Publications

Does Local Politics Drive Tropical Land-Use Change? Property-Level Evidence from the Amazon
(with Fanny Moffette) (Conditionally Accepted at The Economic Journal)
Working Paper   Slides

Click for AbstractLand conversion to agriculture is a defining environmental challenge for tropical regions. We construct a novel panel dataset of land-use changes on the properties of municipal politicians and campaign donors in the Brazilian Amazon to assess channels through which local politics may drive land conversion. Estimating event studies around close mayoral elections, we find that large landholders significantly increase soy cultivation while the candidate they donated to is in office. This suggests landholders invest in political influence to overcome barriers to agricultural intensification. In turn, mayors who receive landholder donations govern in favor of agriculture – increasing spending on agricultural promotion and distribution of rural credit. While agricultural promotion “returns the favor” for mayors’ donors, it is not precisely targeted. We document large spillovers onto lands not registered to donors, resulting in increased environmental violations and deforestation in these areas. Results reveal how patronage and special interests drive land-use change in the Amazon.

Timing is Everything: Labor Market Winners and Losers during Boom-Bust Cycles
(with Dominic Parker and Steven Poelhekke) (Accepted at JAERE)
Working Paper   CEPR Discussion Paper   Slides (English)   Slides (Portuguese)   Ipea Webinar (Portuguese)

Click for Abstract Sectoral expansions and contractions require labor reallocation between declining and booming sectors. Which types of workers gain and lose during these transitions? Using linked employer-employee panel data from Brazil spanning a full boom-bust cycle in its oil sector, we find that timing of labor market entry is critical. Only highly educated workers hired at the onset of a boom reap significant earnings and employment benefits. Low-education workers and later entrants experience earnings and employment penalties, reflecting a last-in, first-out pattern. Skilled professional occupations insulate high-education early entrants during downturns, while a boom in sector-specific education erodes earnings of later entrants.

Winning and Losing the Resource Lottery: Governance after Uncertain Oil Discoveries
Journal of Development Economics, Vol. 166 (2024)
Published Version   Slides   Replication Package
Media Coverage:   VoxDev   World Bank Development Impact Blog   Grist

Click for Abstract Natural resource discoveries are often followed by delays and uncertain production outcomes, creating challenges for governments that anticipate resource revenues. I leverage exogenous subnational variation in offshore oil discoveries in Brazil to identify dynamic effects of discovery news and revenue shocks on local public finances, public goods provision, and politics. Municipalities where discoveries are realized enjoy significant growth in revenues and spending, but fail to improve public goods provision or stimulate economic activity. Municipalities that experience discovery announcements but never receive windfalls suffer long-term declines in revenues, investment, and public goods provision relative to never-treated controls. I show that electoral responses underlie these dynamics: discovery announcements draw less-educated candidates into local politics, and shortfalls between anticipated and realized oil revenues increase political turnover. Findings highlight discovery uncertainty as a fundamental resource governance challenge, and reveal mismanagement of windfalls and adjustment costs after disappointment as two faces of the Resource Curse.

Quantifying the Effects of Energy Infrastructure on Bird Populations and Biodiversity
Environmental Science and Technology, Vol. 58(1), pp. 323–332 (2024)
Published Version   Open Access Pre-Print   Slides   Replication Package
Media Coverage:   The Economist   Los Angeles Times   Die Presse (Austria)   Courrier International (France)   Focus Online (Germany)   BNNVARA (Netherlands)   El Imparcial (Mexico)   El Nacional (Spain)   ETC (Sweden)   Le Temps (Switzerland)   Tages Anzeiger (Switzerland)   Basler Zeitung (Switzerland)   Berner Zeitung (Switzerland)   Der Bund (Switzerland)   Enrique Dans (Medium Blog)   Big Pivots (USA)

Click for Abstract Shale oil and gas production and wind energy generation both expanded rapidly across the United States between 2000-2020, raising concerns over impacts on wildlife. I combine longitudinal micro-data from the National Audubon Society’s Christmas Bird Count with geolocated registries of all wind turbines and shale wells constructed in the contiguous US during this period to estimate the causal effects of these contrasting types of energy infrastructure on bird populations and biodiversity – key bellwethers of ecosystem health. Results show that the onset of shale oil and gas production reduces subsequent bird population counts by 15%, even after adjusting for location and year fixed effects, weather, counting effort, and anthropic land-use changes. Wind turbines do not have any measurable impact on bird counts. Negative effects of shale are larger when wells are drilled within important bird habitats.

The Relation Between Labor Productivity and Wages in Brazil: A Sectoral Analysis
(with Alexandre Gori Maia)
Nova Economia, Vol. 28(1), pp. 7-38 (2018)
PDF   Published Version

Click for Abstract Labor productivity is a crucial long-run determinant of real wages. Nonetheless, wage and productivity dynamics often diverge in practice due to a range of economic and institutional factors. This study analyzes the relation between the dynamics of labor productivity and wages in Brazil from 1996 to 2014, and adopts a sectoral perspective to account for divergent trends among economic sectors. Analyses are based on pooled data drawn from the National Accounts and the Pesquisa Nacional por Amostra de Domicílios, and hierarchical data models are estimated to assess the impacts of state- and sector-level factors on individuals’ wages. Results indicate that productivity is significantly positively associated with wage levels for all economic sectors, but that institutional factors such as labor formalization and minimum wage exert equally significant impacts, suggesting that wage growth over the 1996-2014 period was as much the result of institutional changes as of transformation of Brazil’s productive structure.

