Peer-review publications and working papers

Abstract:

• This paper employs a meta-regression analysis of 1,149 estimates from 29 studies to take stock of the empirical literature on Chinese aid effectiveness. After accommodating publication selection bias, we find that, on average, Beijing’s foreign assistance is positively associated with economic outcomes in recipient countries, but correlates with deforestation and negative perceptions of China among citizens, albeit negligible in size. We also show that studies that fail to uncover empirical effects that conform to researchers’ expectations are less likely to be submitted or accepted for publication. Differences in the choice of data, estimation method, and authors’ institutional affiliation explain the heterogeneity among Chinese aid effectiveness estimates reported in the literature.

https://doi.org/10.1016/j.worlddev.2023.106211

Abstract:

• Despite a long history of research on political budget cycles, their existence and magnitude are still in question. By conducting a systematic analysis of the existing literature, we intend to clarify the debate. Based on data collected from 1037 regressions in 46 studies, our meta‐analysis suggests that little, if any, systematic evidence can be found in the research record that national leaders do manipulate fiscal tools in order to be reelected. However, it is much more clear that researchers selectively report that national leaders do manipulate fiscal tools in order to be reelected. The publication selection bias highlighted has nonetheless been reduced during the past 25 years of research. We also show that the incumbents' strategies differ depending on which tools they use. Finally, the nature and quality of political institutions appear to be the factors which most affect the political budget cycles.

https://doi.org/10.1111/joes.12263

Abstract:

• This paper analyses how short-term fluctuations in economic growth affect inequality in developing countries. Using a sample of 71 countries, we find that, on average, growth upswings are associated with reductions in inequality. This reduction is, however, largely undone by growth slowdowns. A mediation analysis framework helps identify unemployment, especially youth unemployment, as the main channel through which fluctuations in growth affect the dynamics of inequality. These findings suggest that both the quality of jobs created, and labor market policies are important to ensure that growth outcomes are conducive to inequality reduction.

https://doi.org/10.1007/s00181-023-02476-w

Abstract:

• Slow growth in manufactured and agricultural exports has been attributed to the high share of natural resources in many African economies. Not only does the resource sector draw labour and capital away from other sectors, but also the spending of resource revenues in the domestic economy bids up the price of non-tradable goods, making the tradable sectors less competitive—a phenomenon known as Dutch disease. This paper argues that an important and neglected channel for this effect is through the public sector. Since government receives a large portion of resource revenues, the public-sector booms alongside the resource sector. But the government is largely unaccountable for the spending of these revenues, since they are not raised via taxes on citizens. The result is this money might be spent in inefficient and distortionary ways, undermining competitiveness. One solution may be for government to transfer natural-resource revenues directly to citizens and then tax them to finance public expenditure. The increased accountability might improve the effectiveness of the public sector and therefore the competitiveness of the private sector.

https://doi.org/10.1093/jae/ejac017

Abstract:

• Despite a long history of research on political budget cycles, their existence and magnitude are still in question. We conduct a meta-regression analysis of this literature with the intention to clarify the debate. Based on data collected from 1,037 estimates, results suggest that manipulation of national public accounts by political leaders before elections is in average limited at best and over-estimated by researchers. In addition, through a Bayesian model averaging and a multiple meta-regression analyses, we identify some factors, such as country characteristics and methodological choices affecting magnitude of cycles estimated by scholars.

ISBN 9781138060920

Abstract:

• This paper investigates how governors' partisan affiliation affects the poverty status of immigrants to the U.S. To this end, we compare the poverty outcomes of immigrants in states ruled by Democratic governors relative to the outcomes for those in states ruled by Republican governors. We employ a regression discontinuity design using the re-centered Democratic margin of victory as a running variable, to overcome the identification challenge posed by confounding factors. Consistent with the literature on partisan affiliation, we find that immigrants are more likely to get out of poverty in states with Democratic governors than states with Republican governors. Our results are submitted to a variety of robustness checks and sensitivity tests, to assess the validity of the identification strategy, and highlight conditional lame-duck effects. A formal mediation analysis reveals that the empirical results are mediated through better access to the labor market and possibly through higher wages and labor earnings for immigrants. Last but not least, we check for alternative hypotheses and potential detrimental effects for native populations.   

Additional info: 

• We assess the validity of the RD design and look at the alternative story of immigrants’ ``voting with their feet'' by moving between states following Democratic victories. We also check a selection bias in state location for immigrants according to their schooling attainment. Last but not least, we also find a positive effect of Democratic governors both on the poverty reduction of white natives and black natives, despite different labor market outputs for these populations. Hence, our results do not suggest that Democratic governors improve labor market conditions for the whole resident population, as effects are ambiguous for majority groups of white natives. [...] Last but not least, as there is no free lunch, the global fiscal solvency may be worse in states ruled by Democrats. 

https://doi.org/10.1016/j.ejpoleco.2017.11.004 

Abstract:

