Civil Liberties, Mobility, and Economic Development

To what extent do civil liberties affect economic development? This dissertation addresses this question in two essays. The first chapter (joint with Roger Betancourt) provides a new economic interpretation of civil liberties as rights over a person's most basic human asset: her own self. The importance of these rights to economic development is based on the principle that property rights-defined over a broad set of "property''-are crucial for economic growth. The empirical literature to date shows little support for such claims related to civil liberties, however, with ambiguous evidence on the role of these rights in driving long-run growth. Using newly available data from Freedom House, we find that one of the recently disaggregated categories of civil liberties explains income differences across countries more powerfully and robustly than any other measure of property rights or the rule of law considered. This component, entitled "Personal Autonomy and Individual Rights,'' evaluates the extent of personal choice over issues such as where to work, study, and live, as well as a broader set of property rights and other choices. While the first chapter finds that greater civil liberties can substantially improve long-run economic development, the second chapter identifies a key friction in this relationship. In countries that lack complementary institutions, civil liberties governing individual mobility can complicate credit transactions. By allowing individuals to move to locations where less is known about their prior defaults, mobility freedoms induce opaqueness and can result in credit rationing. I develop an instrumental variable estimation to study these effects, which would otherwise be complicated by omitted variable bias and endogeneity. Using household survey data from Guatemala, I instrument for individual migration with the interaction of violence patterns and individual sensitivities toward that violence. Using this approach, I find that the act of migration within a country actually causes individuals to have significantly less access to credit, primarily because lenders are concerned about these borrowers' opportunistic default

Can Network Theory-based Targeting Increase Technology Adoption?

In order to induce farmers to adopt a productive new agricultural technology, we apply simple and complex contagion diffusion models on rich social network data from 200 villages in Malawi to identify seed farmers to target and train on the new technology. A randomized controlled trial compares these theory-driven network targeting approaches to simpler strategies that either rely on a government extension worker or an easily measurable proxy for the social network (geographic distance between households) to identify seed farmers. Our results indicate that technology diffusion is characterized by a complex contagion learning environment in which most farmers need to learn from multiple people before they adopt themselves. Network theory based targeting can out-perform traditional approaches to extension, and we identify methods to realize these gains at low cost to policymakers. Keywords: Social Learning, Agricultural Technology Adoption, Complex Contagion, Malawi JEL Classification Codes: O16, O13Comment: 61 page

The Economic Efficiency of Aid Targeting

How efficient is the targeting of foreign aid to populations in need? A long literature has focused on the impacts of foreign aid, but much rarer are studies that examine how such aid is allocated within countries. We examine the extent to which donors efficiently respond to exogenous budget shocks by shifting resources toward needier districts within a given country, as predicted by theory. We use recently geocoded data on the World Bank’s aid in 23 countries that crossed the lower-middle income threshold between 1995 and 2010 and thus experienced sharp aid reductions. We measure locations’ need along a number of dimensions, including nighttime lights emissions, population density, conflict exposure, and child mortality. We find little evidence that aid project siting is increasingly concentrated in worse-off areas as budgets shrink; the only exception appears to be a growing share of funding in more conflict-affected areas. We further analyze the relationship of health aid to child mortality measures in six key countries, again finding little evidence of efficient responses to budget shocks. Taken together, these results suggest that large efficiency gains may be possible in the distribution of aid from the World Bank and other donors

The Economic Efficiency of Aid Targeting

How efficient is the targeting of foreign aid to populations in need? A long literature has focused on the impacts of foreign aid, but much rarer are studies that examine how such aid is allocated within countries. We examine the extent to which donors efficiently respond to exogenous budget shocks by shifting resources toward needier districts within a given country, as predicted by theory. We use recently geocoded data on the World Bank’s aid in 23 countries that crossed the lower-middle income threshold between 1995 and 2010 and thus experienced sharp aid reductions. We measure locations’ need along a number of dimensions, including nighttime lights emissions, population density, conflict exposure, and child mortality. We find little evidence that aid project siting is increasingly concentrated in worse-off areas as budgets shrink; the only exception appears to be a growing share of funding in more conflict-affected areas. We further analyze the relationship of health aid to child mortality measures in six key countries, again finding little evidence of efficient responses to budget shocks. Taken together, these results suggest that large efficiency gains may be possible in the distribution of aid from the World Bank and other donors

Childhood health and the changing distribution of foreign aid: Evidence from Nigeria’s transition to lower-middle-income status

