Browsing by Author "Beramendi, Pablo"

This paper is focusing on the relationship between China’s aid to South Africa and people’s perception of inequality in recipient areas, and its mechanism. South Africa is African’s largest economy and second largest China’s aid recipient. However, in the meantime, South Africa is a country with high inequality and a large amount of people are living under the poverty line. This paper is focusing on subjective inequality. This paper proposes that China’s aid can reduce people’s perception of inequality by promoting employment therefore increases people’s prospect of upward mobility. AidData’s China’s aid dataset and South Africa Social Attitude Survey are used to test this theory. The result is that China’s aid decreases perception of inequality in recipient areas, however, the result varies among ethnic groups. To avoid endogenous, this paper also uses China’s steel production as an instrument variable. This paper also uses different measurement of aid, different methods, different attitudes and different instruments to test the robustness. The result is robust. However, the effect of mechanism—employment is weak.

This analysis addresses the issue of immigration in the context of the European Union enlargement. Focusing on the use of transitional provisions, it attempts to explain why and when EU leaders give workers from new member countries access to their labor market. Building on the observation that EU leaders seem not to use provisions in the spirit of the law, I gauge the importance of domestic political stakes in the use of those provisions. The empirical results suggest that although EU leaders implement and repeal provisions based on economic circumstances, political factors do intervene in the decision-making process. However, it remains uncertain whether those political factors are institutional or purely electoral.

This dissertation studies the political economy of city status and its historical role in promoting development. The status of a city was a set of political institutions that altered the governance of towns it was bestowed upon, making towns into cities and townsmen into citizens. The three essays of this dissertation explore why and how alternative city-level political institutions may result in different development outcomes, and how individuals may dynamically interact with and respond to political institutions. I highlight the role of the distribution of political power between the landed and the urban elites as key to understanding the consequences of city status. In this dissertation, I utilize a variety of methods such as archival research, game-theoretic modeling, historical and qualitative analysis, case studies, geographic information system mapping as well as econometric analysis.

In Chapter 2, I develop a formal model of city formation with political control by landed or urban elites. I show how technological limitations faced by the landed elites, a result of their dependence on the scarcely available land as a production input, constrain optimal allocation decisions for employing complementary production inputs, labor, and productive public goods. The model predicts that political control by landed elites will result in cities with a smaller equilibrium population size and with fewer public goods being provided.

In Chapter 3, I argue that institutions privileging urban at the expense of landed elites may generate better outcomes even in the absence of democracy and may actually outperform democracy if it leads to political control by landed elites. Using original town-level data, I draw on evidence from an 1869 city reform in Congress Poland which deprived three-quarters of the 452 cities of their city status, giving political rights to landed but not urban elites. I show that degraded cities experienced a 64 percentage points slower population growth over the next 40 years. City status was associated with greater public goods provision and more effective judiciary in remaining cities and contributed to a relative agrarianization of degraded cities. I discuss implications for our understanding of the role of inclusive institutions in promoting development.

Chapter 4 explores how individuals may contest unfavorable formal institutions, resulting in the development of norms that directly counter these institutions. The theoretical framework developed in this chapter serves to provide an explanation for how formal institutions may persist even long after their demise, and why the direction of this persistence does not need to replicate equilibria that formal institutions were meant to sustain. To investigate this empirically, I study the long-term effects of the 1869 city reform to show how formal city-level institutions that have been unfavorable to entrepreneurship have led to the development of strong pro-entrepreneurship norms that have persisted until the present and make the populations of towns with previously unfavorable institutions more entrepreneurial now.

