The idea that public debt may represent a burden for the economic system as a whole has distant origins and focuses on who and how should pay for debt, and with what consequences on the economy. Nevertheless, particularly influential both for academic research and the implementation of the fiscal corrective policies was the empirical paper proposed by Reinhart and Rogoff in 2010 at the dawn of the crisis. Reinhart and Rogoff (2010), in a large panel of countries, identified a critical threshold of 90% of the debt-to-GDP ratio beyond which debt is harmful to growth. Several countries in the world were fast approaching that threshold or already were well beyond it. Though Reinhart and Rogoff’s work was affected by many flaws, it has spurred buoyant empirical research in search of the general debt thresholds above which growth is jeopardised by public debt. Further works have supported the existence of critical debt-to-GDP ratios under various time and space observational fields, but results of these researches are inconclusive or controversial, as discussed in Chapter 2. Country-specific characteristics and contingencies play in fact a prominent role, thus prompting a branch of literature that attempts to comprehensively understand the debt-growth relationship and its determinants (see for instance Panizza and Presbitero, 2014; Eberhardt and Presbitero, 2015). In contrast with the findings of the broad threshold literature and of many theoretical models, the idea that public debt is always harmful to economic growth has partially been reconsidered in the last few years. Nevertheless, the existence of a linkage between debt and growth has not been rejected: the long-run relationship between such macroeconomic variables is inevitably and broadly affected by heterogeneous factors. However, in retrospect and as emerges in Chapter 1, one may say that the empirical pursuit of the debt-to-GDP threshold harmful to growth lacks deeper foundational work: why should we expect a negative public debt-growth relationship? In addition, if such a relationship exists, why should it take the specific form of a threshold of the debt-to-GDP ratio, and why should we expect this threshold to be equally valid across time and space? These questions are the starting point of this Doctoral Thesis, which is organised as follows. Chapter 1 surveys the theoretical literature concerning public debt and economic growth, aiming at finding a theoretical foundation for the debt-threshold literature. Overall, there is no clear and straightforward answer to the questions of why we should expect a negative public debt-growth relationship in the first place, why it should take the specific form of a threshold of the debt-to-GDP ratio, and why we should expect this threshold to be equally valid across time and space. Or, from another perspective, there are many possible answers and many elements affecting them, thus reflecting the complexity of the argument, as well as the variety of the empirical situations. In particular, the literature that I examine, on the one hand offers a rich variety of explanations and insights to researchers of the debt-growth relationship but, on the other, it does not provide any one-way conclusion: the relationship may be negative, positive, or even no relationship may exist, both from a theoretical and an empirical point of view. Even less is theoretically founded the existence of a general debt-to-GDP threshold above which growth is consistently stifled. Each country’s specific characteristics, circumstances, and events have an overwhelming importance that cannot be encapsulated in a single general law. In Chapter 1, I also present a fiscal model of endogenous growth that may help address the theoretical issues in an orderly and consistent manner along two specific coordinates of debt assessment: sustainability/unsustainability, and efficiency/inefficiency. The thrust of the model is that no meaningful assessment of debt and its effect on growth at any point in time is possible without reference to the whole debt trajectory and the specific state of the economy along the trajectory. Chapter 2 reviews the empirical literature and focuses on the debt-growth relationship from an econometric point of view. As before, it is difficult to derive a univocal conclusion on the nature of such a relationship on the basis of the literature’s findings: the existence of a significant negative relationship between debt and growth is the predominant thinking, though in contrast with the conclusions of several works. For these reasons, the aim of Chapter 2 is to go to the roots of the debt-growth relationship, to investigate whether the outstanding debt and the GDP are linked. To this end, I have adopted a research methodology that differs from the most common employed in the literature on debt-to-GDP thresholds. First, my analysis does not hinge on any specific theory, and it should not be considered as a proof of a specific theoretical statement. Rather, it is based on the approach outlined by Hoover et al. (2008) and aims at understanding "what the data say" without imposing aprioristic theoretical structures. A second methodological choice consistent with this approach is to treat the (growth of the) amount of public debt and (the growth of) GDP as the