Essays on the Political Economy of Public Good Provision in Developing Countries PDF Download

Author: Afua Branoah Banful
Publisher:
ISBN:
Category :
Languages : en
Pages : 234

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The second chapter focuses on a comparison of the relationship between social divisions and access to public goods in rural Ghana before and after the government institution investigated in chapter one. The evidence shows that the intervention which made large amounts of funds automatically available to local government reduces the role of population heterogeneity in access to public goods. In the third chapter, I present an empirical analysis similar to that in Chapter two using data from villages in the neighboring northern Indian states of Bihar and Uttar Pradesh. I find that more homogeneous populations tend to have better access to public goods in the education sector. However, some public goods may have been transformed to club goods and so are positively correlated with population heterogeneity.

Author: Leo Mwila
Publisher:
ISBN: 9783668227231
Category :
Languages : en
Pages : 20

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Essay from the year 2015 in the subject Politics - International Politics - Topic: Development Politics, grade: 74%, Murdoch University (Murdoch University), course: Public Policy and International Affairs Foundations, language: English, abstract: The purpose of this essay is to examine the major challenges faced by developing countries in providing public goods. Effective provision of public goods is paramount in fostering economic and social development. Citizens' access to public goods may, however, be hindered by many factors including; political, institutional, social and economic arrangements that pertain to certain countries. Despite the local efforts and international support towards the provision of public goods in developing regions, many developing countries still face numerous challenges in delivering public goods such as health, education and transport. The essay will first define public goods and its associated theories, and then discuss six main factors that pose a challenge in the provision of public goods in developing countries. In doing so, the essay will argue that the effective provision of public goods in developing countries is hampered by various challenges, making it difficult for citizens to access public goods or even participate collective action. These challenges include: insufficient resources; increasing human population; ethnic diversities; ineffective governance systems; institutional and political instability; and international agencies' dictates on the provision of public goods in developing countries.

Author: Maxim L. Pinkovskiy
Publisher:
ISBN:
Category :
Languages : en
Pages : 166

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This thesis studies topics in public economics in developed and developing countries, including health insurance regulation, public goods provision and inequality and welfare measurement. The first chapter analyzes the impacts of the managed care backlash in the United States on health care costs in the late 1990s and early 2000s. During the late 1990s, most U.S. states passed a variety of laws in this period that restricted the cost-cutting measures that managed care organizations (HMOs, PPOs and others) could use. I exploit panel variation in the passage of these regulations across states and over time to investigate the effects of the managed care backlash, as proxied by this legislation, on health care cost growth. I find that the backlash had a strong effect on health care costs, and can statistically explain much of the rise in health spending as a share of U.S. GDP between 1993 and 2005 (amounting to 1% - 1.5% of GDP). I also investigate the effects of the managed care backlash on intensity of care, hospital salaries and technology adoption. I conclude that managed care was largely successful in keeping health care costs on a sustainable path relative to the size of the economy. The second chapter attempts to quantify the impact of differences in political factors on economic growth and development, and specifically, assess to what extent variation in public goods provision may be responsible for cross-country differences in income and growth rates. Using a new methodology for the computation of standard errors in a regression discontinuity design with infill asymptotics, I document the existence of discontinuities in the levels and growth of the amount of satellite-recorded light per capita across national borders. Both the amount of lights per capita and its growth rate are shown to increase discontinuously upon crossing a border from a poorer (or lower-growing) into a richer (or higher-growing) country. I argue that these discontinuities form lower bounds for discontinuities in economic activity across borders, which suggest the importance of national-level variables such as institutions and culture relative to local-level variables such as geography for the determination of income and growth. I find that institutions of private property are helpful in explaining differences in growth between two countries at the border, while contracting institutions, local and national levels of public goods, as well as education and cultural variables, are not. The last chapter of my thesis, which I have published in the Journal of Public Economics, investigates the dynamics of the world distribution of income using more robust methods than those in the previous literature. I derive sharp bounds on the Atkinson inequality index for a country's income distribution that are valid for any underlying distribution of income conditional on given fractile shares and Gini coefficient. I apply these bounds to calculate the envelope of possible time paths for global inequality and welfare in the last 40 years. While the bounds are too wide to reject the hypothesis that world inequality may have risen, I show that world welfare rose unambiguously between 1970 and 2006. This conclusion is valid for alternative methods of dealing with countries and years with missing surveys, alternative survey harmonization procedures, alternative GDP series, or if the inequality surveys used systematically underreport the income of the very rich, or suffer from nonresponse bias.

