WORKSHOP ON INSTITUTIONAL ANALYSIS
DECEMBER 7-14, 2025
PERUGIA & FLORENCE, ITALY
ABSTRACTS
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| Abramenko
| Achhpilia
| Aulaiwi
| Buyukeren
| Cavalcanti
| Chi
| Ciliberti
| Correa Maia Valeria
| Delgado-Vega
| Halatek
| Han
| Jimenez
| Kartashkov
| Kiselev
| Le
| Nguyen
| Nitsova
| Schoeyen
| Soldatkin
| Vasca
| Zeeshan
| Zhao
| Zhou
| Zhu
|
Migration and Student Mobility: Evidence from the Erasmus Program
Serhii ABRAMENKO
LUISS Guido Carli and EIEF
Persistent immobility within heterogeneous political unions, such as the European Union, weakens both labor market flexibility and integration. Economically, limited internal migration undermines the union's ability to absorb asymmetric shocks. Politically, low cross-border movement may erode cohesion and trust and even heighten conflict. Institutional efforts to promote mobility are therefore crucial.
This project examines whether temporary educational experiences abroad can shape long-term migration behavior by reducing psychological and structural barriers during formative years, with the Erasmus program as a natural experiment. As the world's largest student exchange scheme, Erasmus is one of the EU's flagship initiatives to foster integration and a shared European identity.
I compile and merge three novel datasets. First, I digitize archival records of Inter-University Cooperation Programmes (1987-1997), which document the early adoption of Erasmus and the formation of exchange links across departments. Second, I assemble a dataset of over 10 million Linkedln profiles of EU university graduates, including 500,000 profiles explicitly mentioning Erasmus participation. These profiles provide detailed education and employment histories, allowing me to track post-graduation migration at both individual and university cohort levels. Finally, I use administrative Erasmus records covering all student mobility episodes from 2008/2009 to 2021/2022, detailing sending and receiving institutions, fields of study, and individual characteristics.
I am implementing a difference-in-differences strategy exploiting variation in Erasmus adoption across departments, cohorts, and bilateral links to estimate its causal effect on overall and destination-specific migration, including whether participants later relocate to the host regions or to the home regions of peers they met during exchange. Preliminary evidence from 500,000 Linkedln profiles suggests that Erasmus participants are about twice as likely to live or work abroad after graduation, with effects strongly destination-specific.
Beyond direct impacts, I analyze heterogeneity by origin-destination characteristics (e.g., GDP per capita gaps, cultural proximity, trust) and assess spillover effects on non-participants at both home and host universities, which can substantially amplify the overall impact. By providing credible causal estimates of the direct effects, exploring various heterogeneities from the rich context, and documenting spillovers, this project aims to reshape our understanding of the long-term integration role of student mobility.
Flattening Hierarchies or Amplifying Control? How Frontier Technologies (Re)Shape (De)Centralization within Organizations.
Muskan P. ACHHPILIA, Andre van Hoorn, and Imtiaz Sifat
Radboud University Nijmegen
Do information and communication technologies (ICT) shift decision-making authority from managers to non-managerial employees, or do they reinforce managerial control? Decentralization - the delegation of decision-making authority to lower levels of the organizational hierarchy - is central to harnessing benefits of comparative advantage through specialization. While prior cross-sectional studies suggest that Information and Communication Technology (ICT) investments affect worker autonomy and span of control, the direction of causality remains uncertain: does technology reshape organizational structure, or does organizational structure determine how technology is used? Our paper investigates the evolving relationship between JCT and decentralization, with a focus on maturity and investments in technology over time and organizational context. Using a panel dataset of 28,691 German establishments (1998-2021), we find robust evidence that ICT investments lead to sustained increase in decentralization over time. However, this effect is smaller than prior literature reported once establishment-level fixed effects are accounted for. Notably, the positive effect weakens over time within a firm, indicating that earlier technology investments reshape workplaces and (de)centralization but frontier technology investments may continue to do so at a decreasing rate and may also have possibility in future of (re)centralizing organizations. Moreover, we find that smaller firms tend to be more decentralized, and that digital technologies do not systematically amplify decentralization in megafirms - challenging the assumption that lCT uniformly shifts authority downward across organizational scales. We conclude a nuanced relationship in which technologies can both decentralize and recentralize decision-making, depending on its use, maturity, and organizational context.
