-1995. We find that in the first and last stages of appeal the probability of error is 3 and 9 percentage points higher for minority defendants who killed white (versus minority) victims.

Download paper
2013
Alesina, Alberto. 2013. “Regional Reckonings.” City Journal, 23, 1. Download article
Alesina, Alberto, and Veronique de Rugy. 2013. “Austerity:The Relative Effects of Tax Increases versus Spending Cuts”. Download paper
Mercatus Center Working Paper
Alesina, Alberto, George-Marios Angeletos, and Guido Cozzi. 2013. “Fairness and Redistribution: Reply.” American Economic Review 103 (1): 554-561. Abstract
This paper responds to the comment of Di Tella and Dubra (2013). We first clarify that the model of Alesina and Angeletos (2005) admits two distinct types of multiplicity: one that is at the core of their contribution, and a separate one that is at work in Di Tella and Dubra's example. We then proceed to show how Alesina and Angeletos's results are robust to alternative specifications of the voting mechanism.
Download article
Alesina, Alberto, Francesca Lotti, and Paolo Emilio Mistrulli. 2013. “Do Women Pay More for Credit? Evidence from Italy.” Journal of the European Economic Association 11 (s1): 45-66. Download article Abstract
By using a unique and large data set on loan contracts between banks and microfirms, we find robust evidence that women in Italy pay more for credit than men, although we do not find any evidence that women borrowers are riskier than men. The male/female differential remains even after controlling for a large number of characteristics of the type of business, the borrower, and the structure of the credit market. The result is not driven by lack of credit history, nor by women using a different type of bank than men, since the same bank charges different rates to male and female borrowers.
Alesina, Alberto, and Silvia Ardagna. 2013. “The Design of Fiscal Adjustments.” Tax Policy and the Economy 27: 19-68.
Alesina, Alberto, Paola Giuliano, and Nathan Nunn. 2013. “On the Origin of Gender Roles: Women and the Plough.” Quarterly Journal of Economics 128 (2): 469-530. Abstract

The study examines the historical origins of existing cross-cultural differences in beliefs and values regarding the appropriate role of women in society. We test the hypothesis that traditional agricultural practices influenced the historical gender division of labor and the evolution of gender norms. We find that, consistent with existing hypotheses, the descendants of societies that traditionally practiced plough agriculture today have less equal gender norms, measured using reported gender-role attitudes and female participation in the workplace, politics and entrepreneurial activities. Our results hold looking across countries, across districts within countries, and across ethnicities within districts. To test for the importance of cultural persistence, we examine the children of immigrants living in Europe and the United States. We find that even among these individuals, all born and raised in the same country, those with a heritage of traditional plough use exhibit less equal beliefs about gender roles today.

Download article

Alesina, Alberto, Dorian Carloni, and Gianpaolo Lecce. 2013. “The Electoral Consequences of Large Fiscal Adjustments.” Fiscal Policy after the Great Recession, edited by Alberto Alesina and F Giavazzi, 531-572. Chicago: University of Chicago Press and NBER.
2012
Alesina, Alberto. 2012. “The Kindest Cuts.” City Journal. Download article
Autumn 2012
Alesina, Alberto, Guido Cozzi, and Noemi Mantovan. 2012. “The Evolution of Ideology, Fairness, and Redistribution.” The Economic Journal 122 (565): 1244–1261. Download article Abstract
Ideas about what is ‘fair’ influence preferences for redistribution. We study the dynamic evolution of different economies in which redistributive policies, perception of fairness, inequality and growth are jointly determined. We show how including beliefs about fairness can keep two otherwise identical countries on different development paths for a very long time. We show how different initial conditions regarding how ‘fair’ is the same level of inequality can lead to two permanently different steady states. We also explore how bequest taxation can be an efficient way of redistributing wealth to correct ‘unfair’ past accumulation of inequality.
Alesina, Alberto. 2012. “Fiscal Policy after the Great Recession.” Atlantic Economic Journal 40 (4): 429-435. Abstract
The Great Recession has severely hit the economies of most of the countries. Given that, fiscal policies have gained back a central role in the debate as a tool to recover from this situation. This paper provides an overview about the main controversial issues related to the fiscal policy. In particular, we analyze the role and the different effects played by discretionary counter-cyclical policies – say, for instance, tax cuts or increased government spending. Disagreement on this topic follows from the fact that it is extremely difficult to isolate the exogenous effect of these policies on GDP. We review several ways in which economists have tried to deal with this problem of estimation. Finally, we discuss why spending-based adjustments are preferable and less likely to be costly than tax-based ones and why large fiscal consolidation accompanied by appropriate policies can be much less costly than what we think.
Download article
2011
Alesina, Alberto, Alberto Carasquilla, and Roberto Steiner. 2011. “Governance in Colombia's Central Bank.” Central Banking, 11, 39-42.

Pages