Economics - Theses, Dissertations, and other Required Graduate Degree Essays

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Essays on Social Capital and State Capacity: Tracing the Origins of the Welfare States

Date created: 
2014-08-07
Abstract: 

In Chapter 2 of this Thesis, I study the effect of form of government on government policy in elections with a small margin of exceeding a threshold. I propose an identification strategy that is suitable for the implementation of a sharp regression discontinuity design for all possible types of pure and mixed proportional electoral systems used in 82 countries. To illustrate the implementation of this identification strategy, I use electoral, census and public finances data from Spanish municipalities in the autonomous region of the Basque Country. I present causal evidence suggesting that form of government induces a budget electoral cycle in components of per capita expenditure that are visible to the voters and classifiable as local public goods. Relative to coalition governments, single party governments increase the shares of capital outlays and tangible investment to the total budget by additional 14 % and 20 % respectively. In Chapter 3 of this Thesis, I present evidence that households contribute more to local public goods in the presence of a community organization based on cross-sectional survey data from low-income neighbourhoods of Quito, Ecuador. The observed differences in household contributions are attributed to the ability of a community organization to coercively induce households to commit their time to community projects. This coercive power is argued to have origins associated with the formation of a neighbourhood as an illegal settlement. This coercive power is also suggested to have been a by-product of households voluntarily contributing to the organization in return for protection against government eviction. Locations with specific geographic characteristics served an important role in providing natural protection and also in legally qualifying the organization to seek a global title over the invaded land. Using exogenous variation in these geographic characteristics, I find that the presence of a community organization has a positive effect on household time contributions to two public goods: trash collection in public areas (50 %) and community patrolling (176 %). In Chapter 4 of this Thesis, I develop an occupational choice model with open-rule legislative bargaining to determine the conditions allowing for poor property rights to arise in a democratic equilibrium and to also demonstrate that their presence leads to inefficient outcomes. The necessary conditions emerge when each rich agent self-selects as an entrepreneur for a positive theft rate. The equilibrium occupational shares determine the necessity for coalition formation in the legislature, where the endogenously determined status-quo theft rate is subject to revision. A minimum winning coalition favouring a higher theft rate up to a threshold value, at which each rich agent is just willing to be an entrepreneur who hires workers, provide the sufficient conditions. The equilibrium is inefficient because a positive equilibrium theft rate reduces implies that not all of endowment is invested in the most productive process. The majority in this society, the ex-ante identical poor agents, also end up being ex-post identical but their most preferred theft rate is higher relative to the equilibrium theft rate. This result arises because the poor agents end up being represented by two political parties based on their occupation choice.

Document type: 
Thesis
File(s): 
Senior supervisor: 
Alexander Karaivanov
Department: 
Arts & Social Sciences: Department of Economics
Thesis type: 
(Thesis) Ph.D.

Essays on Institutions and Development

Author: 
Date created: 
2014-06-20
Abstract: 

This thesis studies three different aspects of the development of societies. The first chapter studies the effect of monopolistic competition in the presence of moral hazard on consumer welfare and the efficiency of resource allocation based on market institutions. The second chapter analyses the effect of capital market imperfections on the evolution of inequality and conflict between different socio-economic classes. The goal of this chapter is to provide a framework of the study of the effect of economic development on the dynamics of state repression. The third chapter looks at the process of development from a historical perspective and studies the effect of European colonization on contemporary economic development of former colonies. To this end, I examine the effect of colonization on genetic and non-genetic (e.g. institutional) aspects of former colonies. The broad message of this thesis is that non-market factors - historical and contemporary factors relating to social norms, beliefs, and institutions - play a crucial role in determining societies' potential for development and their prosperity.

Document type: 
Thesis
File(s): 
Senior supervisor: 
Alexander Karaivanov
Department: 
Arts & Social Sciences: Department of Economics
Thesis type: 
(Thesis) Ph.D.

