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, Rohini, and Petia Topalova. 2013. “Women in Charge.” International Monetary Fund's "Finance and Development," June 2013. Publisher's VersionAbstract

A policy experiment in India suggests that placing female leaders in positions of power can dramatically change public attitudes

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.

Khwaja, Asim, Bailey Klinge, and Carlos del Carpio. 2013. Enterprising Psychometrics and Poverty Reduction. Springer Brief Series: Innovative Psychology for Poverty Reduction. Eds. Sharon Panulla & Stuard C. Carr. New York: Springer, May 17, 2013. Publisher's VersionAbstract

There is a huge lost opportunity in emerging markets. Between 310 and 380 million of small business owners want loans, and could earn very high rates of return on that additional capital if they could get it. Banks have this capital available, and want to let it out, particularly to small businesses since competition in that segment is low, unmet demand is high, and the interest rates that can be paid are very attractive. But the connection between the banks and entrepreneurs just isn't happening, because it is extremely difficult for banks to evaluate risk and know who to lend to. The entrepreneurs running these small businesses typically lack credit history and collateral. They don't have well-fomatted trustable financial statements, and many of their transactions are with cash. So banks have no means to identify the high-potential, honest entrepreneurs. Lending to small businesses in advanced economies suffered this same problem, until the banks started evaluating and serving small business more like they serve the mass individual segment rather than treating them as mini-corporations. One of the key innovations was to use individual borrowing history of the owner to evaluate risk for the small business loan, applying quantitative credit scoring. This approach lead to a rapid expansion in profitable and sustainable small business lending, because it leveraged what information was available, and did it in a way that kept transaction costs low so that banks could make a large number of smaller loans to businesses. But what can be done in emerging markets, where credit bureaus lack the depth and breadth of coverage?

Levy, Dan, and Dean Yang. 2013. “Competing for Jobs or Creating Jobs? The Impact of Immigration on Native-Born Unemployment in Venezuela, 1980-2003.” Venezuela Before Chávez: Anatomy of an Economic Collapse. Vol. Penn State University Press, Penn State University Press, Ed. Ricardo Hausmann and Francisco R. Rodríguez.Abstract

At the beginning of the twentieth century, Venezuela had one of the poorest economies in Latin America, but by 1970 it had become the richest country in the region and one of the twenty richest countries in the world, ahead of countries such as Greece, Israel, and Spain. Between 1978 and 2001, however, Venezuela’s economy went sharply in reverse, with non-oil GDP declining by almost 19 percent and oil GDP by an astonishing 65 percent. What accounts for this drastic turnabout? The editors of Venezuela Before Chávez, who each played a policymaking role in the country’s economy during the past two decades, have brought together a group of economists and political scientists to examine systematically the impact of a wide range of factors affecting the economy’s collapse, from the cost of labor regulation and the development of financial markets to the weakening of democratic governance and the politics of decisions about industrial policy.

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.

Yanagizawa-Drott, David. 2013. “Propaganda vs. Education; A Case Study of Hate Radio in Rwanda.” Oxford Handbook of Propaganda Studies, ed. Jonathan Auerbach and Russ Castronovo, 378-394. Oxford: Oxford University Press, 378-394.Abstract

sponsored propaganda on political violence. It provides evidence of the hypothesis that basic education can limit the effectiveness of propaganda by increasing access to alternative media sources. It builds on the case study of the Rwandan Genocide in Yanagizawa-Drott (2011), and shows that the propaganda disseminated by the “hate radio” station RTLM did not affect participation in violence in villages where education levels, as measured by literacy rates, were relatively high. A discussion of the potential underlying mechanisms driving the results is presented. The methodological challenges of identifying causal effects of mass media and propaganda are also described, including recent innovations using statistical methods that may be used to overcome those challenges.

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.

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.

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.

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.

Pande, Rohini, and Benjamin Olken. 2012. “Corruption in Developing Countries.” Annual Review of Economics. 4 (1): 479-509. Publisher's VersionAbstract

Recent years have seen a remarkable expansion in economists’ ability to measure corruption. This, in turn, has led to a new generation of well-identified, microeconomic studies. We review the evidence on corruption in developing countries in light of these recent advances, focusing on three questions: how much corruption is there, what are the efficiency consequences of corruption, and what determines the level of corruption. We find robust evidence that corruption responds to standard economic incentive theory, but also that effects of anti-corruption policies often attenuate as officials find alternate strategies to pursue rents.

