Does minority representation in a legislative body differentially impact outcomes for minorities? To examine this question, we study close elections for California city council seats between white and nonwhite candidates. We find that nonwhite candidates generate differential gains in housing...

China's four-trillion-yuan stimulus package fueled by bank loans in 2009 has led to the rapid growth of shadow banking activities in China after 2012. The local governments in China financed the stimulus plan mainly through bank loans in 2009, and resorted to non-bank debt financing after 2012...

America's local governments spend about one-eighth of our national income, one-fourth of total government spending, and employ over 14 million people. This paper surveys the large and growing economics literature on local governments and their finances. A primary difference between local and...

Medellin's government wanted to raise its efficacy, legitimacy, and control. The city identified 80 neighborhoods with weak state presence and competing armed actors. In half, they increased non-police street presence tenfold for two years, offering social services and dispute resolution. In...

The current paper presents a method of deciding the question of whether any given stage in the budget process is an example of the "political" or the "bureaucratic" model. We then use it to study local government spending on education. The basis for our method is the important difference between...

What are the incentives faced by local officials in China? Without democratic institutions, there is no mechanism for local residents to exercise "voice". Given the hukou registration system, local residents have little opportunity to threaten "exit" if they are unhappy with local taxes and...

Political institutions can affect corruption. We use audit reports from an anti-corruption program in Brazil to construct new measures of political corruption in local governments and test whether electoral accountability affects the corruption practices of incumbent politicians. We find...

Recent studies have emphasized the importance of the quality of politicians for good government and consequently economic performance. But if the quality of leadership matters, then understanding what motivates individuals to become politicians and perform competently in office becomes a central...

There are two main forms of government in U.S. cities: council-manager and mayor-council. This paper develops a theory of fiscal policy determination under these two forms. The theory predicts that expected public spending will be lower under mayor-council, but that either form of government...

This paper analyzes the roots of variation in de facto institutions, within a constant de jure institutional setting. We explore the role of rent-seeking episodes in colonial Brazil as determinants of the quality of current local institutions, and argue that this variation reveals a de facto...