Browsing by Author "Malesky, EJ"

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Open Access
A Peek under the Engine Hood: The Methodology of Subnational Economic Governance Indices
(Hague Journal on the Rule of Law, 2011-09) Malesky, EJ; Merchant Vega, ANDN
© 2011 T.M.C.ASSER PRESS and Contributors. In recent years, The Asia Foundation (The Foundation) has conducted a series of Economic Governance Indexes (EGIs) in countries throughout South and Southeast Asia including Bangladesh, Sri Lanka, Vietnam, Cambodia, and Indonesia. EGIs are country-specific diagnostic tools used to assess and rank sub-national units (provinces, states, districts, etc.) on various aspects of their regulatory environments. This article reviews the basic theoretical and programmatic rationale for the EGI. The overall rationale for this tool stems from the idea that economic governance impacts private sector development – independent of structural endowments such as location, infrastructure, and human capital. Therefore, good economic governance practices explain why some sub-national units out-perform others in spite of having similar initial endowments. EGIs have become an important tool to provide relevant economic governance information to policy makers, business leaders and citizens. Examining the methodological principles underlying the index approach, this article also describes how the three primary EGI methodological elements anticipate potential pitfalls and how they have been addressed within the methodology.
Open Access
Accountability and Inequality in Single-Party Regimes: A Comparative Analysis of Vietnam and China.
(Comparative Politics, 2011) Malesky, EJ; Abrami, R; Zheng, Y
Open Access
Can Elections Motivate Responsiveness in a Single-Party Regime? Experimental Evidence from Vietnam
(American Political Science Review, 2022) Malesky, EJ; Todd, JD; Tran, ANH
A growing body of evidence attests that legislators are sometimes responsive to the policy preferences of citizens in single-party regimes, yet debate surrounds the mechanisms driving this relationship. We experimentally test two potential responsiveness mechanisms—elections versus mandates from party leaders—by provisioning delegates to the Vietnamese National Assembly with information on the policy preferences of their constituents and reminding them of either (1) the competitiveness of the upcoming 2021 elections or (2) a central decree that legislative activities should reflect constituents’ preferences. Consistent with existing work, delegates informed of citizens’ preferences are more likely to speak on the parliamentary floor and in closed-session caucuses. Importantly, we find that such responsiveness is entirely driven by election reminders; upward incentive reminders have virtually no effect on behavior.
Open Access
Can Results-Free Review Reduce Publication Bias? The Results and Implications of a Pilot Study
(Comparative Political Studies, 2016-11) Findley, MG; Jensen, NM; Malesky, EJ; Pepinsky, TB
© 2016, © The Author(s) 2016. In 2015, Comparative Political Studies embarked on a landmark pilot study in research transparency in the social sciences. The editors issued an open call for submissions of manuscripts that contained no mention of their actual results, incentivizing reviewers to evaluate manuscripts based on their theoretical contributions, research designs, and analysis plans. The three papers in this special issue are the result of this process that began with 19 submissions. In this article, we describe the rationale for this pilot, expressly articulating the practices of preregistration and results-free review. We document the process of carrying out the special issue with a discussion of the three accepted papers, and critically evaluate the role of both preregistration and results-free review. Our main conclusions are that results-free review encourages much greater attention to theory and research design, but that it raises thorny problems about how to anticipate and interpret null findings. We also observe that as currently practiced, results-free review has a particular affinity with experimental and cross-case methodologies. Our lack of submissions from scholars using qualitative or interpretivist research suggests limitations to the widespread use of results-free review.
Open Access
Chains of Love? Global Production and the Firm-Level Diffusion of Labor Standards
(American Journal of Political Science, 2018-07-01) Malesky, EJ; Mosley, L
©2018, Midwest Political Science Association Under what conditions does the global economy serve as a means for the diffusion of labor standards and practices? We anticipate variation among internationally engaged firms in their propensity to improve labor standards. Upgrading is most likely when a firm's products exhibit significant cross-market differences in markups, making accessing high-standards overseas markets particularly profitable. Additionally, upgrading is more likely when lead firms attach a high salience to labor standards. Therefore, while participation in global production induces “trading up” behaviors among firms overall, the effect strength varies across industries. We test our expectations via a survey experiment, which queries foreign firms operating in Vietnam about their willingness to invest in labor-related upgrading. We find strong evidence for the effect of markups on upgrading choices and suggestive evidence for the saliency mechanism.
