Nimish Adhia

University of Illinois, Chicago
Economics

"Role of Ethics in India’s Economic Liberalization: Evidence from Print Media”

Why did India embark on a program of economic liberalization since the early 1990s? It is argued here that the current interest-based explanations cannot account for the scale and timing of the reforms. Drawing upon the work of North, Sen and McCloskey on the role of ideas, an ideological shift among Indian Intellectuals is explored as an explanation. For evidence, results are presented from a content analysis of a top newsweekly and an examination of the recipients of the country's top civilian award.

Jowei Chen 

Stanford University
Political Science

“Do Politically Connected Firms Receive More Generous Government Bailouts?”

Abstract: How do governments deliver financial rewards to their partisan supporters? We illustrate one mechanism by analyzing which banks received and did not receive TARP bailouts from the US Treasury Department. Overall, we find that TARP bailouts favored banks with Republican political connections, as measured by employees’ direct campaign contributions to Republican candidates. We also show that this pro-Republican bias in the TARP bailouts disappeared after Obama assumed office on January 20, 2009. To determine whether financial markets anticipated this partisan bias in TARP bailouts, we analyze abnormal stock price returns on days that Congress voted on the original TARP bailout proposal. When the House rejected the original TARP bill (September 29, 2008), the stock prices of Republican connected firms suffered disproportionately large losses. The reverse outcome occurred when the Senate passed a revised TARP bill two days later. In other words, market investors correctly anticipated that TARP would uniquely benefit Republican connected firms.

Bill English

Duke University
Political Science

“Demystifying Trust: Experimental evidence from Cambodia and Thailand”

We report the results of a public goods game and trust survey conducted in Thailand and Cambodia that strongly suggests that economic behavior tracks expectations in the majority of the population. We find that standard survey measures of trust employed by the World Values Survey, which form the basis of many macro empirical investigations of the relationship between trust and economic growth, are not useful for predicting contributions to a public goods game in two representative communities in the developing world. This suggests that at the micro level the relationship between trust responses and economic behavior is not as straight forward as much of the social capital and trust literature has assumed. However, these findings do support a "rational" account of trust, which entails more hopeful policy conclusions. Moreover, this study shows that expectations have a profound effect on economic behavior and that this effect is independent of the most widely used indicator of trust ("do you think most people can be trusted").

Finally, we observe a distribution of player types similar to previous studies, with reciprocators constituting the largest block, followed by free riders and altruists. Most significantly, principled reciprocators, who constitute a majority of the population, quickly update their behavior based on expectations of trustworthiness. These results provide resources for further developing an account of how trust, expectations, and player types interact to produce different cooperative patterns in economic dilemmas in the developing world.

Francisco Flores-Macias 

Massachusetts Institute of Technology
Political Science

“The Grabbing Hand Meets Market Competition? Hugo Chávez and the Petroleum Refining Market in the United States” 

The conventional wisdom in economics holds that private ownership of enterprise is more efficient than government ownership. Some authors, however, have challenged that view and argue that state-owned enterprises can attain comparable levels of productivity and efficiency as long as they face the discipline of market competition. Testing this claim has been difficult due to the fact that state-owned enterprises generally operate in countries where market institutions are not fully developed. In this study, I use the case of the Citgo Petroleum Corporation—wholly owned by the government of Venezuela since 1990—to examine the effect of the competitive petroleum refining business environment of the United States on the performance of a state-owned enterprise. Using an original dataset as well as in-depth qualitative interviews, this paper suggests that Citgo has performed at high levels compared to many of its counterparts in the market of the United States, even after Hugo Chávez rose to power and increased the degree of government interference in the company. This finding underscores that institutional aspects of the business environment where the companies operate may be just as important—if not more—than whether a company is private or state owned. Moreover, it suggests that good corporate governance arrangements of state-owned enterprises are “sticky,” so that an interventionist government may need several years to transform them.

Laura Inglis

Oxford University
History

“The Rise of Substantive Due Process in New York State”

This paper examines the origins of substantive due process, a controversial doctrine which has given the U.S. Supreme Court tremendous discretionary power in interpreting the Constitution. The 14^th Amendment, ratified in 1868, provides that “No person shall be deprived of life, liberty, or property without due process of law.” On its face, this means that the government cannot take away a person’s life, liberty, or property without following correct procedures, such as giving that person a fair trial. In the late 19^th century, however, the U.S. Supreme Court determined that the due process clause should be interpreted substantively, instead of merely procedurally. A substantive interpretation of the due process clause allows the Court to prohibit particular legislative actions which the Constitution itself does not prohibit. This effectively enables the Court to add to the Constitution at its own discretion.  The doctrine of substantive due process was used throughout the 20^th century for diverse purposes, from protecting liberty of contract to establishing a right to privacy, and continues to feature prominently in judicial activity to the present day.

