We examine the effect of community-designed electoral codes on Canadian First Nation communities. Adopting a custom code for local elections allows for changes such as increasing term duration, creating appeal and supervisory bodies, and incorporating traditional governance elements. To reduce biases due to selective opt-in, we exploit the timing of the electoral reform and a rich set of controls. We find that bands using the custom systems pay lower remunerations to their chiefs, spend more on education and training and less on band development, and have better wastewater services but show no sizable differences in income, population, or employment.

This article studies the influence of cultural norms on economic outcomes. We combine detailed information on second-generation female immigrants with historical data from their ancestral source countries to see how the cultural endowment affects current decisions on work and fertility. We show that results using the standard approach are somewhat sensitive to context and specification. We then extend to reveal an education gradient for cultural assimilation: lower-educated women exhibit a strong influence of cultural variables while higher-educated women show no influence at all. We gather and present evidence on several potential mechanisms for the education gradient.

This paper examines the economic effects of existing private property rights on First Nations’ reserves. We focus on three forms of land tenure regimes: lawful possession, designated land, and permits. These land regimes have been used to create individual land holdings, and grant, secure and transferable, rights of use of reserve land to band and non-band members. Using confidential Census micro-data and rich administrative data, we find evidence of improvements in home ownership and housing conditions, as well as increments in band’s public spending. However, we do not find significant effects on household income nor employment outcomes. Instead, we document a sizeable increase in non-Aboriginal population. Our findings suggest that some caution is warranted when discussing the potential economic benefits of property rights reforms for First Nations’ communities.

We study borrowers’ choice between formal and informal credit in a setting with imperfect debt enforcement. In contrast to formal loans (e.g., from banks), informal loans (e.g., from friends or relatives) can be enforced by the threat of severing social ties. If the underlying social capital is sufficiently large, we show that informal loans carry lower interest rate and collateral than formal loans, including the possibility of zero interest and collateral. This makes informal credit a priori more attractive to borrowers. At the same time, since physical collateral is divisible unlike the social capital pledged in informal credit, default on formal loans is less costly to both parties than default on informal loans. Because of this trade-off, formal and informal credit can co-exist depending on the loan riskiness measured by the ratio of loan size to borrower’s wealth (LTW ratio). Borrowers choose formal credit for riskier (larger) loans while informal credit is preferred for (smaller) projects with low default risk. Empirical results using household data from rural Thailand are consistent with the predicted choice pattern and terms of formal and informal credit.

This paper sheds light on why political leaders may wantto adopt positions and maintain them over time even inthe face of conflicting evidence. We study a dynamic framework inwhich politicians are better informed than the voting public aboutan underlying state of nature that determines the desirability ofa given policy measure. The issue itself is non-partisan (everybodyhas the same policy preferences) but voters attach labelsto both candidates and available policy alternatives. We show thatboth sides may be caught in an ideological trap of self-fulfilling expectations: because votersexpect the perceived ideology of office holders to determine theirpolitical actions, politicians are tempted to act according to theirperceived ideology, resulting in partisanship, policy persistence, and political failure.

The paper provides an explanation for why officeholders persistently pursue partisan policies even though voters express preferences for non-partisan behaviour, and evidence suggests to of-ficeholders that voters would benefit from non-partisan policies. We develop a dynamic model where officeholders have private information about the benefits of the policies they can implement. The policy issue itself is non-partisan—everyone has the same policy preferences—but candidates differ in their expertise at implementing different policies. To secure re-election by convincing voters that future circumstances favour their expertise, incumbents have an incentive to implement their partisan policy, even when they know it to be wrong. Importantly, incumbents pursue non-partisan policies only when circumstances suggest that pursuing partisan policies are particularly damaging. Thus, officeholders pursue non-partisan policies precisely when it matters most to voters. Paradoxically, though, by doing so an officeholder reveals the value of a rival’s expertise, ensuring his subsequent electoral defeat.

The international community devotes significant resources to encouraging emerging democracies to hold free and fair elections, and monitoring whether they do so. Current statistical methods for determining whether violations of electoral norms have occurred are (with notable exceptions) limited to violations that take place within polling stations, such as ballot stu ng. We introduce a method for detecting violations of electoral norms that occur before votes have been cast. Our method is general in the sense that it does not require a natural experiment (although it can exploit one) and is robust to countrywide shifts in voter support (”swing”). The method can not only identify whether violations occurred, but can also estimate the impact they had on the results. We apply this method to allegations of fraud in a recent Canadian federal election, and estimate that illegal demobilization e↵orts reduced turnout by an average of 3.9% in 27 a↵ected electoral districts. This finding is robust across several specifications and alternative identification strategies.

