Agricultural & Resource Economics Theses and Dissertations
Permanent URI for this collectionhttp://hdl.handle.net/1903/2739
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Item Essays on Political Economy of Development in Latin America(2024) Angulo Santacruz, Juan Carlos; Battistin, Erich; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)This dissertation is composed of three applied economics essays in the intersection of development economics and political economy. The first provides an economic explanation to the increase in the intensity of conflict. The second focuses on the effects of presence of illegal activities on educational outcomes. The third analyzes the effect of mass migration on voting behavior and political preferences. Chapter 1 studies how crime may be an unintended consequence of local development. The surge in global demand for Mexican avocados, particularly from the United States, has led to increased production and revenue in avocado-producing municipalities of Mexico. I show that these external changes in avocado global consumption patterns have influenced conflict levels in Mexico. Combining geographical variations in avocado cultivation suitability and fluctuations in avocado demand over time, I find a notable rise in homicides among agricultural workers in municipalities that are well-suited for avocado production. I demonstrate that this rise in homicides is not explained by the increased presence of drug cartels but rather heightened competition between cartels for resources in municipalities where avocados are produced. These findings suggest that cartels vie for territorial control, diversifying their income sources, including the avocado industry, in response to their relatively limited influence over drug markets and routes. In Chapter 2, I turn my attention to the production of illegal crops and how it affects schooling decisions. I focus on the case of Colombian coca leaves, the main input to produce cocaine. The country's main strategy to eradicate coca crops was the fumigation of herbicide until 2015, when the practice was banned. I exploit a plausible exogenous variation in the probability of being sprayed and the temporal effects of the fumigation campaigns as an instrument for the presence of coca fields. This temporal variation along with the cross-sectional variation of the spraying campaigns lead to an instrumental variable difference-in-differences. I use data on coca presence, eradication missions, and school outcomes at the municipal level from 2012 to 2018 to test whether a change in the presence of coca crops has an effect on schooling decisions. I show that my setting does not meet all the assumptions of the traditional difference-in-differences strategy but it fits those of Fuzzy Difference-in-Differences. My empirical findings suggest that an increase in the area cultivated with coca crops increases the high-school dropout rate and it has no effect on the enrollment rate. I rule out the possibility that coca presence crowds out other legal crops. Taken together, these results suggest that high school-age individuals are leaving school to work on coca related activities. In Chapter 3, I revisit the question on whether political preferences of voters are molded by the presence of migrants. I exploit the unanticipated inflow to Colombia of Venezuelans fleeing their home country's political crisis in 2016 and the onset of economic collapse. I compare the results of the 2018 presidential campaign in Colombia across municipalities with similar trends in electoral outcomes between 2002 and 2014 but different presence of Venezuelan migrants on the verge of the 2018 campaign. To address the spatial sorting of migrants across these municipalities, I construct an instrumental variable based on the distance from the closest ports of entry. I find that an increase in the presence of migrants in the municipality yielded a polarized voting behavior. I show that these effects are explained by an increase in the electoral turnout, and that the fondness of voters for Colombia's 2016 Peace Agreement Plebiscite was an important determinant of their behavior, which has been overlooked in past empirical work.Item Essays on the impact of conflict and regulations on the private sector in developing countries(2013) Tran, Trang Thu; Alberini, Anna; Agricultural and Resource Economics; Digital Repository at the University of Maryland; University of Maryland (College Park, Md.)My dissertation explores the effect of ethnic conflict, or regulations meant to avoid ethnic strife, on firm employment and productivity in developing countries. The first chapter investigates the impact of the conflict in Cote d'Ivoire that began in 2000, using a census of all registered firms for the years 1998-2003. We use structural estimates of the production function and exploit spatial variations in conflict intensity to derive the cost of conflict on firms in terms of productivity loss. The results indicate that the conflict led to an average 16-23% drop in firm total factor productivity and the decline is 5-10 percentage point larger for foreign firms. These results are consistent with anecdotal evidence of attacks on and looting of foreigners and their businesses during the conflict. We also find evidence to support the hypothesis that firms responded by hiring less foreign workers. The second chapter studies affirmative action policies in Malaysia, focusing on a specific policy in the private sector. In particular, I examine the impact of a regulatory change which no longer requires foreign-owned manufacturers above a certain size to reserve 30% equity for (ethnic) Malay shareholders. I set up a theoretical model to show that the original policy results in a range of firms to stay inefficiently small. Removing this equity requirement for foreign firms leads to two effects: (i) foreign firms become less likely to be sized constrained, and (ii) their average size increases relatively to other firms. These predictions are supported by empirical evidence from difference-in-difference estimations, based on firm-level data from the Malaysia Productivity and Investment Climate Survey in 2002 and 2007. Finally, chapter three examines the relationship between labor standards and market power in imports in a cross-country context. The hypothesis is that since labor standard policies can act as a substitute for import tariffs, all else equal, bigger importers would have lower labor standards. IV estimation with geography-based instruments finds evidence consistent with theory. In general, countries with higher market shares in labor intensive imports tend to have weaker Free Association and Collective Bargaining rights. Moreover, the effect is stronger among GATT members.