This dissertation consists of three chapters exploring challenges that many developing countries face in augmenting state capacity and accumulating human capital. In particular, I focus on difficulties in developing state capacity and human capital induced by political violence, natural disasters, and over-reliance on income from foreign countries. The first chapter explores the effects of losing local politicians on the fiscal and personnel capacity of local governments using the outcome of the assassination attempts on mayors in Mexico. The second chapter investigates the effects of exposure to natural disasters on birth outcomes in Indonesia, using the Indian Ocean Tsunami as a natural experiment. In the final chapter, I use a cross-country analysis to study the link between reliance on remittances and the capacity of a country to collect taxes efficiently.
The first chapter investigates the effects of losing mayors to successful assassinations on the capacity of local governments. By leveraging the randomness in the outcomes of assassination attempts against mayors in Mexico in 2002-21, I find that the loss of mayors negatively affects the fiscal and personnel capacities of the local governments. Municipal tax collection decreases by 29\%. The share of expenditure on primary services falls by 3 percentage points and is crowded out toward investment in construction. Municipal workers at productive stages in their careers leave the position. The back-of-the-envelope calculation shows that wages should increase by 13\% to retain them after assassinations. Organized criminal groups take advantage of the loss of mayors by increasing their presence in municipalities with successful assassinations. The results are not explained by non-political violence, levels of economic activities, or population changes. The results speak to the significance of leaders in maintaining fiscal capacity and retaining capable personnel in the workforce even in a violent environment.
In the second chapter, co-authored with Elizabeth Kayoon Hur (Michigan State University), I evaluate the effect of in-utero exposure to the 2004 Indian Ocean Tsunami on short-term childbirth outcomes in Indonesia. Exploiting variation in the timing of exposure, I find that the probability of successful pregnancies drops by 5.9 percentage points (pp), while miscarriages increase by 5.5 pp for those exposed in the earliest stage of pregnancy. I find suggestive evidence that post-disaster health investments by households may have shielded later cohorts from harmful effects. The results suggest the importance of considering fetal loss in developing countries and highlight that facilitating household investment in health through various policies may mitigate negative birth effects in the aftermath of natural disasters.
The third chapter investigates the relationship between a country's reliance on remittances from abroad and its ability to collect taxes from various domestic sources. Despite the increasing flow of remittances in volume and proportion, particularly among developing countries, their role in determining the state's capacity to collect taxes has received little attention. This chapter explores the link between remittances and various tax revenue categories using country-level data. Two-way panel regressions suggest that a 1 percentage point (pp) increase in the inflow of remittances explains a 0.12 pp rise in consumption tax revenues. The same estimate derived from IV methods proxying for migrant network strength and openness of borders increases to 0.9 pp. Decomposing this result reveals that the increase in household consumption expenditure explains all of the statistical association, not the efficient tax-collecting mechanisms such as VAT. Subsample regressions by income category suggest that the association between remittances and consumption tax revenue is stronger in countries with lower income.
| Identifer | oai:union.ndltd.org:columbia.edu/oai:academiccommons.columbia.edu:10.7916/ax74-hc26 |
| Date | January 2024 |
| Creators | Lee, Seung-hun |
| Source Sets | Columbia University |
| Language | English |
| Detected Language | English |
| Type | Theses |
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