University of Macau / Faculty of Social Sciences and Humanities / Department of Economics

The overall goal of this dissertation is to study important questions in public economics. In its three chapters, I look at peak world oil production and its implications for oil prices; cross-country pollution emission rates and implications for institutional quality; and finally, black-white arrest rates and implications for law enforcement discount factors. Each chapter of this dissertation combines new theory with robust empirical work to extend the quantitative frontier of research in public economics. / text

This dissertation examines how firm-specific behavior concerning factors of production is shaped by institutional constraints in development countries. The initial two chapters analyze how firms in Brazil compensate workers for their labor: the first centers on the role of the collective bargaining framework, and the second quantifies the impact of firms on the racial wage gap. The final chapter focuses on firms' use of credit for working capital in response to disruptive periods of violence during Mexico's Drug War. Firms compensate workers not only with wages, but also with other job characteristics that the labor literature broadly refers to as amenities. However, it is hard to study amenity compensation because we rarely observe variation in amenities across establishments in some systematic way. One exception is the comprehensive set of amenities codified in the text of collective bargaining agreements (CBAs) that unions negotiate with employers. In chapter 1, I leverage a reform that automatically extended all existing CBAs in Brazil to analyze the impact of this new collective bargaining framework on firm compensation, as measured by wages and amenities, as well as subsequent selection effects in the workforce. To quantify the value workers place on amenities secured by unions, I measure how textual elements in CBAs influence an establishment's ability to poach workers from other employers, conditional on wages, using data on the universe of CBAs merged with an administrative linked employer-employee dataset. I find that automatic extensions increase compensation by 1.6-3.8% when unions are strong---an effect that is driven by additional amenities whose value more than offsets foregone wage gains. These changes in compensation lead to an increase in hiring concentrated among low-skill workers, implying an elasticity of labor supply to the affected firms of around 2. Further evidence suggest that unions reduce compensation inequality within establishments. While union-driven changes to firm compensation can lead to an influx of low skill workers, how firms select and pay workers can have important consequences for wage disparities between groups. In Chapter 2 (work co-authored with François Gerard, Edson Severnini, and David Card), we measure the effects of firms' employment and wage setting policies on racial pay differences in Brazil. We find that nonwhites are less likely to work at firms that pay more to all race groups. This sorting pattern explains about 20% of the white-nonwhite wage gap for both genders. Moreover, the pay premiums offered by different employers are also compressed for nonwhites relative to whites. This within-firm differential wage setting contributes another 5% of the overall gap. We then explore to what extent the under-representation of nonwhites at higher-paying firms is due to the selective skill mix at these workplaces. Using a counterfactual based on the observed skill distribution at each firm and the nonwhite shares in different skill groups in the local labor market, we conclude that assortative matching accounts for about two- thirds of the underrepresentation gap for both men and women. The remainder reflects an unexplained preference for white workers at higher-paying firms. Interestingly, the wage losses associated with unexplained sorting and differential wage setting are largest for nonwhites with the highest levels of general skills. This suggests that the allocative costs of race-based preferences may be relatively large in Brazil. The first two chapters reveal that firms exercise some discretion over compensation and hiring within the context of institutions such as collective bargaining and nondiscrimination laws. But firms are also constrained by other institutions in how they carry out their day-to-day activities. In particular, the capacity of the State to exercise control over the legitimate use of force promotes the fundamental trust required between agents to make welfare-enhancing transactions. In Chapter 3, I analyze how drug-related violence affects credit use by micro and small enterprises (MSEs). Leveraging administrative data on working capital credit lines issued to MSEs in Mexico, I exploit geographic variation in homicide rates as well as exogenous kingpin captures to identify the causal effects of violence on credit use. I find that firms significantly increase the amounts drawn from their credit lines after experiencing violence shocks. More credit use could be motivated by rising short-term liquidity needs (distress story) or increasing risk of holding cash (substitution story). Rising default probabilities indicate signs of distress, although heterogeneity analyses reveal cash-for-credit substitution among non-revolving borrowers. I also find evidence that rising liquidity needs among distressed MSEs are likely driven by decreased economic activity rather than theft or extortion. As such, this paper highlights the important role that financial products play in terms of helping firms absorb violence shocks as well as providing safe alternatives to cash holdings under insecure environments.

Note:

In 1965, amid antagonism between capital-importing and capital-exporting states over investment protection, the World Bank created ICSID. ICSID facilitates the resolution of disputes between foreign investors and states. Since major initiatives to create investment rules have failed within the UN and OECD, ICSID is the only successful attempt to create a multilateral, inter-state organization dedicated to investment. This thesis probes the intellectual, political, and economic forces behind the creation and early development of ICSID. This study combines archival work, oral histories, and interviews with econometric work. On this basis, it illuminates how ICSID's creators-mainly staff in the World Bank's Legal Department-adapted their ideas to suit the charged political context. When disseminating the idea of ICSID to states, they relied on ambiguity, expertise, and incrementalism. These three characteristics constitute an approach to organization building that I term "modest multilateralism" since the World Bank's President praised ICSID as "a modest proposal." By illustrating how this approach operated in ICSID's case, I generate insights that are applicable to other international organizations. ICSID's creation differs from the expectations of institutionalist IR theory in important ways. First, there was little state leadership, and ICSID's founding Convention is devoid of substance-it merely outlines a procedure. In this way, it takes the idea of ambiguity to its extreme. Second, ICSID's founders took steps to shield the organization from the politics of investment protection: they asked states to send legal experts, not elected representatives, and avoided deliberative debate. Third, ICSID's design was explicitly evolutionary. ICSID can operate alongside changing substantive rules-multilateral, bilateral, or domestic. Finally, contrary to previous accounts, in this thesis the ICSID Secretariat emerges as a dynamic agent. The Secretariat actively pursued ratifications and advance consents to investor-state arbitration. The creation of ICSID fostered a community of practice, which subsequently redefined international investment law through treaty making and arbitral practice.

University of Macau / Faculty of Law

Univ., Diss.--The Hague, 2006. / Literaturverz. S. [261] - 275.

Thesis (M.A.) - Carleton University, 2007. / Includes bibliographical references (p. 103-113). Also available in electronic format on the Internet.

Thesis (Ph.D.)--York University, 2005. / Includes bibliographical references (leaves 592-662). Also available on the Internet.

This study develops and empirically tests a model of the determinants of federal spending for crime-fighting policies. An inter-disciplinary approach to building the model is utilized that merges ideas from budgeting, policy analysis and criminology. Four factors hypothesized to impact federal spending for the administration of justice are operationalized as eight variables and tested using ordinary least squares regression analysis on time series data. The factors hypothesized to impact federal spending in this area are economic constraints imposed on government spending, the ideological makeup of Congress and the president, the actual crime rate, and the public's attitude toward crime. Five of the eight variables demonstrated statistical significance at the.10 level or better.