The paper studies a federal system where (a) a region provides non-contractible inputs into the social benefits from a public policy project with spillovers to other regions, and (b) where political bargaining between different levels of government may ensure efficient decision making ex post. Allowing intergovernmental grants to be designed optimally, we ask whether project authority should rest with the region or with the central government. Centralization is shown to dominate when governments are benevolent. With regionally biased governments, both centralization and decentralization yield inefficiencies and the second-best institution depends on parameter values if political bargaining is prohibited. When bargaining is feasible, however, the first best can often be achieved under decentralization, but not under centralization. At the root of this dichotomy is the alignment of decision making over essential inputs and project size under decentralized governance, and their misalignment under centralization.

I study the direct and spillover effects of social interactions using in a network of volunteers from Engineers Without Borders (EWB), Canada. I model social interactions as a network game in which agents simultaneously choose their effort levels, taking the network and their friends’ efforts as given. The effects from social interactions are introduced through two separate channels: a strategic interaction term which affects the marginal benefit from supplying effort and a direct spillover term affecting the level of an agent’s payoff. I construct three different categories of online and offline networks and estimate the model using instrumental variables and system GMM. The identification strategy relies on the yearly variation in the location of the EWB national conference and new members’ participation levels in this event each year. The estimates demonstrate different patterns for engagement versus fundraising activities. Large significant levels of strategic complementarities are always present in fundraising activities regardless of the definition of links, however, in engagement activities, strategic complementarities are only significant in online networks. Additionally, engagement activities exhibit positive significant levels of direct spillovers for all networks. In contrast, in fundraising campaigns, the direct spillover effect is only significant in large offline networks.

The paper presents a positive model of policy formation in federal legislatures when delegates engage in the strategic exchange of policy-relevant information. Depending on the type of policy under consideration, communication between delegates generally suffers from a bias that makes truthful communication difficult and sometimes impossible. This generates inefficient federal policy choices that are often endogenously characterized by overspending, universalism, and uniformity. Building on these findings, I develop a theory of fiscal (de-)centralization, which revisits the work of Oates in a world of incomplete information and strategic communication. Empirical results from a cross section of US municipalities are consistent with the predicted pattern of spending.

Much debate concerning property rights on reserves in Canada focuses on socio-economic impacts and the potential for individualized land tenure to support economic development, thereby reducing poverty. Study of existing forms of individual property on reserves is needed to inform these debates. In this article, we examine data on the lawful possession (Certificate of Possession) system that is currently used on reserves across Canada. We provide descriptive statistics regarding the variability of lawful possessions across First Nations and using regression analysis we assess which socio-economic, demographic, and locational variables influence the use of lawful possessions instead of communal land or other customary land holding systems. We show that use of the lawful possession system is surprisingly low and very uneven. As well, our regression results suggests that using the system requires a relatively educated community with low levels of poverty, with a favourable geographic location. Overall, the results are consistent with the view that lawful possessions are not primarily used to foster economic development.

The paper presents evidence on the effect of voter demobilization in the context of the Canadian 2011 federal election. Voters in 27 ridings (as of February 26, 2012) allegedly received automated phone calls (`robocalls') that either contained misleading information about the location of their polling station, or were harassing in nature, claiming to originate from a particular candidate in the contest for local Member of Parliament. We use within-riding variation in turnout and vote--share for each party to study how turnout changed from the 2008 to the 2011 election as a function of the predominant party affiliation of voters at a particular polling station. We show that those polling stations with predominantly non-conservative voters experienced a decline in voter turnout from 2008 to 2011, and that this effect was larger in ridings that were allegedly targeted by the fraudulent phone calls. The results thus indicate a statistically significant effect of the alleged demobilization efforts: in those ridings where allegations of robocalls emerged, turnout was an estimated 3 percentage points lower on average. This reduction in turnout translates into roughly 2,500 eligible (registered) voters that did not go to the polls. The 95%-confidence interval gives a lower bound estimate of 1,000 fewer votes cast in robocall ridings, which is still a sizable effect.