Pande, Rohini, and Deanna Ford. 2012. “Gender Quotas and Female Leadership: A Review.” Background Paper for the World Development Report on Gender. April, 2011. Publisher's VersionAbstract

Despite significant advances in education and political participation, women remain underrepresented in leadership positions in politics and business across the globe. In many countries, policy-makers have responded by introducing gender quotas in politics and increasingly, many have expressed an interest in requiring gender quotas for corporate boards. This paper reviews the evidence on the equity and efficiency impacts of gender quotas for political positions and corporate board membership. Adoption of quotas by countries is likely correlated with attitudes about women within a country. However, the randomized allocation of political quotas in India and the unanticipated introduction of board quotas in Norway have allowed researchers to provide causal analysis and this review focuses on evidence from these two settings. The Indian evidence demonstrates that quotas increase female leadership and influences policy outcomes. In addition, rather than create a backlash against women, quotas can reduce gender discrimination in the long-term. The board quota evidence is more mixed. While female entry on boards is correlated with changing management practices, this change appears to adversely influence short-run profits. Whether this is partly driven by negative perceptions of female management choices remains an open question. Returning to the broader cross-country context, we find evidence in many different settings that political and corporate entities often act strategically to circumvent the intended impact of quotas. Consistent with this, we report suggestive evidence that the design of the quota and selection systems matter for increasing female leadership.

Pande, Rohini, Lori Beaman, and Alexandra Cirone. 2012. “Politics as a Male Domain and Empowerment in India.” Chapter 14 in The Impact of Gender Quotas: Women's Descriptive, Substantive, and Symbolic Representation. Ed. S. Franceschet, M. Kook, and J. Piscopo. Oxford University Press. Publisher's VersionAbstract

India is the world’s largest democracy, yet female presence in India’s state and national legislatures has consistently remained under 10 percent. In contrast, female representation in Iocal village councils has risen dramatically in the last twenty years. A constitutional amendment instituted in 1993 both devolved significant powers to village councils and instituted a quota system that required that one-third of village council leader positions be reserved for women. While the mandatory nature of the quota system implied that it led to an immediate increase in descriptive representation, our work with co-authors demonstrates that it also increased substantive representation.

Pande, Rohini, Timothy Besley, and Vijayendra Rao. 2012. “Just Rewards? Local Politics and Public Resource Allocation in South India.” World Economic Review 26 (2): 191-216. Publisher's VersionAbstract

What factors determine the nature of political opportunism in local government in South-India? To answer this question, we study two types of policy decision that have been delegated to local politicians {beneficiary selection for transfer programs and the allocation of within-village public goods. Our data on village councils in South-India show that, relative to other citizens, elected councillors are more likely to be selected as beneficiaries of a large transfer program. The chief councillor's village also obtains more public goods, relative to other villages.These findings can be interpreted using a simple model of the logic of political incentives in the context that we study.

Duflo, Esther, Rema Hanna, and Stephen P Ryan. 2012. “Incentives Work: Getting Teachers to Come to School.” American Economic Review 102 (4): 1241-1278. Publisher's VersionAbstract

We use a randomized experiment and a structural model to test whether monitoring and financial incentives can reduce teacher absence and increase learning in India. In treatment schools, teachers' attendance was monitored daily using cameras, and their salaries were made a nonlinear function of attendance. Teacher absenteeism in the treatment group fell by 21 percentage points relative to the control group, and the children's test scores increased by 0.17 standard deviations. We estimate a structural dynamic labor supply model and find that teachers respond strongly to financial incentives. Our model is used to compute cost-minimizing compensation policies.

Banerjee, Abhijit, Rema Hanna, and Sendhil Mullainathan. 2012. “Corruption.” The Handbook of Organizational Economics. Princeton University Press, 1109-1147. Publisher's VersionAbstract

In this paper, we provide a new framework for analyzing corruption in public bureaucracies. The standard way to model corruption is as an example of moral hazard, which then leads to a focus on better monitoring and stricter penalties with the eradication of corruption as the final goal. We propose an alternative approach which emphasizes why corruption arises in the first place. Corruption is modeled as a consequence of the interaction between the underlying task being performed by bureaucrat, the bureaucrat's private incentives and what the principal can observe and control. This allows us to study not just corruption but also other distortions that arise simultaneously with corruption, such as red-tape and ultimately, the quality and efficiency of the public services provided, and how these outcomes vary depending on the specific features of this task. We then review the growing empirical literature on corruption through this perspective and provide guidance for future empirical research.

Hanna, Rema, and Leigh L Linden. 2012. “Discrimination in grading.” American Economic Journal: Economic Policy 4 (4): 146-168. Publisher's VersionAbstract

We report the results of an experiment that was designed to test for discrimination in grading in India. We recruited teachers to grade exams. We randomly assigned child "characteristics" (age, gender, and caste) to the cover sheets of the exams to ensure that there is no relationship between these observed characteristics and the exam quality. We find that teachers give exams that are assigned to be lower caste scores that are about 0.03 to 0.08 standard deviations lower than those that are assigned to be high caste. The teachers' behavior appears consistent with statistical discrimination.