Do natural resources benefit producer economies, or is there a "Natural Resource Curse,"0 perhaps as the crowd-out of manufacturing productivity spillovers reduces long-term growth? We combine new data on oil and gas endowments with Census of Manufactures microdata to estimate how oil and gas booms affect local economies in the United States. Local wages rise during oil and gas booms, but manufacturing is not crowded out-in fact, the sector grows overall, driven by upstream and locally-traded subsectors. Tradable manufacturing subsectors do contract during resource booms, but their productivity is unaffected, so there is no evidence of foregone local learning-by-doing effects. Over the full 1969-2014 sample, a county with one standard deviation additional oil and gas endowment averaged about one percent higher real wages. Overall, the results provide evidence against a Natural Resource Curse within the United States.
Urban growth requires the replacement of outdated buildings, yet growth may be restricted when landowners do not internalize positive spillover effects from their own reconstruction. The Boston Fire of 1872 created an opportunity for widespread simultaneous reconstruction, initiating a virtuous circle in which building upgrades encouraged further upgrades of nearby buildings. Land values increased substantially among burned plots and nearby unburned plots, capitalizing economic gains comparable to the prior value of burned buildings. Boston had grown rapidly prior to the Fire, but negative spillovers from outdated durable buildings had substantially constrained its growth by dampening reconstruction incentives. (JEL H76, N91, R11, R52, R58)
Do natural resources benefit producer economies, or is there a "Natural Resource Curse,"0 perhaps as the crowd-out of manufacturing productivity spillovers reduces long-term growth? We combine new data on oil and gas endowments with Census of Manufactures microdata to estimate how oil and gas booms affect local economies in the United States. Local wages rise during oil and gas booms, but manufacturing is not crowded out-in fact, the sector grows overall, driven by upstream and locally-traded subsectors. Tradable manufacturing subsectors do contract during resource booms, but their productivity is unaffected, so there is no evidence of foregone local learning-by-doing effects. Over the full 1969-2014 sample, a county with one standard deviation additional oil and gas endowment averaged about one percent higher real wages. Overall, the results provide evidence against a Natural Resource Curse within the United States.jobs are created and destroyed nationwide in the boom of the 1970s and early 1980s, the bust of the late 1980s, and the second boom of the past decade.Our empirical results trace out the local economic impacts of oil and gas booms and busts, with special attention to the possible chain of events suggested by the within-country version of Dutch Disease. First, local wages, population, and employment in resource-abundant counties are all procyclical with oil and gas: they rise during oil and gas booms and fall during busts.During the most recent boom (2007)(2008)(2009)(2010)(2011)(2012)(2013)(2014), wages were 1.6 to 3.0 percent higher in counties with one standard deviation more oil and gas endowment, and wages also rose significantly in resourceabundant counties during the boom of the 1970s and 1980s. This introduces the possibility that some manufacturers could be crowded out.Second, however, while manufacturing is often thought of as largely producing tradable goods, the sector in aggregate is not crowded out by resource booms. Instead, manufacturing in resourceabundant counties grows during resource booms and shrinks during busts. More disaggregated analyses show that manufacturing's procyclicality is driven by locally-traded subsectors and those with upstream or downstream input-output linkages to oil and gas. By contrast, more highlytradable manufacturing subsectors contract during booms. Thus, these tradable subsectors could still generate a Dutch Disease effect, if their contraction leads to reduced productivity. Third, local manufacturing plants' revenue-based total factor productivity (TFP-R) is procyclical with local resource booms. This could either be because local output prices are procyclical with resource booms, or because transport costs are countercyclical, as local buyer and supplier bases grow during booms and shrink during busts. In tradable manufacturing subsectors, despite the temporary contraction during booms, TFP-R never decreases. This rules out the productivity decline that is central to a Dutch Disease mechanism. Fourth, while county-level population, employment, wages, and...
Institutions in developing countries, particularly those inherited from the colonial period, are often thought to be subject to strong inertia. This study presents the results of a unique randomized trial testing whether these institutions can be reformed through incremental administrative change. The police department of the state of Rajasthan, India collaborated with researchers at US and Indian universities to design and implement four interventions to improve police performance and the public's perception of the police in 162 police stations (covering over one-fifth of the State's police stations and personnel): (1) placing community observers in police stations; (2) a freeze on transfers of police staff; (3) in-service training to update skills; and (4) weekly duty rotation with a guaranteed day off per week. These reforms were evaluated using data collected through two rounds of surveys including police interviews, decoy visits to police stations, and a large-scale public opinion and crime victimization survey-the first of its kind in India. The results illustrate that two of the reform interventions, the freeze on transfers and the training, improved police effectiveness and public and crime victims' satisfaction. The decoy visits also led to an improvement in police performance. The other reforms showed no robust effects. This may be due to constraints on local implementation: The three successful interventions did not require the sustained cooperation of the communities or the local authorities (the station heads) and they were robustly implemented throughout the project. In contrast, the two unsuccessful interventions, which required local implementation, were not systematically implemented.2
in on the analysis of the data or the drafting of the report. All the data collected in the course of this project is available for download and public use (including, but not limited to, replication of our results) at http://dvn.iq.harvard.edu/dvn/dv/jpal. We are grateful for funding from the Will and Flora Hewlett Foundation and the UNODC. The Hewlett Foundation was not involved in the drafting of this paper. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.
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