The Non-Monotonic Political Effects of Resource Booms

This study uses variation in natural resource rents and mineral production among Peruvian municipalities to analyze the impact of resource booms on local politicians' behavior and citizens' well-being. Although this topic has recently attracted scholarly interest, existing empirical evidence remains inconclusive regarding whether resource booms are beneficial or detrimental to citizens via their effects on public good provision and living standards. Despite many existing theoretical models allowing for the possibility of non-monotonic responses, empirical literature has largely approached this phenomena using linear models, thus misunderstanding the complex nature of resource booms. By examining recent extraordinary mineral price increases along with particular rules for natural resource rent distribution in Peru, I show that the effects of resource booms on reelection outcomes, political competition, public goods provision, clientelism, and well-being are conditional to the size of the rents in a non-monotonic fashion. These results are robust to endogenous production responses and are consistent with recent theoretical scholarship for resource rich economies

The value of redistribution: natural resources and the formation of human capital under weak institutions

We exploit time and spatial variation generated by the commodities boom to measure the effect of natural resources on human capital formation in Peru, a country with low governance indicators. Combining test scores from over two million students and district-level administrative data on mining production and the redistribution of mining taxes to local governments, we find no effect from production. However, redistribution of mining taxes increases math test scores by 0.23 standard deviations. We identify the improvements in the quality of teachers and in school infrastructure, together with increases in adult employment and health outcomes of adults and children, as key mechanisms from the redistribution. Policy implications for the avoidance of the natural resource curse are discussed.Los autores aprovechan la variación espacial y temporal generada por el boom de las materias primas para medir el efecto de los recursos naturales sobre la formación de capital humano en el Perú, un país con bajos indicadores de gobernanza. Al combinar las puntuaciones de las pruebas de más de dos millones de estudiantes y los datos administrativos a nivel de distrito sobre la producción minera y la redistribución de los impuestos mineros a los gobiernos locales, no se encontró ningún efecto de la producción. Sin embargo, la redistribución de los impuestos mineros aumenta los resultados de las pruebas de matemáticas en 0.23 desviaciones estándar. Los autores identifican las mejoras en la calidad de los docentes y en la infraestructura de la escuela, junto con el aumento en el empleo de los adultos y en los resultados de salud de adultos y niños, como mecanismos clave de la redistribución. Finalmente, en el documento se discuten las implicaciones de política para evitar la maldición de los recursos naturales

Resource Windfall and Corruption: Evidence from a Natural Experiment in Peru *

Abstract The relationship between economic conditions and corruption has been subject of an intense discussion in the empirical literature due to the lack of good quality data on objective measures of corruption and the presence of omitted variables, measurement error and reverse causality problems. Using a rich and novel dataset that includes a complete set of bribery-related questions for the period 2002-2006, I exploit an exogenous variation in the economic conditions of a set of mineral-rich local governments in Peru which is due to an interaction between a fiscal rule that forces the central government to allocate 50% of the income taxes paid by mining companies to these governments and the extraordinary rise of the international prices of mineral resources observed since 2003. Using different empirical strategies, I find that, after the increase of prices of mineral resources, the predicted probability of being asked to pay a bribe by a local public official reduces by 1.5-1.8 percentage points in districts with access to this type of transfers, being the effect larger in mineral producer districts (2.7 percentage points). This represents a 52-62% reduction on the average probability. However, when focusing in areas most benefited from the positive shock of mineral prices, I find a positive effect on corruption with an increase in the former predicted probability of 4.3 percentage points. Taken together, these results suggest that the increase of transfers due to positive shocks in mineral prices have differential effects on corruption depending on the magnitude of the shock in local government revenues. JEL: Q3, H3, C

Campaña de envío de SMS para mejorar la ejecución presupuestal de los recursos destinados a mantenimiento de locales escolares : nota conceptual