Open Access
Competing for global capital or local voters? The politics of business location incentives
(Public Choice, 2015-09) Jensen, NM; Malesky, EJ; Walsh, M
© 2015, Springer Science+Business Media New York. The competition for global capital has led to interjurisdictional competition between countries, states and cities as to who can offer the most attractive incentives to firms. In this study, we examine the domestic politics of this competition by focusing on incentive use in the United States from 1999 to 2012. We define incentives as the targeted tax deductions or exemptions that are used to lure businesses into a locality. Drawing on data from municipal incentive programs, we examine how electoral competition shapes the use and oversight of targeted incentives. We find evidence that cities with elected mayors provide larger incentives than non-elected city managers by taking advantage of exogeneity in the assignment of city government institutions and a database of over 2000 investment incentives from 2010 to 2012. We also find that elected mayors enjoy more lax oversight of incentive projects than their appointed counterparts. Our results have important implications for the study of interjurisdictional competition and the role of electoral institutions in shaping economic policy.
Open Access
Cultural Constraints and Policy Implementation: Effects of the Beijing License Plate Lottery on the Environment
(Quarterly Journal of Political Science, 2024) Liu, AH; Malesky, EJ
Open Access
Effect of Interest Rate Subsidies on Firm Performance and Investment Behavior during Economic Recession: Evidence from Vietnam
(Asian Economic Journal, 2013-06) Dinh, TM; Malesky, EJ; To, TT; Nguyen, DT
This paper aims to quantitatively evaluate the microeconomic consequences of the 4-percent interest rate subsidy program, the main component of the Vietnamese Government's economic stimulus package in 2009, which was intended to assist recovery from the global economic and financial recession. Our analyses based on the Provincial Competitive Index 2009 survey and accounting data of firms listed on Vietnam's two stock exchanges show that firms that received subsidized loans were more likely to increase labor, to expand investment and to possess optimistic business plans. However, we find evidence that not all business activity generated by the stimulus led to productivity increases: a non-trivial proportion of subsidized loans were not used to invest in production or expansion, but for speculative activities such as real estate and stock market trading. © 2013 East Asian Economic Association and Wiley Publishing Pty Ltd.
Open Access
Enhancing Research on Authoritarian Regimes through Detailed Comparisons of China and Vietnam
(Problems of Post-Communism, 2021-01-01) Malesky, EJ
In exploring the role of factions, personalism, and legislative behavior in the two states, the three contributions in this issue dispense with the simplistic notion of a China or Vietnam “Model” of political economy, but instead explain the politics behind how leaders are chosen and how legislative decisions are made and implemented. As I argue in this essay, the insights of these three papers are important not only for broadening area studies expertise, but also contributing to the burgeoning literature on authoritarian regimes, which has insufficiently accounted for subtle institutional differences and variation in the policy preferences of elite actors.
Open Access
Experimentally Estimating Safety in Numbers in a Single-Party Legislature
(Journal of Politics, 2022-07-01) Malesky, EJ; Todd, JD
This article builds on recent experimental work in the Vietnamese National Assembly to explore a critical qualification regarding responsiveness in authoritarian parliaments: delegates grow increasingly responsive as the number of peers possessing the same information rises. We suggest that this reinforcement, or safety-in-numbers, effect arises because speaking in authoritarian assemblies is an intrinsically dangerous task, and delegates are reluctant to do so without confidence in the information they would present. Here we describe the saturation design for the original experiment, theorize safety-in-numbers behavior among authoritarian legislators, and test an additional observable implication of the logic. Consistent with the safety-in-numbers logic, we find that the effects of reinforcement are greater in televised floor speeches than closed-door caucuses.
