Publications by Type: Working Paper

Khwaja, Asim, Tahir Andrabi, Natalie Bau, and Jishnu Das. Submitted. “Are Bad Public Schools "Public Bads"? Test Scores and Civic Values in Public and Private Schools”.Abstract

Enrollments in private schools have exploded in many low income countries during the last decade and now exceed 20 percent of primary enrollments in countries like India and Pakistan. The majority of these schools are small scale, low cost enterprises that effectively do not face any regulatory oversight or receive any government subsidies. This key feature offers a unique opportunity to evaluate the outcomes benefits (or lack thereof), not of vouchers or public support, but of a pure market model of educational provision. We combine data on household and school locations with test scores from Pakistan to provide instrumental variables estimates of public private differences in test scores and civic values. Since tests were administered by the research team in strictly controlled conditions, we are able to rule out the possibility of cheating. Our instrumental variables estimates show that test scores of children in private schools are standard deviation higher (depending on the subject) than those of their public school counterparts. Furthermore, and surprisingly, children in private schools also have better civic skills; they are better informed about Pakistan, more "pro-democratic and exhibit lower gender biases. Finally, the cost of educating a child in a private school is 40 percent lower than in a government school without factoring in administrative costs. This cost saving is equivalent to 5 percent of total village consumption expenditures in the sample. Adding in administrative costs could inflate the cost difference 2 times or more. These results argue for a reassessment of the fundamental model of education delivery in low income settings, where governance and accountability problems in public schools are common

Hanna, Rema, and Iqbal Dhaliwal. Submitted. “Deal with the Devil: The Successes and Limitations of Bureaucratic Reform in India”.Abstract

Employing a technological solution to monitor the attendance of public-sector health care workers in India resulted in a 15 percent increase in the attendance of the medical staff. Health outcomes improved, with a 16 percent increase in the delivery of infants by a doctor and a 26 percent reduction in the likelihood of infants born under 2500 grams. However, women in treatment areas substituted away from the newly monitored health centers towards delivery in the (unmonitored) larger public hospitals and private hospitals. Several explanations may help explain this shift: better triage by the more present health care staff; increased patients’ perception of absenteeism in the treatment health centers; and the ability of staff in treatment areas to gain additional rents by moving women to their private practices and by siphoning off the state-sponsored entitlements that women would normally receive at the health center at the time of delivery. Despite initiating the reform on their own, there was a low demand among all levels of government–state officials, local level bureaucrats, and locally-elected bodies—to use the better quality attendance data to enforce the government’s human resource policies due to a fear of generating discord among the staff. These fears were not entirely unfounded: staff at the treatment health centers expressed greater dissatisfaction at their jobs and it was also harder to hire new nurses, lab technicians and pharmacists at the treatment health centers after the intervention. Thus, this illustrates the implicit deal that governments make on non-monetary dimensions—truancy, allowance of private practices—to retain staff at rural outposts in the face of limited budgets and staff shortages.

Yanagizawa-Drott, David, and Filipe Campante. Submitted. “Intergenerational Transmission of War”.Abstract

Does war service by one generation affect service by the next generation in later wars? Using data from major U.S. 20th-century wars, we exploit that closeness to age 21 at a time of war is a key determinant of the likelihood of participation. We find that a generation’s war service experience positively affects service by the next generation, with each war having substantially impacted those that followed. The  evidence is consistent with cultural transmission, and indicates that a history of  wars can help overcome the collective action problem of getting citizens to  volunteer for war service.

Yanagizawa-Drott, David, Tessa Bold, Kayuki C. Kaizzi, and Jakob Svensson. Submitted. “Low Quality, Low Returns, Low Adoption: Evidence from the Market for Fertilizer and Hybrid Seed in Uganda”.Abstract

To reduce poverty and food insecurity in Africa requires raising productivity in agriculture. Systematic use of fertilizer and hybrid seed is a pathway to increased productivity, but adoption of these technologies remains low. We investigate whether the quality of agricultural inputs can help explain low take-up. Testing modern products purchased in local markets, we find that 30% of nutrient is missing in fertilizer, and hybrid maize seed contains less than 50% authentic seeds. We document that such low quality results in negative average returns. If authentic technologies replaced these low-quality products, average returns for smallholder farmers would be over 50%.

