Searching for policy reforms

We construct a model of policy reform in which two players continually search for Pareto improving policies. The players have imperfect control over the proposals that are considered. Inefficient gridlock takes place due to the difficulty in finding moderate policies. The reform process is path dependent, with early agreements determining long-run outcomes. The process may also be cyclical, as players alternate between being more and less accommodating. Our model provides a noncooperative foundation for the “Raiffa path”, by which bargainers gradually approach the Pareto frontier

Progressive learning

We study a dynamic principal–agent relationship with adverse selection and limited commitment. We show that when the relationship is subject to productivity shocks, the principal may be able to improve her value over time by progressively learning the agent's private information. She may even achieve her first‐best payoff in the long run. The relationship may also exhibit path dependence, with early shocks determining the principal's long‐run value. These findings contrast sharply with the results of the ratchet effect literature, in which the principal persistently obtains low payoffs, giving up substantial informational rents to the agent

Combining Outcome-Based and Preference-Based Matching: A Constrained Priority Mechanism

We introduce a constrained priority mechanism that combines outcome-based matching from machine-learning with preference-based allocation schemes common in market design. Using real-world data, we illustrate how our mechanism could be applied to the assignment of refugee families to host country locations, and kindergarteners to schools. Our mechanism allows a planner to first specify a threshold $\bar g$ for the minimum acceptable average outcome score that should be achieved by the assignment. In the refugee matching context, this score corresponds to the predicted probability of employment, while in the student assignment context it corresponds to standardized test scores. The mechanism is a priority mechanism that considers both outcomes and preferences by assigning agents (refugee families, students) based on their preferences, but subject to meeting the planner's specified threshold. The mechanism is both strategy-proof and constrained efficient in that it always generates a matching that is not Pareto dominated by any other matching that respects the planner's threshold.Comment: This manuscript has been accepted for publication by Political Analysis and will appear in a revised form subject to peer review and/or input from the journal's editor. End-users of this manuscript may only make use of it for private research and study and may not distribute it furthe

Essays in the Positive Theory of Policy Choice

This manuscript consists of three essays in the positive theory of policy choice. The first essay, titled Equilibrium False Consciousness, focuses on policy choice through majoritarian voting in a model of class conflict and social mobility. It studies a new model of social mobility with two types of voters: high income voters and low income voters. All voters are fully rational and care only about their economic payoff. However, the main result of the chapter is the existence of an equilibrium (for large electorates) where some low income voters cast their ballot for the right wing policy despite knowing that the left wing policy gives them a higher expected payoff. The chapter provides a new explanation for why rational low income voters may oppose redistribution on the basis of their preferences and expectations regarding the prospect of upward mobility. The second essay, titled Incomplete Policymaking: Making Healthcare Policy 2009-2010, explains the emergence of incomplete policies as the outcome of a dynamic logrolling problem between policymakers. The idea that incomplete policies may emerge as a partial solution to the dynamic logrolling problem is new to the formal literature on policy-making. The theory is developed through a narrative of the healthcare policy negotiations that took place in the U.S. Congress between 2009 and 2010. The third and final essay, titled Coordination and Development in Dictatorships, develops a theory of inefficient policy choice by authoritarian regimes, and highlights the tradeoff between the benefits of economic coordination for rulers vis-a-vis the costs of political coordination. One important implication of the theory is the result that part of the impetus for democratization may emerge as a consequence of the eciency gains associated with eliminating some of the intensity of political conflict. This is in sharp contrast to most of the previous formal literature, which emphasizes social conflict at the expense of modernization in explaining the emergence of democracy

Replication Data for: The Political Legacy of American Slavery

Contains all code to reproduce tables and figures in "The Political Legacy of American Slavery." Also contains the data to produce most of the tables. Links to restricted data or data too large for this archive are contained in the source code