How does political decentralization affect the frequency and costliness of bribe-extraction by corrupt officials? Previous empirical studies, using subjective indexes of perceived corruption and mostly fiscal indicators of decentralization, have suggested conflicting conclusions. In search of more precise findings, we combine and explore two new data sources-an original cross-national data set on particular types of decentralization and the results of a firm level survey conducted in 80 countries about firms' concrete experiences with bribery. In countries with a larger number of government or administrative tiers and (given local revenues) a larger number of local public employees, reported bribery was more frequent. When local-or central-governments received a larger share of GDP in revenue, bribery was less frequent. Overall, the results suggest the danger of uncoordinated rent-seeking as government structures become more complex.
Many children worldwide are left-behind by parents migrating for work - over 61 million in rural China alone, almost half of whom are left-behind by both parents. While previous literature considers impacts of one parent absent on educational inputs (e.g., study time, enrollment, schooling attainment), this study directly investigates impacts on children\u27s learning (test scores) and distinguishes impacts of absence of one versus both parents. Dynamic panel methods that control for both unobserved individual heterogeneity and endogeneity in parental absence are used with data collected from rural China. The estimates indicate significant negative impacts of being left-behind by both parents on children\u27s cognitive development, reducing their contemporary achievements by 5.4 percentile points for math and 5.1 percentile points for Chinese, but much smaller insignificant impacts of being left-behind by one parent. Cross-sectional evidence indicates that only absence of both parents is associated with substantially lower family inputs in after-school tutoring
This paper applies the recently developed econometric methods of panel unit root tests and nonlinear mean reversion to investigate price convergence in China-the largest transitional economy in the world. We find that prices did converge to the law of one price in China for an overwhelming majority of goods and services, based on a large panel data set. The finding sheds light on the extent of the market economy in China, and casts doubt on Young's proposition that the economic reform has led to the fragmentation of Chinese domestic markets. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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A theory is developed of labor migration that is prompted by a desire to avoid "social humiliation." In a general equilibrium framework it is shown that as long as migration can reduce humiliation sufficiently, migration will occur even between two identical economies. Migration increases the number of individuals who choose to perform degrading jobs and consequently, migration lowers the price of the good produced in the sector that is associated with low social status. Moreover, the greater an individual's aversion to performing degrading jobs, the more likely it is that he will experience a welfare gain when the economy opens up. Running Head: Social Stigma and Migration
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