Research

We examine how social interactions and friendships shape students’ political opinions in a natural experiment at Sciences Po, a leading French university specializing in social and political sciences. The quasi-random assignment of students into short-term integration groups before their academic curriculum reduces political opinion gaps and fosters friendship formation. Using same-group membership as an instrumental variable for friendship, we find that after 6 months friendship reduces opinion differences by 50% of the mean opinion gap. Our evidence supports a homophily-enforced mechanism: friendships form among initially politically similar students, leading them to join political associations together, reinforcing their similarity. However, friendship does not significantly influence politically dissimilar pairs. Instead, it reduces opinion divergence without enforcing ideological convergence.

We study the stock market performance of firms with Jewish board members during the ``Dreyfus Affair'' in 19th century France. In a context of widespread latent antisemitism, initial accusations made against the Jewish officer Alfred Dreyfus led to short-lived abnormal negative returns for Jewish-connected firms. However, investors betting on these firms earned higher returns during the period corresponding to Dreyfus' rehabilitation, starting with the publication of the famous op-ed J'Accuse! in 1898. Our conceptual framework illustrates how diminishing antisemitic biases among investors might plausibly explain these effects. Our paper provides novel insights on how antisemitism can increase and decrease over short periods of time at the highest socio-economic levels in response to certain events, which in turn can affect firm value in financial markets.

We investigate the links between capital cities, conflict, and the quality of governance, starting from the assumption that incumbent elites are constrained by the threat of insurrection, and that the latter is rendered less effective by distance from the seat of political power. We show evidence that (i) conflict is more likely to emerge (and dislodge incumbents) closer to the capital, and (ii) isolated capitals are associated with misgovernance. The results hold only for relatively nondemocratic countries and for intrastate conflicts over government (as opposed to territory)—exactly the cases where our central assumption should apply. 

Previously circulated as "Isolated Capital Cities and Misgovernance: Theory and Evidence"

We study patronage politics in authoritarian Vietnam, using an exhaustive panel of ranking officials from 2000 to 2010 to estimate their promotions' impact on infrastructure in their hometowns of patrilineal ancestry. Native officials' promotions lead to a broad range of hometown infrastructure improvement. Hometown favoritism is pervasive across all ranks, even among officials without budget authority, except among elected legislators. Favors are narrowly targeted toward small communes that have no political power, and are strengthened with bad local governance and strong local family values. The evidence suggests a likely motive of social preferences for hometown.

We show that isolated capital cities are robustly associated with greater levels of corruption across US states, in line with the view that this isolation reduces accountability. We then provide direct evidence that the spatial distribution of population relative to the capital affects different accountability mechanisms: newspapers cover state politics more when readers are closer to the capital, voters who live far from the capital are less knowledgeable and interested in state politics, and they turn out less in state elections. We also find that isolated capitals are associated with more money in state-level campaigns, and worse public good provision. 

We conduct a field experiment in a large real‐world social network to examine how subjects expect to be treated by their friends and by strangers who make allocation decisions in modified dictator games. Although recipients' beliefs accurately account for the extent to which friends will choose more generous allocations than strangers (i.e., directed altruism), recipients are not able to anticipate individual differences in the baseline altruism of allocators (measured by giving to an unnamed recipient, which is predictive of generosity toward named recipients). Recipients who are direct friends with the allocator, or even recipients with many common friends, are no more accurate in recognizing intrinsically altruistic allocators. Recipient beliefs are significantly less accurate than the predictions of an econometrician who knows the allocator's demographic characteristics and social distance, suggesting recipients do not have information on unobservable characteristics of the allocator.

We conducted online field experiments in large real-world social networks in order to decompose prosocial giving into three components: (1) baseline altruism toward randomly selected strangers, (2) directed altruism that favors friends over random strangers, and (3) giving motivated by the prospect of future interaction. Directed altruism increases giving to friends by 52% relative to random strangers, whereas future interaction effects increase giving by an additional 24% when giving is socially efficient. This finding suggests that future interaction affects giving through a repeated game mechanism where agents can be rewarded for granting efficiency-enhancing favors. We also find that subjects with higher baseline altruism have friends with higher baseline altruism. 

Previously circulated as "Social Capital in Social Networks"

We investigate the relationship between corruption and political stability, from both theoretical and empirical perspectives. We propose a model of incumbent behavior that features the interplay of two effects: a horizon effect, whereby greater instability leads the incumbent to embezzle more during his short window of opportunity, and a demand effect, by which the private sector is more willing to bribe stable incumbents. The horizon effect dominates at low levels of stability, because firms are unwilling to pay high bribes and unstable incumbents have strong incentives to embezzle, whereas the demand effect gains salience in more stable regimes. Together, these two effects generate a non‐monotonic, U‐shaped relationship between total corruption and stability. On the empirical side, we find a robust U‐shaped pattern between country indices of corruption perception and various measures of incumbent stability, including historically observed average tenures of chief executives and governing parties: regimes that are very stable or very unstable display higher levels of corruption when compared with those in an intermediate range of stability. These results suggest that minimizing corruption may require an electoral system that features some re‐election incentives, but with an eventual term limit. 