The Paper studies the effects and the determinants of interregional redistribution in a model of residential and political choice. We find that paradoxical consequences of interjurisdictional transfers can arise if people are mobile: while self-sufficient regions are necessarily identical with respect to policies and average incomes in our model, interregional redistribution always leads to the divergence of regional policies and per capita incomes. Thus, interregional redistribution prevents interregional equality. As we show, however, it at the same time allows for more interpersonal equality among the inhabitants of each region. For this reason, the voting population may in a decision over the fiscal constitution deliberately implement such a transfer scheme to foster regional divergence.

This paper provides an explanation for why political leaders may want to adopt ideological positions and maintain them over time even in the face of conflicting evidence. We study a dynamic framework in which politicians are better informed than the voting public about an underlying state of nature that determines the desirability of a given policy measure. The issue itself is non-partisan (everybody has the same policy preferences) but voters attach ideological labels to both candidates and available policy alternatives. We show that both sides may be caught in an ideology trap: because voters expect the perceived ideology of office holders to determine their political actions, politicians are tempted to act according to their perceived ideology, resulting in political failure.

Do inter-governmental transfers such as equalization grants reduce interregional disparities? This paper studies both theoretically and empirically the impact of interregional redistribution on interregional inequality. We set up a model with residential choice and equalization grants between regions, and show that interregional transfer payments prevent convergence promoting migration. We test our model in using cross-country data and panel data for 22 highly developed OECD countries. The evidence suggests a positive relationship between interregional transfers and regional disparities both across countries and over time from 1982 to 2000. In the cross-section data, we find that countries with higher levels of interregional redistribution in the past show a subsequent increase in interregional disparity, while countries with lower levels of grants and transfers show less divergence or even convergence. The panel reveals a similar picture: countries who have increased their sub-governmental transfers and grants have experienced more divergence (less convergence) over time than countries who have lowered their transfers.

The paper studies a world where a region provides essential inputs for the successful implementation of a local public policy project with spill-overs, and where bargaining between different levels of government may ensure efficient decision making ex post. We ask whether the authority over the public policy measure should rest with the local government or be centralized, allowing financial relationships within the federation to be designed optimally. We show that centralization is always dominant when governments are benevolent, and that both governance structures are otherwise inefficient as long as political bargaining is disregarded. With bargaining, however, the first best can often be achieved under decentralization, but not under centralization. At the root of the result is the alignment of decision making over both essential inputs and final project size under decentralization. JEL Classification: D23, D78, H21, H 77

The paper studies a world where a region provides essential inputs for the successful implementation of a local public policy project with spill-overs, and where bargaining between different levels of government may ensure efficient decision making ex post. We ask whether the authority over the public policy measure should rest with the local government or be centralized, allowing financial relationships within the federation to be designed optimally. We show that centralization is always dominant when governments are benevolent, and that both governance structures are otherwise inefficient as long as political bargaining is disregarded. With bargaining, however, the first best can often be achieved under decentralization, but not under centralization. At the root of the result is the alignment of decision making over both essential inputs and final project size under decentralization.

Human capital theory distinguishes between training in general-usage and firm-specific skills. Becker (1964) argues that employers will only invest in specific training, not general training, when labour markets are competitive. The article reconsiders Becker's theory. Using essentially his framework, we show that there exists an incentive complementarity between employer-sponsored general and specific training: the possibility to provide specific training leads the employer to invest in general human capital. Conversely, the latter reduces the hold-up problem that arises with firm-specific training. We also consider the desirability of institutionalised training programmes and the virtues of breach penalties, and discuss some empirical facts that could be explained by the theory.

The paper considers a two-community model with freely mobile individuals. Individuals differ not only in their incomes, but also in their tastes for a local public good. In each jurisdiction, the amount of public services is determined by majority vote of the inhabitants, and local spending is financed by a residence-based linear income tax. When making their residential and political choices, individuals thus face a trade-off between the provisionary and redistributive effects of policies. We analyze this trade-off and show that Tiebout-like sorting equilibria often exist. If the spread in tastes among individuals is very large, an almost perfect sorting according to preferences emerges; otherwise, a partial sorting prevails and stratification into rich and poor communities is more pronounced. Importantly, we demonstrate that all these sorting equilibria exist whether or not individuals are allowed to relocate after voting.