En el año 2014, el Ministerio de Educación (Minedu) implementó un programa de envío de mensajes de texto (SMS), a manera de recordatorios, para mejorar la gestión de los recursos destinados al mantenimiento de locales escolares, a cargo del Programa Nacional de Infraestructura Educativa (PRONIED). Este programa buscaba recordar a los responsables de mantenimiento las actividades y procesos por realizar para incentivar la ejecución de la totalidad de los recursos. Esta iniciativa es de interés para el Minedu, en un contexto en el que se busca mejorar el nivel de ejecución presupuestal de distintas iniciativas a su cargo. El programa también presentó una oportunidad para innovar y gestionar evidencia alrededor de los elementos de “principios de comportamiento” (behavioural insights) que pueden integrarse en el contenido y contexto de envío de mensajes. Con esta motivación surge la propuesta de innovación “Campaña de envío de SMS para mejorar la ejecución presupuestal de los recursos destinados a mantenimiento de locales escolares”, el cual propone desarrollar una herramienta para incentivar la mejora de la gestión de los recursos de mantenimiento de locales escolares. La herramienta consiste en el envío de SMS combinando una parte informativa, que contiene el recordatorio de las actividades a realizar, con una parte motivacional, que se encuentra basada en distintos principios del comportamiento, con la finalidad de mejorar el nivel de cumplimiento de las actividades de gestión de los recursos de mantenimiento. Durante el año 2015, la campaña de envío de SMS tiene como objetivo mejorar la implementación de las actividades de mantenimiento en los locales escolares, en el marco del PRONIED. La campaña será implementada por el Minedu a través de la Secretaría de Planificación Estratégica, la Oficina de Informática y el PRONIED, asimismo, será evaluada usando una metodología de impacto experimental. El presente documento constituye la nota conceptual que servirá como guía para el diseño del programa y de su respectiva evaluación de impacto rigurosa

Mining Boom and Corruption of Public Officials of Local Governments in Peru: Evidence of a Natural Experiment

El presente trabajo se propone superar algunas de estas limitaciones mediante un enfoque creíble para estimar el efecto causal de cambios en los ingresos fiscales de las municipalidades sobre el comportamiento corrupto de sus funcionarios públicos en su interacción con los ciudadanos. Para superar los problemas de información existentes, se tomará ventaja del módulo de gobernabilidad incluido en la Encuesta Nacional de Hogares (ENAHO), el cual incluye un conjunto completo de preguntas relacionadas con el pago de sobornos para el período 2002-20063. Una ventaja importante de este conjunto de datos es que contiene información sobre la interacción de los miembros del hogar con funcionarios públicos, así como la solicitud de sobornos por parte de estos últimos

Empoderar a las mujeres mediante intervenciones multifacéticas: Evidencia a largo plazo de un diseño de doble coincidencia

Empoderar a las mujeres es un objetivo político que ha despertado mucho interés por parte de los responsables políticos del mundo en desarrollo en los últimos años, aunque se sabe poco sobre las formas eficaces de promoverlo de forma sostenible. La mayoría de las intervenciones existentes no abordan la naturaleza multidimensional del empoderamiento. Utilizando un diseño de emparejamiento doble para construir el marco muestral y estimar los efectos causales, evalúo el impacto a largo plazo de una intervención política multifacética diseñada para mejorar el empoderamiento de las mujeres en la región atlántica de Colombia. Esta intervención proporcionó información sobre los derechos de la mujer, habilidades sociales y formación profesional, capital semilla y tutoría simultáneamente. Encuentro que esta intervención tiene resultados mixtos: mejoras en los ingresos y otras dimensiones económicas junto con grandes efectos de capital político y social, pero impactos limitados o nulos en el conocimiento de los derechos de las mujeres y el control sobre el propio cuerpo. Usando un experimento de lista, incluso encuentro un aumento en la probabilidad de violencia dentro del hogar. Los resultados resaltan la importancia de abordar el carácter multidimensional del empoderamiento de las mujeres en las innovaciones políticas diseñadas para fomentarlo, incorporando a los hombres en estos esfuerzos.Empowering women is a policy goal that has received a lot of interest by policy-makers in the developing world in recent years, yet little is known about effective ways to promote it sustainably. Most existing interventions fail to address the multidimensional nature of empowerment. Using a double matching design to construct the sampling frame and to estimate causal effects, I evaluate the long-term impact of a multifaceted policy intervention designed to improve women's empowerment in the Atlantic region in Colombia. This intervention provided information about women’s rights, soft-skills and vocational training, seed capital, and mentoring simultaneously. I find that this intervention has mixed results: improvements in incomes and other economic dimensions along with large political and social capital effects, but limited or null impacts on women’s rights knowledge and control over one’s body. Using a list experiment, I even find an increase in the likelihood of intra-household violence. The results highlight the importance of addressing women's empowerment multidimensional nature in policy innovations designed to foster it, incorporating men in these efforts

Mas allá de la igualdad de oportunidades, desigualdad de ingresos, responsabilidad individual y movilidad social en el Perú