Three Essays on the Economic Effects of Violent Conflicts and Culture

Date created: 
2014-05-15
Abstract: 

Chapters 1 and 2 of my thesis deal with long-term economic effects of violent conflicts. In the first chapter, I use World War II casualties suffered in Austrian municipalities as a natural experiment for human casualties and find a significant negative causal effect of human losses on economic activity today. As I demonstrate, the likely channel through which the effect persisted over time is through its impact on the structural composition of the work force. Specifically, greater human losses increased the fraction of employment in manufacturing at the expense of agriculture until the 1970s and services from then onwards. A simple model shows that structural change can translate a lower labor share in agricultural production into less participation of service sector growth at a later time. In the next chapter, I identify a channel through which the disadvantage of displacement during a violent conflict might be carried over to the next generation. In particular, I show that displaced parents spend significantly less on the education of their children years later. A decomposition of the causal effect shows that differences in income and the stock of durable goods can at most explain one third of the finding. Some evidence points towards increased uncertainty about the future of displaced parents and hence reduced spending on non-vital expenditure positions. The final chaper revisits the paper by Algan & Cahuc (AER, 2010) in which they find that inherited trust has a large impact on GDP per capita. First, I show that the estimates presented in Algan & Cahuc might be biased due to a difference between the lag structure of inherited trust and initial income in their econometric specification. Next, I focus on their robustness checks, where I replicate their results and document that most of their robustness checks fail when a programming error and data problems are corrected. I conclude that their results should be considered with great care.

Document type: 
Thesis
File(s): 
Senior supervisor: 
Anke Kessler
Department: 
Arts & Social Sciences: Department of Economics
Thesis type: 
(Thesis) Ph.D.

Three Experiments on Institutions

Author: 
Date created: 
2014-04-25
Abstract: 

Institutions are an ubiquitous presence in our lives. The focus in this Thesis is on norm compliance, analyzed as an important component of the institutional framework within which decisions are made. The first paper of this Thesis (Chapter 2) evaluates how norms of symmetry and centricity affect the functioning of two ways to allocate resources described in the economic anthropology literature, namely reciprocity and redistribution. The main conclusion of the experimental inquiry is that reciprocity and redistribution can seldom allocate resources efficiently in the absence of norms of symmetry and centricity in the experimental design. By symmetry we mean a common acknowledgement that certain features are shared in the group. By centricity we mean a common acknowledgement that a degree of differentiation in roles is acceptable in the group. The second paper of this Thesis (Chapter 3) presents an experimental investigation of a well-known repeated network formation game. Heterogeneity and perceived similarity are found not to influence networking choices. Players do not frequently engage in naive best responses when transitioning from one round of play to the next in the repeated game. Although Nash networks are rare in this environment, subjects come often close to achieving an equilibrium network. Reciprocity is found to discourage naive best responses. The third paper of this thesis (Chapter 4) discusses two instruments through which corporate law attempts to promote trust and trustworthiness in business organizations: (i) monitoring of the manager by a principal, as in the agency approach; (ii) moral suasion, as in the approach according to which managers are held to a standard of trustworthiness. A laboratory experiment shows that the "fiduciaries" language increases the investors' trust. Monitoring also increases the investors' trust, but only when the manager is not aware of the experimental identity of the principal. The manager is trustworthy up to a certain degree, regardless of the governance structure of the organization and of the accuracy with which he/she observes each investor's entrustment.

Document type: 
Thesis
File(s): 
Senior supervisor: 
Jasmina Arifovic
Department: 
Arts & Social Sciences: Department of Economics
Thesis type: 
(Thesis) Ph.D.

Technology-specific capacity and the environment

Author: 
Date created: 
2013-06-20
Abstract: 

Chapter 1 studies the role of investment-related emissions for the efficient distribution of investment among dirty and clean technologies. Dirty technology is not used depending on technology parameters, though clean technology may be relatively more expensive on all scales, and the societal effect of the first pollution unit may be small. In plausible cases there is a unique stationary point. Disregarding emissions from investment in dirty technology biases the stationary cost of polluting downward if dirty technology is used and the time discount factor is not too small. An inverse relationship between the cost of polluting and the marginal rate of intertemporal substitution of consumption on an optimal path is established. Chapter 2 examines the retirement of pre-existing capital and irreversible investment in dirty and clean technologies in Pareto optimum and competitive equilibrium. Dirty capacity is optimally underutilized in equilibrium if government policy internalizes the pollution externality after such policy is sufficiently long delayed. Dirty technology capital, for example, fossil-fuel using engines and plants, should be underutilized if pollution, such as atmospheric carbon dioxide, is below its long-term level. Underutilization of the pre-installed dirty technology capital diminishes it optimally because it is not needed in the long-term or smooths it through postponing its use until investment becomes worthwhile in dirty technology. Clean technology capital, for example, solar panels or wind turbines, are efficiently underutilized to save emissions from investment or because creating new units is more costly than forwarding existing units. Chapter 3 considers production using a dirty and reliable technology, for example, coal-using electricity generation, versus production using a clean and unreliable technology, for example, solar energy conversion into electricity, in a dynamic economy. Consumption can be equalized across states because investment absorbs the fluctuation in clean technology productivity in days in which consumption is maximized. Clean output subsidies such as feed-in premiums for grid-distributed electricity can implement a Pareto optimum. For example, the subsidy rebates a uniform energy tax or a uniform tax on investment goods. In a further example the subsidy is funded by price surcharges that are differentiated between households.

