Publications by Type: Journal Article

2014
Singhal, Monica, and Lucie Gadenne. 2014. “Decentralization in Developing Economies.” Annual Review of Economics 6: 581-604. Publisher's VersionAbstract

Standard models of fiscal federalism suggest many benefits of decentralization in developing economies, and there has been a recent push toward decentralization around the world. However, developing countries presently still have less decentralization, particularly on the revenue side, than both developed countries today and the United States and Europe historically. We consider how the trade-offs associated with fiscal federalism apply in developing countries and discuss reasons for their relatively low levels of decentralization. We also consider additional features relevant to federalism in developing economies, such as the prevalence of nongovernmental organizations and the role of social incentives in policy design.

Singhal, Monica. 2014. “Tax Morale.” Journal of Economic Perspectives 28 (4): 149-168. Publisher's VersionAbstract

Standard economic models of tax compliance have focused on enforcement-driven compliance. Notably, tax administrators also tend to place a great deal of emphasis on the importance of improving “tax morale” by encouraging voluntary compliance, creating a culture of compliance, and changing social norms. Tax morale does indeed appear to be an important component of compliance decisions, and there is strong evidence that tax morale operates through a variety of underlying channels. There is less evidence - to date - that indicates we know how to leverage these channels to improve compliance and revenue collection in a consistently successful way.

Pande, Rohini, Sean Lewis-Faupe, Yusuf Negger, and Benjamin A. Olken. 2014. “Can Electronic Procurement Improve Infrastructure Provision?Evidence from Public Works in India and Indonesia.” American Economic Journal: Public Policy.Abstract

Poorly functioning, and often corrupt, public procurement procedures are widely faulted for the low quality of infrastructure provision in developing countries. Can electronic procurement (e-procurement), which reduces both the cost of acquiring tender information and personal inter-action between bidders and procurement officials, ameliorate these problems? In this paper we develop a unique micro-dataset on public works procurement from two fast-growing economies, India and Indonesia, and use regional and time variation in the adoption of e-procurement across both countries to examine its impact. We find no evidence that e-procurement reduces prices paid by the government, but do find that it is associated with quality improvements. In India, where we observe an independent measure of construction quality, e-procurement improves the average road quality, and in Indonesia, e-procurement reduces delays in completion of public works projects. Bidding data suggests that an important channel of influence is selection {regions with e-procurement have a broader distribution of winners, with (better) winning bidders more likely to come from outside the region where the work takes place. On net, the results suggest that e-procurement facilitates entry from higher quality contractors

pande_r_-_can_electronic_procurement_infrastructure_july_2014.pdf
Yanagizawa-Drott, David. 2014. “Propaganda and Conflict: Evidence from the Rwandan Genocide.” The Quarterly Journal of Economics 129 (4): 1947-1994. Publisher's VersionAbstract

This paper investigates the role of mass media in times of conflict and state-sponsored mass violence against civilians. We use a unique village-level dataset from the Rwandan Genocide to estimate the impact of a popular radio station that encouraged violence against the Tutsi minority population. The results show that the broadcasts had a significant impact on participation in killings by both militia groups and ordinary civilians. An estimated 51,000 perpetrators, or approximately 10 percent of the overall violence, can be attributed to the station. The broadcasts increased militia violence not only directly by influencing behavior in villages with radio reception, but also indirectly by increasing participation in neighboring villages. In fact, spillovers are estimated to have caused more militia violence than the direct effects. Thus, the paper provides evidence that mass media can affect participation in violence directly due to exposure, and indirectly due to social interactions.

propaganda_conflict_evidence_from_rwandan_genocide_-_qje_2014.pdf
Hanna, Rema, and Michael Greenstone. 2014. “Environmental Regulations, Air and Water Pollution, and Infant Mortality in India.” American Economic Review 104 (October 2014) (10): 3038-3072. Publisher's VersionAbstract

Using the most comprehensive developing country dataset ever compiled on air and water pollution and environmental regulations, the paper assesses India's environmental regulations with a difference-in-differences design. The air pollution regulations are associated with substantial improvements in air quality. The most successful air regulation resulted in a modest but statistically insignificant decline in infant mortality. In contrast, the water regulations had no measurable benefits. The available evidence leads us to cautiously conclude that higher demand for air quality prompted the effective enforcement of air pollution regulations, indicating that strong public support allows environmental regulations to succeed in weak institutional settings.

envl_regs_infant_mortality.pdf
Banerjee, Abhijit, Donald Green, Jeffrey McManus, and Rohini Pande. 2014. “Are Poor Voters Indifferent to Whether Elected Leaders are Criminal or Corrupt? A Vignette Experiment in Rural India.” Political Communications 31 (3): 391-407.Abstract

