Listen to Robin Burgess discussing his research research in a VoxDev Talk with Tim Phillips. Topics discussed are the motivation of civil servants, recent evidence on poverty traps, and the political economy of electricity:
Bureaucracy and Development
With Timothy J. Besley, Adnan Khan and Guo Xu
The Annual Review of Economics, 2022, 14: 397-424.
Abstract
In recent years, there has been increasing interest in whether and how
bureaucratic effectiveness contributes to development. Just what makes for
an effective bureaucracy and what are the building blocks of state capacity
remain subject to debate. This article reviews the arguments connecting
contemporary research using administrative data and field experiments to
wider discussions of the origins of state capacity. Most current research has
focused on understanding specific features of the environment in which
bureaucrats operate. We connect this to discussions of bureaucratic systems,
specifically the relationship to politics, citizens, firms, and nongovernmental
organizations.
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The Economics of Tropical Deforestation
With Clare Balboni, Aaron Berman and Benjamin A. Olken
Forthcoming, The Annual Review of Economics
Abstract
Two factors have elevated recent academic and policy interest in tropical deforestation: first, the
realization that it is a major contributor to climate change; and second, a revolution in satellite-based
measurement that has revealed that it is proceeding at a rapid rate. We begin by reviewing
the methodological advances that have enabled measurement of forest loss at a fine spatial
resolution across the globe. We then develop a simple benchmark model of deforestation based
on classic models of natural resource extraction. Extending this approach to incorporate features
that characterize deforestation in developing countries—pressure for land use change, significant
local and global externalities, weak property rights, and political economy constraints—provides
us with a framework for reviewing the fast-growing empirical literature on the economics of
deforestation in the tropics. This combination of theory and empirics provides insights not
only into the economic drivers and impacts of tropical deforestation but also into policies that
may affect its progression. We conclude by identifying areas where more work is needed in this
important body of research.
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Demand for Electricity on the Global Electrification Frontier
With Michael Greenstone, Nicholas Ryan and Anant Sudarshan
Working Paper
Press Coverage: The Economist, IGC Blog, Forbes
Abstract
"Falling off-grid solar prices and subsidized grid extension are revolutionizing choice for
the billion people without electricity. We use experimental price variation to estimate
demand over all electricity sources in Bihar, India, during a four-year period when
electrification rates leapt from 27% to 64%. We find that household surplus from electrification tripled, with gains due nearly as much to off-grid solar as to the subsidized
grid. Choice matters—the surplus from electrification is 3-5 times greater than from any
one source. Nonetheless, we project future electrification will come mainly from the
grid, since households prefer the grid as they grow wealthier."
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Short Video
Full Documentary
The Consequences of Treating Electricity as a Right
With Michael Greenstone, Nicholas Ryan and Anant Sudarshan
Journal of Economic Perspectives, 2020, 34(1): 145-169.
Press Coverage: IGC Blog
Abstract
This paper seeks to explain why billions of people in developing countries either have no access to electricity or lack a reliable supply. We present evidence that these shortfalls are a consequence of electricity being treated as a right and that this sets off a vicious four-step circle. In step 1, because a social norm has developed that all deserve power independent of payment, subsidies, theft, and nonpayment are widely tolerated. In step 2, electricity distribution companies lose money with each unit of electricity sold and in total lose large sums of money. In step 3, government-owned distribution companies ration supply to limit losses by restricting access and hours of supply. In step 4, power supply is no longer governed by market forces and the link between payment and supply is severed, thus reducing customers' incentives to pay. The equilibrium outcome is uneven and sporadic access that undermines growth.