This paper examines the evolution of substantive due process from the founding of New York until the first fully-fledged substantive due process decision in 1843. A subsequent chapter will trace the further development of this doctrine and demonstrate that New York cases disproportionately influenced the U.S. Supreme Court’s decision to substantive due process at the end of the 19^th century.

Peter Jaworski

Bowling Green State University
Philosophy

“The Problem of the Continuity of Ownership Claims”

My dissertation is entitled, "Me, Myself & Mine: The Scope of Ownership Claims." The overall goal of the dissertation is to take a (really) close look at what we mean by "ownership," and what gets to count as legitimate ownership. The questions I'm pursuing here include these: What objects are open or "fit" for the ownership relation? Are persons the kinds of things that can be "owned"? Is "self-ownership" a category error? Against whom do we have ownership claims? Are there particular relationships that we may be in that weaken or eliminate our claims (like within families and amongst friends)? Can we own significant cultural artifacts (like the Mona Lisa or the Leaning Tower of Pisa)?

Robert Nozick thought that a complete theory of justice when it comes to property will include a principle of justice in initial acquisition, a principle of justice in transfer, and a principle for rectification of violations of the first two principles. Nozick may be wrong. We may need a principle to cover the continuation of property claims

We need a principle to cover the continuity of claims across time.  I canvas the following possibilities for the morally relevant metaphysical unit: (1) Identity of living human being, (2) Identity of person, (3) Identity of self, and (4) Identity of momentary experiencer.  I argue against (1) and insist that (4) is implausible without argument. (2) and (3) are both plausible, and one of these two options is most likely the truth.  One possible way to avoid some of these problems for the natural rights theorists of property is to suggest that we implicitly transfer what we own to all future “stages” of ourselves, or that we inherit property from earlier “stages” of ourselves. Whatever turns out to be the truth, I try to demonstrate that natural rights theories of property have a bit of work to do to iron out this particular problem.

Erik Kimbrough

George Mason University
Economics

“Developing Respect for Property in Human-Subject Experiments and Agent-Based Models”

I perform agent-based simulations and human-subject experiments to explorethe emergence of re spect for property in a specialization and exchange economy where theft is costless. Agents, driven by reciprocity and hill-climbing heuristics and parameterized to replicate human outcomes when property is exogenously protected, are employed to construct predictions for human behavior when property can be freely appropriated. Agents do not predict human behavior in a new set of experiments because most subjects innovate, constructing a property norm of mutual taking that allows exchange to crowd out theft. When this norm is imposed on agents, they again replicate human behavior. Property emerges as a social convention that exploits the capacity for reciprocity to sustain trade.

 Adam Martin

A gulf separates two analytic visions in economics. The dominant Ricardian vision, including most rational choice theory, emphasizes the role of underlying technical factors in determining social equilibria. The Smithian vision focuses on open-ended processes and endogenously generated change. This paper argues that Knightian uncertainty can serve as a microfoundation for Smithian processes wholly compatible with rational choice, allowing economists to tell stories of virtuous cycles and vicious circles without abandoning instrumental rationality. The analytics of uncertainty are explored and two example cases are put forward.

Omar Wasow

Harvard
Ethnic Studies

“Why Does Integration Happen? Reconsidering the Schelling Segregation Model to Explain Mixed Race Neighborhoods”

The Schelling model of residential segregation suggests that high rates of racial segregation may occur even when no individual desires such an outcome. Interdependence among decision makers can lead to tipping effects that produce significant rates of segregation. Numerous extensions of Schelling’s model suggest that the theory is robust to a wide variety of specifications. Despite its widespread acceptance, empirical evidence is ambiguous. In particular, over the last forty years, stable, integrated neighborhoods have increased in number. To explain the absence of a tipping effect, I propose an alternative model that explains growing integration as a function of heterogeneous and multidimensional preferences among agents operating with constrained choices. In particular, I investigate if improved policing in black neighborhoods has made such areas attractive to individuals more concerned with safety than racial composition.

Nicolas Ziebarth

Northwestern University
Economics

“Policies and Reactions: The Case of Free Banking”

Free banking was a major policy reform in the antebellum period that reduced the cost of entry for potential banks. However, policy makers were uncertain what effects this reform had along numerous dimensions for the simple reason that this had never been tried before. This suggests that outcomes of other states would have had an effect on the policy choice of a given state through social learning. I look for this effect in the data by estimating spatial autocovariance functions. I find a strong correlation at short distances and then show that this correlation is not driven by correlation in observables. I argue that this uncertainty over the efficacy of the policy had an effect on the subsequent efficacy of the policy and that this in turn effected continued implementation of the policy. I develop a model that captures this feedback between learning about policy effects on the part of policy makers and market outcomes. This model can generate both vicious and virtuous cycles depending on how firms perceive the effects of future policy reversals.