Khwaja, Asim, Adnan Q. Khan, and Benjamin A. Olken. 2015. “Tax Farming Redux: Experimental Evidence on Performance Pay for Tax Collectors.” Quarterly Journal of Economics. Publisher's VersionAbstract

Performance pay for tax collectors has the potential to raise revenues, but might come at a cost if it increases the bargaining power of tax collectors vis-a-vis taxpayers. We report the first large-scale field experiment on these issues, where we experimentally allocated 482 property tax units in Punjab, Pakistan into one of three performance-pay schemes or a control. After two years, incentivized units had 9.4 log points higher revenue than controls, which translates to a 46 percent higher growth rate. The scheme that rewarded purely on revenue did best, increasing revenue by 12.9 log points (64 percent higher growth rate), with little penalty for customer satisfaction and assessment accuracy compared to the two other schemes that explicitly also rewarded these dimensions. The revenue gains accrue from a small number of properties becoming taxed at their true value, which is substantially more than they had been taxed at previously. The majority of properties in incentivized areas in fact pay no more taxes, but instead report higher bribes. The results are consistent with a collusive setting in which performance pay increases collectors’ bargaining power over taxpayers, who either have to pay higher bribes to avoid being reassessed, or pay substantially higher taxes if collusion breaks down.


Tax Farming Redux: Experimental Evidence of Performance Pay for Tax Collectors Appendix
Pande, Rohini, Michael Greenstone, Janhavi Nilekani, Nicholas Ryan, Anant Sudarshan, and Anish Sugathan. 2015. “Lower Pollution, Longer Lives. Life Expectancy Gains if India Reduced Particulate Matter Pollution.” Economic and Political Weekly,February 21m 2015, 50, 8, 40-46. Publisher's VersionAbstract

India’s population is exposed to dangerously high levels of air pollution. Using a combination of ground-level in situ measurements and satellite-based remote sensing data, this paper estimates that 660 million people, over half of India’s population, live in areas that exceed the Indian National Ambient Air Quality Standard for fine particulate pollution. Reducing pollution in these areas to achieve the standard would, we estimate, increase life expectancy for these Indians by 3.2 years on average for a total of 2.1 billion life years. We outline directions for environmental policy to start achieving these gains.

Pande, Rohini. 2015. “Keeping Women Safe.” Harvard Magazine, January-February, 2015. Publisher's VersionAbstract

Addressing the root causes of violence against women in South Asia

Sheely, Ryan. 2015. “Mobilization, Participatory Planning Institutions, and Elite Capture: Evidence from a Field Experiment in Rural Kenya.” World Development, March 2015 67. Publisher's Version
Yanagizawa-Drott, David, and Filipe Campante. 2015. “Does Religion Affect Economic Growth and Happiness? Evidence from Ramadan.” The Quarterly Journal of Economics 130 (2): 615-658. Publisher's VersionAbstract

We study the economic effects of religious practices in the context of the observance of Ramadan fasting, one of the central tenets of Islam. To establish causality, we exploit variation in the length of daily fasting due to the interaction between the rotating Islamic calendar and a country’s latitude. We report two key, quantitatively meaningful results: (i) longer Ramadan fasting has a negative effect on output growth in Muslim countries, and (ii) it increases subjective well-being among Muslims. We find evidence that these patterns are consistent with a standard club good explanation for the emergence of costly religious practices: increased strictness of fasting screens out the less committed members, while the more committed respond with an increase in their relative levels of participation. together, our results underscore that religious practices can affect individual  behavior and beliefs in ways that have negative implications for economic performance, but that nevertheless increase subjective well-being among followers.

Hanna, Rema, and Paulina Oliva. 2015. “Moving Up the Energy Ladder: The Effect of a Permanent Increase in Assets on Fuel Consumption Choices in India.” American Economic Review 105 (5 (May 2015): 242-46. Publisher's VersionAbstract

Rising household wealth may potentially impact both total fuel consumption and fuel-type composition, resulting in significant health and environmental implications. Using data from a field experiment in India, we explore the effects of a transfer program that provided poor, rural households with greater levels of assets and cash. Total fuel consumption rose as a result of the transfers. Households shifted from using electricity rather than kerosene as their primary form of light, but total kerosene consumption also rose. In contrast, we did not observe a shift to cleaner cooking fuels.

Hanna, Rema, Sendhil Mullainathan, and Joshua Schwartstein. 2015. “Learning Through Noticing: Theory and Evidence from a Field Experiment.” The Quarterly Journal of Economics 129 (3): 1311-1353. Publisher's VersionAbstract

We consider a model of technological learning under which people “learn through noticing”: they choose which input dimensions to attend to and subsequently learn about from available data. Using this model, we show how people with a great deal of experience may persistently be off the production frontier because they fail to notice important features of the data they possess. We also develop predictions on when these learning failures are likely to occur, as well as on the types of interventions that can help people learn. We test the model’s predictions in a field experiment with seaweed farmers. The survey data reveal that these farmers do not attend to pod size, a particular input dimension. Experimental trials suggest that farmers are particularly far from optimizing this dimension. Furthermore, consistent with the model, we find that simply having access to the experimental data does not induce learning. Instead, behavioral changes occur only after the farmers are presented with summaries that highlight previously unattended-to relationships in the data.

