Why Pay the Chief? Land Rents and Political Selection in Indonesia

Abstract : Much of modern development efforts are channeled through traditional local governance. Yet, despite their importance as politician-bureaucrats, local leaders are rarely paid a living wage. This paper studies the effect of awarding chiefs cultivation rights over village rice land, a stable revenue generating asset, during their term of office. I use a fuzzy spatial regression discontinuity design to exploit a historical natural experiment in Java where in the nineteenth century a homogeneous region was split, and in one part chiefs were awarded cultivation rights but not in the other. To measure political outcomes, I collect original data from the field tracing the modern electoral history of 931 chiefs in 193 villages. Higher land rents cause positive chief performance and economic development. Chiefs raise more funds and construct more public goods such that areas under their control are richer and more developed even today. I find evidence consistent with historically positive political selection as a key mechanism. Higher rents attracted better quality chiefs in the past. These chiefs were so effective at educational provision that the entire village today remains more educated. As a result, despite higher land rents attracting a higher quality pool of candidates today, neither candidates nor chiefs today are more selected compared to the average villager. Instead, positive development outcomes today are shaped by the selection of chiefs whose interests are aligned away from supra-village elite interests. Overall, my findings provide evidence that paying local leaders from a stable source of local revenue can be good for economic development.

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There’s No Such Thing As Free Land: the Homestead Act and the Economic Development

Abstract : During the 19th century the U.S. government privatized nearly a billion acres of land. Initially, settlers and investors could purchase unrestricted amounts of land. Following the 1862 Homestead Act, settlers could also claim up to 160 acres of federal land for free after five years of residency and cultivation. Despite its historical importance and vast scale, evidence of the causal effect of the act on economic development is limited. This study utilizes two empirical strategies to examine the long-run impacts of the act. First, we exploit plausibly exogenous variation along the 1862 frontier resulting from the time of enactment and the patterns of prior land privatizations. Second, we utilize regression discontinuity at the boundaries of former Native Americans tribal land, on which subsequent homesteading was prohibited. Results from both designs indicate that the Homestead Act had a negative effect on development. Areas more exposed to homesteading have lower property values, lower income, and lower levels of education attainment in today. Using census data from the period of initial settlement, we find no evidence of selective sorting on observable demographics. To further explore channels, we study the dynamics of development, the patterns of land ownership, and the geographic and economic mobility of homesteaders relative to land purchasers.

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Decentralization of Land Administration and Elections in Burkina Faso

Abstract : I study politicians' responses to the decentralization of land governance in Burkina Faso. To what extent are politicians motivated by private rents versus a concern with constituent welfare? I develop a theoretical model and test its implications using municipal elections during the experimental pilot phase of a land governance decentralization reform. I find that 0.8 additional political parties contest elections in municipalities randomly slated to receive pilot-phase local land offices, although voter turnout is lower than expected and elections do not become meaningfully more competitive. After implementation and documentation of land rights, both parties and voters behave similarly to their control municipality counterparts. From this pattern, and by examining heterogeneity in political responses according to different tensions emerging from customary land rights systems, I argue that politicians are not only driven by their own private rents, but also demonstrate a policy-centric focus on constituent welfare. This speaks to a trade-off inherent in decentralization: despite potential efficiency gains and increased accountability to local citizens, more localized government could be more vulnerable to elite capture, so the motivations of those elites are important.

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