Although in theory, elections are supposed to prevent criminal or venal candidates from winning or retaining office, in practice voters frequently elect and re-elect such candidates. This surprising pattern is sometimes explained by reference to voters’ underlying preferences, which are thought to favor criminal or corrupt candidates because of the patronage they provide. This paper tests this hypothesis using data from the Indian state of Uttar Pradesh, where one in four representatives in the state legislature has a serious criminal record and where political corruption is widespread. Contrary to the voter preference hypothesis, voters presented with vignettes that randomly vary the attributes of competing legislative candidates for local, state, and national office become much less likely to express a preference for candidates who are alleged to be criminal or corrupt. Moreover, voters’ education status, ethnicity, and political knowledge are unrelated to their distaste for criminal and venal candidates. The results imply that the electoral performance of candidates who face serious allegations likely reflects factors other than voters’ preferences for patronage, such as limited information about candidate characteristics or the absence of credible alternative candidates with clean records. 

journal_of_political_communications_vol_31_no_3_pande_2014.pdf
Pande, Rohini, Benjamin Feigenberg, Erica Field, Natalia Rigol, and Shayak Sarkar. 2014. “Do Group Dynamics Influence Social Capital Gains Among Microfinance Clients? Evidence From a Randomized Experiment in Urban India.” Journal of Policy Analysis and Management 33 (4): 932-949. journal_of_policy_analysis_vol_33_no_4_pande_2014.pdf
Callen, Michael, Mohammad Isaqzadeh, James Long, and Charles Sprenger. 2014. “Violence and Risk Preference: Experimental Evidence from Afghanistan.” American Economic Review 104 (1): 123-148.Abstract

We investigate the relationship between violence and economic risk preferences in Afghanistan combining: (i) a two-part experimental procedure identifying risk preferences, violations of Expected Utility, and specific preferences for certainty; (ii) controlled recollection of fear based on established methods from psychology; and (iii) administrative violence data from precisely geocoded military records. We document a specific preference for certainty in violation of Expected Utility. The preference for certainty, which we term a Certainty Premium, is exacerbated by the combination of violent exposure and controlled fearful recollections. The results have implications for risk taking and are potentially actionable for policymakers and marketers.

american_economic_review_vol_104_no_1_callen_2014.pdf
Yanagizawa-Drott, David. 2014. “Propaganda and Conflict: Evidence from the Rwandan Genocide.” Quarterly Journal of Economics 129 (4). Publisher's VersionAbstract

This paper investigates the role of mass media in times of conflict and state-sponsored mass violence against civilians. We use a unique village-level dataset from the Rwandan Genocide to estimate the impact of a popular radio station that encouraged violence against the Tutsi minority population. The results show that the broadcasts had a significant impact on participation in killings by both militia groups and ordinary civilians. An estimated 51,000 perpetrators, or approximately 10 percent of the overall violence, can be attributed to the station. The broadcasts increased militia violence not only directly by influencing behavior in villages with radio reception, but also indirectly by increasing participation in neighboring villages. In fact, spillovers are estimated to have
caused more militia violence than the direct effects. Thus, the paper provides evidence that mass media can affect participation in violence directly due to exposure, and indirectly due to social interactions.

Greenstone, Michael, and Rema Hanna. 2014. “Environmental Regulations, Air and Water Pollution, and Infant Mortality in India.” American Economic Review 104 (10): 3038-72. Publisher's VersionAbstract
Using the most comprehensive developing country dataset ever compiled on air and water pollution and environmental regulations, the paper assesses India's environmental regulations with a difference-in-differences design. The air pollution regulations are associated with substantial improvements in air quality. The most successful air regulation resulted in a modest but statistically insignificant decline in infant mortality. In contrast, the water regulations had no measurable benefits. The available evidence leads us to cautiously conclude that higher demand for air quality prompted the effective enforcement of air pollution regulations, indicating that strong public support allows environmental regulations to succeed in weak institutional settings.
2013
Pande, Rohini, Benjamin Feigenberg, and Erica Field. 2013. “The Economic Returns to Social Interaction: Experimental Evidence from Microfinance.” Review of Economic Studies (April 2013) 80 (4): 1459-1483. Publisher's VersionAbstract

Microfinance clients were randomly assigned to repayment groups that met either weekly or monthly during their first loan cycle, and then graduated to identical meeting frequency for their second loan. Long-run survey data and a follow-up public goods experiment reveal that clients initially assigned to weekly groups interact more often and exhibit a higher willingness to pool risk with group members from their first loan cycle nearly two years after the experiment. They were also three times less likely to default on their second loan. Evidence from an additional treatment arm show that, holding meeting frequency fixed, the pattern is insensitive to repayment frequency during the first loan cycle. Taken together, these findings constitute the first experimental evidence on the economic returns to social interaction, and provide an alternative explanation for the success of the group lending model in reducing default risk.