Document type: 
Thesis
Senior supervisor: 
Steeve Mongrain
Department: 
Arts & Social Sciences: Department of Economics
Thesis type: 
(Thesis) Ph.D.

Assessing the Economic Viability of an LNG Terminal in Newfoundland: With Export to European Markets

Date created: 
2014-01-20
Abstract: 

In this paper I analyze the economic viability of a liquefied natural gas (LNG) terminal in Newfoundland, with export to European markets. Natural gas is extracted offshore Newfoundland & Labrador and transported via pipeline to shore. The natural gas liquids (NGLs) and impurities are then separated from the pure methane. The NGLs are processed at an NGL processing plant and sold on their respective markets. The impurities are discarded and the natural gas is then liquefied and loaded onto double hulled tankers, which will transport the LNG to European markets. Capital and operating expenditures are calculated, with a 20 year production profile. Royalties are analyzed and compared using the Nova Scotia and Newfoundland royalty systems. Provincial and Federal corporate income taxes are also included in the analysis. The pipeline and LNG transport will be contracted out to outside parties. The producer will operate the production facility, as well as the LNG and NGL stations. Three reserve scenarios are analyzed (4-6 trillion cubic feet) and an internal rate of return (IRR) on the project is determined for the producer until different price scenarios, which range from $6 CDN/MMBtu to $16 CDN/MMBtu. The project is considered to be economically viable if the IRR is at least 15%, according to industry standards set by Husky Energy, operating from St. John’s, Newfoundland. Given that the price of natural gas in Europe is expected to increase to nearly $14 CDN/MMBtu in 2016, the project is deemed to be economically viable under all reserve scenarios.

Document type: 
Graduating extended essay / Research project
File(s): 
Senior supervisor: 
Douglas Allen
Department: 
Arts & Social Sciences: Department of Economics
Thesis type: 
(Project) M.A.

Does Access to Microcredit Lead to Agricultural Productivity Gains? Evidence from Bangladesh

Date created: 
2013-08-09
Abstract: 

I analyze data from a 1991—92 field survey of rural Bangladeshi households to determine the effect of access to microcredit on agricultural productivity in rural areas. I argue that rural farmers with access to microcredit should only realize productivity gains if they are credit-constrained. I find that, relative to people who had no opportunity to join a microcredit program, access to a microcredit program does not lead to direct productivity gains for farmers of either transplanted Aman rice or a high-yield variety of Aman rice. Only access to a Grameen Bank microcredit program is associated with a lower cost of sharecropping—defined as the share kept by the landlord multiplied by the sharecropped proportion of the total land cultivated by the farmer—while access to BRAC (previously the Bangladesh Rural Advancement Committee) and Bangladeshi Rural Development Board programs are not. Only access to a Grameen program leads to significant productivity gains when considered jointly with a reduction in sharecropping-costs. The results suggest that access to microcredit does not lead to direct improvements in agricultural productivity.

Document type: 
Graduating extended essay / Research project
File(s): 
Senior supervisor: 
Alexander Karaivanov
Department: 
Arts & Social Sciences: Department of Economics
Thesis type: 
(Project) M.A.

