Working Paper
Dana Higgins. Working Paper. “Islands of Agreement in the Tidal Wave of Enduring Rivalries”.
Dana Higgins, Brock Tessman, and Chad Peltier. Working Paper. “The Missing Link Between System Structure and State Behavior”.Abstract

Do leadership perceptions of relative power distribution in a competitive system tend to differ from the objective distribution of power in that system? If so, how does this difference influence our understanding of the connection between relative power and state behavior? In this article, we draw insight from the fields of cognitive, social, and political psychology, diplomatic history, and international relations in order to develop and test a “Perceptions of Power” (PoP) model that more accurately tracks leadership perceptions of relative power in competitive systems. We use and transform capability data from pre-World War One Europe in order to generate PoP scores that track German perceptions of relative power in Europe between 1871 and 1914. We then conduct a systematic and detailed analysis of diplomatic documents from that time period in order to assess the PoP model and demonstrate that it has greater external validity than raw national capability scores. We find that this is particularly the case when it comes to identifying the point in time at which Germany reaches power parity with Great Britain, and accounting for the anxiety that Germans leaders felt because of the specific way in which Russia recovered after its defeat in the Russo-Japanese War. Both of these improvements offer a great deal of insight for scholars that are interested in understanding both the motivation and timing of German strategy in the years prior to World War One. In addition, we are optimistic about the generalizability of the PoP model. In as much as it can be applied to other systems and time periods, it may be able to uncover new ways to connect the systemic distribution of relative power to actual foreign policy outcomes.

Copy Here
Dana Higgins, Connor Huff, and Anton Strezhnev. Working Paper. “Survivability not Superiority: A Critique of Kroenig (2013)”.Abstract

Kroenig (2013) finds that in crises between nuclear-armed states, countries possessing nuclear arsenals larger than those of their opponents tend to be victorious. After correcting for coding errors in the dataset and for finite-sample bias in clustered standard error estimates, we show that this relationship no longer holds at conventional levels of statistical significance. We further demonstrate that the observed association between nuclear superiority and crisis victory is extremely sensitive to the author's variable coding decisions and model specifications. Under reasonable alternative coding and model choices, the nuclear superiority finding is no longer present. We find instead that the possession of an assured nuclear second-strike capability is consistently and robustly associated with positive crisis outcomes among nuclear states. Survivability, rather than superiority, appears to be the element of a state's nuclear arsenal that has the most significant bearing on its ability to win nuclear crises.