two genuine primitives, without imposing the debt-to-GDP ratio as a primitive itself. In fact, for this to be possible, the two underlying primitives should display well defend statistical properties, namely cointegration and convergence towards a long-term equilibrium value, which are usually not tested in the literature. Third, I believe that the heterogeneity, or non-generality, of results that I have pointed out before should be taken as an intrinsic feature of the problem at hand, so that a viable strategy is to restrict, rather than expand, the observational field. I have set time and space limits to my dataset by purpose: my analysis is based on a panel dataset including quarterly data for 25 Eastern and Western European countries from 1999Q1 to 2015Q4. The Eurozone represents a unique "field experiment" of a large number of countries where some key conditioning factors of fiscal policy are common and exogenous, namely fiscal targets and rules, monetary policy, and the exchange rate with the rest of the world. The main result is that a long-run equilibrium relationship between GDP and debt exists for some countries ? and debt and GDP tend to adjust towards it ? but it is not generalisable. Where a relationship exists, it does not always imply that the debt-to-GDP ratio may be the appropriate variable for describing it. Moreover, cross-country heterogeneity and the role of the financial crisis and of the austerity periods remain substantial and overwhelming factors. Therefore, a unique equation describing the GDP-debt relationship does not seem to exist, which entails the impossibility to derive a meaningful general debt-to-GDP threshold. Thus far I have focused on the general relationship between debt and growth from both the theoretical and the empirical points of view. Turning to the analysis of the Sovereign Debt Crisis and of the austerity period, Chapter 3 attempts to explain what has driven austerity ? measured as the first difference of the cyclically adjusted structural primary balance ? within a dataset of 28 European countries. In the first part of this chapter I present a correlation analysis that describes the relationship between the variable austerity and each of the considered determinants, that are brought back to four main sets of variables: fiscal discipline, market discipline, fiscal consolidation, and macroeconomic stabilisation. The second part implements a panel econometric analysis based on the principal component factor analysis and on the pooled partial common correlation effect estimator. Results show that the variables and factors of the analysis are not able to fully explain austerity, though an important contribution is provided by the enforcement of the Eurozone fiscal rules (the adoption of excessive deficit procedures) and is partially counterbalanced by the cyclical position of the economy. The last chapter, Chapter 4, aims at gaining insight into the role of debt and government expectations and their impact on growth under uncertainty conditions. In fact, it is possible that the effects of austerity measures in some countries, for instance the so-called PIIGS, were amplified by uncertainty. My ambition is to relate austerity with consumers’ expectations, thus studying whether and when consumers’ beliefs about public debt and government intervention affect their consumption, savings, and tax compliance choices with a direct impact, at the aggregate level, on economic growth. Therefore, Chapter 4 implements a laboratory experiment to study how people react in a generalized framework in which public debt may be unexpectedly reduced. The debt dynamics arises endogenously: within a public good game, taxes are collected from all participants and are used to cover a given level of public expenditure, which is then equally distributed to the same participants at the beginning of each round. If the collected amount of taxes is lower than what the public expenditure would require, a deficit is generated. Moreover, reproducing a forced withdrawal, the outstanding amount of public debt can be reduced upon accessing subjects’ savings. Within this setting, expectations are directly elicited by asking subjects if they believe that public debt is going to be reduced, and if they think that the other subjects believe that public debt is sustainable. Therefore, it is possible to identify whether and how agents’ allocations and expectations are affected by the public debt path. As mentioned above, a peculiarity of my approach is the endogenous dynamics of public debt: not only it avoids introducing predetermined dynamics, but also increases the ecological validity of the experiment. Participants are indeed more psychologically involved in the debt mechanism and they might feel responsible for the raise in debt. On the other hand, an exogenous dynamics could depict public debt and tax compliance as irrelevant. Results show that this experimental framework is characterized by relatively high and often increasing aggregate savings and relatively low and decreasing aggregate consumption. Interestingly, an increase in the debt-reduction expectations and a decrease in the perceived debt sustainability are also found to explain savings and consumption behaviours, as is shown in the econometric part of Chapter 4.