The last two decades have seen an emergence of a new regime type, called mixed regimes, whose democratically elected leaders have slowly eroded institutions of accountability. Unlike democratic breakdowns, such erosions take place in incremental steps, which create uncertainties about what the cumulative effects of these steps will lead to in the future. This dissertation focuses on media and information manipulation to understand how unconstrained leaders use media to sustain popular support and how they leverage such uncertainties for their benefit. I first analyze how governments in mixed regimes manipulate the informational environment in an era of conglomerate-owned media. I argue that state contracts in non-media sectors represent an essential tool for influencing media coverage. I use machine learning to construct a media bias measure and analyze the universe of all state contracts and a vast corpus of newspaper articles from Turkey. I show that conglomerate-owned newspapers are more pro-government than other newspapers. More importantly, this bias grows with the government’s discretion. In return, these conglomerates secure state contracts on favorable terms. Chapter 3 takes the analysis further and analyzes specific information manipulation strategies in captured media. In particular, I answer the following question: how do governments in mixed regimes manipulate economic news in times of economic crisis? Although economic crises may cause regimes to collapse, we see that unconstrained leaders in mixed regimes are resilient even in times of crisis. Using the 2021 currency crisis from Turkey and analyzing the entire corpora of three media outlets, this chapter examines the prevalence of different information manipulation strategies using various machine learning and dictionary methods. While these two chapters focus on media, Chapter 4 instead focuses on how such information manipulation strategies affect citizens in critical junctures, e.g., when asked about institutional changes that pave the way for unconstrained executives. In this chapter, I argue that aspiring unconstrained leaders are more likely to gain popular support when they present checks and balances as obstacles to getting things done. In doing so, these leaders exploit a critical tension between the possibility of gridlock and the abuse of power, which is inherent in democratic institutions. Using cross-national data and leveraging an original survey experiment from Turkey, I show that effective checks and balances decrease democracy satisfaction and that aspiring unconstrained leaders are more likely to gain popular support when they present these institutions as obstacles to getting things done. More interestingly, respondents perceive their gridlock justification to dismantle checks and balances as a pro-democratic attempt to remove the barriers to a policy-responsive regime. Overall, this dissertation project helps us understand how information manipulation in mixed regimes sustains popular support for unconstrained leaders.

What explains the spatial patterns of public goods provision in the developing world? Understanding the distributive logic of public goods and services of who gets what, why, and how, is increasingly important, with implications on lives and livelihood of the developing world. To answer this canonical question in distributive politics, the supply-side literature has been focused on explaining the patterns of distribution through the logic of electoral politics or ethnic politics.

The literature, however, has been less precise on why political elites choose the exact type of public goods they provide and how they are provided. To develop a more in-depth understanding of the distributive logic of public goods, I develop a theoretical argument that reconciles the political incentives of the elites that derive from the electoral and ethnic geography they face. I make the argument that the political and social geography elites face determine their time horizons, which in turn influence the type of public goods they provide, to whom, and how. I theorize that higher levels of electoral competition that lead to shorter time horizons are associated with the provision of universal public goods with larger catchment areas, higher visibility, and quicker delivery to maximize electoral gains within a shorter period of time. Lower levels of electoral competition and the subsequent longer time horizons are associated with public goods that are targetable in implementation and provided to rich core voters. Ethnic heterogeneity conditions the effect of electoral competition by imposing a cost to learning about voters' preferences. Furthermore, I argue that higher ethnic heterogeneity increases the cost of learning, thereby reinforcing the patterns to providing all-encompassing, universal, public goods, whereas lower heterogeneity allows elites to learn about the voters' preferences, leading to a relatively more targeted approach to provision. Using granular panel data on Indonesia, I find quantitative evidence of my theoretical expectations.

In addition to exploring the incentives of political elites on public goods provision, I explore the long-run constraints posed to the elites by the colonial legacies. I identify an important tension in the discussion on colonial institutions and development--the inconclusiveness of the implications of colonial rule--and argue that infrastructural legacies of colonialism need to be accounted for in order to explain the variations within and between the types of colonial institutions. I theorize that the availability of colonial infrastructural legacies helps overcome the potential adverse effect of extractive colonial institutions. This is done so by helping the post-colonial regime provide public goods and services by providing a stock of infrastructure that the regime can leverage in providing public goods and services. Using a quasi-experiment in Cameroon, I find evidence that the combination of colonial rule (direct rule) and colonial infrastructural investments matter for access to public goods in the post-colonial period compared to a combination of indirect rule without investments.

Urbanization in the global south has made the relationship between ethnic proximity and politics increasingly important. The literature mainly studies either the social or the political effects of proximity, without distinguishing between them or exploring their relationship to one another. I reconcile the two sides of this literature by developing a theory about the relationship between the social and the political consequences of ethnic proximity. To measure heterogeneity and proximity in dynamic and data-poor urban environments, I develop novel measurements of individual outgroup exposure and neighborhood-level segregation. To test my theory, I apply the exposure metric to original data from slums in three Indian cities, and find support for my claim that proximity has distinct effects on social and political relations between groups. I then explore the relationship between neighborhood-level collective action and social mobility. I find that collective political mobilization has a substantial impact on lived outcomes, through the mechanism of services.

