Tax efficiency in selected Indian states

This paper attempts to measure pure tax efficiency of fifteen major Indian states (Andhra Pradesh, Assam, Bihar, Haryana, Gujarat, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Orissa, Punjab, Rajasthan, Tamilnadu, Uttar Pradesh and West Bengal) for the period 1980–81 to 1992–93 in a manner that allows this efficiency to vary both across time as well as across states. It is discovered that there is a moral hazard problem in the design of central grants in that higher grants by the central government to the state governments reduce efficiency of tax collection by these states. The less poor states are more efficient in tax collection. The rankings of states by tax efficiency for the various years do not converge. An index of aggregate tax efficiency is calculated and it appears that this index has been stagnating. It is argued that the weight placed on tax effort in the formula determining central grants to state governments should be increased to improve tax efficiency of state governments. First version received: November 1997/final version received: November 1998     

The Indian Public Distribution System as provider of food security: Evidence from child nutrition in Andhra Pradesh

We study whether a sudden increase of the price of rice supplied by the Indian Public Distribution System in Andhra Pradesh, a large Indian state, had a negative impact on child nutrition. A few months after the price increase, a health survey started to record weight for a large sample of children. The data collection continued for several months, so that children measured later lived for a longer period of time in a less favorable price regime. Using different estimation techniques we find that longer exposure to high prices are not accompanied by worse nutritional status, as measured by weight-for-age.     

Does the certainty of arrest reduce domestic violence? Evidence from mandatory and recommended arrest laws

Domestic violence remains a major public policy concern despite two decades of policy intervention. To eliminate police inaction in response to domestic violence, many states have passed mandatory arrest laws, which require the police to arrest abusers when a domestic violence incident is reported. Using the FBI Supplementary Homicide Reports, I find that mandatory arrest laws actually increased intimate partner homicides. I discuss two potential mechanisms for this increase in homicides: decreased reporting by victims and increased reprisal by abusers. I investigate validity of these hypotheses by examining the effect of mandatory arrest laws on different sub-groups and by analyzing family homicides where the victim is less often responsible for reporting. There appears to be consistent evidence for the reporting mechanisms. For family homicides, mandatory arrest laws appear to reduce the number of homicides. This study therefore provides evidence that these laws may have perverse effects on intimate partner violence, harming the very people they seek to help.     

Damaging democracy? Security provision and turnout in Afghan elections†

In emerging democracies, elections are encouraged as a route to democratization. However, not only does violence often threaten these elections, but citizens often view as corrupt the security forces deployed to combat violence. We examine the effects of such security provision. In Afghanistan's 2010 parliamentary election, polling centers with similar histories of pre‐election violence unintentionally received different deployments of the Afghan National Police, enabling identification of police's effects on turnout. Using data from the universe of polling sites and various household surveys, data usually unavailable in conflict settings, we estimate increases in police presence decreased voter turnout by an average of 30%. Our results adjudicate between competing theoretical mechanisms through which security forces could affect turnout, and show behavior is not driven by voter anticipation of election‐day violence. This highlights a pitfall for building government legitimacy via elections in weakly institutionalized and conflict‐affected states.     

Identity and learning: A study on the effect of student-teacher gender matching on learning outcomes

In this paper we examine the gender matching effects in learning outcomes by studying the sorting behaviour of teachers and students by gender across private and public schools.We develop a theoretical framework behind the selection mechanism process which is grounded in the economic framework of systematic gender norms. Using contextual gender norms that are relevant to a developing country context, our theoretical model of matching behaviour predicts that the relative gain in learning outcomes is higher for female students under female teachers. We find support for our theoretical predictions when we test them using Young Lives Survey (YLS) data collected from Andhra Pradesh.     

