Shan Aman-Rana

Spillovers in State Capacity Building: Evidence from the Digitization of Land Records in Pakistan [latest version] [VoxDev]

(w/ Clement Minaudier (City University))

Revise and Resubmit, American Economic Review

Abstract: Digitization reforms have been hailed as an effective way to strengthen state capacity. However, digitization can also disrupt the organization of bureaucracies. Using a unique administrative dataset on agricultural taxation and surveys of local bureaucrats from Punjab, Pakistan, we show that digitization reforms can have unintended consequences for state capacity. We exploit the staggered rollout of the digitization of land records in Punjab to show that digitization had a negative effect on tax collection. The fall in taxes was not due to a decrease in the tax base. Instead, digitization affected the bureaucracy's capacity to collect taxes. The paper thus sheds light on the importance of understanding state capacity development from an organizational perspective.

 

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Screen Now, Save Later? The Trade-Off between Administrative Ordeals and Fraud [NBER version][latest version]

(w/ Daniel Gingerich (UVA) and Sandip Sukhtankar (UVA))

Revise and Resubmit, American Economic Journal: Economic Policy

Abstract: Screening requirements are common features of fraud and corruption mitigation efforts around the world. Yet imposing these requirements involves trade-offs between higher administrative costs, delayed benefits, and exclusion of genuine beneficiaries on one hand and lower fraud on the other. We examine these trade-offs in one of the largest economic relief programs in US history: the Paycheck Protection Program (PPP). Employing a database that includes nearly 11.5 million PPP loans, we assess the impact of screening by exploiting temporal variation in the documentation standards applied to loan applications for loans of different values. We find that  screening significantly reduced the incidence and magnitude of various measures of loan irregularities that are indicative of fraud, without deterring screened borrowers. Moreover, our analysis reveals that a subset of borrowers with a checkered history strategically reduced their loan application amounts in order to avoid being subjected to screening. Borrowers without a checkered history engaged in this behavior at a much lower rate, implying that the documentation requirement reduced fraud without imposing an undue administrative burden on legitimate firms. All told, our estimates imply that screening led to a reduction in losses due to fraud equal to at least $832 million.

 

​​Informal fiscal systems in developing countries [NBER version][latest version]

(w/ Clement Minaudier (City University) and Sandip Sukhtankar (UVA))

Revise and Resubmit, Journal of Development Economics 

Abstract: Governments in developing countries have low fiscal capacity yet face pressures to provide public goods and services, leading them to rely on various unusual fiscal arrangements. We uncover one such arrangement - informal fiscal systems that rely on local bureaucrats to fund the delivery of public goods and services - cataloging its existence in at least 20 countries. Using survey data and government accounts from Pakistan, we show that public officials are expected to cover funding gaps in public services and they do so, at least partially, through extracted bribes. We develop a model of bureaucratic agency to explore when governments benefit from sustaining such systems and investigate their implications for welfare and bureaucrat selection. Informal fiscal systems are more likely to arise when corruption is widespread but public service delivery is relatively easy to monitor. While they provide an effective second-best solution in the presence of moral hazard and adverse selection, they can distort the effective incidence of the tax burden, reduce the incentives of governments to fight corruption, and legitimize bribe-taking. This makes corruption more widespread and thus makes informal systems self-reinforcing.

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Bureaucratic Deliberation and Performance: Evidence from a Field Experiment in Benin [Draft available on request]

(w/ Leonard Wantchekon (Princeton) and Lazare Kovo (Emory))  

Abstract: Designing accountability systems for bureaucracies remains a key challenge for state capacity development. We carried out a randomized control trial at-scale with local bureaucrats in Benin to investigate whether performance improves with deliberation on external evaluation reports. In the treated municipalities, bureaucrats organized internal meetings to deliberate on issues highlighted in audit reports and surveys of bureaucrats and citizens. We find a positive treatment effect on internal performance of bureaucrats (6.8 pp or 8.7% of the control group mean), while there is no immediate effect on service delivery. We investigated the mechanisms and found that the meetings helped bureaucrats update their beliefs about corruption in the local government, and resulted in a fall in trust and cooperation between bureaucrats. These results suggest that in public sector bureaucracies in which the chance of collusion is high (Tirole, 1986), an intervention that leads to a lower level of cooperation and trust may still improve performance

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​​Selected Work in Progress (advanced stage)​

Gender and Choice over Co-workers: Experimental Evidence from Pakistan (w/ Alexia Delfino (Bocconi University), Clement Minaudier (City University), Brais Álvarez Pereira (Universidade NOVA SBE) and Shamyla Chaudry (Lahore School of Economics))

[Status: experiment complete, analysis]

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Structure of Public Services and Bureaucratic Performance (w/ Claudio Ferraz (UBC) and Capt. Retd. Ikram-ul-Haq (PLRA))

[Status: data collection complete, analysis]

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​​Selected Work in Progress (pilot stage)​

Political Economy of Urban Waste Recycling (w/ Asim I. Khwaja (Harvard))

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​Quality of Public Services and Trust in the State (w/ Claudio Ferraz (UBC))

 

​Deliberation and Mental Health of Female Entrepreneurs (w/ Leonard Wantchekon (Princeton) & Suman Zahra (independent researcher))

 

​Colorism and the Marriage Market (w/ Siwan Anderson (UBC) and Ritika Gupta (UVA))

 

Permanent Working Paper

Charitable donations and violence: Evidence from Pakistan 

Abstract: This paper suggests a new channel of violence: the charitable donations channel. I exploit the rules of religious donations coupled with variations in the international price of gold/silver to arrive at a source of exogenous variation for donations. Using district-year level data on average household donations and terrorist attacks in Pakistan for the years 2001-2013, I find that donations increase the probability of a terrorist attack by 79% and the number of terrorist attacks by 30. All the effect of donations appears to work through an increase in suicide attacks as a specific terrorism tactic. All other tactics appear unaffected. 

• Based on the MRes paper:  The Economic Causes of Terror: Evidence from Rainfall Variation and Terrorist Attacks in Pakistan [click here]