The Determinants of IMF Loan Programs

This paper focuses on the bargaining process underlying financial arrangements between the IMF and recipient countries. The primary aim is to investigate the relationship between the own country characteristics, both in terms of macroeconomic conditions and bargaining power, and the outcome of the agreement with the Fund. IMF lending practices respond to economic conditions but are also sensitive to other factors that reflect the importance of the country within the international financial community (measured by the bilateral trade volume between the country and the OECD countries and by debt service) and the importance of the country within the international politics (measured by the UN voting patterns between the country and the USA, the colonial past and by country share of IMF quotas).

Liquidity, risk and occupational choices

We explore whether financial constraints matter and which financial constraints matter the most in the choice of becoming an entrepreneur. We exploit a randomly assigned welfare program in rural Mexico to show that cash transfers significantly increase entry into entrepreneurship, thereby providing evidence of financial constraints. We then develop a simple model to highlight how liquidity and insurance constraints respond differently to the time profile of expected cash transfers. Exploiting the cross-households variation in the timing of these transfers, we find that current occupational choices are significantly more responsive to the amount of transfers expected for the future than to the amount of transfers currently received. We interpret these findings as evidence that the program has been effective in promoting micro-entrepreneurship by enhancing the willingness to bear risk.financial constraints ; entrepreneurship ; insurance, liquidity

Weak Instruments and Weak Identification in Estimating the Effects of Education on Democracy

Is there any relation between education and democracy? Once we correct for weak instruments and identify education as `weakly exogenous` we find new evidence that education systematically predicts democracy. Our results are robust across model specification, instrumentation strategies, and samples.

Ayuda y crecimiento: La política importa

La literatura sobre la efectividad de la ayuda extranjera se ha enfocado más en las políticas del país que recibe la ayuda que en los determinantes de su distribución. Sin embargo, un resultado consistente es que los aliados políticos obtienen más ayuda de los países donantes que los no aliados. Este articulo muestra que la ayuda entregada a aliados políticos no favorece el crecimiento, mientras que la ayuda que reciben países no aliados es muy efectiva. Este resultado es robusto utilizando varias especificaciones y técnicas de estimación. En particular, se utilizan nuevos métodos para controlar por endogenidad. Se sugiere que la distribución de la ayuda extranjera sea revisada con cuidado de tal forma que esta sea lo más efectiva posible.

Liquidity, Risk, and Occupational Choices.

We explore which financial constraints matter the most in the choice of becoming an entrepreneur. We consider a randomly assigned welfare program in rural Mexico and show that cash transfers signi cantly increase entry into entrepreneurship. We then exploit the cross-household variation in the timing of these transfers and nd that current occupational choices are signi cantly more responsive to the transfers expected for the future than to those currently received. Guided by a simple occu- pational choice model, we argue that the program has promoted entrepreneurship by enhancing the willingness to bear risk as opposed to simply relaxing current liquidity constraints.insurance; entrepreneurship; Financial constraints; liquidity;

Neighborhood effects and take-up of transfers in integrated social policies: Evidence from Progresa

When potential beneficiaries share knowledge and attitudes about a policy intervention, that can influence their decisions to participate and, in turn, change the effectiveness of both the policy and its evaluation. This matters notably in integrated social policies with several components. We examine neighborhood effects on the take-up of the schooling subsidy component of the Progresa-Oportunidades program in Mexico.We exploit random variations in the local densities of program beneficiaries generated by the randomized evaluation. Higher program densities in areas of 5 km radius increase the take-up of scholarships and enrollment at the junior-secondary level. These neighborhood effects exclusively operate on households receiving another component of the program, and do not carry over larger distances. While several tests reject heterogeneities in impacts due to spatial variations in implementation, we find suggestive evidence that neighborhood effects stem partly from the sharing of information about the program among eligible households

Perceived Ability and School Choices

This paper studies how youths’ self-perceptions of ability affect their sorting patterns across schools. We design and implement a field experiment in which ninth-graders from less advantaged backgrounds in Mexico City are provided with individualized feedback about their performance on an achievement test. The treatment shifts both the mean and the variance of the subjective distributions of academic ability. This variation is embedded into a discrete choice model that characterizes the channels through which perceived ability shapes individual preferences over school characteristics. Follow-up data on schooling outcomes suggest that the information intervention improved the match between students and education choices

Self-Perceptions about Academic Achievement: Evidence from Mexico City

A growing body of evidence suggests that people exhibit large biases when processing information about themselves, but less is known about the underlying inference process. This paper studies belief updating patterns regarding academic ability in a large sample of students transitioning from middle to highschool in Mexico City. The analysis takes advantage of rich and longitudinal data on subjective beliefs together with randomized feedback about individual perfor-mance on an achievement test. On average, the performance feedback reduces the relative role of priors on posteriors and shifts substantial probability masstoward the signal. Further evidence reveals that males and high-socioeconomic status students tend to process new information on their own ability more effectively