Open Access
FDI Incentives Pay – Politically
(Vale Columbia FDI Perspectives Perspectives, 2010-06-26) Jensen, N; Malesky, EJ
Open Access
Firm Growth and Corruption: Empirical Evidence from Vietnam
(The Economic Journal, 2019-02-01) Bai, J; Jayachandran, S; Malesky, EJ; Olken, BA
Open Access
Foreign Direct Investors as Agents of Economic Transition: An Instrumental Variables Analysis
(Quarterly Journal of Political Science, 2009-03-19) Malesky, EJ
Previous empirical analysis has noted a correlation between Foreign Direct Investment (FDI) and economic reformin Eastern Europe and the Former Soviet Union, but has attributed the relationship to investors rewarding countries after reform decisions. Little attention has been paid to the fact that investors' lobbying efforts may actually influence reform choices. This paper finds a positive effect of FDI on reform progress through apanel analysis of investor influence in 27 transition states (1991-2004). To address endogeneity bias, the exogenous portion of a country's exchange rate movement is used as an instrument in a two-stage procedure. The underlying counterfactual comparison that results from this approach is between two similarly situated countries, but where one country experienced a large shift in the share of FDI in its economy as a result of changes in the international economy and the other did not. Further analysis reveals that the relationship is particularly strong in the manufacturing and service sectors, but does not hold for construction, utilities, or natural resource based projects. © 2009 E. J. Malesky.
Open Access
Foreign investment and bribery: A firm-level analysis of corruption in Vietnam
(Journal of Asian Economics, 2012-04) Georguiev, D; Malesky, EJ
Among the concerns faced by countries pondering the costs and benefits of greater economic openness to international capital flows is the worry that new and powerful external actors will exert a corrupting influence on the domestic economy. In this paper, we use a novel empirical strategy, drawn from research in experimental psychology, to test the linkage between foreign direct investment (FDI) and corruption. The prevailing literature has produced confused and contradictory results on this vital relationship due to errors in their measurement of corruption which are correlated with FDI inflows. When a less biased operationalization is employed, we find clear evidence of corruption during both registration and procurement procedures in Vietnam. The prevalence of corruption, however, is not associated with inflows of FDI. On the contrary, one measure of economic openness appears to be the most important driver of reductions in Vietnamese corruption: the wave of domestic legislation, which accompanied the country's bilateral trade liberalization agreement with the United States (US-BTA), significantly reduced bribery during business registration. © 2011 Elsevier Inc.
Open Access
Fostering global value chains through international agreements: Evidence from Vietnam
(Economics and Politics, 2021-11-01) Malesky, EJ; Milner, HV
Which is more reassuring to foreign investors—domestic laws or international agreements? A substantial literature argues that foreign investment may be underprovided, because governments cannot offer credible guarantees that judicial institutions are impartial and that investors will be able to fairly resolve disputes with business partners and enforce contracts. This time inconsistency problem deters profitable business partnerships between foreign investors and domestic firms in the host country. Consequently, for emerging market leaders seeking to deepen their countries’ integration into global value chains (GVCs), enhancing the confidence of investors in contracting institutions is critical. In this paper, we study the emerging market of Vietnam to examine which type of reassurance mechanism is most successful. Using a survey of 1,583 foreign firms, we inform investors about either a domestic law or international treaty designed to strengthen commercial arbitration procedures. We find that priming foreign firms about the international investment agreement has a larger positive impact on their views about the future profitability of their projects and the likelihood of contracting with other firms in GVCs than simply learning about the commitments in domestic law.
Open Access
Globalization and State Capitalism: Assessing Vietnam's Accession to the WTO
(CESifo Working Paper Series, 2017-08-28) Baccini, L; Impullitti, G; Malesky, EJ
What do state-owned enterprises (SOEs) do? How do they respond to market incentives? Can we expect substantial efficiency gains from trade liberalization in economies with a strong presence of SOEs? Using a new dataset of Vietnamese firms we document a set of empirical regularities distinguishing SOEs from private firms. We embed some of these features characterizing SOEs operations in a model of trade with firm heterogeneity and show that they can hinder the selection effects of openness and tame the aggregate productivity gains from trade. We empirically test these predictions analyzing the response of Vietnamese firms to the 2007 WTO accession. Our result show that WTO accession is associated with higher probability of exit, lower markups, and substantial increases in productivity for private firms but not for SOEs. Domestic barriers to entry and preferential access to credit are key drivers of the different response of SOEs to trade liberalization. Our estimates suggest that the overall productivity gains would have been about 66% larger in a counterfactual Vietnamese economy without SOEs.
