The Political Economy and Economic Development of Non-Democracies
Friday, Jan. 3, 2020 2:30 PM - 4:30 PM (PST)
- Chair: Gerard Padró i Miquel, Yale University
Conflict and Inter-Group Trade: Evidence from the 2014 Russia-Ukraine Crisis
AbstractDoes armed conflict reduce trade even in non-combat areas through the destruction of inter-group social capital? We analyze Ukrainian trade transactions before and after the 2014 Russia-Ukraine conflict. In a difference-in-differences framework, we find that Ukrainian firms from districts with fewer ethnic Russians experienced a deeper decline in trade with Russia. This decline is economically significant, persistent, and explained by erosion of trust and the rise of local nationalism. Affected Ukrainian firms suffered a decrease in performance and diverted trade to other countries. Our results suggest that, through social effects, conflict can be economically damaging even away from combat areas.
Persistent Political Engagement: Social Interactions and the Dynamics of Protest Movement
AbstractWe test whether participation in one protest within a political movement increases subsequent protest attendance, and why. To identify an effect of protest participation, we randomly, in- directly incentivize Hong Kong university students into participation in an antiauthoritarian protest. To identify the effects of social interactions, we randomize the intensity of this treatment across major-cohort cells. We find that experimentally-induced protest participation is significantly associated with protest attendance one year later, though political beliefs and preferences are unaffected. Persistent political engagement is greatest among individuals in the cells with highest treatment intensity, suggesting that social interactions sustained persistent political engagement.
The Rise and Fall of Local Elections in China
AbstractWe propose a simple informational theory to explain why autocratic regimes introduce local elections. Because citizens have better information on local officials than the distant central government, delegation of authority via local elections improves selection and performance of local officials. However, local officials under elections have no incentive to implement unpopular centrally mandated policies. The model makes several predictions: i) elections pose a trade-off between performance and vertical control; ii) elections improve the selection of officials; and iii) an increase in bureaucratic capacity reduces the desirability of elections for the autocrat. To test (i) and (ii), we collect a large village-level panel dataset from rural China. Consistent with the model, we find that elections improve (weaken) the implementation of popular (unpopular) policies, and improve official selection. We provide a large body of qualitative and descriptive evidence to support (iii). In doing so, we shed light on why the Chinese government has systematically undermined village governments twenty years after they were introduced.
- O1 - Economic Development
- P4 - Other Economic Systems