Working paper available through PEDL. Open-access published article available here.
Abstract
Existing theories of democratic reversals emphasize that elites mount actions like coups when democracy is particularly threatening to their interests. However, existing theory has been largely silent on the role of elite social networks, which interact with economic incentives and may facilitate antidemocratic collective action. We develop a model where coups generate rents for elites and show that the effort an elite puts into a coup is increasing in their network centrality. We empirically explore the model using an original dataset of Haitian elite networks that we linked to firm-level data. We show that central families were more likely to be accused of participating in the 1991 coup against the democratic Aristide government. We then find that the retail prices of staple goods that are imported by such elites differentially increase during subsequent periods of nondemocracy. Our results suggest that elite social structure is an important factor in democratic reversals.
Increases in the minimum wage can substantially reduce earnings inequality. To demonstrate this, we combine administrative and survey data with an equilibrium model of the Brazilian labor market.
Many firms in developing countries could be too small to adopt modern technology embodied in expensive production machines. This paper shows that rental market interactions allow these small firms to increase their effective scale and mechanize production.
Tracing out the effect of large economic stimuli on the pattern of transactions in an integrated economy, and their aggregate implications, has long been a central goal of economic analysis, but until now has not been studied experimentally.
In this pilot study, we demonstrate that low-skilled day labourers who are socially connected to their employers have significantly higher chances of securing jobs, irrespective of having lower productivity than their lesser connected counterparts in Pakistan.