According to the 2017 World Economic Forum, the factors that pose a serious risk to today’s global economy are rising inequality and the polarization of societies, which in turn threat the social cohesion. This doctoral dissertation contributes to the understanding of these major current challenges, by investigating the ex- tend of unequal access to opportunity in education and in the labour market in the former communist countries; the potential of diversity in the South African multi- cultural society in terms of employment; the formation of interpersonal trust at the individual level in Germany.

This dissertation investigates the way in which potential and actual shocks influence economic conditions and choices of the Indonesian rural households. The analysis focuses on three main issues. First, we explore which strategies are chosen for different types of shocks. Second, we investigate which are the specific mechanisms adopted in the face of the most common shock (crop loss), and the consequences on consumption. Finally, we analyze the consequences of risk and shocks on a particularly important household decision: how much to invest in children education. Three sets of main conclusions emerge from this dissertation. First, we have learned that when facing a shock, households choose risk coping strategies by comparing responses with each other rather than with a common benchmark. In such a situation of non-exclusive and dependent multiple responses, the widely used Marginal Logit Model (MLM) suffers from a number of limitations. The two models we developed to take into account these specificities appear to outperform the MLM in describing these type of choices. The second main conclusion relates to the evidence that the choices between different coping strategies markedly differ between poor and non-poor households. In the face of shocks, the former appear to behave in a very different way. In general, rich households smooth consumption relative to income, whereas the need to accumulate savings to both build a buffer stock of assets and self-finance profitable investments leads poor people to rely more on ex post income smoothing strategies (taking an extra job) and to use part of this extra labour income to preserve their level of assets, even reducing consumption if necessary. Finally, it is necessary to deepen our knowledge of the long-run consequences of shocks, particularly with respect to the human capital formation of children. We found that the impact of uncertainty on schooling decisions is more subtle than suggested by much of the existing development literature. Taking into account that withdrawal from school is an absorbing state, that is children cannot re-enroll once they stop going to school, temporary interruptions in child schooling have long term impacts on the child human capital. Given irreversibility of withdrawal from school, in the face of household income variability parents are more likely to send children to school to give them the option to continue with higher schooling levels in the future (and hence earn higher earnings when they become adults).

Agricultural cooperatives emerge as tools through which individual farmers meet their economic and social needs and they do so in a manner that allows them both to economize on costs and to disperse the risks associated with pursuing these needs individually. They are particularly useful for enhancing economic development of transition countries in which basic market economy infrastructure is either underdeveloped or is altogether missing. However, agricultural cooperatives do not always deliver the desired level of rural development. Although the literature sometimes takes this to mean that the model itself is defective, I argue to the contrary. In this thesis, I propose that it is the evolutionary path of cooperative idea, its implementation in reality and the way in which it interacts with its institutional surroundings that condition the ability of the model to perform. In other words, cooperative idea is not immune to its political and economic context but rather it is molded by it, and sometimes to the point that it no longer resembles its original substance. In line with that, the main objective of this thesis is to look into factors that either stimulate or discourage development and functioning of agricultural cooperatives in a context of post-socialist and post-conflict Bosnia and Herzegovina (BiH). In doing so, the thesis adopts a new institutionalist frame of analysis combining it with the insights from the economics of the third sector and the cooperative theory to highlight both the evolutionary nature of cooperative idea as well as its embeddedness in the socio-economic context. The research relied on quantitative and qualitative approaches and gathered data from field work and secondary sources. The main findings can be summarized in the following several points: both formal and informal institutions have shaped the way in which cooperatives are understood and utilized by farmers in BiH; cooperatives in post-socialist and post-conflict settings require legal clarity that not only sets them apart from other types of firms in the market but also from degenerated forms of cooperatives that exist to serve interests of few individuals rather than cooperative members and their communities; when judged by the standards that apply to cooperatives in economically advanced societies, it is safe to state that there are very few true cooperatives in BiH; given the structure of agricultural market and number of farmers, there is a lot of potential in utilizing the cooperative model for purposes of rural development. However, using cooperatives for development purposes requires a basic alignment between the features of institutional environment and cooperative organizational characteristics. If stimulated properly through positive policy changes, cooperatives can exhibit transformative potential that is best reflected in how they empower their patrons as well as contribute to the development of their communities.

