At political boundaries, local leaders often have weak incentives to reduce polluting activity because the social costs are borne by downstream neighbors. This paper exploits a natural experiment set in China in which the central government changed the local political promotion criteria and...

The Securities and Exchange Commission (SEC) sanctioned investor-paid rating agency Egan-Jones for falsely stating that it did not know its clients' investment positions. The SEC's action against Egan-Jones raises the broad question whether knowledge of clients' investment positions creates a...

The quality of governance depends on public sector worker productivity. We use micro data from China to document that judges are less productive on polluted days. Building on the insights of Alchian and Kessel (1962), we discuss the role of organization design and the incentives of public versus...

We examine the influence of social capital in the municipal bond market. Defined as the norms and networks that encourage cooperation, social capital is a social construct which captures a region's level of altruism, trustworthiness and propensity to honor obligations. We expect that...

We provide empirical evidence on the effectiveness of target-based performance evaluation for bureaucrats in the context of the Two Control Zones policy in China. In 2006, the Chinese central government made sulphur dixoide (SO2) emissions cuts a major performance evaluation criterion for...

Researchers have found that the volume of exceptions generated by a continuous auditing system can be overwhelming for an internal audit department to investigate. In this paper, we propose a framework that systematically prioritizes exceptions based on the likelihood of an exception being...

In this paper, we examine a causal relationship between flattening of a government hierarchy and economic performance. Exploiting a novel panel dataset on government reorganization in China from 1999 to 2012, we find that delayering has led to increases in revenue and inter-govermental transfers...

The quality of governance depends on public sector worker productivity. We use micro data from China to document that judges are less productive on polluted days. Building on the insights of Alchian and Kessel (1962), we discuss the role of organization design and the incentives of public versus...