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The Political Economy and Economic Development of Non-Democracies

Paper Session

Friday, Jan. 3, 2020 2:30 PM - 4:30 PM (PST)

Manchester Grand Hyatt, Ocean Beach
Hosted By: Society for Economic Dynamics
  • Chair: Gerard Padró i Miquel, Yale University

Social Media and Xenophobia: Evidence from Russia

Leonardo Bursztyn
,
University of Chicago
Georgy Egorov
,
Northwestern University
Ruben Enikolopov
,
New Economic School
Maria Petrova
,
Pompeu Fabra University

Abstract

We study the causal effect of social medial on hate crimes and xenophobic attitudes in Russia, using quasi-exogenous variation in social media penetration across cities. We find that higher penetration of social media leads to more ethnic hate crimes, but only in cities with high baseline level of nationalist sentiment prior to the introduction of social media. Consistent with a mechanism of coordination of crimes, the effects are stronger for crimes with multiple perpetrators. Using a list experiment embedded in a survey, we show that social media penetration also had a persuasive effect on young and uneducated individuals, who become more likely to have xenophobic attitudes. Our results are consistent with a simple model of social learning where penetration of social networks increases individuals' propensity to meet like-minded people.

Conflict and Inter-Group Trade: Evidence from the 2014 Russia-Ukraine Crisis

Alexey Makarin
,
EIEF
Vasily Korovkin
,
CERGE-EI

Abstract

Does 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

Leonardo Bursztyn
,
University of Chicago
Davide Cantoni
,
University of Munich
David Yang
,
Harvard University
Noam Yuchtman
,
University of California-Berkeley
Y. Jane Zhang
,
University of New South Wales

Abstract

We 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

Monica Martinez Bravo
,
CEMFI
Gerard Padró i Miquel
,
London School of Economics
Nancy Qian
,
Northwestern University
Yang Yao
,
Peking University

Abstract

We 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.
JEL Classifications
  • O1 - Economic Development
  • P4 - Other Economic Systems