The rapid proliferation of North-South preferential trade agreements (PTAs) during the last quarter century has had broad implications for developing and emerging economies. As a result of North-South power asymmetries and the aggressive trade policy that has been characterized as ‘competitive liberalization,’ it has been argued that these agreements have produced asymmetric results in favor of Northern countries. This thesis advances a novel approach in the assessment of North-South preferential trade relations that goes beyond the simplistic interpretation of North-South trade politics as a phenomenon largely dominated by North-South power asymmetries. By acknowledging that not all North-South PTAs have the same characteristics, this thesis divides North-South PTAs into two sequential categories: first-order, i.e., Southern countries’ first North-South PTAs and second-order, i.e., Southern countries’ subsequent North-South PTAs. The thesis argues that, while first-order North-South PTA negotiations can produce asymmetric outcomes in favor of Northern countries because they have the ability to exert discriminative pressure on Southern countries, second-order North-South PTA negotiations follow a different logic. Having secured preferential access to Northern markets through first-order PTAs, Southern countries become immune to competitive pressures and can themselves exert discriminative pressure on Northern countries during second-order negotiations. The thesis examines the North-South PTA negotiations of Mexico, Chile, Korea, Colombia, and Peru, five countries of the Global South that have been especially active in North-South preferential trade. Based on the author’s personal interviews with EU and US trade officials and primary and secondary sources, this thesis conducts process tracing to account for the process of the five Southern countries’ first-order and second-order North-South PTA negotiations and reveal the impact of first-order North-South PTAs on the bargaining powers of Southern countries in second-order negotiations and hence the outcomes of second-order agreements. The thesis concludes that, albeit to varying extents, first-order agreements improve the bargaining powers of Southern countries in second-order North-South trade negotiations.

The thesis explores the question of whether immigrants can spur the internationalization and innovation activities of the local production systems of their countries of destination. It is composed of two parts. In the first part, migrants' pro-trade effects is analysed through a theory-consistent gravity model augmented with migration variables. The analysis takes subnational units, i.e. NUTS3 regions, and compares Italy and Spain. The empirical model allows for subnationally heterogeneous multilateral resistance term. An econometric strategy based on Head and Mayer (2014) is implemented to address the main econometric issues and to select the suitable estimator. This leads to selecting the Gamma PML estimator in the case of Spain and the OLS estimator in the Italian case. The results suggest that applying the same model to different contexts can lead to different results: immigration is found to have a positive trade facilitating effect in the Spanish case and a negative trade-diverting role in the Italian case. This difference is attributed to specificities in the composition and integration patterns of the immigrant population in the two countries; tentative explanations are proposed for the negative effect. The second part of the thesis analyses the determinants of immigrants’ employment focussing, in a comparative perspective, on two case studies of local systems specialized in the mechanic sector, i.e. Reggio Emilia in Italy and Elgoibar in Spain. The two are similar in many respects - income and employment levels, sectoral specialisation, high levels of local social capital - but are marked by quite different capacity of integrating immigrant labour in the core industry. Drawing on the availability of two sets of similar firm-level microdata at the corresponding NUTS2 levels, cluster and discriminant analysis are performed to outline the characteristics of firms hiring immigrants in each context. The comparison of the two regions shows that, in the more inclusive context, immigrants are also much more frequently employed in knowledge-oriented firms. The subjective determinants for hiring immigrants are deepened in a series of semi-structured interviews with the employers. In the local system marked by bridging social capital, immigrants’ employment is found to be determined by a wider set of considerations that span well beyond labour replacement in manual tasks. Diverse work teams are reported to contribute to product development and innovation allowing a combination of cost-saving standardization and cultural-specific customizability to serve foreign tastes.

This dissertation aims to test, in a controlled laboratory setting, the role of dierent types of both monetary and non-monetary incentives in coordination. Although complexity and task interdependence have rapidly grown, organizations have often overlooked the importance of integrating specialized activities, hence causing organizations to drift into, or stay locked in, inecient equilibria for a wide range of coordination problems. I adopted an experimentally-grounded approach to organizational design which has long been neglected by both economics and management scholars, and in an attempt to enhance the generalizability of the results to actual organizations, I carried out a series of experiments in which real-eort tasks are implemented. The present dissertation is organized as follows: Chapter 1 and 2 critically review the relevant literature on coordination games and real effort in laboratory experiments, respectively. Chapter 3 compares individual and group-based incentives in a real-eort coordination game. In line with some empirical evidence on actual organizations, group-based payments work as good as, and in some cases outperform, individual-based payments. Chapter 4 tests the impact of group pride on coordination. I found a large and statistically signicant eect of information about ranking and matching procedure on coordination. Chapter 5 test the robustness of group pride across dierent tasks. Quite surprisingly, group pride induced by a task related to the one used in the coordination phase was not eective, while group pride induced by an unrelated task was eective in enhancing coordination among top performers.