Optimal Mechanisms for Heterogeneous Multi-Cell Aquifers

Standard economic models of groundwater management impose restrictive assumptions regarding perfect transmissivity (i.e., the aquifer behaves as a bathtub), no external effects of groundwater stocks, observability of individual extraction rates, and/or homogeneous agents. In this article, we derive regulatory mechanisms for inducing the socially optimal extraction path in Markov perfect equilibrium for aquifers in which these assumptions do not hold. In spite of the complexity of the underlying system, we identify an interesting case in which a simple linear mechanism achieves the social optimum. To illustrate potential problems that can arise by erroneously imposing simplifying assumptions, we conduct a simulation based on data from the Indian state of Andhra Pradesh.     

The formation and evolution of childhood skill acquisition: Evidence from India

Building on recent advances in the literature and using a rich data set for two cohorts of children aged between one and twelve for Andhra Pradesh, India, we investigate the determinants of children's cognitive as well as non-cognitive skills. We find evidence of self-productivity for cognitive skills and cross-productivity effects from cognitive on non-cognitive skills. Moreover, we demonstrate that parental investment has contemporaneously positive effects on skill levels for all age groups. Investigating other determinants of these skills, we find child health at age one to influence cognitive abilities at age five, whilst child health at age one is influenced by parental care already during pregnancy and earliest childhood. Understanding the determinants which account explicitly for the effect of a large number of child, caregiver and household characteristics provides insights with regard to possible policy interventions to improve the chances of children in poor environments of developing cognitive and non-cognitive skills crucial for success in many spheres of life.     

Police Violence and the Underreporting of Crime

This paper examines the relationship between police violence and the reporting of crime. Utilizing original data from a large‐scale household survey conducted in Costa Rica from October 2013 to April 2014 (n = 4,200), we find that the observation of police violence significantly reduces citizens’ willingness to report crime. The implications of this finding are explored using a game‐theoretic model of crime, crime reporting, and police misconduct. The model reveals that although the prospect of police violence against criminals may generate a degree of deterrence for criminal behavior, permissiveness toward police violence also raises expectations about the likelihood of police abuse against law‐abiding citizens. Consistent with our empirics, this reduces citizens’ propensity to report crime, thereby fostering a climate of impunity for criminal activity.     

Family violence and football: the effect of unexpected emotional cues on violent behavior

We study the link between family violence and the emotional cues associated with wins and losses by professional football teams. We hypothesize that the risk of violence is affected by the “gain-loss” utility of game outcomes around a rationally expected reference point. Our empirical analysis uses police reports of violent incidents on Sundays during the professional football season. Controlling for the pregame point spread and the size of the local viewing audience, we find that upset losses (defeats when the home team was predicted to win by four or more points) lead to a 10% increase in the rate of at-home violence by men against their wives and girlfriends. In contrast, losses when the game was expected to be close have small and insignificant effects. Upset wins (victories when the home team was predicted to lose) also have little impact on violence, consistent with asymmetry in the gain-loss utility function. The rise in violence after an upset loss is concentrated in a narrow time window near the end of the game and is larger for more important games. We find no evidence for reference point updating based on the halftime score.     

Territorial state capacity and elite violence from the 6th to the 19th century

We present new evidence for elite violence using regicide, the killing of kings, and investigate the role of the state in European violence between the 6th and 19th centuries. First, regicide is critically assessed as a proxy for interpersonal elite violence. Second, we propose ‘territorial state capacity’ as a measure of states being able to keep or even expand their territories. We find a negative correlation between the changes in territorial state capacity and the changes in elite violence. This could be interpreted in two ways, either that growing territorial state capacity enabled human society to reduce violence, or that a higher regicide rate resulted in lower territorial state capacity. Another possibility would be a bidirectional mechanism that resulted in a co-evolution of the two variables.     