Se ponen en cuestión dos “hechos estilizados”, que suelen ser afirmaciones de muchos en el Perú, desde los estudios de Webb y Figueroa (1975). Uno es que la distribución del ingreso es muy desigual y el otro que dicha desigualdad habría aumentado desde mediados del siglo pasado. Con ese propósito, y en concordancia con recientes avances de la literatura se contrapone la visión predominante –la cual centra su interés en la desigualdad de una variable de resultado como es el ingreso- con una aproximación que da cuenta de la desigualdad como el producto de factores que escapan al control de los individuos y otros que se encuentran bajo la responsabilidad individual. A estos factores, siguiendo a Roemer (1998), se les llama “circunstancias” y “esfuerzos”, respectivamente. Esta aproximación permitirá mejorar nuestra comprensión respecto a la naturaleza del fenómeno distributivo, en especial porque permitirá dilucidar el rol que cumple la responsabilidad individual en términos del acceso al bienestar alcanzado por las personas. La literatura distributiva para el caso peruano ha tendido a resaltar la importancia de variables de “circunstancia”, como el origen étnico, a la hora de explicar las brechas de ingreso y bienestar observadas dentro del país. Por esta razón, este estudio se concentró en evaluar la magnitud de dichas desigualdades. La evidencia encontrada indica que las desigualdades al interior de cada grupo son significativas y que son lo más importante a la hora de explicar la desigualdad total observada. Así, apenas el 9% de la desigualdad total, a nivel nacional, se explica por diferencias entre grupos étnicos, mientras que son las diferencias educativas y de dominio geográfico los factores más importantes para explicar la desigualdad inter-grupal. Como era de esperarse, las brechas en términos de bienestar entre los grupos étnicos bajo análisis son importantes. Consistentemente, es la población caucásica la que se encuentra en mejor situación, mientras que –en el otro extremo- son los grupos indígenas los que se encuentran en la peor. Asimismo, la distancia en términos de bienestar entre la población caucásica y el grupo étnico que sigue en el ordenamiento de bienestar es significativa. De este modo, el Perú puede ser caracterizado como una sociedad en donde la heterogeneidad social está fuertemente vinculada a aquella relacionada al disfrute de bienestar, en donde un grupo muy pequeño disfruta de altos niveles de bienestar promedio, mientras que los más umerosos y socialmente excluidos se encuentran en peores condiciones y acceden a niveles de bienestar ostensiblemente menores. Además, es una sociedad donde las desigualdades al interior de cada grupo étnico contribuyen a explicar gran parte de los altos niveles de desigualdad que la caracterizan

Resource windfall and corruption : evidence from a natural expirement in Peru.

Fil: Maldonado Zambrano, Stanislao, 1978-. Universidad de San Andrés. Departamento de Economía; Argentina."The relationship between economic conditions and corruption has been subject of an intense discussion in the empirical literature due to the lack of good quality data on objective measures of corruption and the presence of omitted variables, measurement error and reverse causality problems. Using a rich and novel dataset that includes a complete set of bribery‐related questions for the period 2002‐2006, I exploit an exogenous variation in the economic conditions of a set of mineral‐rich local governments in Peru which is due to an interaction between a fiscal rule that forces the central government to allocate 50% of the income taxes paid by mining companies to these governments and the extraordinary rise of the international prices of mineral resources observed since 2003. Using different empirical strategies, I find that, after the increase of prices of mineral resources, the predicted probability of being asked to pay a bribe by a local public official reduces by 1.5‐1.8 percentage points in districts with access to this type of transfers, being the effect larger in mineral producer districts (2.7 percentage points). This represents a 52‐62% reduction on the average probability. However, when focusing in areas most benefited from the positive shock of mineral prices, I find a positive effect on corruption with an increase in the former predicted probability of 4.3 percentage points. Taken together, these results suggest that the increase of transfers due to positive shocks in mineral prices have differential effects on corruption depending on the magnitude of the shock in local government revenues.