Banerjee, Abhijit, Rema Hanna, Jordan Kyle, Benjamin A. Olken, and Sudarno Sumarto. Submitted. “The Power of Transparency: Information, Identification Cards and Food Subsidy Programs in Indonesia”.Abstract

Can governments improve aid programs by providing information to beneficiaries? In our model, information can change how much aid citizens receive as they bargain with local officials who implement national programs. In a large-scale field experiment, we test whether mailing cards with program information to beneficiaries increases their subsidy from a subsidized rice program. Beneficiaries received 26 percent more subsidy in card villages. Ineligible households received no less, so this represents lower leakage. The evidence suggests that this effect is driven by citizen bargaining with local officials. Experimentally adding the official price to the cards increased the subsidy by 21 percent compared to cards without price information. Additional public information increased higher-order knowledge about eligibility, leading to a 16 percent increase in subsidy compared to just distributing cards. In short, increased transparency empowered citizens to reduce leakages and improve program functioning.

Pande, Rohini, Dean Karlan, Jake Kendall, Rebecca Mann, Tavneet Suri, and Jonathan Zinman. 2016. “Research and Impacts of Digital Financial Services”. Publisher's VersionAbstract

A growing body of rigorous research shows that financial services innovations can have important positive impacts on wellbeing, but also that many do not. We first describe the latest evidence on what works in financial inclusion. Second, we summarize research on key financial market failures and on products and innovations that address specific mechanisms underlying them. We conclude by highlighting open areas for future work.

Pande, Rohini, Sharon Barnhardt, and Erica Field. 2015. “Moving to Opportunity or Isolation? Network Effects of a Randomized Housing Lottery in India”.Abstract

A housing lottery in an Indian city provided winning slum dwellers the opportunity to move into improved housing on the city’s periphery. Fourteen years later, relative to lottery losers, winners report improved housing farther from the city center, but no change in family income or human capital. Winners also report increased isolation from family and caste networks and lower access to informal insurance. We observe significant program exit: 34% of winners never moved into the subsidized housing and 32% eventually exited. Our results point to the importance of considering social networks when designing housing programs for the poor.

Pande, Rohini. 2015. “Why Are Indian Children So Short?”.Abstract

India's child stunting rate is among the highest in the world, exceeding that of many poorer African countries. In this paper, we analyze data for over 174,000 Indian and Sub-Saharan African children to show that Indian firstborns are taller than African firstborns; the Indian height disadvantage emerges with the second child and then increases with birth order. This pattern persists when we compare height between siblings, and also holds for health inputs such as vaccinations. Three patterns in the data indicate that India's culture of eldest son preference plays a key role in explaining the steeper birth order gradient among Indian children and, consequently, the overall height deficit. First, the Indian firstborn height advantage only exists for sons. Second, an Indian son with an older sibling is taller than his African counterpart if and only if he is the eldest son. Third, the India-Africa height deficit is largest for daughters with no older brothers, which reflects that fact that their families are those most likely to exceed their desired fertility in order to have a son.

Levy, Dan, Joshua Yardley, and Richard Zeckhauser. 2015. “Getting an Honest Answer: Clickers in the Classroom”.Abstract

Asking students to raise their hands is a time-honored feedback mechanism in education. Hand raising allows the teacher to assess to what extent a concept has been understood, or to see where the class stands on a particular issue, and then to proceed with the lesson accordingly. For many types of questions, as the evidence here demonstrates, the tally from a public show of hands misrepresents the true knowledge or preferences of the class. The biases are predictable and systematic. Specifically, students raising their hands tend to herd and vote with the majority answer. Beyond impeding the teacher’s ability to assess her class, such herding threatens to diminish learning by limiting the level to which a student engages with the questions posed by the teacher.

Callen, Michael, Leonardo Bursztyn, Bruno Ferman, Ali Hasanain, and Noam Yuchtman. 2015. “Identifying Ideology: Experimental Evidence on Anti-Americanism in Pakistan”.Abstract

Identifying the role of intrinsic, ideological motivation in political behavior is confounded by agents' consequential aims and social concerns. We present an experimental methodology isolating Pakistani men's intrinsic motives for expressing anti-American ideology in a context with clearly-specied nancial costs, but negligible other consequential or social considerations. Following a survey, we offer subjects a bonus payment. One-quarter of subjects forgo around one-fifth of a day's wage to avoid anonymously checking a box indicating gratitude toward the U.S. government, revealing anti-Americanism. Wefind that even extremists moderate their political expression when the nancial cost is high and when anticipating public expression.

Hanna, Rema, Abhijit Banerjee, Gabriel Kreindler, and Benjamin A. Olken. 2015. “Debunking the Stereotype of the Lazy Welfare Recipient: Evidence from Cash Transfer Programs Worldwide”.Abstract

Targeted transfer programs for poor citizens have become increasingly common in the developing world. Yet, a common concern among policy makers - both in developing as well as developed countries - is that such programs tend to discourage work. We re-analyze the data from 7 randomized controlled trails of government-run cash transfer programs in six developing countries throughout the world, and find no systematic evidence that cash transfer programs discourage work.

