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Coautores: Ana Arjona (Northwestern University), Julián Arteaga, Juan Camilo Cárdenas y Patricia Justino (Institute of Development Studies)
This paper explores the economic legacies of conflict through a particular transmitting mechanism: war-time institutions. The empirical strategy causally identifies household responses to random weather shocks and estimates its heterogeneous impact by the extent of armed group interventions on the communities. Using a household panel in four conflict regions in Colombia, the estimation controls for time invariant unobservables. The study finds that war-time institutions have large and persistent economic impacts. In regions with strong interventions from non-state armed actors (NSAA), households are better able to cope with negative weather shocks compared to those living in regions with NSAA presence but with limited or no interventions. The former households resort less to survival migration and transfers from social networks, while using formal credits and non-agricultural activities to offset the negative income shock. Strong interventions from NSAA seemingly reduce uncertainty and provide a predictable environment in which civilians can better operate, pushing these households to engage in more profitable activities and a higher income trajectory. Conflict exerts a negative economic impact on households, yet this negative impact is lower if NSAA provide clear and stable rules.
Coautores: Eric Avis (UC Berkeley), Frederico Finan (UC Berkeley), and Carlos Varjão (Stanford)
This paper examines the effects of campaign spending limits on political competition and incumbency advantage. We study a reform in Brazil that imposed limits on campaign spending for mayoral elections. These limits were implemented with a discontinuous kink which we exploit for causal identification. We find that stricter limits increase political competition by creating a larger pool of candidates that is on average less wealthy. Moreover, we find that stricter spending limits reduce the incumbency advantage, causing mayors to be less likely to be reelected. These findings are consistent with a contest model with spending caps and endogenous candidate entry.