Journal of Comparative Economics最新文献

We analyze the impact of a politician’s childhood experience on their policy choices. By exploiting exogenous variations in exposure to China’s Great Famine, we find that a provincial leader’s childhood experience of the famine significantly increases the share of government expenditure allocated to health care during his term. This effect is observed only for those who were aged under five during the famine and is not found among older cohorts. The impact is substantial: our back-of-the-envelope calculation indicates that an increase of one standard deviation in exposure to the famine can lead to an increase of roughly 7.84 billion RMB (equivalent to about 1.19 billion US Dollars) in annual provincial health care expenditure for a province with average government spending in 2017. We provide evidence suggesting that this effect may be driven by a politician’s personal experience of negative health outcomes due to the famine. Furthermore, we observe that China’s political promotion system, which favors economic growth, incentivizes provincial leaders to counterbalance increased health care spending by reducing funding for less visible public services, particularly cultural activities. Such strategic allocations ensure the continuity of other policy areas that are more influential in their political career.

Strong institutions attract talent to productive activities, whereas weak ones raise the appeal of rent seeking. We propose a theory that describes the impact of institutions on occupational choices over a range of abilities, and predicts that the sensitivity of such choices to the quality of institutions rises in talent when the latter increases from low to intermediate levels, and declines thereafter. To test these predictions empirically, we use a unique micro data set describing the choices of fields of studies by newly enrolled university students in Russian regions in 2011–2014. We show that the popularity of sciences and engineering, on one hand, and law and public administration, on the other, are linked to the quality of regional investment climate and another measure of institutional quality in a manner predicted by our theory.

We use Chinese firm-level data from 2001 to 2007 to estimate the (dis)connection between firms’ R&D and productivity and find that the productivity effect of R&D investment is very low. We conjecture that firms conduct/report unproductive R&D in order to obtain policy benefits. To explore this plausible misconduct, we investigate the effects of China's 2003 R&D tax reform on firms’ R&D investment. The reform generates exogenous treatment variations across firm ownerships for causal identification. We find that the reform has statistically significant and positive effects on firms’ R&D investments. Quantitatively, the reform raises firms’ R&D investments by 6.68 % and the estimated R&D elasticity of tax deduction for private firms is 0.9147, which is comparable to other countries. However, our further empirical results indicate that the policy-induced R&D is less efficient in promoting firms’ productivity than the spontaneous R&D. We provide evidence of firms’ relabeling non-R&D expenses to R&D expenses, which partly explains the inefficiency of R&D investment.

This paper studies the effects of export expansions between 2000 and 2015 on China's local labor markets, focusing on the heterogeneous effects for people with different Hukou statuses. We find that rising local exports increased manufacturing and service-sector employment shares but decreased agricultural employment share for non-local-urban-Hukou residents, including local-rural-Hukou people and cross-prefecture migrants. On the other hand, trade expansions decreased the likelihood of employment and service-sector employment for local-urban-Hukou people. We provide evidence on the substitution and wealth effects for the “crowding-out” of local-urban-Hukou people out of employment.

Preferences play a key role in economic models as drivers of behaviour. Recent contributions have started to model preferences as endogenously determined. This creates two fundamental issues for empirical research. The first concerns the determinants of preferences. The second concerns the effect of preferences on economic outcomes, which become difficult to quantify once preferences are endogenous. We explore the extent to which the prevalence of risk tolerance across countries is endogenously determined by the legal and institutional environment of a country, and whether this behavioural trait in turn contributes to shaping the aggregate entrepreneurship rate. To do so, we rely on structural equation modelling, where the direction of causality arises from the underlying model assumed to construct the equations. Data fit to the model serve to determine whether the underlying causal model presents a plausible representation of the empirical facts. We find that legal origins exert a strong effect on risk tolerance. We further document an indirect effect of legal origins on entrepreneurship rates passing through risk preferences. These findings illustrate the pervasiveness of the effect of legal origins on economic behaviour.