Draft Copy
Pia Deshpande and Jeremiah Cha. Working Paper. The 2020 CES: Duplicate Respondents and Handling Asian and Hispanic Subsamples. The Cooperative Election Study.Abstract
Pia Deshpande ( and Jeremiah Cha ( report that 25% of the 2020 CES sample took the 2018 CES. They report best practices for conducting analyses of ethnic subgroups and produce tables documenting counts for specific Hispanic (Mexican, Puerto Rican, South American, Spanish, and U.S.-identified Hispanics) and Asian (Indian, Chinese, Filipino, U.S.-identified Asians) subgroups. The report also compares the 2020 CES sample of Asians and Hispanics to the 2019 5-year American Community Survey and notes where samples differ.
Accountability for Children’s Rights. With Special Attention to Social Accountability and Its Potential to Achieve Results and Equity for Children.
Liz Gibbons. Working Paper. “Accountability for Children’s Rights. With Special Attention to Social Accountability and Its Potential to Achieve Results and Equity for Children.”.
Blanca Sanchez-Alonso. Working Paper. “The Age of Mass Migration in Latin America”.Abstract
The experiences of Latin American countries are not fully incorporated into current debates concerning the age of mass migration even though 13 million Europeans migrated to the region between 1870 and 1930. This paper draws together different aspects of the Latin America immigration experience. Its main objective is to rethink the role of European migration to the region, addressing several major questions in the economics of migration: whether immigrants were positively selected from their sending countries, how immigrants assimilated into the host economies, the role of immigration policies, and the long-run effects of immigration. Immigrants came from the economically backward areas of Southern and Eastern Europe, yet their adjustment to the host labour markets in Latin America seems to have been successful. The possibility of rapid social upgrading made Latin America attractive for European immigrants. Migrants were positively selected from origin according to literacy. The most revealing aspect of new research is showing the positive long-run effects that European immigrants had in Latin American countries. The political economy of immigration policies deserves new research, particularly for Brazil and Cuba. The case of Argentina shows a more complex scenario than the classic representation of landowners constantly supporting an opendoor policy.
Davide Furceri, Prakash Loungani, and Jonathan D. Ostry. Working Paper. “The Aggregate and Distributional Effects of Financial Globalization: Evidence from Macro and Sectoral Data”.Abstract
We take a fresh look at the aggregate and distributional effects of policies to liberalize international capital flows—financial globalization. Both country- and industry-level results suggest that such policies have led on average to limited output gains while contributing to significant increases in inequality—that is, they pose an equity–efficiency trade-off. Behind this average lies considerable heterogeneity in effects depending on country characteristics. Liberalization increases output in countries with high financial depth and those that avoid financial crises, while distributional effects are more pronounced in countries with low financial depth and inclusion and where liberalization is followed by a crisis. Difference-indifference estimates using sectoral data suggest that liberalization episodes reduce the share of labor income, particularly for industries with higher external financial dependence, those with a higher natural propensity to use layoffs to adjust to idiosyncratic shocks, and those with a higher elasticity of substitution between capital and labor. The sectoral results underpin a causal interpretation of the findings using macro data.
Stephan Zheng, Alexander Trott, Sunil Srinivasa, Richard Socher, and David C. Parkes. Working Paper. “The AI Economist: Optimal Economic Policy Design via Two-level Deep Reinforcement Learning.” CoRR abs/2004.13332.
Anna Crowe. Working Paper. “All the regard due to their sex”: Women in the Geneva Conventions of 1949 Harvard Law School”. Publisher's VersionAbstract

This working paper focuses on the gendered concepts of women that emerge from the texts of the Geneva Conventions of 1949, especially the concept of “honor and modesty.” Through analysis of historical materials, the paper describes the background to Article 27 of the Fourth Geneva Convention, which refers to the protection of women from rape and enforced prostitution. In particular, the paper examines the question of why the Conventions’ drafters did not include rape in the list of acts that constitute grave breaches of the Conventions, worthy of special condemnation.

Olle Folke and Johanna Rickne. Working Paper. “"All the Single Ladies: Job Promotions and the Durability of Marriage"”.Abstract

This paper shows that promotion to top jobs dramatically reduce the durability of women’s marriages, but not men’s. For two political jobs – mayor and parliamentarian – we can follow successful and unsuccessful job contenders over time, both before and after the promotion. With this data, we can ascertain common trends in divorce and earnings before the promotion, and use a difference in difference approach to estimate the causal effect of promotion on divorce. To further control for unobservables, we also define a subsample close elections where the promotion is quasi-randomly assigned. For promotions to CEO of private firms, we can only analyze promotion winners, but an event study that compares promoted men and women gives strong supports to our baseline findings. Looking into  possible mechanisms, we can rule out that promoted women are differentially “tempted” by new partners after promotion. Instead, it appears that norms and behavior in the marriage  market may hinder the closure of the gender gap in the labor market. Divorces do not  occur in couples that are more equally matched in terms of age, parental leave, or earnings. Instead they occur in couples where behaviors are more traditional, which is still the case for most relationships.