Hanna: Debunking Labor Supply WP
Callen, Michael, Saad Gulzar, Ali Hasanain, Yasir Khan, and Arman Rezaee. 2015. “Personalities and Public Sector Performance: Evidence from a Health Experiment in Pakistan”. Publisher's VersionAbstract

This paper provides evidence that the personality traits of policy actors matter for policy outcomes in the context of two large-scale experiments in Punjab, Pakistan. Three results support the relevance of personalities for policy outcomes. First, doctors with higher Big Five and Perry Public Sector Motivation scores attend work more and falsify inspection reports less. Second, health inspectors who score higher on these personality measures exhibit a larger treatment response to increased monitoring. Last, senior health officials with higher Big Five scores are more likely to respond to a report of an under-performing facility by compelling better subsequent staff attendance.

Callen, Michael, Suresh De Mel, Craig McIntosh, and Christopher Woodruff. 2015. “What are the Headwaters of Formal Savings? Experimental Evidence from Sri Lanka”.Abstract

When households increase their deposits in formal bank savings accounts, what is the source of the money? We combine high-frequency surveys with an experiment in which a Sri Lankan bank used mobile Point-of-Service (POS) terminals to collect deposits directly from households each week. In this context, the headwaters of formal savings are to be found in sacrificed leisure time: households work more, and work more on the wage market when savings options improve. These results suggest that the labor allocation channel is an important mechanism linking savings opportunities to income.

Singhal, Monical. 2014. “Dodging the Taxman: Firm Misreporting and Limits to Tax Enforcement”. Publisher's VersionAbstract

Reducing tax evasion is a key priority for many governments, particularly in developing countries. A growing literature has argued that the ability to verify taxpayer self-reports against reports from third parties is critical for modern tax enforcement and the growth of state capacity. However, there may be limits to the effectiveness of third-party information if taxpayers can make offsetting adjustments on less verifiable margins. We present a simple framework to demonstrate the conditions under which this will occur and provide strong empirical evidence for such behavior by exploiting a natural experiment in Ecuador. We find that when firms are notified by the tax authority about detected revenue discrepancies on previously filed corporate income tax returns, they increase reported revenues, matching the third-party estimate when provided. Firms also increase reported costs by 96 cents for every dollar of revenue adjustment, resulting in minor increases in total tax collection.

Pande, Rohini, Esther Duflo, Michael Greenstone, and Nicholas Ryan. 2014. “The Value of Regulatory Discretion: Estimates from Environmental Inspection in India”. Publisher's VersionAbstract

In collaboration with a state environmental regulator in India, we conducted a field experiment to raise the frequency of environmental inspections to the prescribed minimum for a random set of industrial plants. The treatment was successful when judged by process measures, as treatment plants, relative to the control group, were more than twice as likely to be inspected and to be cited for violating pollution standards. Yet the treatment was weaker for more consequential outcomes: the regulator was no more likely to identify extreme polluters (i.e., plants with emissions five times the regulatory standard or more) or to impose costly penalties in the treatment group. In response to the added scrutiny, treatment plants only marginally increased compliance with standards and did not significantly reduce mean pollution emissions. To explain these results and recover the full costs of environmental regulation, we model the regulatory process as a dynamic discrete game where the regulator chooses whether to penalize and plants choose whether to abate to avoid future sanctions. We estimate this model using original data on 10,000 interactions between plants and the regulator. Our estimates imply that the costs of environmental regulation are largely reserved for extremely polluting plants. Applying the cost estimates to the experimental data, we find the average treatment inspection imposes about half the cost on plants that the average control inspection does, because the randomly assigned inspections in the treatment are less likely than normal discretionary inspections to target such extreme polluters.

Callen, Michael, Eli Berman, Clark Gibson, and James D. Long. 2014. “Election Fairness and Government Legitimacy in Afghanistan”. Publisher's VersionAbstract

International development agencies invest heavily in institution building in fragile states, including expensive interventions to support democratic elections. Yet little evidence exists on whether elections enhance the domestic legitimacy of governments. Using the random assignment of an innovative election fraud-reducing intervention in Afghanistan, we find that decreasing electoral misconduct improves multiple survey measures of attitudes toward government, including: (1) whether Afghanistan is a democracy; (2) whether the police should resolve disputes; (3) whether members of parliament provide services; and (4) willingness to report insurgent behavior to security forces.

