Suchergebnisse

Abstract
Polls are used by politicians, voters, and businesspeople alike to form expectations over political outcomes. In an electoral system with 'pork' at the national level, local economic prospects will be a direct function of political support. Because every poll comes with its margin of error, we can exploit the error in sub-national polls to test for whether forward-looking investment in the economy adjusts to shocks in local political behavior. The covariance between the strength of this adjustment and local-level characteristics allows us to identify the locations in which strong 'pork' contracts exist. To illustrate the technique, we provide a theoretical foundation and an empirical exercise using data on Ugandan micro-entrepreneurs during the 2001 presidential election. We find evidence that investor behavior responds in a small but significant way to surprises in electoral support, and this responsiveness is strongest in 'core' electoral districts.

Abstract
We play a series of incentivised laboratory games with risk-exposed co-operativised Guatemalan coffee farmers to understand the demand for index-based rainfall insurance. We estimate an explicit utility curve for every player and hence predict expected utility demand under counterfactual scenarios. Using these estimates, we provide a precise money-metric decomposition of the extent to which the low observed demand for index insurance is driven by expected utility theory, or by behavioural issues arising from a prospect-style utility structure. Our results suggest that consumers value probabilistic insurance using a prospect-style utility function that is concave both in probabilities and in income.

Despite their explicit focus on reaching the poor, many community driven development (CDD) initiatives are only partially successful in targeting spending towards them. This paper examines Tanzania's flagship CDD program and provides new evidence on the mechanisms by which the demand-driven components of the program may undermine the goal of pro-poor funding allocations. We exploit two data sources for the analysis: a census of wards for mainland Tanzania and a census of households in 100 program villages. These data paint a consistent picture at both levels: wealth, education, access to media, and political engagement are positively correlated with the likelihood to apply for the program at the national level, and to be aware of it at the local level. Centrally dictated features of the program – namely predetermined funding allocations to districts and eligibility rules – combine with the decentralized selection process within districts to counteract this initially regressive application pattern and produce a program that is, like many other CDD programs, only mildly pro-poor. Our results suggest that sensitization and outreach prior to the application process will be a critical dimension in making CDD programs more progressive.