Barton E. Lee, Daniel J. Moroz, and David C. Parkes. Working Paper. “An Analysis of Blockchain Governance via Political Economics”.
Paul W. Rhode, James M. Snyder Jr., and Koleman Strumpf. Working Paper. “"The Arsenal of Democracy: Production and Politics During WWII"”.Abstract
We study the geographic distribution of military supply contracts during World War II. This is a unique case, since over $3 trillion current day dollars was spent, and there were concerns that the country's future hinged on the war outcome. We find robust evidence consistent with the hypothesis that economic factors dominated the allocation of supply contracts, and that political factors---or at least winning the 1944 presidential election---were at best of secondary importance. General industrial capacity in 1939, as well as specialized industrial capacity for aircraft production, are strong predictors of contract spending across states. On the other hand, electoral college pivot probabilities are at best weak predictors of contract spending, and under the most plausible assumptions they are essentially unrelated to spending. This is true not only for total contract spending over the entire period 1940-1944, but also for shorter periods leading up to the election in November 1944, as well as for new facilities spending. That is, we find no evidence of an electoral cycle in the distribution of funds.
Timothy J. Besley. Working Paper. “"Aspirations and the Political Economy of Inequality."”.Abstract
In standard approaches to the political economy of inequality, the income distribution and the preferences of households are taken as fixed when studying how incomes are determined within and between nations. This paper makes the income distribution endogenous by supposing that aspirational parents can socialize children into having aspirational preferences which are modeled as a reference point in income space. The model looks at the endogenous determination of the level of income, income inequality and income redistribution where the proportion of aspirational individuals evolves endogenously according to payoffs along the equilibrium path. The paper discusses implications of the model for intergenerational mobility. It also shows how the income generation process is critical for the dynamics and welfare conclusions. Finally, it looks at some evidence from the World Values Survey in light of the theory.
Nauro F. Campos. Working Paper. “B for Brexit: A Survey of the Economics Academic Literature”.Abstract
This paper surveys the economics academic literature on Brexit. It is organised in: pillars,
channels, and consequences. The two building blocks to understand Brexit are the economic history of the UK-EU relationship and the literature on the political economy of globalisation and populism. The paper then reviews the evidence on the standard mechanisms through which the UK benefited from EU integration (trade, migration and FDI). Next it surveys the short-run effects of the vote and discuss expected long-term consequences of “Brexit proper.” It concludes by identifying some main gaps in the economics literature on Brexit.
Does democracy hold its promise to curb domestic political violence? While the matter has been heatedly debated for decades, not much reliable causal evidence exists so far. To study this question we focus on UK's Victorian Age of Reform, and in particular the Representation of the People Act of 1867 -- which is widely regarded as a critical juncture in the history of democratization. We have constructed a novel dataset on conflict events and economic performance around the 1868 Elections (the first elections where newly enfranchised citizens could vote) and exploit arguably exogenous variation in enfranchisement intensity across UK cities. We find a strong and robust peace-promoting effect of franchise extension and identify as major channel the beneficial impact of representation on local economic growth.
Matthew S. Jaremski and David C. Wheelock. Working Paper. “"Banker Preferences, Interbank Connections, and the Enduring Structure of the Federal Reserve System"”.Abstract

Established by a three person Reserve Bank Organization Committee (RBOC) in 1914, the structure of the Federal Reserve System has remained essentially unchanged ever since, despite criticism at the time and over ensuing decades. This paper examines the selection of cities for Reserve Banks and branches, and of district boundaries. We show that each aspect of the Fed’s structure reflected the preferences of national banks, including adjustments to district boundaries after the Fed was established. Further, using newly-collected information on the locations of each national bank’s correspondents, we find that banker preferences mirrored established interbank connections. The Federal Reserve was thus formed on top of the structure that it was meant to replace.

George Akerlof and Pascal Michaillat. Working Paper. “Beetles: Biased Promotions and Persistence of False Belief.”.Abstract
This paper develops a theory of promotion based on evaluations by the already promoted. The already promoted show some favoritism toward candidates for promotion with similar beliefs, just as beetles are more prone to eat the eggs of other species. With such egg-eating bias, false beliefs may not be eliminated by the promotion system. Our main application is to scientific revolutions: when tenured scientists show favoritism toward candidates for tenure with similar beliefs, science may not converge to the true paradigm. We extend the statistical concept of power to science: the power of the tenure test is the probability (absent any bias) of denying tenure to a scientist who adheres to the false paradigm, just as the power of any statistical test is the probability of rejecting a false null hypothesis. The power of the tenure test depends on the norms regarding the appropriate criteria to use in promotion and the empirical evidence available to apply these criteria. We find that the scientific fields at risk of being captured by false paradigms are those with low power. Another application is to hierarchical organizations: egg-eating bias can result in the capture of the top of organizations by the wrong-minded.
Magdalena Ignatowski, Josef Korte, and Charlotte Werger. Working Paper. “"Between Capture and Discretion -- The Determinants of Distressed Bank Treatment and Expected Government Support"”.Abstract