Why do agents react to economic shocks privileging their identities and distrust of elites over their economic interests? This dissertation argues that this paradox can be explained by the logic of democratic representation. In a democracy, citizens delegate their economic interests to elites and institutions and forge a \emph{long-run relationship} with them. It shows that three factors -trust, identity and economic aspirations- regulate this relationship, and the fact that conflicts are processed within it can explain two puzzles: a) why economic disagreements arise while economic conditions remain unchanged and b) why economic shocks result in polarization or populism.

Firstly, it looks at the link between living standards and anti-establishment politics after financial crises. It pools 250 opinion and spending surveys and shows that unfulfilled economic aspirations undermine the trust in elites and institutions. Citizens protect their economic interests making their trust contingent on their economic aspirations. Financial crises undermine their well-being, and the ensuing decline in trust can interact with pre-existing political identities, and polarize politics along lines apparently unrelated to economic deprivations.

Secondly, it examines the link between affective polarization and economic expectations looking at 27 European countries since 1993. It identifies partisan bias looking at how citizens react to cabinet shifts. It shows that citizens with identical fundamentals but different identities update their subjective expectations in opposite directions. It argues that partisan bias is driven by affective polarization: the polarization of elites increases the hostility towards opponents, and citizens express it through their subjective expectations. However, bias does not push citizens to act against their economic self-interest. I reject alternative explanations about the source of bias including (a) lack of information (b) disagreements over the expected effects of government policy or its competence.

These findings suggest that democracy can transform the experience of citizens of economic antagonisms into conflicts with elites or about identity. However, trust and identities do not diminish the impact of economic factors, it only makes it more complex.

Bureaucracy is a pillar of state building. I examine how new states achieve the transition from tenuous rule to consolidated rule. Rulers can diversify the selection system to recruit agents who have different skill sets to solve the dual challenges of territorial pacification and routine administration in pursuit of state-building. While rulers appoint officials who have cultural training resources to maintain routine governance, they turn to officials with practical skills to pacify contentious areas.

This dissertation brings bureaucracy to the debate on state-building and contributes to the literature about meritocracy and bureaucratic politics. I draw on archives to build an original dataset on the prefects of Qing Dynasty of Imperial China prefectural and conflict incidents to test this theory. First, I explain the temporal variation in recruitment channels by describing how appointment strategies responded to perceived regime threats, conditioned by the supply side constraint. Second, I find that during peaceful times the Qing imperial court was more likely to appoint officials who passed entered the Imperial Civil Service Exams during peaceful times, but they the court turned to Manchu officials and office purchasers after conflicts broke out. Third, I examine the impact of bureaucratic structure on state performance. I test whether or not the exam officials performed better in terms of delivering famine relief and establishing charities. I find the Qing imperial court shifted to appointing officials with military skills and fiscal resources after conflicts broke out from appointing officials who entered the administration via the exam route. I also find that the exam officials did not perform better than non-exam officials in governance, measured by famine relief measures and charitable activities. I conclude the dissertation by summarizing the theoretical framework and empirical findings, discussing limitations, and reviewing the research agenda.

This dissertation explores why, how, and to what extent economic elites influence distributive outcomes. In answering these questions, it challenges standard political economy approaches built on the assumption that economic elites' interests can be traced to a single sector or asset.

Building on the literatures on business and financial economics, the history of elites, and the latest contributions to the political economy literature, it proposes that the structure of economic elites' asset portfolio is crucial to explain their role in shaping distribution. This work thus develops a theory that explains how asset portfolio diversification shapes economic elites' preferred policies to protect their capital, how such preferences shape the political strategies they use to advance their interests and, ultimately their capacity to influence distributive outcomes.

In the first part, it shows that diversified members of the economic elite tend to pursue policies that have a multiplier effect on the overall economy, whereas specialized elites prioritize policies that narrowly target their sector alone. Furthermore, to achieve their preferred policy outcome, the former type is likely to embed in the state structure by directly participating in the state administration and electoral politics, and the latter is more prone to lobby in favor of their interests from the outside, relying on sectoral business associations.

In the second part, it demonstrates that diversification was a risk hedging strategy pursued by landed elites that faced a high risk of expropriation during the transition from a traditional to a modern economy. Where this process of early diversification took place, rates of development where higher both in the short and the long run. Furthermore, areas where landed elites remained specialized became economic laggards.

The evidence to sustain these claims comes from a combination of historical narratives from Argentina and Chile and the use of multiple statistical techniques drawing on original individual- and subnational-level data from previously untapped historical archives that altogether spans between the mid-nineteenth and the mid-twentieth centuries.