This thesis analyses the impact of three different trade shocks on labour market outcomes and firms’ performance. The first chapter evaluates the impact of an increase in import competition on employment, gender employment gap and structural transformation in Ethiopia over the 1994-2013 period. In the second chapter, the objective is to investigate the changes in the Egyptian trade policies on wages and job stability, with a panel dataset covering a 20 years period (1998-2018); the last chapter examines the consequences of the Covid-19 pandemic on firms with different modes of internationalization, in terms of changes in sales and in business strategies. By exploiting three different very rich micro-level datasets, we study trade shocks under three different perspectives: a worker-level perspective, a firm-level perspective and a local labour market perspective. What emerges is that the impact of trade shocks is ultimately an empirical question, and that the direction of results greatly depends on the economic context under analysis. When trade liberalization is implemented in countries whose structural transformation process is still at an early stage, as in the Ethiopian case, this can harm rather than benefit their economies. On the other hand, the evidence in the third chapter suggests that being interconnected in the international market can help firms mitigating the shock, not only when the shock is domestic or idiosyncratic, but also, as in the case of Covid-19, when the it affects the whole global economy.

Infrastructural investments are crucial drivers for promoting growth and activating virtuous cycles of development. Their allocation processes and their socio-economic impact are themes of fundamental importance for development economics. The first two chapters of this thesis employ quasi-experimental methods to analyze the Road Sector Development Programme (RSDP), a large-scale infrastructural investment project implemented in Ethiopia between 1998-2016. The first chapter investigates whether road investment decisions have been influenced by ethnic favoritism mechanisms benefiting the Tigray People’s Liberation Front (TPLF), the dominant component of the Ethiopian People’s Revolutionary Democratic Front (EPRDF). We find evidence of a significant misallocation of public resources towards areas inhabited by the Tigray ethnicity with respect to a suitable control group. The second chapter looks at the impact of the increase in market access due to the RSDP on the productivity of formal and informal Ethiopian firms. Given the important role of informality in Sub-Saharan Africa, it is paramount to disentangle their reaction to productivity shocks from that of formal enterprises. We detect an increase in productivity for formal firms and a decrease in the likelihood of a firm being informal, compatible with the “entry into informality” of less productive formal enterprises and with the presence of informal “survivalist” firms at lower tiers of the productivity distribution. The third chapter employs near-real time satellite data to assess the economic and environmental impact of the Covid-19 contagion containment measures enacted by a selected group of Arab countries, therefore bringing to prominence the use of large, granular, and publicly available datasets for informing crisis response.

This dissertation aims to contribute to the literature of cooperation and social preferences. We use experimental and computational methods to understand the role and extent of reciprocity on cooperation. The first paper is a methodological contribution to the large literature on conditional preferences of cooperation. Cooperation generated by this type of preferences is notoriously unstable, as individuals reduce their contributions to the public good in reaction to other subjects' free-riding. This has led to the widely-shared conclusion that cooperation observed in experiments (and its collapse) is mostly driven by imperfect reciprocity. In this study, we explore the possibility that reciprocally cooperative preferences may themselves be unstable. We do so by observing the evolution of subjects' preferences in an anonymously repeated social dilemma. Our unsettling result is that, in the course of the experiment, a significant fraction of reciprocally cooperative subjects become egoistic, while the reverse is rarely observed. The non-selfish preferences that appear to be more stable are those most easily attributed to confusion. We are thus driven to the conclusion that egoism is more resistant to exposure to social dilemmas than reciprocity. The second paper the evolutionary success of conditional preferences by using simulations. We use an agent-based model in which agents play a variation of the iterated Prisoner's Dilemma game. We estimate the likelihood of cooperation levels as well as the likelihood of the existence of conditional types for different continuation probabilities. We show that an all-or-none type of conditional cooperation strategy together with the perfect conditional cooperation strategy are most likely to emerge when the continuation probability is sufficiently high. Our most surprising finding is related to the so-called hump-shaped strategy, a conditional type that is commonly observed in experiments. Our simulations show that those types are likely to thrive for intermediate levels of the continuation probability due to their relative advantage when probability of interaction is not enough to sustain a full-cooperation, but instead merely sustains mid-level cooperation. The third paper aims to understand the underlying reciprocal motives in altruistic behavior. We argue that the altruism that is revealed in dictator games can be explained by what we call presumptive reciprocity. Subjects may display non-selfish preferences because they presume that the other subjects would have revealed similar, non-selfish preferences if the roles had been reversed. This kind of intuitive reasoning, although partially captured by indirect reciprocity, is overlooked in the literature on social preferences, especially when it comes to explaining the behavior that appears to be purely altruistic. The experimental evidence we provide shows that people's choices reveal mostly presumptive reciprocity, while purely altruistic preferences play a much smaller role.