Essays in Political Economics

This dissertation consists of three chapters. The first two chapters study the local governance in China. Guided by theoretical insights originated from the political economics literature, I exploit natural experiments to provide empirical evidence on how local governance decisions are affected by bureaucratic incentives and incoordination between local governments. The third chapter is a descriptive study examining the broader social science research community on researchers' attitudes and behaviors towards open science practices./nIn Chapter 1 (coauthored with Shaoda Wang), we investigate a question central to the long-standing debates on federalism and decentralization: how does decentralized decision-making distort the governments’ incentives to internalize border spillovers, and what are the associated economic and welfare consequences? We attempt to answer these questions by exploiting the ``township merger program'' in China, where thousands of pairs of neighboring townships were required to merge over the last two decades. Collecting novel firm-level geocoded emission and production panel datasets, and exploiting more than 3000 cases of township mergers between 2002 and 2008, we find evidence that local governments are internalizing spillovers on the merging borders. Empirical results show that when a polluting firm suddenly ``moves'' from the border to the center of the town, it receives lower government subsidies, faces higher de facto tax rates, and at the same time reduces pollutant emissions and invests more in emission abatement equipment. Utilizing another transaction-level dataset containing the universe of land auctions in China, we observe that both land prices and new developments of residential buildings increase near the merging borders with polluting firms, indicating that household welfare increases with the internalization of border pollution./nChapter 2 puts focus on bureaucrats running the local governments and try to understand whether and how bureaucrats respond to non-pecuniary incentives besides career concern. Specifically, I investigate whether appointing bureaucrats in the place where they originate would improve or impair their performance./nBy exploiting exogenous variations in city leadership vacancy and the turnovers in the personnel decision-making body, I find that Chinese municipal leaders’ biographical background indeed plays an important role in their governance decisions. Natives, who grew up in the city they serve, would implement policies that lead to a 7\% reduction in total tax revenue. Estimates from firm-level data also show a significant drop in tax payment from firms during natives' tenure despite increases in outputs and profits. But further examination suggests that only firms in the home counties of native leaders benefit from the tax breaks. With respect to budgetary policies, native officials exhibit a pro-social tendency, allocating a higher share of municipal budget to education and health care, and a lower share to infrastructure. However, despite the changes in budget composition, real outcomes of public goods deteriorate under the native city leadership. Taken together, my results suggest that social proximity hampers bureaucrat performance and facilitates local favoritism./nChapter 3, joint work with Garret Christensen, Elizabeth Levy Paluck, Nicholas Swanson, David Birke, Edward Miguel, and Rebecca Littman, offers a textured description of the current state of social science regarding research transparency and open science practices. Discussions about changes in practices such as posting data and pre-registering analyses have been marked by controversy---including controversies over the extent to which change has taken place./nThis study, based on the State of Social Science (3S) Survey, provides the first comprehensive assessment of awareness of, attitudes towards, perceived norms regarding, and adoption of open science practices within a broadly representative sample of scholars from four major social science disciplines: economics, political science, psychology, and sociology. We observe a steep increase in adoption: as of 2017, over 80\% of scholars had used at least one such practice, rising from one quarter a decade earlier. Attitudes toward research transparency are on average similar between older and younger scholars, but the pace of change differs by field and methodology. According with theories of normal science and scientific change, the timing of increases in adoption coincides with technological innovations and institutional policies. Patterns are consistent with most scholars underestimating the trend toward open science in their discipline.

Advisor: Miguel, Edward