pande_r_-_economic_returns_to_social_interaction_april19_ii.pdf
Pande, Rohini, Timothy Besley, Jessica Leight, and Vijayendra Rao. 2013. “Long-Run Impacts of Land Regulation:Evidence from Tenancy Reform in India.” Journal of Developmental Economics.Abstract

Land reform policies have been widely enacted across the developing world. How-ever, despite the central importance of land as an asset in low-income economies, evidence about the long-run impact of such policies remains limited. In this paper, we provide evidence about these long-run effects by combining the quasi-random assignment of linguistically similar areas to South Indian states that subsequently pursued different tenancy regulation policies with cross-caste variation in landownership. Roughly thirty years after the bulk of land reform occurred, land inequality is lower in more regulated areas, but the impact differs by caste group. Tenancy reforms increase own-cultivation among middle caste households, but render low caste households more likely to work as daily agricultural laborers. At the same time, an increase in agricultural wages is observed. These results are consistent with credit markets playing a central role in determining the long-run impact of land reform: tenancy regulations increased land sales to the relatively richer and more productive middle caste tenants but reduced land access for poorer low caste tenants

pande_r._-_long-run_impacts_of_land_1.11.13.pdf
Callen, Michael, Saad Gulzar, Ali Hasanain, Abdul Rehman Khan, Yasir Khan, and Muhammad Zia Mehmood. 2013. “Improving Public Health Delivery in Punjab, Pakistan: Issues and Opportunities.” The Lahore Journal of Economics 18 (SE): 249-269. Publisher's VersionAbstract

Pakistan has a large and dispersed primary public health system that gives citizens access to trained doctors and staff, and to subsidized medicines. However both the use of these facilities and health outcomes remain low. Improvements in information and communications technology provide exciting opportunities to leverage technology to improve management. This paper presents a detailed qualitative and quantitative study of the institutional context in which such interventions in the public health sector in Punjab would be trialed. We describe the structure and management of primary healthcare facilities, present selected results from a survey of a representative sample of basic health units, and identify some key issues. We also report and discuss officials’ responses to the question of how services might be improved.

improving_public_health_delivery_in_punjab_pakistan.pdf
Yanagizawa-Drott, David, Andreas Madestam, Daniel Shoag, and Stan Veuger. 2013. “Do Political Protests Matter? Evidence from the Tea Party Movement.” The Quarterly Journal of Economics 128 (4): 1633-1685. Publisher's VersionAbstract

Can protests cause political change, or are they merely symptoms of underlying shifts in policy preferences? We address this question by studying the Tea Party movement in the United States, which rose to prominence through coordinated rallies across the country on Tax Day, April 15, 2009. We exploit variation in rainfall on the day of these rallies as an exogenous source of variation in attendance. We show that good weather at this initial, coordinating event had significant consequences for the subsequent local strength of the movement, increased public support for Tea Party positions, and led to more Republican votes in the 2010 midterm elections. Policymaking was also affected, as incumbents responded to large protests in their district by voting more conservatively in Congress. Our estimates suggest significant multiplier effects: an additional protester increased  the number of Republican votes by a factor well above one. Together our results  show that protests can build political movements that ultimately affect policymaking, and that they do so by influencing political views rather than solely through the revelation of existing political preferences.

do_political_protests_matter_-teapart_protests_-_2013.pdf
Callen, Michael, and Nils B. Weidmann. 2013. “Violence and Election Fraud: Evidence from Afghanistan.” British Journal of Political Science 43 (1): 53-75. Publisher's VersionAbstract
What explains local variation in electoral manipulation in countries with ongoing internal conflict? The theory of election fraud developed in this article relies on the candidates’ loyalty networks as the agents manipulating the electoral process. It predicts (i) that the relationship between violence and fraud follows an inverted U-shape and (ii) that loyalty networks of both incumbent and challenger react differently to the security situation on the ground. Disaggregated violence and election results data from the 2009 Afghanistan presidential election provide empirical results consistent with this theory. Fraud is measured both by a forensic measure, and by using results from a visual inspection of a random sample of the ballot boxes. The results align with the two predicted relationships, and are robust to other violence and fraud measures.
Pande, Rohini, Ben Feigenberg, Erica Field, John Papp, and Natalia Rigol. 2013. “Does the Classic Micro finance Model Discourage Entrepreneurship Among the Poor? Experimental Evidence from India.” American Economic Review, October 2013 103 (6): 2196-2226. Publisher's VersionAbstract

