Political Property Rights: Essays on Economic Opportunity Under Selective Rule of Law

Secure property rights are a major predictor of economic growth, yet property rights in much of the world are a function of political power. Those with political connections have privileged access to state institutions, benefit from preferential contract enforcement, and face fewer risks of expropriation in the private sector. This dissertation examines how consumers and firms navigate the complex interaction between formal and informal institutions in these environments of selectively enforced rule of law. I use original experimental data from Senegal, a state that epitomizes political property rights. In Paper 1, I argue that political connections produce moral hazard in exchange and introduce biases in judicial enforcement. I present evidence from a field experiment in which I created and operated a sales company, randomizing political connections and formal contracts during transactions. The results show that asymmetric political connections decrease buyers’ propensities to trade and that formal contracts only increase exchange among connected buyers. This work challenges conventional wisdom and extant literature on the value of political connections and formal contracts in the private sectors of developing countries. Paper 2 examines how political connections and formal contracts, among other state and nonstate influences, affect the behavior of firms under selective rule of law. To illustrate the complicated decision calculus that firms face when social, formal, and political factors all motivate exchange, I implemented a conjoint experiment with 2,389 firm managers. The results show that firms avoid deals with partners that have low-to-mid-level political connections, yet seek out deals with the most highly connected firms—despite believing they are more likely to breach contracts. These results demonstrate the countervailing effects of political connections and suggest why consumers and firms may react to them differently. Finally, Paper 3 asks how firms enforce their property rights when deals go astray. I argue that contract formality can shape firms’ property security strategies and demand for rule of law, and test this using evidence from a survey experiment administered to firms in both the formal and informal economies. I present descriptive evidence that enforcement strategies differ by firm formality status and political connections. The experimental findings show that while formal contracts increase the use of legal enforcement institutions, they also widen the enforcement gap between formal and informal firms. Together, these papers present theory and evidence of politically determined economic behavior under selective rule of law. The results imply that political connections are a form of rent-seeking that can suppress overall trade and produce market inefficiencies. Under these conditions, state institutions may unintentionally exacerbate political and economic inequalities

Senegal: Presidential elections 2019 - The shining example of democratic transition immersed in muddy power-politics

Whereas Senegal has long been sold as a showcase of democracy in Africa, including peaceful political alternance, things apparently changed fundamentally with the Senegalese presidentials of 2019 that brought new configurations. One of the major issues was political transhumance that has been elevated to the rank of religion in defiance of morality. It threatened political stability and peace. In response, social networks of predominantly young activists, created in 2011 in the aftermath of the Arab Spring focused on grass-roots advocacy with the electorate on good governance and democracy. They proposed a break with a political system that they consider as neo-colonialist. Moreover, Senegal’s justice is frequently accused to be biased, and the servility of the Constitutional Council which is in the first place an electoral court has often been denounced

Political determinants of economic exchange: evidence from a business experiment in Senegal

Economic growth requires confidence in the state's ability to enforce secure exchange. But when states selectively enforce rule of law, political considerations can moderate the trust that buyers have in sellers. I argue that political connections produce moral hazard in exchange because they introduce biases in expectations of judicial enforcement. Buyers avoid trade with politically connected sellers, and, in this context of unequal enforcement, formal contracts disproportionately protect politically connected buyers. To examine these features of connections and contracts, I created a sales business in Senegal and randomized whether employees signaled political connections and/or offered formal contracts during transactions. The results show that political connections decreased buyers' willingness to exchange. Formal contracts increased exchange, though primarily for connected buyers. These findings show that asymmetric political connections can impede daily trade and intensify economic inequalities in developing contexts, while simultaneously demonstrating the limits of state institutions for mitigating politically driven moral hazard

Able and Mostly Willing: An Empirical Anatomy of Information's Effect on Voter‐Driven Accountability in Senegal

Political accountability may be constrained by the reach and relevance of information campaigns in developing democracies and—upon receiving information—voters' ability and will to hold politicians accountable. To illuminate voter‐level constraints and information relevance absent dissemination constraints, we conducted a field experiment around Senegal's 2017 parliamentary elections to examine the core theoretical steps linking receiving different types of incumbent performance information to electoral and nonelectoral accountability. Voters immediately processed information as Bayesians, found temporally benchmarked local performance outcomes particularly informative, and updated their beliefs for at least a month. Learning that incumbents generally performed better than expected, voters durably requested greater politician contact after elections while incumbent vote choice increased among likely voters and voters prioritizing local projects when appraising incumbents. In contrast, information about incumbent duties did not systematically influence beliefs or accountability. These findings suggest voters were able and mostly willing to use relevant information to hold politicians to account

The Political Nature of Entrepreneurship in Developing Countries: Experimental Evidence from Tunisia and Senegal

Although our understanding of the important role of broken institutions in economic development has grown significantly, we still lack a strong understanding of the mechanisms by which exclusionary political-economic arrangements reproduce themselves over time. To better undrstand this problem, we conducted online and offline experiments about political connections and early-stage career choices in a national sample of college-educated young people in Tunisia and Senegal. We first administered surveys with embedded conjoint experiments to 1,110 young people to assess the determinants of entrepreneurial intention. Next, we recruited a randomized subsample of survey respondents to participate in entrepreneurship training sessions in Tunis and Dakar in which government officials offered advice to young entrepreneurs. The survey results reveal that young people are uncertain whether connections will affect their career prospects, yet rate connections to political parties as the most valuable attribute a prospective entrepreneur could possess. Randomized training sessions increased entrepreneurs' intention to create businesses, with 10-17% of this effect mediated by an exogenous increase in political connections. By demonstrating the powerful impact of political connections on desires to enter the business world, these results suggest that entrepreneurship promotion efforts will be of limited value without providing access to relevant policymakers