This study examines the impact of superstition on corporate decision-making in Vietnam, a highly irreligious country. We focus on the folk belief that the ages of 49–53 are considered calamitous and use a regression discontinuity design to show that companies significantly decrease their investment in fixed assets during these ages of their directors. The effect is more pronounced in smaller firms and is not accompanied by a decrease in employment growth. We introduce a novel two-stage difference method to identify the role of superstition in causing the ‘calamitous ages’ effect.

We generate and analyze data pertinent to examining whether developments in caselaw were consequential for England's economic performance during the Industrial Revolution. Applying topic modeling to a corpus of 67,455 reports on English court cases, we construct annual time series of caselaw developments between 1765 and 1865. We then add a real per-capita GDP series to our caselaw series and estimate a structural VAR featuring a linear time trend. Our evidence shows that caselaw developments were an important determinant of economic fluctuations. Caselaw shocks jointly account for more of the variability in per-capita GDP around its long-term trend than do shocks directly to per-capita GDP. The response of per-capita GDP to caselaw innovations critically depends on the legal domain. Developments in caselaw on intellectual property, organizations, debt and finance, and inheritance boosted economic performance while developments in property and ecclesiastical caselaw had negative effects on per-capita GDP. Our analysis uncovers a 'bleak-law era' when the legal system misallocated attention between output-promoting and output-hindering areas of law.

Do politically administered mass layoffs undermine trust and political interest? During the German reunification, formerly state-owned socialist firms in East Germany were privatized by the Treuhand, which came at the cost of massive job losses and public protest. We demonstrate that these activities had a detrimental effect on attitudes and political behavior of the affected individuals. Using survey data from the German Socio-economic Panel and election results, we find that East Germans who lost their jobs exhibit significantly lower trust levels, lower political interest and a lower identification with mainstream democratic parties, even up to 30 years after reunification. We corroborate the causality of the results using fixed-effects estimations and a placebo analysis, which fails to explain political disenchantment by reasons other than the Treuhand experience. We interpret the findings as the persistent, negative effect of perceived political mismanagement during a crucial phase of economic transition on long-run political identification.

The Covid 19 pandemic has caused both a decrease in tax revenues and an increase in public spending, forcing governments to increase fiscal deficits to unprecedented levels. Given these circumstances, it is foreseeable that fiscal rules will play a predominant role in the design of many countries’ recovery policies. We develop a general equilibrium, overlapping generations model for a small, open economy in order to study the impact of several fiscal rules upon welfare, public expenditures and growth. We calibrate the model to the Peruvian economy. In this economy, fiscal rules have been widely used and, unlike in other Latin American countries, they have been relatively successful. We find that fiscal rules will generate better results in terms of output if, in addition to maintaining control over the fiscal result, they also preserve public investment. We also find that the performance of economies that implement structural rules tends to be better than the performance of economies that implement rules based on realized budget balance.

Although formal education is often considered an indicator of political leaders’ quality, the evidence on the effectiveness of educated leaders is mixed. Besides, minimum education qualifications are increasingly being used as requirements for contesting elections, making it critical to understand the role of politicians’ education in their performance. This study investigates the impact of electing an educated politician on economic development in the politician’s constituency in India. The analysis uses constituency-level panel data on the intensity of night-time lights to measure economic activity. The identification strategy is based on a regression discontinuity design that exploits quasi-random outcomes of close elections between educated and less-educated politicians. The results show that narrowly electing a graduate leader, as compared to a non-graduate leader, in the state assembly constituency increases the growth rate of night-time lights by about 3 percentage points in the constituency. As pathways, graduate leaders are found to improve the provision of roads, electricity, and power; however, they do not significantly impact the overall provision of public goods. In comparison with findings from other studies in the literature, these results suggest that the impact of formal education of the leader is weaker than the leader’s other characteristics, such as gender or criminality.