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Short Video
Full Documentary
The Search for good jobs: Evidence from a Six-Year Experiment in Uganda
With Oriana Bandiera, Vittorio Bassi, Imran Rasul, Munshi Sulaiman and Anna Vitali
Revise and Resubmit, Journal of Labor Economics
Press Coverage: J-PAL blog
Abstract
Developing countries face the challenge of aiding large cohorts of labor market entrants find good jobs. How to do so is complicated by job seekers differing in their skills, information and traits. We present results from a six-year field experiment studying job search behavior among youth in urban labor markets in Uganda, who at baseline, are unskilled yet optimistic over their job prospects. We engineer heterogeneity across workers through the offer of vocational training, and job assistance to meet with potential employers. Vocational training leads to measurable improvements in skills, while job assistance alters information workers have on their prospects, as call back rates from employers are low. Search behavior varies across the skills distribution: relative to controls, skilled youth become even more optimistic, search more intensively, and direct search towards better firms. The additional provision of job assistance to skilled youth causes them to revise down their beliefs, search less intensively and over lower quality firms. These differential search strategies impact long run outcomes: skilled workers without job assistance have higher employment rates and spell durations, and match to higher quality jobs and firms. Fixed traits across workers such as their cognitive ability and self-evaluation determine search strategies and outcomes because they interlink with how youth respond to the low call back rates from job assistance. Overall, our study provides insights on sources of worker heterogeneity driving labor market inequalities and inefficiencies, and on the design and targeting of labor market programs.
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Cycles of Fire? Politics and Forest Burning in Indonesia
With Clare Balboni, Anton Heil, Jonathan Old, and Ben Olken
The American Economic Association: Papers & Proceedings
Published paper Online Appendix
Abstract
This paper examines the link between electoral incentives and environmental degradation by exploiting a satellite data set on 107,000 forest fires and 879 asynchronous district elections in Indonesia. Fires represent a cheap but illegal means of converting forested land to other uses, but risk burning out of control and creating substantial negative environmental externalities. We find a significant electoral cycle in forest fires. Ignitions and area burned decline during election years, but steeply increase in the year after. The results suggest that politicians may suppress this activity at times when it might particularly dent their electoral chances.
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The Origins and Control of Forest Fires in the Tropics
With Clare Balboni and Ben Olken
Resubmitted, The Review of Economic Studies
Abstract
Environmental externalities – uncompensated damages imposed on others – lie at the root of climate change, pollution, deforestation and biodiversity loss. Empirical evidence is limited, however, as to how externalities drive private decision making. We study one such behavior, illegal tropical forest fires, using 15 years of daily satellite data covering over 107,000 fires across Indonesia. Weather-induced variation in fire spread risk and variation in who owns surrounding land allow us to identify how far externalities influence the decision to use fire. Relative to when all spread risks are internalized, we find that firms overuse fire when surrounded by unleased government lands where property rights are weak. In contrast, and consistent with Coase, firms treat risks to nearby private concessions similarly to risks to their own land. Government
sanctions, concentrated on fires spreading to populated areas, also deter fires, consistent with Pigouvian deterrence.
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The Glittering Prizes: Career incentives and bureaucrat performance
With Guo Xu, Marianne Bertrand and Arunish Chawla
The Review of Economic Studies, 2020, 87(2): 626-655
Published Paper Online Appendix Replication Files
Press Coverage: ThePrint
Abstract
Bureaucracies are configured differently to private sector and political organizations. Entry is competitive, promotion is based on seniority, jobs are often for life and retirement occurs at a fixed age. This implies that older entering officers, who are less likely to attain the glittering prize of reaching the top of the bureaucracy before they retire, may be less motivated and exert less effort. Using a nationwide stakeholder survey and rich administrative data on elite civil servants in India we provide evidence that: (i) officers who cannot reach the senior-most positions before they retire are perceived to be less effective and are more likely to be suspended, (ii) this effect is weakened by a reform that extends the retirement age and (iii) states that contain a higher proportion of career capped officers perform less well but this effect is weakened by the pension reform. Together these results suggest that the career incentive of reaching the top of a public organization is a powerful determinant of bureaucrat performance.
