Learning About Growth and Democracy

Abstract : We develop and estimate a model of learning that explains the observed correlation between income and democracy as well as the clustering of democratization events. In our model, countries' own and neighbors' past experiences shape elites' beliefs about the effects of democracy on economic growth and their likelihood of retaining power. These beliefs influence the choice to transition into or out of democracy. We show that learning from past experiences is crucial to explaining observed transitions since the mid-twentieth century. Moreover, our model predicts reversals to authoritarianism if the world experienced a growth shock the size of the Great Depression.

---

Blame-shifting Through Delegation: Evidence from China's One-child Policy

Abstract : It has long been suggested that when trying to implement an unpopular policy, the politicians should delegate the task to an external agency to shift the blame to them. Such blame-shifting practices are widely observed in the political sphere and have recently been shown to be effective in the lab. However, field evidence of the effect is still missing. In this study, using data from China's one-child policy (OCP), we investigate people's mistrust in the government when the unpopular task was delegated to the citizens and when it was conducted by the government itself. Our main empirical strategy exploits the exogeneity of the gender of a couple’s first child. Due to the widely-shared ``at least one son" preference, Chinese couples whose first child is a girl were more likely to violate the One Child Policy than their counterparts. We find that when the enforcement of the policy was delegated to the citizens, by encouraging and incentivizing them to report their neighbors' violations of the policy and join the local enforcement institutions, the blame is shifted from the government to its citizens. In particular, the results show that people who were exposed more severely to OCP exhibit significantly lower trust towards their neighbors today. However, the exposure to the policy does not significantly undermine their trust in the local governments. The results are reversed when the policy was solely implemented by the government officials in an earlier phase. We find that people who experienced this period's OCP blamed the local government but not their neighbors.

---

Democratic Spillovers

Abstract : Capital mobility is a channel of either positive or negative institutional spillovers between countries. This article emphasizes the importance of the distribution of capital in deciding which type of spillovers will play out. Widely distributed capital ownership disciplines a rent seeking elite, and favors political inclusiveness. Conversely, when capital is concentrated, the elite take advantage of the existence of an alternative jurisdiction to increase rent extraction and cement their rule. This highlights a potentially dysfunctional role played by a neighbor with good institutions, and suggests an endogenous path for the emergence of tax havens.

---