Author: Olga Memedović
Publisher: UN
ISBN:
Category : Business & Economics
Languages : en
Pages : 198

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This publication addresses factors that promote or inhibit successful provision of the four key international public goods: financial stability, international trade regime, international diffusion of technological knowledge and global environment. Without these goods, developing countries are unable to compete, prosper or attract capital from abroad. The need for public goods provision is also recognized by the Millennium Development Goals, internationally agreed goals and targets for knowledge, health, governance and environmental public goods. The Report addresses the nature of required policies and institutions using the modern principles of collective action.

Author: Matthew James Albert Lowe
Publisher:
ISBN:
Category :
Languages : en
Pages : 263

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This thesis comprises four essays in development economics and political economy, with a hint of behavioral economics. The first two chapters explore the effects of integration in two different settings: caste in India, and politics in Iceland. In the first chapter, I explore whether the effects of caste integration depend on whether such integration is collaborative or adversarial. To do so, I recruited 1,261 young Indian men from different castes and randomly assigned them either to participate in month-long cricket leagues or to serve as a control group. Players faced variation in collaborative contact, through random assignment to homogeneous-caste or mixed-caste teams, and adversarial contact, through random assignment of opponents. Collaborative contact reduces discrimination, leading to more cross-caste friendships and 33% less own-caste favoritism when voting to allocate cricket rewards. These effects have efficiency consequences, increasing both the quality of teammates chosen for a future match, and cross-caste trade and payouts in a real-stakes trading exercise. In contrast, adversarial contact generally has no, or even harmful, effects. Together this chapter shows that the economic effects of integration depend on the type of contact. The second chapter (co-authored with Donghee Jo) explores whether physical integration of politicians can affect political polarization in Iceland. We tackle this question by exploiting random seating in Iceland’s national Parliament. Since almost all voting is along party lines, we use a text-based measure of language similarity to proxy for the similarity of beliefs between any two politicians. Using this measure, we find an in-coalition effect: language similarity is greater for two politicians that share the same political coalition (government coalition or opposition) than for two politicians that do not, suggesting that the measure captures meaningful partisan differences in language. Next, we find that when two MPs randomly sit next to each other, their language similarity in the next parliamentary session (when no longer sitting together) is significantly higher, an effect that is roughly 16 to 25 percent of the size of the in-coalition effect. The persistence of effects suggests that politicians are learning from their neighbors, not just facing transient social pressure. However, this learning does not reflect the exchange of ideas “across the aisle”. The effects are large for neighbors in the same coalition group, at 29 to 53 percent of the in-coalition effect, with no evidence of learning from neighbors in the other group. Based on this evidence, integration of legislative chambers would likely slow down, but not prevent, the ingroup homogenization of political language. The third chapter (co-authored with Madeline McKelway) uses a field experiment to understand whether barriers to spousal communication could explain low female labor force participation in India. For this chapter, we partnered with India’s largest carpet manufacturer to offer employment opportunities to 495 married women. Gender differences in preferences meant there was an intra-household tension: women were often interested in working outside of the home, while their husbands opposed the idea. We experimentally varied how the job opportunity was presented to couples. To test for the effects of information, and the incentives of husbands to withhold it, we randomized whether enrollment tickets and job information were given to the women or to their husbands. For the nontargeted spouse, we cross-randomized whether they were informed about the job opportunity, giving variation in whether husbands had plausible deniability. To test for the importance of communication, some couples received the ticket and information together, with a chance to discuss the job. Overall, enrollment was low at 17%. Information was not a barrier to enrollment - providing women with information about the opportunity had no effect because husbands did not strategically withhold information, despite having plausible deniability. Surprisingly, we find that having couples discuss the opportunity together decreased enrollment, by 6 to 9 percentage points. We conclude that policymakers should tread with care: intra-household communication may not be easily manipulated without unintended consequences for decision-making. In the fourth and final chapter, I study the effects of early exposure on the careers of UK politicians. To do so, I exploit a natural randomized experiment in the UK Parliament. Each year, hundreds of Members of Parliament (MPs) enter a lottery for the opportunity to legislate. Using archival data from 1950 to 1990 I find that high-ranked winners are 34% (8 p.p.) more likely to ever become ministers and hold 28% (0.4) more political offices over their careers. Three pieces of evidence suggest that the key mechanism is exposure, as opposed to learning-by-doing or political survival. First, the effect of winning is larger for women, an under-represented group for which priors are likely to be more diffuse. Second, the effect is smaller if there are randomly more winners from the same party in the same year, dividing the attention of senior party members. Third, the effect is smaller when the MP has won before, consistent with diminishing returns to signals. These results suggest that early exposure can have long-run career effects even in information-rich political settings.