Examining the Effects of External Price Shocks on the Economy of China by the Use of a Dynamic Computable General Equilibrium Model

Date created: 
2013-03-28
Abstract: 

Within the framework of a dynamic CGE model for the Chinese economy, we simulate increases in global food and energy prices and appreciation of nominal exchange rate. First, our results show that increases in global prices for agricultural products in the last decade had overall positive effects on the Chinese economy: investment growth and an improved trade balance pushed the GDP up. The consumption per capita fell below the benchmark in the short to medium run but overcame this trend in the long run. The food price increases partially explain the consumer price inflation in China and the observed accumulation of foreign asset holdings. We demonstrate that restrictive policy interventions into agricultural markets have harmed the development of China’s agricultural sector. Second, in contrast to the impact of increased food prices, higher global prices for energy commodities negatively influenced both the real economy and private incomes in China. Household consumption suffered the most significant effects of reduced GDP growth,. We also find that energy prices were largely responsible for the domestic inflation in the last decade. While the economic growth rate has slowed, the growth itself has continued: positive rates of growth have remained for all economic indicators, suggesting that China’s economy has a strong growth foundation and is equipped to meet the challenge of increased energy prices. Third, we found that the recent appreciation of the nominal exchange rate of the yuan, the Chinese national currency, has had contractionary effects on the economy and exacerbated income inequality. Nevertheless, it has appreciably helped to curb inflation and reduced external imbalances. We argue that the yuan appreciation can serve as an effective inflation control instrument that should be accompanied by proper social policies targeting income inequality. In general, China’s economy has proved strong enough to respond to global challenges. Most negative effects do not eliminate the positive growth rate but only slow it slightly. Provided proper policies, China has the potential to continue its role as a leading power in the world economy in the decades to come.

Document type: 
Thesis
File(s): 
Senior supervisor: 
Richard Harris
Department: 
Arts & Social Sciences: Department of Economics
Thesis type: 
(Thesis) Ph.D.

Essays in applied econometrics

Date created: 
2013-04-17
Abstract: 

This thesis includes three essays in applied econometrics. The first and third chapters focus on labor market outcomes of minority group members, while the second focuses on education. Chapter 1 deals with the relationship between sexual orientation, gender, partnership, and labor outcomes. I suggest that if there are compensating differentials and a gender gap in potential wages, an income effect can lead partnered gay men to jobs with lower wages and higher amenities than partnered straight men. The same mechanism would lead partnered lesbians to lower amenity and higher wage jobs than partnered straight women, and we would expect no differences between singles. I present results on estimated wages and new data on stressfulness of one's working environment that are largely consistent with these predictions, and then I discuss possible alternative explanations for my findings. Chapter 2 focuses on the effect of open enrollment policies on students' academic achievement. The introduction of open enrollment may improve student achievement by providing access to better schools and by increasing inter-school competition. We use measures of the local scope for school choice and competition before and after the policy change to investigate its effect on test scores. We find the policy's effect depends on the quality of public schools that are located in proximity to a student's residence. Students who are already guaranteed access to the locally top-ranked school earn lower scores under open enrollment, while those who gain access to higher-ranked schools earn higher scores. All students experience a small positive effect from increased competition. Chapter 3 explores the role of initial housing conditions on labor outcomes of new immigrants to Canada. We focus on whether immigrants arranged housing before landing. Within the framework of a dual search model, this variable can be interpreted as capturing the opportunity cost of searching for a job. We find that not pre-arranging housing is associated with temporary worse labor outcomes among unskilled immigrants. The remainder of the chapter is spent looking for evidence that these results are due to an unobserved variable driving both housing arrangements as well as labor outcomes, but no such evidence is found.

Document type: 
Graduating extended essay / Research project
File(s): 
Senior supervisor: 
Krishna Pendakur
Department: 
Arts & Social Sciences: Department of Economics
Thesis type: 
(Extended Essays) Ph.D.

Is trade facilitation the right direction to go in building trade capacity?

Date created: 
2005
Abstract: 

This paper uses the gravity equation of international trade to study the relationship between trade facilitation commitments and trade flows using the OECDIWTO Trade Capacity Building - Trade Facilitation Database. In the analyses of 257 donor-recipients pairs, it is found that bilateral trade facilitation commitments are positively related, while multilateral sources are negatively related to exports from recipients to donors. These negative relationships for the multilateral institutions were found by using cross-sectional studies and are significant, for all but the World Customs Organization. From the firstdifferenced estimations, changes in exports from recipients to donors covariate positively with changes in the World Customs Organization trade facilitation commitments; the estimated effect is 0.23 percent to 0.41 percent increase in exports for every 10 percent increase in the World Customs Organization trade facilitation commitments. There is no evidence that changes in other trade facilitation sources will bring significant changes to bilateral trade.

Document type: 
Thesis
File(s): 
Department: 
Department of Economics - Simon Fraser University
Thesis type: 
Project (M.A.)