Open Access
Labor upgrading and export market opportunities: Evidence from Vietnam
(Economics and Politics, 2021-11-01) Malesky, EJ; Mosley, L
We explore and provide an empirical assessment of an important mechanism by which global markets can motivate labor-related upgrading among developing country firms. New market opportunities, which result from exogenous shocks, can some producers to improve their treatment of workers. These improvements come because they are consistent with taking advantage of new opportunities. We focus specifically on how shifts in U.S. trade policy toward China in 2018 affect the willingness of foreign firms operating in Vietnam to engage in upgrading. Our analyses, based on surveys of firms in 2016, 2017, and 2018, suggest that firms respond significantly to changes in market opportunities, especially when they are primed to consider specific supply chain relationships. This market opportunity mechanism for upgrading contrasts with another widely used tool, in which developed country governments condition access to their markets upon improved human and labor rights outcomes. The former operates, in the short to medium term, at the firm level, while the latter seeks to effect change at the country level.
Open Access
“Leakage” in international regulatory regimes: Did the OECD Anti-Bribery convention increase bribery?
(Quarterly Journal of Political Science, 2021-10-18) Chapman, TL; Jensen, NM; Malesky, EJ; Wolford, S
When do well-intended regulatory regimes have unintended consequences? We examine one obstacle to successful regulation, “regulatory leakage,” in the context of the OECD Anti-Bribery Convention (ABC). Leakage occurs when regulated behavior decreases for actors under a regime’s jurisdiction, but increases among those outside of it. We analyze a formal model that demonstrates how the ABC may simultaneously reduce bribery among firms from member countries, while increasing bribery by firms from non-ABC member countries. We also show how the ABC may lead firms from ABC member countries to shift to bribery through intermediaries. New empirical evidence of MNC activity in Vietnam shows evidence of both regulatory leakage and bribery through intermediaries.
Open Access
Methodological errors in corruption research: Recommendations for future research
(Journal of International Business Studies, 2024-03-01) Delios, A; Malesky, EJ; Yu, S; Riddler, G
The secretive, illegal, multidimensional, and ubiquitous nature of corruption leads to formidable difficulties in research design and measurement. When research fails to account for these challenges, it can lead to an empirical misalignment with concepts and theories of corruption, with inferential errors commensurately emerging. We define, measure, and track four common measurement errors and two common research design errors for papers on corruption published in international business/management and political economy journals in the 2000–2021 period. Our data marks a substantial opportunity to tighten the fit between theory and methods. We offer recommendations to accelerate improvements in empirical research on corruption, and indeed for other phenomena that are characterized by legal, moral, and social desirability concerns. These empirical recommendations contribute to more robust theory building.
Open Access
Monopoly Money: Foreign Investment and Bribery in Vietnam, a Survey Experiment
(American Journal of Political Science, 2015-02) Malesky, EJ; Gueorguiev, DD; Jensen, NM
©2014, Midwest Political Science Association. Prevailing work argues that foreign investment reduces corruption, either by competing down monopoly rents or diffusing best practices of corporate governance. We argue that the mechanisms generating this relationship are not clear because the extant empirical work is too heavily drawn from aggregations of total foreign investment entering an economy. Alternatively, we suggest that openness to foreign investment has differential effects on corruption even within the same country and under the same domestic institutions over time. We argue that foreign firms use bribes to enter protected industries in search of rents, and therefore we expect variation in bribe propensity across sectors according to expected profitability. We test this effect using a list experiment embedded in three waves of a nationally representative survey of 20,000 foreign and domestic businesses in Vietnam, finding that the effect of economic openness on the probability to engage in bribes is conditional on policies that restrict investment.