Author: Mustafa Kaba
Publisher:
ISBN:
Category : Economics
Languages : en
Pages : 136

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This thesis is a collection of independent empirical essays in the field of political economy. The first chapter investigates the electoral effects of a local public good provision, using a local food subsidy program that took place in Turkey, 2019. Exploiting the variation in the geographical distances of voters to the food subsidy program groceries, I establish three results. First, the food subsidy program has a statistically significant positive effect on the incumbent vote share. Second, the effects of the program are conditional on partisanship. Although the effects of the incumbent vote share do not change across different partisan groups, the effects on turnout are heterogeneous and countervailing across partisans of incumbent and opposition party. Finally, I find that much of the electoral effects of the program come from areas where voters are uniformly partisans of either party rather than from areas with mixed partisan profiles. The second chapter investigates the evolution of class distinctiveness in economic preferences across countries and over time. To this end, I first develop a new measure of class distinctiveness by using predictive modeling. I then estimate this new measure for 18 European countries for three points in time using micro-level survey data. After validating the newly developed measure, I test whether the variation in the strength of class-based voting can be explained by the class distinctiveness in economic preferences. In the third chapter, co-authored with Nicole Stoelinga, we test whether hosting or bidding on the Olympic games leads to an increase in the exports of the host and bidding countries. Previous studies on this question provide mixed findings and typically suffer from empirical problems such as selection bias. We re-evaluate the problem by applying a synthetic control approach. Our results indicate that hosting or bidding on the Olympic Games may affect exports positively or negatively depending on the countries' initial reputation in terms of trade.

Author: Francisco Muñoz Martínez
Publisher:
ISBN:
Category :
Languages : en
Pages :

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This dissertation explores how the nexus between the government and the private sector can generate misallocation of resources in the economy, and how government tools used to reduce this problem can impact the private sector. In the first chapter joint with Felipe González we notice that political transitions are associated with significant economic changes, but little is known about how firms fare across regimes. We study Chile's transition to democracy and show that firms in the dictator's network make critical investments in physical capital before the transition takes place. These investments are made possible by government banks during the dictatorship and allow them to improve their market position in the new regime. Our results show how market distortions can be transferred across regimes and suggest limited changes in the distribution of economic power after a democratization. The second chapter joint with Emanuele Colonnelli investigates the impact of anti-corruption audits on the private sector. In particular, we study whether firms are affected by the disclosure of information about corporate misconduct. We focus on a natural experiment given by a large Brazilian anti-corruption audit program, and we estimate both a difference-in-difference and an event study model that rely on the random timing of the audits for identification. Exploiting a special feature of the auditors' instruction manual, we are able to manually construct a dataset on more than 20,000 corruption cases. This dataset is then linked to matched employer-employee data, to the universe of federal procurement contracts and government loans, as well as to in-court prosecutions. We first show that government anti-corruption audits have significant real effects on the local economy. We then find that corrupt firms suffer a drop in employment and total wages after the information about their misconduct is revealed to the public. Concurrently, the probability that the corrupt firm fires the managers or CEO increases, leading to a restructuring at the top of the organization. We conclude by discussing the channels and mechanisms at play, and the potential policy implications. Finally in the third chapter joint with Emanuele Colonnelli and Edoardo Teso, we ask how the political career of politicians affects their labor market returns. We collect data on the labor market history of Brazilian local candidates, leveraging close elections to obtain exogenous variation in political power. We find no evidence of a return to office in the labor market outside of politics. On the contrary, we show that losers obtain substantial gains following their unsuccessful race, which come in the form of better employment opportunities in the public sector. These benefits exist only for unelected candidates aligned with the mayor in power, are increasing in a candidate's electoral performance, and are strictly tied to the fortunes of a candidate's party. These findings are consistent with an insurance mechanism in which parties and coalitions reward candidates for their electoral efforts in the negative state in which they fail to be elected. We provide evidence suggesting that this system creates incentives to increase the size of public sector employment and leads to misallocation of skills in the public sector.

