Research

Peer-reviewed articles  


This paper evaluates the effects of sub-national development aid projects from China and the World Bank on firm performance, and considers the role of supply-side constraints of the firms as channels of transmission. We find that, contrary to the World Bank, Chinese ODA projects increase firm sales: a one percent increase in Chinese ODA commitments increases firm sales growth by 3 percent. Moreover, we find some evidence that Chinese ODA intervention crowds out local firms operating in the mineral sector, which is one of the most financed by China. Finally, we show that the positive effect of Chinese aid is stronger for firms lacking access to finance, suggesting that Chinese aid may improve firm performance by releasing their financing constraints.

While it is recognised that the ability of states to raise revenues (i.e., fiscal capacity) is important for the provision of key public goods in less developed economies, it is less clear what its determinants are and what explains cross-country differences. We focus on the impact of natural resources. Standard arguments suggest that natural resource rents may harm fiscal capacity, as governments tend to substitute tax revenues with revenues from natural resources. We argue, instead, that a fiscal resource curse may materialise or not depending on whether political institutions can limit the power of the executive and on how easy it is to control or appropriate natural resources. We investigate this hypothesis using panel data methods covering the period 1995-2015 for 62 developing countries. The results suggest that: (i) point-source resources are negatively associated with fiscal capacity, while diffuse resources are not; (ii) developing economies with political institutions placing institutionalised constraints on the executive power are able to neutralise the negative effect of point-source resources on fiscal capacity. Our findings imply that it is possible to develop a natural resources sector without necessarily harming fiscal capacity. 



We examine the link between sovereign defaults and credit risk by distinguishing between commercial and official debt and by taking into account the extent of the final restructuring events, which take place at the end of a default spell. We use a local projection based approach, combined with propensity score weighting (Jordà and Taylor 2016), to estimate the average treatment effect of the final restructuring on our outcome variables of agency ratings and bond yield spreads. Our results show that the average treatment effect on ratings is negative (and positive for bond spreads) up to seven years following the final restructuring with private creditors, while the opposite holds for official creditors. Furthermore, our results are robust to using a panel analysis, which allows us to investigate the importance of the final haircut size. Specifically, we find that the rating (spread) variation (increase) is larger for cases with deeper haircuts. Therefore, we find evidence that official and private defaults have different costs and then may induce selective defaults.

This paper studies the relationship between sovereign debt default and annual GDP growth distinguishing between private and official deals. Using the Synthetic Control Method to analyze 23 official and private defaulters from 1970 to 2017, we find that private defaults generate output losses both during the crisis and persisting over time. Conversely, official defaulters do not show a permanent drop in GDP per capita, neither during the crisis nor in its aftermath. Using panel data analysis to control for the creditors' loss (haircut), we confirm that official and private defaults may have different effects on GDP growth.

In this paper we explore the factors that determine delegation of implementation in project aid. In particular, focusing on the importance of informational asymmetry between levels of government, we empirically assess whether this choice is influenced by the relative importance of the local information at the recipient country level. Moreover, we test whether this choice can in turn influence project performance. Using information on more than 5800 World Bank projects for the period 1995-2014, and controlling for characteristics at both country and project level, we find that transparency does influence the probability that a project is implemented locally rather than nationally. More specifically, a one standard deviation decline in transparency increases the probability of a locally implemented project by three percentage points. We also find that a local implementing agency may increase the probability of a successful project only up to a certain level of a country's transparency.

This paper studies the relationship between sovereign debt (final) restructuring and sovereign ratings, by distinguishing between commercial and official debt and by considering the creditors' loss (haircut). Institutional Investor's index is taken as a measure of a country's creditworthiness. We find that while a restructuring with private creditors seems to involve some reputational costs, "official defaulters" are not affected (or may even benefit) by the restructuring episodes. Using the Synthetic Control Method, we find further evidence for the heterogeneity of the economic impact of debt restructurings, confirming that official and private restructurings may have different costs and then induce selective defaults.

This paper evaluates the existence of a resource curse on political regimes using the Synthetic Control Method to uncover the heterogeneous effect of natural resources across countries. Focusing on 12 countries, we compare their democracy level with the weighted democracy level of countries that have not experienced oil shocks and have similar pre-event characteristics. We find that the exogenous variation in oil endowment does not have the same effect on all countries. In most cases, the event has a negative effect in the long run, but countries with a pre-existing high level of democracy are not negatively affected. 

The United Nations established in 2005 the United Nations Democracy Fund (UNDEF), whose objective is to support projects submitted by national NGOs aimed at increasing government accountability. The purpose of this paper is to investigate the impact of NGOs activity on democracy exploiting the UNDEF database. An empirical analysis based on a propensity score matching (PSM) method is implemented on a sample of 102 developing countries. The findings indicate that the average treatment effect on the treated (ATT) is positive and significant only when countries receive UNDEF-funded NGOs projects for three rounds or more. In this case the Polity IV indicator improves by an average of 1.08 points with respect to the level of 2005.

Working papers


We investigate the informal influence of political leaders' spouses on the subnational allocation of foreign aid. Building new worldwide datasets on personal characteristics of political leaders and their spouses as well as on geocoded development aid projects (including new data on 19 Western donors), we examine whether those regions within recipient countries that include the birthplace of leaders' spouses attract more aid during their partners' time in office. Our findings for the 1990-2020 period suggest that regions including the birthplaces of political leaders' spouses receive substantially more aid from European donors, the United States, and China. We find that more aid goes to spousal regions prior to elections and that developmental outcomes deteriorate rather than improve as a consequence. For Western aid but not for China, these results stand in some contrast to those for leader regions themselves. This suggests that aid from Western donors is directed from serving obvious political motives to promoting more hidden ones. Data: Political Leaders’ Affiliation Database (PLAD),  Geocoded Official Development Assistance Dataset (GODAD)


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