R. Hanna in QJE: "Learning Through Noticing..."
Callen, Michael, Jean Imbs, and Paolo Mauro. 2015. “Pooling Risk Among Countries.” Journal of International Economics 96 (1): 88-99. Publisher's VersionAbstract

Suppose that international sharing risk—worldwide or with large numbers of countries—were costly. How much risk-sharing could be gained in small sets (or “pools”) of countries? To answer this question, we compute the means and variances of poolwide gross domestic product growth, for all possible pools of any size drawn from a sample of 74 countries, and compare them with the means and variances of consumption growth in each country individually. From the difference, we infer potential diversification and welfare gains. As much as two-thirds of the first best, full worldwide welfare gains can be obtained in groupings of as few as seven countries. The largest potential gains arise from pools consisting of countries in different regions and including countries with weak institutions. We argue that international risk-sharing fails to emerge because the largest potential gains are among countries that do not trust each other's willingness and ability to abide by international contractual obligations.

Callen, Michael, Joshua E. Blumenstock, Tarek Ghani, and Lucas Koepke. 2015. “Promises and Pitfalls of Mobile Money in Afghanistan: Evidence from a Randomized Control Trial.” Proceedings of the Seventh International Conference on Information and Communication Technologies and Development. ACM. ACM. Publisher's VersionAbstract

Despite substantial interest in the potential for mobile money to positively impact the lives of the poor, little empirical evidence exists to substantiate these claims. In this paper, we present the results of a field experiment in Afghanistan that was designed to increase adoption of mobile money, and determine if such adoption led to measurable changes in the lives of the adopters. The specific intervention we evaluate is a mobile salary payment program, in which a random subset of individuals of a large firm were transitioned into receiving their regular salaries in mobile money rather than in cash.

We separately analyze the impact of this transition on both the employer and the individual employees. For the employer, there were immediate and significant cost savings; in a dangerous physical environment, they were able to effectively shift the costs of managing their salary supply chain to the mobile phone operator. For individual employees, however, the results were more ambiguous. Individuals who were transitioned onto mobile salary payments were more likely to use mobile money, and there is evidence that these accounts were used to accumulate small balances that may be indicative of savings. However, we find little consistent evidence that mobile money had an immediate or significant impact on several key indicators of individual wealth or well-being. Taken together, these results suggest that while mobile salary payments may increase the efficiency and transparency of traditional systems, in the short run the benefits may be realized by those making the payments, rather than by those receiving them.

Callen, Michael, and James D. Long. 2015. “Institutional Corruption and Election Fraud: Evidence from a Field Experiment in Afghanistan.” American Economic Review 105 (1): 354-81. Publisher's VersionAbstract

We investigate the relationship between political networks, weak institutions, and election fraud during the 2010 parliamentary election in Afghanistan combining: (i) data on political connections between candidates and election officials; (ii) a nationwide controlled evaluation of a novel monitoring technology; and (iii) direct measurements of aggregation fraud. We find considerable evidence of aggregation fraud in favor of connected candidates and that the announcement of a new monitoring technology reduced theft of election materials by about 60 percent and vote counts for connected candidates by about 25 percent. The results have implications for electoral competition and are potentially actionable for policymakers.

M. Callen in AER on Institutional Corruption in Afghanistan
Hanna, Rema, and Paulina Oliva. 2015. “The Effect of Pollution on Labor Supply: Evidence from a Natural Experiment in Mexico.” The Journal of Public Economics 122 (February 2015): 68-79. Publisher's VersionAbstract

Much of what we know about the marginal effect of pollution on infant mortality is derived from developed country data. However, given the lower levels of air pollution in developed countries, these estimates may not be externally valid to the developing country context if there is a nonlinear dose relationship between pollution and mortality or if the costs of avoidance behavior differs considerably between the two contexts. In this paper, we estimate the relationship between pollution and infant mortality using data from Mexico. We find that an increase of 1 parts per billion in carbon monoxide (CO) over the last week results in 0.0032 deaths per 100,000 births, while a 1 μg/m3 increase in particulate matter (PM10) results in 0.24 infant deaths per 100,000 births. Our estimates for PM10 tend to be similar (or even smaller) than the U.S. estimates, while our findings on CO tend to be larger than those derived from the U.S. context. We provide suggestive evidence that a non-linearity in the relationship between CO and health explains this difference.

R. Hanna in JPE on Effect of Pollution in Mexico, CID WP #225 (2011)
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

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.

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.

Hanna, Rema, Vivi Alatas, Abhijit Banerjee, Benjamin Olken, Matthew Wai-Poi, and Ririn Purnamasari. 2014. Targeting the Poor: Evidence from a Field Experiment in Indonesia. 12th ed. Vol. Impact Evaluation Report. International Initiative for Impact Evaluation (3ie), Impact Evaluation Report, 12. Publisher's VersionAbstract

Governments of developing countries often lack verifiable income information for poor people and communities. This makes targeting for social programs a challenge. This report provides results from a randomised control trial that was designed to better understand how to improve targeting in Indonesia. Specifically, during the expansion of Indonesia’s real conditional cash transfer program, Program Keluarga Harapan (PKH), we randomized three different targeting methodologies — proxy means testing, self-targeting and community targeting – across 600 villages. We found that, when poverty is defined by consumption, self-targeting identifies poorer beneficiaries than proxy means testing and it has lower administrative costs. Community targeting is less effective than proxy means testing in identifying the poor based on per capita consumption, but it results in higher satisfaction levels with the program.

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. 

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.