Author: Abu Bakarr Kaikai
Publisher:
ISBN: 9783668055919
Category :
Languages : de
Pages : 16

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Essay from the year 2015 in the subject Sociology - Economy and Industry, grade: D+, Murdoch University, course: Development Studies, language: English, comment: Reviewing, editing, and proofreading further will help guide others who are thinking around the subject of public good dilemma in developing countries. Feedback is welcome to improve on my writing., abstract: Comparatively, most countries in Africa, Asia, and Latin America are endowed with natural resources, such as bauxite, diamond, gold and oil, than other countries in the developed world. However, in the midst of these resources potential, most of the countries are said to be poor, and fall sharply behind in the provision of essential services to improve the lives of their citizens. So, why are the services inadequately provided? In fact, several studies have underscored that international development interventions aimed at promoting governmental and institutional structures have been the source for much of the unfolding problems affecting development in the third world (Booth 2011, Tornquist et al. 1961-2004). On the contrary, several studies have argued that problems, such as corruption, weak institutional system, diverse population and ethnic polarisation in developing countries obscure the attainment of adequate delivery of public services. Interestingly, though both arguments hold different perceptions, they present fundamental issues affecting the creation of essential public goods in the developing countries. Given the divergence in viewpoints, this essay will argue that even though International policy implementation may pose particular challenges, the greater part of the problems affecting the provision of public goods are inherent in the developing nations. Thus, this essay discusses the main compelling challenges, such as international development policies, corruption, imperfect communication and lack of citizens' participation, population and ethnic division and institutional and poli"

Author: Ying Gao (Political scientist)
Publisher:
ISBN:
Category :
Languages : en
Pages : 0

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This dissertation examines the relationship between economic informality, political behavior, and public goods provision. In three papers, it explores how seemingly nonpolitical everyday social institutions and collective action rooted in economic informality help extend the reach of the state and advance public policies in developing societies. I document these complementary mechanisms using microdata and policy variations in Indonesia, an important case given its recent urbanization, democratic status, and the world's fourth largest and highly diverse population. Does informal housing (or slums) cause political marginalization? In the first paper, I delineate between housing informality of infrastructure and tenure insecurity, and posit that the former generates collective interests and demand for the state. Using a panel survey of Indonesian households from 1993 to 2014 with approximately 30,000 observations, I find that those in housing lacking piped water and sanitation access are significantly more likely to speak the national language, express support for vote buying, yet show lower ethnic trust. In light of theoretical knowledge on historical urbanization and political identity formation, results suggest that social contexts afforded by informal housing can produce clientelism alongside attitudes of political integration. I expand on the implications of the connected political and social behaviors of informality by assessing its effects on public policies. I develop a theory of community-driven development's impact on informal settlement leaders. A field survey of 258 formal and informal leaders in urban communities under Indonesia's National Slum Upgrading Program and a comparison group reveals modest effects. The final paper tests the role of quotidian social groups in the setting of Covid-19's economic distress and public health urgency . In a sample of 1,085 Indonesian workers across informal employment sectors, I ask if and why vulnerable informal workers may comply with costly restrictions. Survey experiments varying information regarding a hypothetical but realistic lockdown policy demonstrate that information endorsement by workers' membership associations significantly boosts compliance. Taken together, this dissertation challenges the scholarly pessimism around growing urban informality and contributes to the study of comparative political economy and urban politics of development.

Author: Stanislao Humberto Maldonado Zambrano
Publisher:
ISBN:
Category :
Languages : en
Pages : 179

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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.