With sustained economic growth in many parts of the developing world, an increasing number of countries are transitioning away from the most subsidized development finance as they exceed income and other qualification requirements. Cross-country evidence suggests that Development Assistance Committee (DAC) donors view the crossing over of the World Bank’s International Development Association (IDA) eligibility threshold to signal that a country needs less aid, with subsequent reductions in both IDA and other donors’ concessional funding. Within the health sector, it is particularly important to understand the implications of these status changes for children under five years of age since improving early childhood health is critical to fostering health and social and economic development. Therefore, we examine the implications of the IDA transition by measuring the extent t which World Bank commitments—including both IDA and IBRD—are directed to infant and child health needs in Nigeria. Ordinary Least Squares (OLS) models were used in a difference-indifferences (DID) strategy to compare World Bank IBRD/IDA lending before and after the crossover to regions with varying initial levels of under-five and infant need. We find that the infant need orientation of World Bank aid has increased post-crossover. Conversely, alignment of World Bank commitments to regional child needs appears to have diminished after Nigeria crosses the IDA threshold. However, these effects are statistically insignificant and therefore provides inconclusive evidence. This research addresses an important policy question because the transition away from concessional funding mechanisms will result in difficult tradeoffs in allocating limited health resources; without providing conclusive evidence that crossover results in changes in need-based allocation, it does offer an essential path for future research. These results are directly relevant to policy debates about what we know and do not know about aid in transition and health. This research’s value is especially important in the Sustainable Development Goal (SDG) era in understanding how donor exits could derail progress in health improvement

Can Network Theory-based Targeting Increase Technology Adoption?

In order to induce farmers to adopt a productive new agricultural technology, we apply simple and complex contagion diffusion models on rich social network data from 200 villages in Malawi to identify seed farmers to target and train on the new technology. A randomized controlled trial compares these theory-driven network targeting approaches to simpler strategies that either rely on a government extension worker or an easily measurable proxy for the social network (geographic distance between households) to identify seed farmers. Our results indicate that technology diffusion is characterized by a complex contagion learning environment in which most farmers need to learn from multiple people before they adopt themselves. Network theory based targeting can out-perform traditional approaches to extension, and we identify methods to realize these gains at low cost to policymakers

Unbundling Democracy: Tilly Trumps Schumpeter

Abstract: Much of the recent political economy and political science literature views democracy in onedimensional terms, primarily in terms of political rights. This feature is particularly pronounced in the empirical literature. We expand on this view of democracy by incorporating the role of civil liberties, which are at the core of modern democracy, in two ways. First, we present a conceptual framework that identifies fundamental sources of potential differences in the evolution of political rights and civil liberties. Perhaps more importantly, we provide systematic, robust and varied empirical evidence on this differential evolution using crossnational panel data. Our two main results are: Civil liberties are far more persistent than political rights in affecting subsequent outcomes; Civil liberties are complementary to political rights in affecting subsequent outcomes, but the reverse is not the case. These two main results are robust to the addition of covariates, estimation techniques, and variations in our sample. In particular, these results are invariant to whether or not the modernization hypothesis holds or the political natural resource curse exists. More generally, our analysis can be framed as an implementation and comparison of two very different traditions in how democracy is viewed in the economics and political science literature: Schumpeter's narrow electoral democracy view and Tilly's broader liberal democracy view. The data support the latter

Unbundling Democracy: Tilly Trumps Schumpeter

Abstract: Much of the recent political economy and political science literature views democracy in one-dimensional terms, primarily in terms of political rights. This feature is particularly pronounced in the empirical literature. We expand on this view of democracy by incorporating the role of civil liberties, which are at the core of modern democracy, in two ways. First, we present a conceptual framework that identifies fundamental sources of potential differences in the evolution of political rights and civil liberties. Perhaps more importantly, we provide systematic, robust and varied empirical evidence on this differential evolution using cross-national panel data. Our two main results are: Civil liberties are far more persistent than political rights in affecting subsequent outcomes; Civil liberties are complementary to political rights in affecting subsequent outcomes, but the reverse is not the case. These two main results are robust to the addition of covariates, estimation techniques, and variations in our sample. In particular, these results are invariant to whether or not the modernization hypothesis holds or the political natural resource curse exists. More generally, our analysis can be framed as an implementation and comparison of two very different traditions in how democracy is viewed in the economics and political science literature: Schumpeter's narrow electoral democracy view and Tilly's broader liberal democracy view. The data support the latter