Moving to safety and staying in school: The effects of violence on enrollment decisions in Mexico

There is a vast literature documenting negative impacts of crime on human capital accumulation, which has focused on large‐scale armed conflicts affecting both individuals and infrastructure. However, there is much less evidence in contexts where violence is not accompanied by the destruction of infrastructure. To fill this gap, this paper studies the effects of Mexico's War on Drugs (WoD) on individuals’ schooling decisions. Our results show only small effects of violence on total enrollment of children and young adults, in contrast to recent studies which find significant negative effects for some specific age‐by‐gender groups. Our analysis, which aims to assess the overall impacts of the WoD on enrollment decisions and takes advantage of various rounds of administrative data, the population census, and labor force surveys, shows that many families responded to the increase in violence by migrating to less affected municipalities. However, we find that their education decisions have been quite robust as greater violence did not affect their probability of being enrolled in school. In the long term, however, it is still possible that the increase in violence affects human capital accumulation through indirect effects arising in skill acquisition in early childhood and other stages.     

Conflict displacement and labor market outcomes in post-war Bosnia and Herzegovina

The war in Bosnia and Herzegovina of the early nineties displaced 1.3 million people. This study uses longitudinal data to document the effects of this displacement on labor market outcomes. To account for endogeneity in displacement, I exploit the fact that the level of violence affected the decision to leave and that pre-war economic performance is orthogonal to local violence levels. I find that displaced Bosnians are less likely to be working relative to the people who stayed. Displaced men experience higher unemployment levels, and displaced women are more likely to drop out of the labor force.     

Economic resilience in times of public health shock: The case of the US states

Does adopting social distancing policies amid a health crisis, e.g., COVID-19, hurt economies? Using a machine learning approach at the intermediate stage, we applied a generalized synthetic control method to answer this question. We utilize state policy response differences. Cross-validation, a machine learning approach, is used to produce the “counterfactual” for adopting states—how they “would have behaved” without lockdown orders. We categorize states with social distancing as the treatment group and those without as the control. We employ the state time-period for fixed effects, adjusting for selection bias and endogeneity. We find significant and intuitively explicable impacts on some states, such as West Virginia, but none at the aggregate level, suggesting that social distancing may not affect the entire economy. Our work implies a resilience index utilizing the magnitude and significance of the social distancing measures to rank the states' resilience. These findings help governments and businesses better prepare for shocks.     

Explaining the performance of state–community joint forest management in India

This paper seeks to identify and analyze the factors that explain differential outcomes of joint forest management (JFM) in the Indian state of Andhra Pradesh. Factors affecting the performances of JFM communities are analyzed using an ordered logit model. The results indicate that JFM communities are more likely to perform well when they are smaller in size and when forest resources in the JFM community are scarce. Presence of social capital and high value forests are also likely to promote good forest growth. Effective protection of forests is likely to contribute to the growth of forests. JFM communities that were initiated by NGOs are more likely to manage forests effectively than the one initiated by the Forest Department.     

Is there adaptation to predictable climate change along the temperature-conflict nexus? Evidence from the El Niño Southern Oscillation

A growing body of research connects short-run deviations in weather with violence. Less well understood is the scope for agents to adapt to medium and longer-run climate fluctuations. We follow existing research and use the existing climactic forces of the El Niño Southern Oscillation (ENSO) to analyse climate change – exploiting the fact that in 1989 published forecasts of these fluctuations became available. In a generalized differences framework, we contrast the impact of ENSO in affected areas of the globe relative to unaffected areas before and after 1989, finding no robust evidence that adaptation efforts are successfully mitigating conflict or civil unrest occurring as a result of these fluctuations.     

Growth Convergence and Regional Inequality in India (1981–2012)

