Published Paper:
“Political Decentralization and Corruption: Exploring the Conditional Role of Parties” (with Jorge Martinez Vazquez and Charles Hankla)
Abstract: This study investigates how national levels of corruption are influenced by the interaction of two factors in political decentralization: the presence of local elections and the organizational structure of national parties. Previous studies have focused primarily on the role of fiscal decentralization on corruption and have mostly ignored the institutions of political decentralization. Using new data in a series of expansive models across multiple countries and years, we find that corruption will be lower when local governments are more accountable to and more transparent toward their constituents. This beneficial arrangement is most likely to occur when local elections are combined with nonintegrated political parties, meaning that party institutions themselves are decentralized from national control. Such an institu- tional arrangement maximizes local accountability by putting the decision to nominate and elect local leaders in the hands of those best in a position to evaluate their honesty—local electors.
link: https://doi.org/10.1111/ecpo.12222
Working Papers:
“Fiscal decentralization, Party institutionalization, and Climate change” (with Jorge Martinez Vazquez and Rose Camille Vincent)
Abstract: In this paper, we study the joint effect of fiscal decentralization and party institutionalization on climate change. Decentralization has remained an important shift in governance structure throughout the world in the past few decades. The economics literature, thus far, has not provided conclusive evidence regarding the relationship between fiscal decentralization and climate change. This harkens back to the issue of the potentially large externalities that climate change policies typically carry. As the degree of externality increases, fiscal decentralization might yield under-provision of local public goods with externalities, but which are provided strictly from a local lens. Institutionalized parties have a stable party organizational structure and strong linkage to voters. Thus, they have both the incentives and capacity to shape the political incentives of local politicians. We hypothesize that, holding everything else constant, strong party institutionalization improves the functional role of fiscal decentralization in combating climate change. Our empirical findings support this view. They show that party institutionalization and fiscal decentralization, together, can help lower Co2 emission and promote renewable energy consumption.
link: ICePP Working Paper 25-02
"State Low-Income Housing Credits: Impacts on Housing Affordability" (with Robert D. Buschman and Nicholas Warner)" Link
Abstract: The federal LIHTC subsidizes construction of affordable housing through income tax credits. Since its 1987 launch, 21 states have adopted state LIHTCs. Literature on the federal LIHTC investigates spillover effects on property values and various social conditions. Other literature finds it associated with higher construction costs and crowding out of unsubsidized development. We find no studies evaluating efficacy of state credits in increasing supply of affordable housing. We use LIHTC project data from HUD, factors in demand for low-income housing, and matched untreated control observations to estimate the effect of a state LIHTC on the production of low-income units. Preliminary results suggest Georgia’s LIHTC could be credited with about 1/5 of LIHTC units built in the state through 2009. We next use IPUMS-ACS data to construct housing affordability gap measures, which will be used to estimate the effects of state LIHTCs on housing affordability more generally, not only subsidized production.
Work in Progress:
“Household wealth and labor migration: Study of 2015 Earthquake in Nepal” (Draft coming soon)
Abstract: In this paper I provide empirical evidence for labor migration as ex-post risk management strategy by households following a natural disaster. A negative income shock could lead to an increase in migration (by lowering opportunity cost) or decrease in migration (by raising liquidity constraint). I use the 2015 Earthquake as a natural experiment to study if households use labor migration as a coping strategy following a negative income shock. Then I use panel data and exploit the variation in household wealth to show a diverging effect on labor migration following the earthquake. Furthermore, I show that migration choice varies with migration destination. The results show that, following the earthquake damage, total labor migration decreased. However, household wealth is associated with higher migration within the country and to India. Migration to other destination i.e, Gulf-countries, and Non-Gulf Countries are not statistically significant. The result highlights the significance of wealth heterogeneity on labor migration following an income shock.
