Published Papers
Electoral Cycles in Inequality (with Can Sever)
Journal of Economic Inequality 23(2), 2025, 433-456.
Economic policies play a fundamental role in reducing income inequality within countries, but such policies are subject to electoral cycles. This raises the question whether there exist electoral cycles in income inequality. In this paper, we focus on this phenomenon. We show comprehensive evidence that income inequality decreases in the years of elections. Moreover, electoral cycles in inequality are concentrated on close elections before which incumbent governments have stronger incentives to engage in policy actions, due to higher uncertainty about the election outcome. These findings point out that well-functioning democracies and increased political competition can be important factors in tackling income inequality within countries.
Does Informality Hinder Financial Development Convergence? (with Can Sever)
Economic Systems 48(2), 2024, 101174.
This paper sheds light on the role of informal economy, defined as all economic activities that are hidden from official authorities for various reasons, in financial development convergence. Using panel data from 156 countries over the period of 1991–2017, we find that financial development (as measured by credit as share of GDP) tends to converge across countries over time, particularly when informality is lower. As the size of informal economy becomes larger, however, financial development convergence weakens, and eventually can turn out to be divergence. This finding suggests that policies addressing informality can help countries with lower levels of financial development catch up with the countries with more developed financial systems. It also has implications for the evolution of cross-country income differences, considering the role of financial development in economic performance. In the last part of the paper, we find evidence consistent with this. The results show that higher informality is also associated with weaker income convergence across countries over time.
The Effects of Elections on Macroprudential Policy (with Can Sever)
Journal of Comparative Economics 50(2), 2022, 507-533.
We provide evidence for a specific challenge in the design of macroprudential policy, namely political interference. Using panel data from 80 countries over the period of 1990–2016, we uncover the electoral cycles in macroprudential policy. We show that a loosening in macroprudential policy becomes more likely in the pre-election year, especially in countries with lower institutional quality. There is no evidence for the reversal of such actions in the post-election year. We also find that capital account openness, the history of macroprudential policy actions and inflation matter in determining the strength of electoral cycles in macroprudential policy, in addition to institutional quality. The electoral cycles are found to be stronger in countries that are financially less open, that relied less on macroprudential policy in the past, and that have lower inflation.
Determinants of the Weight for Leisure in Preferences (with Ceyhun Elgin)
Economics E-Journal 8, 2014, 1-26.
In this paper, the authors investigate the determinants of weight for leisure in preferences. First, using a dynamic general equilibrium model, they back out the weight for leisure for an unbalanced panel of 52 countries over the period from 1950 to 2009. Then, the authors perform several panel data regressions using the backed-out values of the preference for leisure as the dependent variable. Estimation results imply that trade openness, GDP per-capita and average temperature positively affect the weight for leisure in preferences in a robust manner. They also find some evidence about the effect of unionization and unemployment.
Conference Proceedings
Growth, Volatility and Informality
Efil Conference on Economics and Society, 2026.
This paper explores the role of informality in growth performance, focusing on both growth level and growth volatility. Based on panel data from 157 countries over the period of 1990-2020, it shows that higher levels of informality are associated with lower and more volatile per capita GDP growth. This pattern is robust to using different measures of informality, and is unlikely to be driven by a few outliers or large global shocks such as the Global Financial Crisis of 2008, or the Covid-19 pandemic. Finally, this paper finds that the role of informality in growth performance is less pronounced in advanced economies. The findings have important policy implications, emphasizing gains from policies aimed at reducing informality. They suggest that such policies not only help emerging market and developing economies achieve higher growth, but also set the stage for a more stable growth trajectory.
Working Papers
Protesting for Progress: The Impact of Black Lives Matter Protests on Policing Reform in the U.S. (with Başak Taraktaş) (available upon request)
Do protests affect policy change? Using data from all 50 U.S. states over 24 months (2020-21) and applying panel data fixed effects regression analysis, we investigate the relationship between Black Lives Matter (BLM) protests and the adoption of state-level policing reforms. We find that the number of protests in the country as a whole, rather than the number of protests at the specific state, has a significant impact on triggering policing reforms at the state level. This impact is driven primarily by states with Democratic-controlled legislatures, whereas Republican-controlled legislatures exhibit weaker responsiveness. We also find that the characteristics of activist strategies and protest location shape the effectiveness of protests in spurring desired changes: Short-term protests occurring in close proximity to state capitals and major cities improve the likelihood of reform passage, while long-lasting ones tend to reduce this likelihood. We further provide evidence that legislative reforms are a response to collective mobilization rather than a direct policy reaction to police shootings themselves. To the best of our knowledge, this is among the first studies to systematically explore the adoption of state-level policing reforms in response to BLM protests.
Third Party Voting: Vote One's Heart or One's Mind? (available upon request)
In this paper, I propose non-instrumental benefits to sincere voting as the explanation for why people vote for candidates certain to lose in elections and for why weak third parties continue to exist. Building on this idea, I provide a framework where the decision of whether to vote sincerely or strategically is an endogenous choice that responds to election-specific characteristics, rather than a characteristic of a voter. I demonstrate that models I build with non-instrumental benefits to sincere voting generate theoretical predictions consistent with existing empirical evidence that standard models cannot match. Using both pivotal voter and group rule-utilitarian frameworks, I show that third party vote shares are lower and the extent of strategic voting is higher when the election is expected to be close or when the stakes of the election are high. I also show that adding a heterogeneous non-instrumental sincere voting benefit implies partial strategic desertion of weak parties by their supporters and a lower participation rate for minor party supporters compared to major party supporters. Furthermore, I present theoretical predictions on the impact of electorate size on third party vote shares and on the correlation between third party voting and turnout. Finally, using data from U.S. presidential elections between 1920 and 2012, I present empirical evidence consistent with the prediction of this paper that closeness of the election at the state level reduces third party vote shares. Empirical results also indicate that the marginal impact of state-level closeness on third party vote shares is increasing in both state-level and national-level closeness.
Voter Alienation from Inherently Unattractive Candidates (with Allan Drazen) (available upon request)
Candidate dislike may motivate abstaining from voting entirely rather than voting for one's ideologocially preferred candidate. We consider such voter "alienation" and show how it may induce extremism on the part of candidates who have no ideological bent. While voter polarization alone may not induce extremism by office-motivated candidates, it will when combined with voter alienation, leading to equilibria where candidates take extreme positions on opposite sides of the policy spectrum in order to increase turnout by their voter base.