In this paper we analyze how sources of political influence relate to the actual regulatory treatment of distressed banks and to the expectation of bank support provided by the government. We assemble a unique dataset connecting U.S. banks' sources of influence (e.g., lobbying expenditures, proximity to legislative committee, prior affiliation with regulatory or government institutions) to bank financial data, actual bank supervisory actions and market-inferred expected government support. Employing this novel data, we cast some light on how regulatory decision making is affected by these sources of influence. Our findings suggest that banks' inuence exertion matters for the regulatory treatment of distressed banks as well as for the expectation of support regardless of bank distress. Several conditions increase the effectiveness of sources of influence in actual regulatory treatment: Lobbying activities are more effective with deteriorating capital ratios and with the aid of former politicians; effectiveness of proximity to representatives of legislative committee increases with the amount of campaign contributions from the financial industry. However, there seems to be a limit to the impact of influence when it comes to closure decisions of the most severely distressed banks. Our findings are instructive for understanding the political influence banks can leverage on shaping regulatory decisions, and propose increased attention to the relations between legislators, regulators, and

David Parsley and Helen Popper. Working Paper. “"Blue States and Red States: Business Cycle Divergence and Risk Sharing"”.Abstract

We examine business cycle divergence and risk sharing within the United States.
In doing so, we also separately examine states whose populations have consistently
voted either Democrat (Blue) or Republican (Red) in national elections. We find that
states' business cycles have diverged markedly since the start of this century: they
are now more asynchronous than is typical across the international borders of distinct
countries. This divergence is even more striking between Blue states and Red states.

At the same time, we find that states smooth their consumption across these diverging business cycles: they share risk much more than is typical internationally. While they share most of their idiosyncratic risk through nancial markets, Blue, Red and swing states share the remainder of their risk in very dierent ways. Red states smooth the remainder largely through fiscal flows (taxes and transfers), while they are left with more than twice the idiosyncratic risk of the other states. In contrast, swing states smooth the remainder largely through migration, while fiscal flows hardly matter at all. Finally, Blue states smooth the remaining idiosyncratic risk through a combination of fiscal flows, migration and the purchases of consumer durables; and they are left with little residual risk.

Amory Gethin, Clara Martínez-Toledano, and Thomas Piketty. Working Paper. “Brahmin Left versus Merchant Right: Changing Political Cleavages in 21 Western Democracies, 1948-2020”. Publisher's VersionAbstract
This paper provides new evidence on the long-run evolution of political cleavages in 21 Western democracies by exploiting a new database on the vote by socioeconomic characteristic covering over 300 elections held between 1948 and 2020. In the 1950s-1960s, the vote for democratic, labor, social democratic, socialist, and affiliated parties was associated with lower-educated and low-income voters. It has gradually become associated with higher-educated voters, giving rise to “multi-elite party systems” in the 2000s-2010s: high-education elites now vote for the “left”, while high-income elites continue to vote for the “right”. This transition has been accelerated by the rise of green and anti-immigration movements, whose key distinctive feature is to concentrate the votes of the higher-educated and lower-educated electorate, respectively. Combining our database with historical data on political parties’ programs, we provide evidence that the reversal of the educational cleavage is strongly linked to the emergence of a new “sociocultural” axis of political conflict. We also discuss the evolution of other political cleavages related to age, geography, religion, gender, and the integration of new ethnoreligious minorities.