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Tackling Youth Unemployment: Evidence from a Labor Market Experiment in Uganda
With Livia Alfonsi, Oriana Bandiera, Vittorio Bassi, Imran Rasul, Munshi Sulaiman, and Anna Vitali
Econometrica, 2020, 88(6): 2369-2414
Published Paper Online Appendix
Microeconomic Insights article
Press Coverage: J-PAL VoxDev Video
Abstract
We design a labor market experiment to compare demand- and supply-side policies to tackle youth unemployment, a key issue in low-income countries. The experiment tracks 1700 workers and 1500 firms over four years to compare the effect of offering workers either vocational training (VT) or firm-provided training (FT) for six months in a common setting where youth unemployment is above 60%. Relative to control workers we find that averaged over three post-intervention years, FT and VT workers: (i) enjoy large and similar upticks in sector-specific skills, (ii) significantly improve their employment rates, and, (iii) experience marked improvements in an index of labor market outcomes. These averages, however, mask differences in dynamics: FT gains materialize quickly but fade over time, while VT gains emerge slowly but are long-lasting, leading VT worker employment and earning profiles to rise above those of FT workers. Estimating a job ladder model of worker search reveals the key reason for this: VT workers receive significantly higher rates of job offers when unemployed thus hastening their movement back into work. This likely stems from the fact that the skills of VT workers are certified and therefore can be demonstrated to potential employers. Tackling youth unemployment by skilling youth using vocational training pre-labor market entry, therefore appears to be more effective than incentivizing firms through wage subsidies to hire and train young labor market entrants.
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Video
Why Do People Stay Poor?
With Oriana Bandiera, Clare Balboni, Maitreesh Ghatak and Anton Heil
The Quarterly Journal of Economics , 2022, 137(2): 785-844
Published paper Online Appendix Oriana's Slides
Press Coverage: VoxDev (Clare's Video), Of Dollars and Data, VoxDev (Maitreesh's Video), LSE Research for the World Magazine
Abstract
There are two broad views as to why people stay poor. One emphasizes differences in fun- damentals, such as ability, talent or motivation. The other, poverty traps view, differences in opportunities which stem from differences in wealth. We exploit a large-scale, randomized asset transfer and panel data on 6000 households over an 11 year period to test between these two views. The data supports the poverty traps view - we identify a threshold level of initial assets above which households accumulate assets, take on better occupations and grow out of poverty. The reverse happens for those below the threshold. Structural estimation of an occupational choice model reveals that almost all beneficiaries are misallocated in the work they do at baseline and that the gains arising from eliminating misallocation would far exceed the program costs. Our findings imply that big push policies which transform job opportunities represent a powerful means of addressing the global mass poverty problem.
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econimate video
Conference Presentation
Organization of the State: Home Assignment and Bureaucrat Performance
With Guo Xu and Marianne Bertrand
The Journal of Law, Economics and Organization, 2021
Abstract
How to allocate personnel is a central question in the organization of the state. We link survey data on the performance of 1,472 elite civil servants in India to their personnel records between 1975-2005 to study how home allocations affect their performance and careers. Using exogenous variation in home assignment generated by an allocation rule, we find that bureaucrats assigned to their home states are perceived to be less effective and more likely to be
suspended. These negative effects are driven by states with higher levels of corruption and cohorts with greater numbers of home state officers.
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The Political Economy of Deforestation in the Tropics
With Matthew Hansen, Ben Olken, Peter Potapov and Stefanie Sieber
In: The Quarterly Journal of Economics, 2012, 127(4): 1707-1754
Published Version Replication Data Online Appendix
Press Coverage: BOS Australia
Abstract
Tropical deforestation accounts for almost one-fifth of greenhouse gas emissions and threatens the world’s most diverse ecosystems. Much of this deforestation is driven by illegal logging. We use novel satellite data that tracks annual deforestation across eight years of Indonesian institutional change to examine how local officials’ incentives affect deforestation. Increases in the number of political jurisdictions lead to increased deforestation and lower timber prices, consistent with Cournot competition between jurisdictions. Illegal logging and local oil and gas rents are short-run substitutes, but this effect disappears over time with political turnover. The results illustrate how local officials’ incentives affect deforestation and show how standard economic theories can explain illegal behavior.
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