Essays in the Political Economy of Natural Resource Booms

I study the political effects of resource booms on the behavior of politicians, citizens and government and discuss why the existing literature provide unsatisfactory answers to understand the complex nature of resource booms. In the first chapter, I explore how resource booms affect the incentives of politicians and how this is related to the contested issue of the impact of natural resources on living standards. Then, in the second chapter, I analyze how resource booms can affect the citizens’ beliefs about the performance of democracy and its implications in terms of quality of the democratic regime. Finally, in the third chapter, I study how resource booms affect the performance of local government in terms of delivering public goods in an efficient manner. Together, these chapters offer a complete understanding of some of the most relevant issues highlighted by the theoretical and empirical literatures of the so-called resource curse. Are resource booms beneficial or detrimental for citizens? What is the role of politicians’ incentives in this regard? In the first chapter “The Political Effects of Resource Booms: Political Outcomes, Clientelism and Public Goods Provision in Peru” I exploit variation in natural resource rents and mineral production among Peruvian municipalities to analyze the impact of resource booms on local politicians’ behavior and citizens’ well-being. Although this topic has recently attracted the attention of several scholars, the existing empirical evidence remains inconclusive regarding whether resource booms are beneficial or detrimental to citizens via their effects on public good provision and welfare outcomes. I argue that, despite the fact that many of the existing theoretical models allow for the possibility of non-monotonic responses, the empirical literature has mostly approached this phenomena using linear models, failing to correctly understand the nature of resource booms. Exploiting the recent extraordinary increase in mineral prices along with a set of rules for the distribution of natural resource rents in Peru, I show that the effects of resource booms in reelection outcomes, political competition, and public goods provision are function of the size of the rents in a non-monotonic fashion. For municipalities that experienced a modest increase in rents, the evidence suggests that the boom is associated with increases in public good provision and living standards, whereas the opposite occurs for the case of extremely rich municipalities in terms of mining rents. These results are robust to endogenous production responses and are consistent with a simple model of electoral competition in a resource rich economy. In the second chapter “Resource Booms and Political Support: Evidence from Peru”, I use the same identification strategy as in Chapter 1 in order to study how resource booms can affect the performance of democracy in resource-rich areas. I motivate this chapter by noticing that resource abundance has been usually associated with poor democratic performance. Particularly, some scholars suggest that in resource-rich countries democracy faces constraints to consolidate and survive. Interestingly, current theoretical explanations emphasize the role of politicians and elites in this regard implicitly assuming that citizens are always pro-democracy. However, historical and empirical evidence suggest that, in countries where democracy is new or unconsolidated, citizens are critical about its performance and willing to replace it with an authoritarian regime if they perceive this regime is better for delivering the policy outcomes they care about. In this chapter, I study this issue exploiting sub-national exogenous variation across mineral-rich local governments in Peru related to the allocation of mineral resource rents during a recent boom in mineral prices. Using a difference in difference approach, I estimate a non-monotonic effect of natural resource rents on the perception about the effectiveness of democracy. For modest increases in rents a positive impact on citizens’ support for democracy is observed whereas the opposite occurs in districts that experienced large transfers. These results are consistent with a model on citizen’s learning about the effectiveness of democracy during a resource boom. Finally, in the third chapter “Natural Resource Windfalls and Efficiency of Local Government Expenditures: Evidence from Peru” I analyze the role of natural resource windfalls in explaining the efficiency of public expenditures. Using a rich dataset of expenditures and public good provision for 1,836 municipalities in Peru for period 2001-2010, I estimate a non-monotonic relationship between the efficiency of public good provision and the level of natural resource transfers. Local governments that were extremely favored by the boom of mineral prices were more efficient in using fiscal windfalls whereas those benefited with modest transfers were more inefficient. These results can be explained by the increase in political competition associated with the boom, as it was found in Chapter 1. However, the fact that increases in efficiency were related to reductions in public good provision casts doubts about the beneficial effects of political competition in promoting efficiency. These chapters provide different and more complex views than the existing literature. They emphasize the existence of non-monotonic patterns in the relationship between resource booms and political and economic outcomes that were not previously addressed empirically exploiting subnational variation to uncover causality. This approach allows us to understand the previously inconsistent findings in the literature with respect to the lack of impacts on living standards despite the large increase in rents experienced by resource-rich areas

Natural resource windfalls and efficiency of local government expenditures: evidence from Peru

We study the role of natural resource windfalls in explaining the efficiency of public expenditures. Using a rich dataset of expenditures and public good provision for 1,836 municipalities in Peru for period 2001-2010, we estimate a non-monotonic relationship between the efficiency of public good provision and the level of natural resource transfers. Local governments that were extremely favored by the boom of mineral prices were more efficient in using fiscal windfalls whereas those benefited with modest transfers were more inefficient. These results can be explained by the increase in political competition associated with the boom. However, the fact that increases in efficiency were related to reductions in public good provision casts doubts about the beneficial effects of political competition in promoting efficiency