• This paper assesses the impact of different types of flexible fiscal rules on the procyclicality of fiscal policy with propensity scores-matching techniques, thus mitigating traditional self-selection problems. It finds that not all fiscal rules have the same impact: the design matters. Specifically, investment-friendly rules reduce the procyclicality of both overall and investment spending. The effect appears stronger in bad times and when the rule is enacted at the national level. The introduction of escape clauses in fiscal rules does not seem to affect the cyclical stance of public spending. The inclusion of cyclical adjustment features in spending rules yields broadly similar results. The results are mixed for cyclically-adjusted budget balance rules: enacting the latter is associated with countercyclical movements in overall spending, but with procyclical changes in investment spending. Structural factors, such as past debt, the level of development, the volatility of terms of trade, natural resources endowment, government stability, and the legal enforcement and monitoring arrangements backing the rule also influence the link between fiscal rules and countercyclicality. The results are robust to a wide set of alternative specifications.  

https://doi.org/10.1016/j.jmacro.2017.04.007

Abstract:

• Dans cet article nous montrons que la théorie des dotations biogéographiques de Diamond (1997) et que la théorie du renversement de la fortune d’Acemoglu, Johnson et Robinson (2002), loin d’être substituables, sont complémentaires pour expliquer les écarts de développement économique dans le monde, depuis le début de l’holocène, en 11000 av. J.-C., jusqu’à aujourd’hui. Empiriquement, nous montrons la complémentarité de ces deux approches théoriques à l’aide d’un modèle structurel et de l’emploi de l’estimateur des triples moindres carrés, à information complète, sur un échantillon le plus large possible de pays de tout niveau de développement et sur un échantillon d’anciennes colonies Européennes. Ces résultats, relativement optimistes, confirment que les institutions agissent sur le niveau de développement. Par ailleurs ces résultats insistent sur l’aspect complémentaire de théories du développement qui sont trop souvent jugées concurrentes, à première vue. 

https://doi.org/10.3917/edd.291.0097

Abstract:

• This paper uses the synthetic control method to assess the impact of the civil war in the Central African Republic on the main socioeconomic indicators. Based on a donor pool of low-income countries, the paper builds a synthetic counterfactual to evaluate the magnitude of the socioeconomic impacts of the civil war. The results indicate that the civil war led to a significant drop in gross domestic product per capita (41.6 percent), nighttime light intensity (33.8 percent), industrial production (34.1 percent), manufacturing value added (33.7 percent), and the human asset index (20.2 percent), from 2013, which is considered as the starting point of the ongoing political and civil crisis.

Abstract:

• Do income shocks locally affect internal conflicts? To address this question, this paper employs a meta-regression analysis of 2,464 infranational estimates from 64 recent empirical studies on conflicts and income-related shocks in developing countries. After accounting for publication selection bias, the analysis finds that, on average, income increasing shocks in the agriculture sector are negatively associated with the local risk of conflict. Nonetheless, the analysis finds no average effect of income-decreasing shocks in the agriculture sector or income-increasing shocks in the extractive sector on the local risk of conflict. The paper also shows that studies that fail to uncover empirical effects that conform to researchers’ expectations on the theoretical mechanisms are less likely to be published. Differences in the geographical area of study, the choice of control variables, and the way shocks are measured substantially explain the heterogeneity among estimates in the literature.

Abstract:

• Do income shocks locally affect internal conflicts? To address this question, this paper employs a meta-regression analysis of 2,464 infranational estimates from 64 recent empirical studies on conflicts and income-related shocks in developing countries. After accounting for publication selection bias, the analysis finds that, on average, wealth-increasing shocks in the agriculture sector are negatively associated with the local risk of conflict. Nonetheless, the analysis finds no average effect of wealth-decreasing shocks in the agriculture sector or wealth-increasing shocks in the extractive sector on the local risk of conflict. The paper also shows that studies that fail to uncover empirical effects that conform to researchers’ expectations on the theoretical mechanisms are less likely to be published. Differences in the geographical area of study, the choice of control variables, and the way shocks are measured substantially explain the heterogeneity among estimates in the literature.

Abstract:

• This paper analyzes the procyclicality of fiscal policy on the tax and spending sides in a sample of 116 developing countries between 2000 and 2016. About 20 percent of the countries in the sample switched from procyclical to countercyclical policy stance. In Sub-Saharan Africa, 30 of 39 countries remained caught in the procyclicality trap and the region has the highest degree of procyclicality. The Middle East and North Africa region switched from a countercyclical policy stance to a procyclical one over time. The Europe and Central Asia and Latin America and the Caribbean regions significantly reduced the degree of procyclicality. The main economic variables that affect procyclicality are financial depth, tax base variability, and natural resource dependence. In line with the political economy literature, the perception of corruption, social fragmentation, and inequality in resource distribution are positively associated with procyclicality. The findings also show that the quality of fiscal institutions is associated with procyclicality; countries with fiscal rules have smaller procyclical bias, but the effect is not homogeneous; and higher degrees of expenditure rigidity are associated with lower procyclical bias. The study finds asymmetric policy stances along the business cycle, with procyclicality being more pronounced during recessions. Similarly, the political cycle affects procyclicality, as procyclical bias increases in electoral years. From the tax management perspective, procyclical bias is still present, but there are significant changes: most of the political economy variables lose significance; the resource-dependence variable is not significant; external credit availability reduces procyclicality; tax base variability increases procyclical bias; and expenditure rigidity is no longer significant, but fiscal space becomes determinant of procyclical bias.