Harvard Seminar on Positive Political Economy

Date: 

Thursday, March 23, 2017, 4:30pm to 6:00pm

Location: 

CGIS Knafel K354

 

The Faculty of Arts and Sciences and The Institute for Quantitative Social Science at Harvard University are sponsoring a seminar on formal and quantitative political research. The Program on Positive Political Economy (PPE) supports research-related activities that integrate the study of economics and politics, whether by studying economic behavior in the political process or political behavior in the marketplace. In general, positive political economy is concerned with showing how observed differences among institutions affect political and economic outcomes in various social, economic, and political systems and how the institutions themselves change and develop in response to individual and collective beliefs, preferences, and strategies. All interested faculty and students are invited to attend.

Harvard University Professor Michael Kremer presents, "There's No Place Like Home: Theory and Evidence on Politician Preferences and Decentralization."

Abstract: We construct a simple model in which politicians can choose to spend resources on themselves, on their home area, or on other geographic areas. The model implies that if politicians are sufficiently home biased, centralization will reduce social welfare relative to decentralization.  Moreover, other approaches to controlling the effects of home bias, such as constitutional equal treatment spending clauses that constrain politicians from focusing resources on their home areas, will increase corruption relative to decentralization.  An incentive-compatible choice experiment in which 179 elected county councilors in rural Kenya chose among alternative water infrastructure projects reveals substantial home bias. We estimate that politicians value each person served in their home village more than twice as much as each person served outside their home village.  Consistent with the model, politicians are more likely to value controlling the discretionary funding associated with the project when they do not control the location of the project.  

 

***We Reserve the right to change the room.