Callen, Michael, Saad Gulzar, Ali Hasanain, and Yasir Khan. 2014. “The Political Economy of Public Sector Absence: Experimental Evidence from Pakistan”.Abstract

In many developing countries, public sector absence is both common and resistant to reform. One explanation is that politicians preferentially provide public jobs with limited work requirements as patronage. We test this patronage hypothesis in Pakistan using: (i) a randomized evaluation of a novel smartphone absence monitoring technology; (ii) data on election outcomes in the 240 constituencies  where the experiment took place; (iii) attendance recorded during unannounced visits; (iv) surveys of connections between politicians and health staff; and (v) a survey of the universe of health supervisors. Four sets of results are consistent with this view. First, 36 percent of health officers report interference by a politician in the previous year when sanctioning an employee and report this twice as often in uncompetitive constituencies. Second, doctors are 21 percentage points less likely to be present if they know their politician, 32 percentage points less likely to be present if they work in an uncompetitive constituency, and are only at work during 10 percent of normal reporting hours if both conditions are true. Third, the effect of the smartphone monitoring technology, which almost doubled inspection rates, is highly localized to competitive constituencies and to monitored employees who do not know their politician. Last, we find evidence that program impact is in part due to the transmission of information to senior officers. We test this by manipulating the salience of staff absence in data presented to senior officials using an online dashboard. Highlighting absence leads to larger subsequent improvements in attendance for facilities located in a competitive constituencies.

Callen, Michael, Joshua Blumenstock, and Tarek Ghani. 2014. “Violence and Financial Decisions: Evidence from Mobile Money in Afghanistan”.Abstract

We examine the relationship between violence and nancial decisions in Afghanistan. Using three separate data sources, we nd that individuals experiencing violence retain more cash and are less likely to adopt and use mobile money, a newfinancial technology. We first combine detailed information on the entire universe of mobile money transactions in Afghanistan with administrative records for all violent incidents recorded by international forces, and find a negative relationship between violence and mobile money use. Second, in the context of a randomized control trial, violence is associated with decreased mobile money use and greater cash balances. Third, in financial survey data from nineteen of Afghanistan's 34 provinces, we find that individuals experiencing violence hold more cash. Collectively, the evidence indicates that individuals experiencing violence prefer cash to mobile money. More speculatively, it appears that this is principally because of concerns about future violence. The degree of the relationship between cash holdings and violence is large enough to suggest that robust formal nancial networks face severe challenges developing in conflict environments.

Yanagizawa-Drott, David, and Filipe Campante. 2014. “Do Campaign Contribution Limits Matter? Evidence from the McCain-Feingold Act”.Abstract

We propose a novel method to estimate the impact of campaign contribution limits, and use it to study the effect on U.S. House Elections of the increased limits introduced by the Bipartisan Campaign Reform (”McCain-Feingold”) Act enacted after the 2002 elections. We first estimate the amount of contributions that had been left unrealized by the presence of the relatively strict limit and were then brought into existence by the reform, and then analyze whether and how the change affected election outcomes and the behavior of politicians. The results indicate that aggregate contributions were 25 percent higher as a result of the higher limit, and that this increase disproportionally went to Republican candidates. We further show that the contributions brought in by the reform led to significantly higher turnout in the 2004 elections (2.6% increase in response to a 10% increase in individual contributions). This effect was essentially driven by an increase in the mobilization of Republican voters, with no evidence of increased mobilization of Democratic voters, consistent with the fact that the Republican candidates on average attracted more of the contributions induced by the reform. A roll-call analysis further shows that incumbent Democratic legislators responded, in the 2003-2004 Congress, by becoming relatively less liberal in places with more new contributions induced by the reform. Together, our results provide evidence that raising limits on individual campaign contributions can affect elections and the incentives faced by politicians in ways that increase political participation, but disproportionally benefit certain political parties.

Yanagizawa-Drott, David, and Thorsten Rogall. 2014. “The Legacy of Political Mass Killings: Evidence from the Rwandan Genocide”.Abstract

We study how political mass killings affect later economic performance, using data from the Rwandan Genocide. To establish causality, we build on and exploit village-level variation in reception of a state-sponsored radio station (RTLM) that explicitly, and successfully, incited killings of the ethnic Tutsi minority population. Our results show that households in villages that experienced higher levels of violence induced by the broadcasts have higher living standards six years after the genocide. They own more assets, such as land, livestock and durable goods. Output per capita from agricultural production is higher, and  consumption levels are greater. These results are consistent with the Malthusian hypothesis that mass killings can raise living standards by reducing the population size and redistributing productive assets from the deceased to the remaining population. However, we also find that the violence affected the age distribution in villages, raised fertility rates among female survivors, and reduced cognitive skills of children. Together, our results show that political mass killings can have positive effects on living standards among survivors in the short run, but that these effects may disappear in the long run.