“The effect of old-age benefit and women’s bargaining power on fertility rate: Evidence from cross country study” (with Xiangyu Meng and Tien Hoang)
Abstract: In 2022, China experienced a unique phenomenon in its modern history – depopulation. China’s modern demographic pattern has been characterized by declining birth rates and a simultaneous increase in the aging population. This demographic shift has exerted considerable strain on China's pension system, prompting a series of adaptive measures starting in the 1950s to the present. While pension reform has historically been linked to the fertility changes in developed countries, only recently has some attention been given to the developing countries. Our paper explores this link closely in the case of China. In 2015, the Chinese government undertook a significant reform consolidating two of its largest public pension plans: the first plan for civil servant and non-profit workers, the Public Employee Scheme (PES), and the second plan for urban employees, Basic Old Age Insurance (BOAI). This merger aimed to mitigate the government’s fiscal responsibility and align the benefits of the urban public workers more closely with those of their non-public counterparts. In this paper, we examine how the pension benefits changed, particularly how the reduction of the replacement ratio after retirement affects the fertility outcomes of the target population – the government workers. Using panel data from the China Family Panel Studies (CFPS), our investigation employs a difference-in-difference (DID) approach to estimate the causal impact of the merging of the PES into BOAI on fertility outcomes. Our contributions to the existing literature are twofold: first, we look at the change in the pension system from the intensive margin instead of the extensive margin by emphasizing the alterations in pension benefits rather than mere coverage; second, we employ the DID design to draw a causal conclusion on how individuals respond to changes in pension benefits by optimizing their fertility behaviors. We hope that our study will aid policymakers in making more informed decisions regarding pension reform amidst the challenges posted by an aging population and declining birth rates.
"Local Sales Tax Elasticity: The Case of Georgia" (with Nicholas Warner and Federico Corredor)
Abstract:Local Option Sales Taxes (LOSTs) are one of the major revenue sources for county governments in the U.S, particularly in Georgia. This paper seeks to evaluate the responsiveness of county governments’ LOST revenues to macroeconomic business cycles, general economic growth and within specific economic sectors. Based on data from 159 counties in Georgia for the period 2000-2022, we estimate the long and short run LOST tax elasticities from macroeconomic changes using Autoregressive Distributed Lag (ARDL) model. Preliminary findings show the presence of heterogeneity in short and long run elasticities across major economic sectors. This study adds to the existing literature by a) employing a dynamic panel framework to analyze heterogenous elasticities with non-stationary timeseries data and b) examining the fiscal implications of LOST revenue’s responsiveness to industry-specific economic growth at the county level. We inform local budgeting and forecasting decision-making by detailing how local industry mix can influence how economic growth translates into LOST collections.
"Fiscal Decentralization and Inclusive Growth: A cross-country study" (with Hyojung Kang and Jorge Martinez-Vazquez)
Abstract: This paper examines the relationship between fiscal decentralization and inclusive growth in a cross-country context. Over the past few decades, many countries have adopted fiscal decentralization as a strategy to improve governance, accountability, and the efficiency of public service delivery. At the same time, the concept of inclusive growth has gained prominence, emerging from the recognition that economic growth alone may not be sufficient to reduce poverty and inequality. Inclusive growth emphasizes not just the pace of economic growth but also the equitable distribution of its benefits across society. While extensive research has explored the impact of fiscal decentralization on economic growth, little is known about its effects on inclusive growth. This study seeks to bridge that gap by investigating whether fiscal decentralization can contribute to achieving inclusive growth by enhancing local governments' capacity to respond to citizens' needs, promoting social equity, and improving access to essential services. Through a cross-country analysis, the paper seeks to contribute to the broader discourse on the role of decentralization in fostering growth that is both sustained and broadly shared.
"Inclusive Growth: Literature Survey" (with Hyojung Kang and Jorge Martinez-Vazquez)
Policy Reports:
"Tax Incentive Evaluation: Georgia's Bank Tax Credit" (2024) (link)
"Forecasting TSPLOST Revenues in Georgia" (2023) (link)
"Tax Incentive Evaluation: Georgia's Film Tax Credit" (2023) (link)
"Tax Incentive Evaluation: Georgia's Other State Tax Credit" (2023) (link)
“Tax Incentive Evaluation: Georgia's Low-Income Housing Tax Credit” (2022) (link)
"Tax Incentive Evaluation: Georgia's Historic Rehabilitation Tax Credit" (2022) (link)