Ethnic minorities have played an out-sized role in both historical and contemporary economic development. This paper studies one of the most prominent but understudied cases, in the world’s most populous island: the economic legacy of ethnic Chinese immigration on Java, Indonesia in the early 21st century. Using an instrumental variables strategy, we exploit plausibly arbitrary 15th-century ethnic Chinese landing sites on the Northern coast of Java that determined initial Chinese presence but have not been accessible by sea since the mid 17th-century due to silting. We find a strong positive effect on local economic development. In districts with higher ethnic Chinese shares, villages are wealthier as measured by consumption, population density and nighttime light intensity. We trace this to the persistently important economic role of Chinese in trade and commerce. Districts with a historically higher ethnic Chinese share have, today, a higher (lower) employment share in services (agriculture), firms have higher sales and these positive effects can be traced to a larger financial industry. Furthermore, we find that subsectors more closely linked to traditional ethnic Chinese sectors continue to employ a larger share of individuals. Our findings suggest that the ethnic Chinese minority in Indonesia, despite their small size, have and continue to play an out-sized role in Indonesia’s modern-day development with spillovers that benefit the entire local population.

Do politicians intentionally and successfully shape voters' economic behaviors? This paper provides a positive empirical answer to this question in the context of Donald Trump's political rallies in 2015-2020, using scanner data from stores across the U.S. We find that Trump's rallies bring a significant advantage to products made in America in comparison with those made in foreign countries, especially from Mexico and China. Within a distance of 100 miles and up to 7 weeks after a rally, this post-rally effect on made-in-America sales amounts to 2%-3%. It varies greatly by the shares of Republican and Democrat voters, thus creates a polarizing effect across America. It is further strengthened when rally speeches target more specifically China and Mexico.

This paper studies the role of cultural norms, specifically those regarding gendered roles in employment, in explaining the gender gap in pay using a unique matched employer-employee dataset linked with immigration records in Canada. To separate the effects of culture from markets and institutions, we investigate how inherited gender norms among immigrants shape their labor market outcomes in the host country. We find that improvements in gender norms are strongly associated with a smaller gender gap in pay and mobility, even with a broad set of interacted fixed effects between firms and workers, suggesting that the findings are unlikely due to discrimination by firms or sorting by workers. Education, occupational sorting, and child penalties do not fully explain this link. We propose a new mechanism wherein gender norms influence the gap in how women and men find job opportunities through their social networks, leading to disparities in both wages and mobility. Distinctive from prevailing discussions on norms, our results highlight that even if women do not internalize these norms, they can still face similarly disadvantaged outcomes.

This paper demonstrates the prevalence, pervasiveness, persistence, and resilience of a system of non-Big God religious beliefs, in absence of religious organizations and moralizing prescriptions, thanks to a self-fulfilling mechanism based on social insurance. We focus on the Vietnamese's beliefs in marriage fortune predictions by the Taoist astrological system Tử Vi. First, we estimate a structural model of assortative marriage matching and show that such beliefs' importance in marriage formation amounts to 6.5% of that of the entire age and education profile. Second, we estimate the effect of auspiciousness on couples' outcomes while controlling for selection into marriage using the structural model's predictions. Auspicious couples receive 11% more social transfers from their extended family, and up to 28% under hardship, because they are believed to be more harmonious and lucky. They further enjoy more consumption, income, and other welfare measures. We link the system's long-term persistence and resilience to its potential role as a commitment device between families

Does more political power always lead to more favoritism? The usual affirmative answer overlooks scrutiny’s role in shaping the pattern of favoritism over the ladder of power. When attaining higher-powered positions under even stricter scrutiny, politicians may reduce quid-pro-quo favors towards connected firms to preserve their career prospect. Around close Congress elections, we find RDD-based evidence of this adverse effect that a politician’s win reduces his former classmates’ firms stock value by 2.8%. As predicted, this effect varies by cross-state scrutiny, politicians’ power, firms’ size and governance, and connection strength. It diminishes as a politician’s career concern fades over time. 

We investigate the role of colonial leaders in shaping contemporary civil conflicts in former French colonies in Western Africa. We argue that the earliest leaders of the colonial era made key decisions in building local government that shaped local perceptions of, and interactions with, the state that led to variation in the local populations’ hostility towards the colonial government. Using the arguably arbitrary assignment of early colonial district leaders, we show that the personality of the first district leaders affected colonial hostility, and that such hostility has led to more modern civil conflicts. 

Previously circulated as “Political Connections and Firm Value: Evidence from Regression Discontinuity Design of Close Gubernatorial Elections”

We study how the urgency of a public service affects its corruption level by analyzing thousands of reported bribes made by inpatients to doctors and nurses in Vietnam. Although it is commonly expected that citizens need to pay a higher bribe to receive a more valuable or urgent service, we find the opposite. Acute patients, despite having conceivably higher benefits of treatment, are 8 percentage points less likely than non-acute patients to pay bribes. If they do, they pay 18% less in bribes. This behavior suggests that even in a highly corrupt environment, public servants face an incentive to provide important services for citizens. To understand this incentive, we show that acute patients pay relatively lower bribes in facilities that are better monitored and audited more frequently.

We construct a general axiomatic approach to measuring spatial concentration around a center or capital point of interest, a concept with wide applicability from urban economics, economic geography and trade, to political economy and industrial organization. By analogy with expected utility theory, we propose a basic axiom of independence (sub-group consistency) and continuity for a concentration order that ranks any two distributions relative to the capital point. We show that this axiom implies an expected influence representation of that order, conceptualizing concentration as an aggregation of the expected influence exerted by the capital on all points in the relevant space (or vice-versa).We then propose two axioms (monotonicity and rank invariance) and prove that they imply that the associated influence function must be a decreasing isoelastic function of the distance to the capital. We apply our index to measure the concentration of population around capital cities across countries and US states, and also in US metropolitan areas. We show its advantages over alternative measures, and explore its correlations with many economic and political variables of interest.