Fiscal Accountability: Institutional Discipline and Behavioral Frictions (with Alejandro Saporiti)
Abstract: We develop and test a model of fiscal accountability in which parties compete over an integrated fiscal platform of taxes, public goods, and political rents. The theory predicts that institutional features such as disproportional electoral rules discipline politicians by raising the electoral stakes, yielding in equilibrium higher provision of public goods, lower corruption, and lower taxes. We test these predictions in a laboratory experiment that models both sides of the electoral game: human subjects act as candidates as well as voters, generating a rich dataset on fiscal policy choice and voting behavior. The results provide causal evidence for the disciplining effect of disproportional rules, which significantly reduce corruption and increase public good provision. Yet two behavioral frictions attenuate this mechanism. A partisan shield allows voters to tolerate high corruption from aligned candidates, while candidates learn a public–good gambit, offsetting rent extraction with additional public spending funded by higher taxes. Our findings show that while electoral rules are a powerful source of discipline, their effectiveness is constrained by the psychological trade-offs voters are willing to accept.
Bureaucratic Competition and Corruption: Theory and Experimental Evidence
Abstract: This paper examines how bureaucratic competition and cadre evaluation criteria jointly shape corruption in China's political system. We develop a theoretical model in which local officials engage in two types of corruption—rent-seeking (graft) and office-buying (bribery)—under a promotion scheme based on economic performance and personal ties. The model predicts that competition increases bribery but reduces graft, while greater emphasis on GDP similarly raises bribery and lowers graft. When GDP importance becomes sufficiently high, both types of corruption are driven to zero. We test these predictions through a laboratory experiment with four treatments varying competition intensity and GDP weight. The results largely confirm the theory, though bribery increases unexpectedly when GDP becomes less salient. These findings underscore the role of institutional design in shaping corruption patterns and offer insights for improving cadre evaluation systems to better deter corruption.
Redistribution, Power Sharing and Inequity Aversion (with Dario Debowicz and Alejandro Saporiti) Social Choice and Welfare, Vol. 57, 2021, pp.197-228.
DOI:10.1007/s00355-021-01310-5
A previous version of this paper circulated under the title "Redistributive Politics, Power Sharing and Fairness",
Working Paper No 681, Luxembourg Income Study Working Paper Series, October 2016
Abstract: We analyze a political competition model of redistributive policies. We provide an equilibrium existence result and a full characterization of the net transfers to the different income groups. We also derive several testable predictions about the way in which the net group transfers and the after-tax Gini coefficient vary with the main parameters of the model. In accordance with the theory, the empirical evidence from a sample of developed and developing democracies supports a highly statistically significant association between: (i) the net group transfer and the gap between the population and the group mean initial income, and (ii) the net group transfer (and resp., the Gini coefficient) and power sharing disproportionality. In addition, the data also provide some empirical evidence confirming a significant relationship between the net transfers to the poor (and resp., the Gini) and the concern of the political parties with income inequality.
Distributive Politics with Other-Regarding Preferences (with Minh Tung Le and Alejandro Saporiti) Journal of Public Economic Theory, Vol. 23, Issue 2, 2021, pp. 203 - 227
DOI:10.1111/jpet.12485
Abstract: This paper analyzes a nonsmooth model of probabilistic voting with two parties and a broad family of other-regarding behavior, including fairness and quasi-maximin preferences, income-dependent altruism, and inequity aversion. The paper provides conditions for equilibrium existence and uniqueness. It also characterizes the Nash equilibrium in pure strategies when parties hold either symmetric payoffs, or minor forms of asymmetries. The characterization shows that the two parties converge to an equilibrium policy that maximizes a mixture of a “self-regarding utilitarian” social welfare function and an aggregate of society's other-regarding preferences. These results are shown to be applicable to other nonsmooth frameworks, such as probabilistic voting with loss-averse voters. The characterization also shows that the direction and the size of the inefficiencies emerging from electoral competition depend in a subtle way on the nature of the other-regarding preferences (and resp., loss aversion).
Why providing more information to parents may not always improve child educational outcomes: lessons from a study in China (with Keyu Chen) Applied Economics, Published online: 04 Aug 2025
DOI:https://doi.org/10.1080/00036846.2025.2538820
Abstract: Information asymmetries between parents and children, as well as poor school-parent communication, hinder parental participation in education. This paper examines two key questions: (1) How does reducing information asymmetries affect student performance? (2) What drives changes in parental and student behaviour? Using data from a Shenzhen school, nearly 250 parents received both positive and negative information on their children’s school performance. The experiment, conducted over two semesters starting in spring 2019, was terminated in spring 2020 due to the COVID-19 pandemic. Contrary to expectations and existing literature, increased parental information was correlated with lower test scores. The explanation lies in ‘upward belief bias’, where parents overestimate their children’s behaviour. Although school information corrected these beliefs, negatively surprised parents responded with increased involvement, such as punishments or rewards for money and playtime, which proved counterproductive. The findings suggest that excessive parental intervention, particularly in response to negative information, exerts undue pressure on children, harming their academic performance. Over-incentivization may not be beneficial for elementary students in China, highlighting the need for balanced parental involvement.
Moral Conflicts and Cooperation: Theory and Experimental Evidence
Social Media and Electoral Accountability
Network Effects in a Political Agency Model (with Robin Ng)
Endogenous Partisanship, Tactical Extremism
Adaptation to Income and Poverty in an Individual Panel (with Wenhao Hu)