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The Dark Side of Infrastructure
Transportation infrastructure is associated with economic development, but it can also be used for social control and to benefit the governing elite. We explore the connection between the construction of road networks, state-led repression, and land allocations in the longest dictatorship in South America: Alfredo Stroessner military regime in Paraguay. Using novel panel data from the truth and reconciliation commission, we show that proximity to roads facilitated state-led repression and the illegal allocation of agricultural plots to dictatorship allies. These results suggest that infrastructure projects can also hinder economic development.
The Divine Economy
A novel economic interpretation of how religions have become so powerful in the modern world Religion in the twenty-first century is alive and well across the world, despite its apparent decline in North America and parts of Europe. Vigorous competition between and within religious movements has led to their accumulating great power and wealth. Religions in many traditions have honed their competitive strategies over thousands of years. Today, they are big business; like businesses, they must recruit, raise funds, disburse budgets, manage facilities, organize transportation, motivate employees, and get their message out. In The Divine Economy, economist Paul Seabright argues that religious m...
Buyer-driven Upgrading in GVCs
This paper studies the Sustainable Quality Program in Colombia -- a quality upgrading program implemented on behalf of a multinational coffee buyer. The Program is a bundle of contractual arrangements involving farmers, intermediaries, exporters and the multinational buyer. We tackle three questions. First, we investigate the impact of the Program on the supply of quality coffee. Eligible farmers upgraded their plantations, expanded land under coffee cultivation, increased quality and received higher farm gate prices. Second, we quantify how the Program gains are shared between farmers and intermediaries along the chain. In regions in which the Program was rolled out surplus along the chain ...
Taxing Fragmented Aid to Improve Aid Efficiency
We present a model with two donors-principals that provide funds to a unique recipient-agent. Each donor decides how to allocate his aid funds between a pooled and a donor specific unilateral project. The production function of development depends positively on the three inputs (pooled funds and each unilateral project). They are complement in the sense that the development good is only produced if a minimum of each of these inputs is provided. Both principals and the agent value the output produced with the principals' pooled and two unilateral funded projects. However the donors have a bias in favor of their own unilateral project, which leads them to over-invest in these projects compared...
Banking on Beijing
Explains China's transformation from 'benefactor' to 'banker' in its relationship with developing countries and traces the impacts of this change.
Behavioral Insights in Infrastructure Sectors
In the past two decades, insights from behavioral sciences, particularly behavioral economics, have been widely applied in the design of social programs such as pensions, social security, and taxation. This paper provides a survey of the existing literature in economics on the application of behavioral insights to infrastructure sectors, focusing on water and energy. Various applications of behavioral insights in the literature are examined from the perspectives of the three main actors in the infrastructure sectors: policy makers, service providers, and consumers. Evidence is presented from the literature on how behavioral regularities, such as imperfect optimization, limited self-control, and nonstandard preferences, affect the strategies, decisions, and actions of policy makers, service providers, and consumers, often leading to suboptimal outcomes for service investment, delivery, access, and use. The paper also highlights how behavioral interventions such as anchoring, framing, nonpecuniary incentives, and altering the choice architecture can lead to improvements in performance, adoption, consumption, and other outcomes of interest in the infrastructure sectors.
Betting on the Lord
We conducted an experimental study in Haiti testing for the relationship between religious belief and individual risk taking behavior. 774 subjects played lotteries in a standard neutral protocol and subsequently with reduced endowments but in the presence of religious images of Catholic, Protestant and Voodoo tradition. Subjects chose between paying to play a lottery with an image of their choice, and saving their money to play with no image. Those who chose the former are defined as image buyers and those who chose the latter as non-buyers. Image buyers, who tend to be less educated, more rural, and to exhibit greater religiosity, bet more than non-buyers in all games. In addition, in the ...