This dissertation puts forward a novel theory of imperfect economic information to understand the determinants of high income earners' support for tax and transfer policies. Although the notion that voters are poorly informed is now a central element of the scholarly heritage of political science, the implications of economic illiteracy of individuals is seldom a consideration in the models of redistributive preferences. Most accounts assume, incorrectly, that people use factual information about income inequality and their position in the income distribution in determining expected benefits and losses from prospective taxation. This project challenges the common perfect information assumption. I thus investigate the micro-mechanisms through which high-income individuals make decisions about welfare policies in the absence of perfect information.

I argue that individuals use social comparison and cognitive heuristics when they lack precise knowledge of the extent of economic inequality and their position on the income ladder. These generated perceptions, in return, form the basis of their calculation of potential benefits and losses due to tax policies. I make several contributions. First, I develop a theoretical model and show empirically that individuals perceiving a significant income gap between themselves and high-income earners are more likely to support higher tax rates. Second, through analyzing survey data, I find ample evidence suggesting that the amount and substance of information available to individuals may be more important than the actual data in predicting and shaping political behavior. Remarkably, my results evince that individuals tend to judge the level of inequality proportionally to the degree of inequality they perceive. I further demonstrate that the effect of misperceptions on one's willingness to contribute to the welfare system depends on the political institutions that control the amount and scope of information available to their citizens. Finally, my analysis of the preferences of Ottoman elites reveals an example for this phenomenon. I find that in authoritarian settings in which class differences are very institutionalized, there are no informational asymmetries. In such cases, decisions of the elite are not affected by distributional misperceptions, and they are predominantly governed by material self interest considerations.

Declining industries are privileged at the expense of new innovative ones in some cities but not others. In order to understand why, I develop an argument about how politics aggregates the demand for industrial rents across space. Geographically concentrated industries produce electorates with homogenous preferences in favor of supporting established local firms. In electoral systems where politicians are beholden to voters in a narrow geographic constituency, politicians will support efforts to prop up these industries even as these measures stymie innovation. Conversely, in electoral systems where politicians are beholden to broad party interests, politicians will support nationally important and geographically dispersed industries. Concentrated industries, by contrast, are more likely to die a rapid death and leave public resources available for new pioneering firms. Thus, the intersection between electoral and political geography provides insight into the Schumpeterian creative destruction needed to transform a city into a post-industrial economy. I formalize my argument in two models: one analyzing the demand of subsidies over public goods by voters and another exploring the tradeoff between rent-seeking and innovation by firms. I test the resulting hypotheses through cross-country statistical regressions and two in-depth case studies. Using firm-level data across many countries I show that political geography conditions the provision of subsidies to declining firms, and that electorally important firms are less likely to innovate. Then, using original field data I investigate the causal impact of political institutions and economic geography on the provision of subsidies by utilizing exogenous shocks in Thailand and India.

It is a fundamental assertion in political science that political parties in government allocate resources disproportionately to benefit the people who have voted for them and for projects that push forward their political agenda. However, this literature ignores the structural (network) limitations of policy making. By creating a new network model which depicts the structure and growth of loosely coupled religious organizations, I create a taxonomy of religious denominations and examine how their network structure affects their likelihood of receiving government support. I test this relationship empirically in the United States and Israel. In the United States, I examine President Bush’s Faith Based Initiative, which was expected to channel government funding mostly to conservative, white, southern churches. In Israel, I research the education systems of the different religious sectors and how much government support they receive, the common belief being that the ultra-orthodox receive the most. Using network modeling, formal modeling and instrumental variable analysis, I show that despite expectations, in the United States conservative congregations did not receive more funding and in Israel not all ultra-orthodox networks receive high levels of support. The significant predictor, in both cases, for receiving funding is the network structure of the denominations, where more hierarchical denominations are more likely to receive funding than those organized in a dispersed network structure.

In this paper, I explore the implications of a dictator's time horizon on the fiscal balance of an authoritarian regime. A dictator with a longer time horizon will discount the future less, thus is more responsible in spending. Since a dictator's time horizon is not directly observable, I discuss the factors that would affect a dictator's time horizon and their influence on the fiscal balance of an authoritarian regime. Testing the results using OLS regressions, limited evidence is found to support my hypotheses. Possible reasons for the inconclusive results are explored and further improvement and future research possibilities are discussed.