Essays in development and political economy
Author(s)Lowe, Matt (Matthew James Albert); Jo, Donghee
Massachusetts Institute of Technology. Department of Economics.
Daron Acemoglu and Esther Duflo.
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This thesis comprises four essays in development economics and political economy, with a hint of behavioral economics. The first two chapters explore the effects of integration in two different settings: caste in India, and politics in Iceland. In the first chapter, I explore whether the effects of caste integration depend on whether such integration is collaborative or adversarial. To do so, I recruited 1,261 young Indian men from different castes and randomly assigned them either to participate in month-long cricket leagues or to serve as a control group. Players faced variation in collaborative contact, through random assignment to homogeneous-caste or mixed-caste teams, and adversarial contact, through random assignment of opponents. Collaborative contact reduces discrimination, leading to more cross-caste friendships and 33% less own-caste favoritism when voting to allocate cricket rewards. These effects have efficiency consequences, increasing both the quality of teammates chosen for a future match, and cross-caste trade and payouts in a real-stakes trading exercise. In contrast, adversarial contact generally has no, or even harmful, effects. Together this chapter shows that the economic effects of integration depend on the type of contact. The second chapter (co-authored with Donghee Jo) explores whether physical integration of politicians can affect political polarization in Iceland. We tackle this question by exploiting random seating in Iceland's national Parliament. Since almost all voting is along party lines, we use a text-based measure of language similarity to proxy for the similarity of beliefs between any two politicians. Using this measure, we find an in-coalition effect: language similarity is greater for two politicians that share the same political coalition (government coalition or opposition) than for two politicians that do not, suggesting that the measure captures meaningful partisan differences in language. Next, we find that when two MPs randomly sit next to each other, their language similarity in the next parliamentary session (when no longer sitting together) is significantly higher, an effect that is roughly 16 to 25 percent of the size of the in-coalition effect. The persistence of effects suggests that politicians are learning from their neighbors, not just facing transient social pressure. However, this learning does not reflect the exchange of ideas "across the aisle". The effects are large for neighbors in the same coalition group, at 29 to 53 percent of the in-coalition effect, with no evidence of learning from neighbors in the other group. Based on this evidence, integration of legislative chambers would likely slow down, but not prevent, the ingroup homogenization of political language. The third chapter (co-authored with Madeline McKelway) uses a field experiment to understand whether barriers to spousal communication could explain low female labor force participation in India. For this chapter, we partnered with India's largest carpet manufacturer to offer employment opportunities to 495 married women. Gender differences in preferences meant there was an intra-household tension: women were often interested in working outside of the home, while their husbands opposed the idea. We experimentally varied how the job opportunity was presented to couples. To test for the effects of information, and the incentives of husbands to withhold it, we randomized whether enrollment tickets and job information were given to the women or to their husbands. For the nontargeted spouse, we cross-randomized whether they were informed about the job opportunity, giving variation in whether husbands had plausible deniability. To test for the importance of communication, some couples received the ticket and information together, with a chance to discuss the job. Overall, enrollment was low at 17%. Information was not a barrier to enrollment - providing women with information about the opportunity had no effect because husbands did not strategically withhold information, despite having plausible deniability. Surprisingly, we find that having couples discuss the opportunity together decreased enrollment, by 6 to 9 percentage points. We conclude that policymakers should tread with care: intra-household communication may not be easily manipulated without unintended consequences for decision-making. In the fourth and final chapter, I study the effects of early exposure on the careers of UK politicians. To do so, I exploit a natural randomized experiment in the UK Parliament. Each year, hundreds of Members of Parliament (MPs) enter a lottery for the opportunity to legislate. Using archival data from 1950 to 1990 I find that high-ranked winners are 34% (8 p.p.) more likely to ever become ministers and hold 28% (0.4) more political offices over their careers. Three pieces of evidence suggest that the key mechanism is exposure, as opposed to learning-by-doing or political survival. First, the effect of winning is larger for women, an under-represented group for which priors are likely to be more diffuse. Second, the effect is smaller if there are randomly more winners from the same party in the same year, dividing the attention of senior party members. Third, the effect is smaller when the MP has won before, consistent with diminishing returns to signals. These results suggest that early exposure can have long-run career effects even in information-rich political settings.
Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2018.This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections.Cataloged student-submitted from PDF version of thesis. Page 263 blank.Includes bibliographical references (pages 249-262).
DepartmentMassachusetts Institute of Technology. Department of Economics
Massachusetts Institute of Technology