We investigate conditions sufficient for identification of average treatment effects using instrumental variables. First we show that the existence of valid instruments is not sufficient to identify any meaningful average treatment effect. We then establish that the combination of an instrument and a condition on the relation between the instrument and the participation status is sufficient for identification of a local average treatment effect for those who can be induced to change their participation status by changing the value of the instrument. Finally we derive the probability limit of the standard IV estimator under these conditions. It is seen to be a weighted average of local average treatment effects.

Evolution and Rationality Some Recent Game-Theoretic Results. Identification and Estimation of Local Average Treatment Effects

This article provides an overview of empirical models of strategic interaction among governments. To clarify the theoretical roots of such studies, the discussion shows how the empirical frameworks fit into two broad categories: spillover models and resource-flow models. Both types of models generate jurisdictional reaction functions, and the empirical task is to estimate such functions. When the estimated reaction-function slope is nonzero, the presence of strategic interaction is confirmed. The second part of the article reviews three econometric issues relevant to this estimation problem.

Strategic Interaction Among Governments: An Overview of Empirical Studies:

This new research report analyzes community development and decentralization projects, shows that such projects often fail to be sensitive to complex contexts, including social, political, historical and geographical realities, and fall short in terms of monitoring and evaluation systems, which hampers learning. Citing numerous examples, including projects and programs supported by the World Bank, the authors demonstrate that participatory projects are not a substitute for weak states, but instead require strong central support to be effective. Promoting participation through community development projects and local decentralization has become a central tenet of development policy. The World Bank alone has invested about $85 billion over the last decade on development assistance for participation. However, some observers feel that policy making in the area is conceptually weak, that project design is informed more by slogans than careful analysis. There have also been questions about whether participatory development is effective in reducing poverty, improving service delivery, and building the capacity for collective action. Some observers also find that participatory projects are complex to implement and deeply affected by context, and are thus unsuited for large development institutions such as the World Bank. This groundbreaking report carefully examines each of these concerns. It outlines a conceptual framework for participation that is centered on the concept of civil society failure and how it interacts with market and government failures. The authors use this framework to understand the key policy debates surrounding participatory development and to frame the key policy questions. The report conducts the most comprehensive review of the evidence on the impact of participatory projects to date, looking at more than 400 papers and books. The report argues that participatory development is most effective when it works within a 'sandwich' formed by support from an effective central state and bottom-up civic action. This report represents an important contribution. It has significant implications for how to improve participation in development interventions and for development policy more broadly.

Localizing Development: Does Participation Work?

A rich array of institutional diversity makes the United States an excellent place to study the relationship between political institutions and public policy outcomes. This essay has three main aims. It reviews empirical evidence on the relationship between institutional rules, political representation and policy outcomes; it aims to place the literature into a broader context of theoretical and empirical work in political economy. Second, it develops a parallel empirical analysis that updates studies in the literature and reexamines some of the claims, in a setting unified in terms of policy outcomes and period under study. Third, it develops new directions for research, presenting some novel exploratory results.

/pdf/political-institutions-and-policy-choices-evidence-from-the-pn2le0ih42.pdf

Political institutions and policy choices: evidence from the United States

This paper analyses how tax morale and countries' institutional quality affect the shadow economy, controlling in a multivariate analysis for a variety of potential factors. The literature strongly emphasizes the quantitative importance of these factors to understand the size and development of the shadow economy. Relatively new data sources that have become available offer an exceptional opportunity to shed more light on a topic that is attracting increasing attention. We find strong support for the assertion that a higher tax morale and a higher institutional quality lead to a smaller shadow economy.

The Impact of Tax Morale and Institutional Quality on the Shadow Economy

In this paper we test the hypothesis that municipalities aligned with upper-tier grantor governments (i.e., controlled by the same party) will receive more grants than those that are unaligned. We use a rich Spanish database, which provides information on grants received by nearly 900 municipalities during the period 1993-2003 from three different upper-tier governments (i.e., Central, Regional and Upper-local). Since three elections were held at each tier during this period, we have enough within-municipality variation in partisan alignment to provide differences-in-differences estimates of the effects of alignment on the amount of grants coming from each source. Moreover, the fact that a municipality may simultaneously receive grants from aligned and unaligned grantors allows us to use a triple-differences estimator, which consists of estimating the effects of changing alignment status on the change in grants coming from the aligned grantors relative to the change in grants coming from the unaligned ones. The results suggest that partisan alignment has a sizeable positive effect on the amount of grants received by municipalities.

The Effects of Partisan Alignment on the Allocation of Intergovernmental Transfers: Differences-in-Differences Estimates for Spain

The regional allocation of infrastructure investment: The role of equity, efficiency and political factors

https://dialnet.unirioja.es/descarga/articulo/3137354.pdf

The effects of partisan alignment on the allocation of intergovernmental transfers. Differences-in-differences estimates for Spain

https://dialnet.unirioja.es/descarga/articulo/2332698.pdf

Albert Solé-Ollé

Papers

The Effects of Partisan Alignment on the Allocation of Intergovernmental Transfers: Differences-in-Differences Estimates for Spain

The regional allocation of infrastructure investment: The role of equity, efficiency and political factors

The effects of partisan alignment on the allocation of intergovernmental transfers. Differences-in-differences estimates for Spain

Vertical income tax externalities and fiscal interdependence: Evidence from the US

Corruption scandals, voter information, and accountability