• Procurement Conference in Lancaster & collusion in Japanese auctions


    On June 12 & 13, I attended the Conference on “Auctions, competition, regulation, and public policy” , organized by Dakshina Da Silva and Klenio Barbosa, at the Department of Economics of Lancaster University Management School.

    Here is the program, with the sample of papers presented. A special highlight for the paper “Detecting Large‐Scale Collusion in Procurement Auctions” by Kei Kawai (NYU) and Jun Nakabayashi (Tohoku University), which analyzes an extraordinary case of systematic collusion in public procurement in Japan:

    This paper documents evidence of widespread collusion among construction firms participating in procurement auctions in Japan using a novel dataset that accounts for most of the construction projects procured by the Japanese national government from 2003 to 2006. By examining rebids that occur for auctions when all (initial) bids fail to meet the reserve price, we identify collusion using ideas similar to regression discontinuity. We identify about 1,000 firms whose conduct is inconsistent with competitive behavior. These bidders were awarded about 7,600 projects, or close to one fifth of the total number of construction projects in our sample. The value of these projects totals about $8:6 billion, about 8:4% of which may have been saved absent collusion.

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  • Development workshop at Toulouse TSE TIGER Forum, June 2 and 3


    Next Monday and Tuesday, in the context of the 2nd Toulouse School of Economics TIGER Forum, I am organizing with my colleague Emmanuelle Auriol a workshop on development economics. We are very happy to gather a great group of researchers:
    – Pascaline Dupas (Stanford University)
    – Marcel Fafchamps (Stanford University)
    – Chris Woodruff (Warwick University)
    – Eliana la Ferrara (Bocconi University)
    – Rocco Macchiavello (Warwick University)
    – Rohini Pande (Harvard University, JFK)
    – Nancy Qian (Yale University),

    and, from TSE, Marti Mestieri, Emmanuelle and myself.

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  • The Brasília Experiment


    My paper with Julia Bird on the long-term impact of road construction in Brazil is now online as TSE working paper n°14-495.

    The Brasília Experiment: Road Access and the Spatial Pattern of Long-term Local Development in Brazil
    This paper studies the impact of the rapid expansion of the Brazilian road network, which occurred from the 1960s to the 2000s, on the growth and spatial allocation of population and economic activity across the country’s municipalities. It addresses the problem of endogeneity in infrastructure location by using an original empirical strategy, based on the “historical natural experiment” constituted by the creation of the new federal capital city Brasília in 1960. The results reveal a dual pattern, with improved transport connections increasing concentration of economic activity and population around the main centers in the South of the country, while spurring the emergence of secondary economic centers in the less developed North, in line with predictions in terms of agglomeration economies. Over the period, roads are shown to account for half of pcGDP growth and to spur a signifficant decrease in spatial inequality.

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  • Yale Conference on Grand and Petty Corruption in Developing States


    From Wednesday April 30 to Friday May 2, I attended the Conference on Grand and Petty Corruption in Developing States: Business, Citizens, and the State, organized at Yale by Susan Rose-Ackerman, Paul Lagunes, and Lynn Hancock.

    As can be seen from the website above, very interesting papers and discussions indeed, from a diverse crowd including lawyers, policy makers, political scientists, economists, bringing very diverse perspectives on corruption around the world from their positions in law firms, the OECD, governments or university among others.

    In this opportunity I presented an early version of what can be considered a discussion paper on the role of the construction of large scale hydroelectric dams in Paraguay (Itaipú and Yacyretá) in the 1970s in locking-in corrupt practices over the long-term, and in doing so adversely affecting the development trajectory of the country over the next 40 years. Here is a preview of the slides: The Story of Paraguayan Dams.

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  • Does migration affect schooling decisions for children back home?


    Really nice paper presented by Taryn Dinkelman in the development seminar at TSE:

    “What are the long run effects of labor migration on human capital? Evidence from Malawi”
    Circular labor migration is a core feature of low-income labor markets. Yet, evidence on how this migration affects education investments in sending communities is limited due to lack of high quality data and challenging identification issues. This is especially true in Africa, where children can substitute for migrant adult labor. In this paper, we estimate the net effect of international migration on human capital accumulation of children by exploiting two large migrant labor shocks in sending communities in Malawi. An international mine labor treaty signed in 1967 initiated a 300% increase in the flow of Malawians to South Africa. Seven years later, a mining plane crash prompted the Malawian government to halt and reverse this expansion until 1977. Our strategy compares differences in long run human capital accumulation across high and low shock areas, among cohorts eligible and ineligible for primary school during the shock years. We construct measures of district-level exposure to this rapid expansion and contraction of foreign employment and earnings using historical locations of mining recruiting stations. We match this spatial variation in migration costs to cohort-specific education outcomes from newly digitized 1977 and 1998 Census data. Both shocks to migration had large, positive impacts on education. Age eligible cohorts exposed to the shocks attained 10 to 15% more schooling and the share with any primary schooling rose by 5 to 8%. Neither school supply-side interventions nor internal migration dynamics account for our results. However, these long run effects are only apparent in districts without agricultural estates, where child labor is less substitutable for missing male labor.

    Full paper here.

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  • Seminars in Santiago, Chile


    Following the workshops in Brazil, I also visited Chile, and I gave a couple of talks at Universidad de Chile, Facultad de Economía y Negocios.

    On Thursday 27, I presented the paper “Road Access and the Spatial Pattern of Long-term Local Development in Brazil” (with Julia Bird), in the regular seminar. Then on Friday 28, I gave a public lecture (in Spanish) entitled “Instituciones electorales, información, y calidad de las políticas económicas“.

    It was also the opportunity to meet again old friends, some of whom I had not seen in more than 15 years, and see some of the changes that the country has been going through in the recent past. This visit was at the invitation of Eduardo Engel, who came back recently from Yale to Chile. On top of academic activities, he is currently doing very interesting work to provide policy advice to the new Chilean government, through the fundation Espacio Público.

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