Do the repayment requirements of the classic microfinance contract inhibit investment in high-return but illiquid business opportunities among the poor? Using a field experiment, we compare the classic contract which requires that repayment begin immediately after loan disbursement to a contract that includes a two-month grace period. The provision of a grace period increased short-run business investment and long-run prots but also default rates. The results, thus, indicate that debt contracts that require early re-payment discourage illiquid risky investment and thereby limit the potential impact of microfinance on micro enterprise growth and household poverty.

review_of_economic_studies_vol_80_no_4_pande_2013.pdf
Levy, Dan, Harounan Kazianga, Leigh Linden, and Matt Sloan. 2013. “The effects of "girl-friendly schools": evidence from the BRIGHT School Construction Program in Burkina Faso.” American Economic Journal of Applied Economics 5 (3): 41-62. Publisher's VersionAbstract

We evaluate a 'girl-friendly' primary school program in Burkina Faso using a regression discontinuity design. After 2.5 years, the program increased enrollment by 19 percentage points and increased test scores by 0.41 standard deviations. For those caused to attend school, scores increased by 2.2 standard deviations. Girls' enrollment increased by 5 percentage points more than boys' enrollment, but they experienced the same increase in test scores as boys. The unique characteristics of the schools are responsible for increasing enrollment by 13 percentage points and test scores by 0.35 standard deviations. They account for the entire difference in the treatment effects by gender.

Duflo, Esther, Michael Greenstone, Rohini Pande, and Nichols Ryan. 2013. “What Does Reputation Buy? Differentiation in a Market for Third-party Auditors.” American Economic Review 103 (3): 314-319. Publisher's VersionAbstract

We study differences in quality in the market for third-party environmental auditors in Gujarat, India. We find that, despite the low overall quality, auditors are heterogeneous and some perform well. We posit that these high-quality auditors survive by using their good name to insulate select client plants from regulatory scrutiny. We find two pieces of evidence broadly consistent with this hypothesis: (i) though estimates are not precise, higher-quality auditors appear to be paid more both in their work as third-party auditors and in their complementary work as consultants; and (ii) plants with high-quality auditors incur fewer costly penalties from the regulator.

american_economic_review_vol_103_no_3_pande_2013.pdf
Duflo, Esther, Michael Greenstone, Rohini Pande, and Nicholas Ryan. 2013. “Truth-Telling by Third-party Auditors and the Response of Polluting Firms: Experimental Evidence from India.” Quarterly Journal of Economics 128 (4): 1-48. Publisher's VersionAbstract

In many regulated markets, private, third-party auditors are chosen and paid by the firms that they audit, potentially creating a conflict of interest. This paper reports on a two- year field experiment in the Indian state of Gujarat that sought to curb such a conflict by altering the market structure for environmental audits of industrial plants to incentivize accurate reporting. There are three main results. First, the status quo system was largely corrupted, with auditors systematically reporting plant emissions just below the standard, although true emissions were typically higher. Second, the treatment caused auditors to report more truthfully and very significantly lowered the fraction of plants that were falsely reported as compliant with pollution standards. Third, treatment plants, in turn, reduced their pollution emissions. The results suggest reformed incentives for third-party auditors can improve their reporting and make regulation more effective.

quarterly_journal_of_economics_vol_128_no_4_pande_2013.pdf
Chandra, Amitabh, Maurice Dalton, and Jonathan Holmes. 2013. “Large Increases in Spending on Postacute Care in Medicare to the Potential for Cost Savings in These Settings.” Health Affairs 32 (5): 864-872. Publisher's VersionAbstract

Identifying policies that will cut or constrain US health care spending and spending growth dominates reform efforts, yet little is known about whether the drivers of spending levels and of spending growth are the same. Policies that produce a one-time reduction in the level of spending, for example by making hospitals more efficient, may do little to reduce subsequent annual spending growth. To identify factors causing health care spending to grow the fastest, we focused on three conditions in the Medicare population: heart attacks, congestive heart failure, and hip fractures. We found that spending on postacute care—long-term hospital care, rehabilitation care, and skilled nursing facility care—was the fastest growing major spending category and accounted for a large portion of spending growth in 1994–2009. During that period average spending for postacute care doubled for patients with hip fractures, more than doubled for those with congestive heart failure, and more than tripled for those with heart attacks. We conclude that policies aimed at controlling acute care spending, such as bundled payments for short-term hospital spending and physician services, are likely to be more effective if they include postacute care, as is currently being tested under Medicare’s Bundled Payment for Care Improvement Initiative.

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