Are GMO Policies “Trade Related”? Empirical Analysis of Latin America
(with Pamela Smith)
Applied Economic Perspectives and Policy, Vol. 39(2), pp. 286-312 (2017)
Published Version

Click for Abstract This paper empirically examines whether GMO policies are “trade related” for countries in Latin America (LA). First, we use the Balassa index to assess the “revealed comparative advantage” of LA countries. We find that LA countries have a revealed comparative advantage in GMO industries relative to the world, and that intra-regional trade in these industries is modest relative to external trade. Second, we estimate the Gravity model to examine the effects of importers’ GMO policies on Argentina and Brazil’s bilateral exports of soybeans and maize. We find that strong GMO policies in importers have a negative effect on Argentina’s bilateral exports of soybeans (an industry and country with historically high GMO content). Further, we find that past GMO policies are a strong determinant of Argentina’s future bilateral exports, and that the negative trade effects of strong GMO policies are increasing over time. In contrast, we find a weaker relationship between the GMO policies of importers and Brazil’s bilateral exports (consistent with Brazil’s more recent increases in GMO content). These findings for Argentina and Brazil provide a benchmark for other developing countries that are looking for guidance on servicing trading partners with diverse GMO policies.


Working Papers

Explosive Diversification: Organized Crime Adaptation to Mexico’s Crackdown on Fuel Theft (Under Review)
(with Itzel de Haro Lopez)
Working Paper

Click for Abstract Oil theft from pipelines funds armed criminal groups around the world. We show that a 2019 crackdown on oil theft in Mexico prompted criminal groups to diversify into gas theft, a more technologically challenging and dangerous activity. This adaptive response to enforcement increased cartel presence by 18% and homicide rates by 19% in municipalities hosting gas pipeline infrastructure. Cartel diversification into gas theft was concentrated in places neighboring oil pipelines and driven most strongly by cartels previously specialized in oil theft. The emergence of large-scale gas theft in Mexico presages threats to gas infrastructure worldwide and reveals how law enforcement crackdowns can provoke criminal diversification into spatially and technologically related activities – spreading violence into previously unaffected areas.

Local and Multinational Comparative Advantage in the Global Mining Industry
(with Jonah Rexer and Utsoree Das)
Latest Working Paper   STEG Working Paper

Click for Abstract Empirical evidence and economic theory suggest multinational firms are more productive than their local counterparts. What explains the persistence of local firms and the recent surge in local content policies? Using a global database of corporate ownership changes for 35,567 commercial mines between 2000-2022, we test whether local firms have a comparative advantage in dealing with weak institutions, corruption, and conflict, which could attenuate or reverse the multinational advantage. We confirm that, on average, output declines by 8% after mines are taken over by local firms. Localized assets also exhibit higher air pollution, indicating lower operational quality. However, in states with weak governance, localization increases mine output by 8%. Local firms also generate more economic activity, urbanization, and non-agricultural employment around mines, indicating stronger local linkages. While multinational mining firms exhibit increasing returns to scale, local firms exhibit decreasing returns, suggesting they may grow based on their ability to navigate institutional weaknesses rather than their productivity. Results highlight the role of institutions in determining relative advantages of multinational versus local firms.


Work in Progress

Do Local Content Requirements Promote Industrialization? Evidence from the Brazilian Oil Industry
(with Fabio Maciel) Funded by STEG Small Research Grant

Click for Abstract Industrial policies are hotly debated, but empirical evidence of their efficacy and underlying mechanisms is thin. I evaluate a common industrial policy–a local content requirement (LCR)–which requires multinational firms to source a percentage of their inputs from local suppliers. Using firm-level panel data from Brazil, I measure whether an LCR for the oil sector increased manufacturing firm growth, innovation, and productivity among upstream input-suppliers, or instead led to rent-seeking and inefficiencies. Competition is a primary mechanism underlying successful industrial policies. I measure whether targeted firms in more competitive subsectors exhibit higher productivity growth relative to firms in less competitive subsectors after introduction of the policy. Another justification of industrial policies is their potential to create positive spillovers. By measuring supply-chain linkages and distance between targeted and non-targeted firms, I estimate spillover effects of the LCR on the broader manufacturing sector. Finally, I leverage data on campaign donations made by LCR beneficiary firms and firm owners to explore the role of special interest politics in sustaining the LCR.

Supply Response to Oil Production Taxes: Evidence from the US Royalty Relief Program
(with Julien Daubanes, Diego Cardoso, and Pritam Saha)

Click for Abstract Supply-side climate policies are receiving increasing attention from governments. For instance, the US is currently considering a major overhaul of rules governing oil extraction on federal lands – which have remained unchanged for nearly a century. We exploit lease-level variation introduced by a temporary royalty relief policy in 2020 to estimate the effects of changes in oil extraction taxes on drilling activity, oil and gas production, and royalty revenues. We assemble a month-lease panel covering drilling and production on all federal oil and gas leases in the contiguous United States between 2005-2022 that accounts for allocation agreements across leases. Using a difference-in-differences strategy that compares outcomes on leases approved for royalty relief with similar untreated leases, we find that royalty reductions lead to immediate increases in the number of producing wells (extensive margin), but also in production from already active wells (intensive margin). Evidence of an intensive-margin response differs from previous studies focused on conventional oil production, suggesting unconventional leases may be more reactive in the short run. Our estimates allow us to quantify the effects of proposed US oil extraction tax reforms on oil and gas production, public revenues, and carbon emissions.

Structural Transformation and Politics: Evidence from Brazil’s Agrobusiness Boom
(with Ricardo Dahis)

Human Capital and Local Spillovers Across the Mining Lifecycle
(with Steven Poelhekke and Fabio Maciel)

Dynamic Adaptation to Sanctions: Evidence from Russian Oil Fields

Sustainability and Quality-Upgrading in Cacao Supply Chains: Experimental Evidence from Ghana
(with Salvatore di Falco and Utsoree Das) Funded by Horizons Europe “Transformative Pathways” Project