There has been significant research effort to study the impact of liberalisation on growth and distribution in India. Using per capita income (PCI) data for the period 1981–82 to 2012–13 (28 regions for the entire period and 31 regions for 2001–2 to 2012–13) at the sub-national level in India we examine the claims of divergence and stratification (twin peak formation) as has been claimed in some of the recent literature. We confirm that there is divergence of PCI. We present the first set of tests of multimodality in the Indian convergence debate using Silverman (J R Stat Soc 43:97–99, 1981; Density estimation for statistics and data analysis. Monographs on statistics and applied probability, Chapman & Hall, London, 1986) procedure. Weighted kernel density plots and multi-modal tests reveal that there is emergence of “multi-modes” in the distribution of PCI, not just twin modes. The spatial pattern of growth reflects an area of stagnation in the eastern-central belt—Bihar, Madhya Pradesh, Uttar Pradesh and Orissa, and in the north eastern part of India—Assam and Manipur and a decline in Mizoram. Sikkim demonstrates fastest growth, whereas Gujarat, Haryana, Kerala, Maharashtra, Punjab, Tamil Nadu (among the big states) and Himachal Pradesh, and Andaman and Nicobar (small state and Union Territories) maintained their position. Karnataka, and Andhra Pradesh (among the southern states), Arunachal Pradesh and Nagaland (among the north eastern states) along with Jammu and Kashmir, Uttarakhand and Chhattisgarh, moved up in the growth ladder. The continuation of growth stagnation in most of the BIMARU states poses a challenge to received theories of growth convergence and raises developmental concerns that the increased play of market forces in the Indian economy have not been able to overcome.

     

Going postal: State capacity and violent dispute resolution

Scholars have long tried to understand the conditions under which actors choose to use violent versus non-violent means to settle disputes, and many argue that violence is more likely in weakly-institutionalized settings. Yet, there is little evidence showing that increases in state capacity lowers the use of violent informal institutions to resolve disputes. Utilizing a novel dataset of violence—specifically, duels—across American states in the 19th century, we use the spread of federal post offices as an identification strategy to investigate the importance of state capacity for the incidence of violent dispute resolution. We find that post office density is a strong, consistent, and negative predictor of dueling behavior. Our evidence contributes to a burgeoning literature on the importance of state capacity for development outcomes.     

Bank credit risk,grain production and the Indian economy

ABSTRACT

We generate measures of banking risk across Indian states and examine the relationship between banking risk and economic production in India. We find that banking risk co-moves with total grain production (TPG) and real gross domestic product (RGDP). The long-term impact of banking risk differs across Indian states. Ten states are negatively affected while one state maintains growth in RGDP. Likewise, the results show that six states are negatively affected while two states maintain growth in TPG. Banking risk is found to induce a larger decline in TPG than in RGDP at the national and state levels. Overall, banking risk shocks induce negative effects on both TPG and RGDP.     

Should the police give priority to violence within criminal organizations? A personnel economics perspective

Even among themselves, criminals are not seen as trustworthy. Consequently, a criminal organization needs to incentivize its members, either by threats of violence or by rewarding good behavior. The cost of using violence depends on the resources police allocate to investigating intraorganizational violence. This means that the police may affect the choice of an incentive scheme by the criminal organization. The design of the optimal strategy for crime control has to take this into account. We develop a model of an infinitely repeated criminal labor market where (i) a criminal organization hires and incentivizes members, and (ii) peripheral crime (crime outside the criminal organization) is a stepping stone to a career in organized crime. We establish that there are two possible optimal strategies for the police. (i) There are situations in which the optimal strategy for the police is to use all of their resources to decrease the efficiency of criminals. (ii) In other situations, the optimal strategy for the police is to spend the minimum amount of resources to ensure that the criminal organization cannot punish disloyal criminals, and spend the rest of their resources to decrease the efficiency of criminals.     

Minimum Wage Policy and Poverty in the United States

Recent studies have found that increasing the minimum wage is a useful antipoverty tool. In this analysis, we examine the influence of minimum wages and other important variables on US family poverty rates using state data over the years 1984-98 by estimating both a fixed effect and random coefficients regression model. Taking into account labor market influences, demographic factors, and differences in poverty rates across states, we find that expanding the minimum wage coverage and increasing labor force participation both have larger effects on poverty rates as compared to equivalent changes in the level of the minimum wage. It is further implied from the empirical results that the most effective means of lifting families out of poverty are policies that are directed toward increasing minimum wage coverage, encouraging increased labor force participation, raising the minimum wage, and subsidizing higher education, respectively.