Essays on Public and Development Economics

Abstract

In Chapter 1, we study an intervention in which the Peruvian government provided public payphones to 6,509 rural villages that did not have communication services before. We show that the intervention timing was orthogonal to potential outcomes and exploit it using a panel of treated villages. Findings suggest increases of 16 percent in prices received by farmers for their crops, and a 23.7 percent reduction in agricultural costs. This income shock has been translated into a reduction in child market and agricultural work of 13.7 and 9.2 percentage points respectively. Findings are consistent with a dominant income effect in child labor demand.

In Chapter 2, we exploit a randomized intervention directed towards enhancing local governments' efficiency in three regions of rural Russia (Adyghea, Penza and

Perm) at the onset of a major decentralization reform. We find that satisfaction levels with decentralized services increased only in the region with relatively higher ex-ante experience with decentralized and participatory decision making (Penza). Moreover, we find that settlements with high pre-treatment accountability levels were differentially benefited by the intervention. Our findings suggest that short-term interventions do not translate into higher satisfaction with local public services. Rather, it appears that enhancing local managerial efficiency in delivering public services is a long-term process and that intensive interventions translate into higher satisfaction provided to local governments with relatively longer institutional experience and higher levels of accountability.

In Chapter 3, we use the timing of cell phone coverage in Peru as an exogenous shock to investigate the effects of phone coverage on several measures of economic development. We exploit a unique dataset drawn from information of private cell phone operators regarding the location, date of installation and technical characteristics of their towers from 2001 through 2007. We then merge this information with national household surveys spanning the same period. Estimates suggest an increase of 7 percentage points in the likelihood of self reported cell phone ownership after getting coverage, an increase of 7.5 percent in yearly household expenditures after coverage, and a 13.5 percent increase in the value of assets.