Monopolising Violence? The Role of Private Security Companies in Post-Soviet Russia's State-Building and Economy from 1991 to the Present
Aymen AULAIWI
University of Oxford
The history of post-Soviet Russia can be characterised as one of intense, and often uncertain, state-building: the process of creating and strengthening state institutions via the establishment of a monopoly of violence within a given territory. Many scholars attribute the country's painful transition during the 1990s to the underdevelopment of state institutions considered essential for economic growth, in particular property rights and contract enforcement. It was only after Putin's ascension to the presidency in 2000 that scholars note a significant strengthening in the state's institutions. However, what is often overlooked is the role that private security companies (PSCs) may have played in the country's state-building and economy during this period.
Private security companies matter for two key reasons: First, as private wielders of violence, they have significant implications for the state's monopoly of violence. Second, by enforcing institutions like property rights, they represent an often-overlooked form of private institutional enforcement.
Therefore, the study seeks to address three key questions: First, to what extent have PSCs contributed to or disrupted state-building in post-Soviet Russia since 1991? Second, what kind of state have PSCs helped to build or hinder since 199I? Third, what has been the resulting function of PSCs in the Russian economy since 1991?
By addressing these questions, the study constructs a typology of PSCs based on two key dimensions: their relationship with the state (controlled or autonomous) and their relationship with businesses (protective or predatory). The resulting fourfold typology - State-Controlled Predatory, Autonomous Predatory, State-Controlled Protective, Autonomous Protective - provides a framework for mapping the regional and temporal variations in PSC behaviour in post-Soviet Russia since 1991.
This study employs a mixed-methods approach, combining newly collated quantitative data on over 38,000 PSCs in post-Soviet Russia, with qualitative sources such as press reports and company statement. Preliminary findings suggest that PSCs hindered state-building in the 1990s but were co-opted into state structures under Putin. However, they became subject to elites embedded within a neo-patrimonial state, rather than a unified formalised state.
Economically, while initially playing a destructive role, since the late 1990s they have served a largely productive function.
Remaking the State from Below: Local Government Formation in Ukraine
Berkeren BUYUKEREN
Einaudi Institute for Economics and Finance and LUISS
How do territorial reforms that consolidate units and expand autonomy shape local governance, economic outcomes and civic identity? I focus on an administrative reform in Ukraine from 2015 to 2020, which allowed smaller local councils (LCs) to voluntarily amalgamate to retain a larger share of tax revenues and gain greater administrative autonomy. This design created a unique combination of consolidation and decentralization - merging jurisdictions while granting them both fiscal and administrative autonomy.
I first analyze the determinants of voluntary amalgamation. Using hand-collected data on the timing and composition of mergers, I show that pre-reform characteristics such as nightlight intensity and the share of native Ukrainian speakers significantly predicted the likelihood of amalgamation, with more similar and better-off councils more likely to merge.
I then study the effects of amalgamation on governance, economic activity and civic identity. Employing a difference-in-differences model, I find that amalgamation increases per capita personal income tax revenues and enhances competition in public procurement. Treated areas have a larger number of lots, more participants per tender and fewer single-bidder awards.
Turning to local economic activity, I document robust evidence on the post-reform local economic growth, measured by increased nightlight intensity. These gains are largest in smaller hromadas, and within them, in the smallest constituent local councils, suggesting that consolidation disproportionately benefits previously disadvantaged localities.
Finally, I link the local governance and economic outcomes to identity impacts by using a nationally representative repeated cross-sectional survey. The results indicate stronger self-identification as Ukrainian in rural areas with a higher share of residents in the newly formed hromadas. This finding suggests that improvements in local governance and economic opportunities can reinforce civic national identity.
Overall, the findings demonstrate that consolidation-based territorial reforms that expand local autonomy can strengthen local fiscal capacity, improve procurement competitiveness, foster economic development and have an impact on civic identity. The results of my job market paper contribute to broader debates on the optimal jurisdiction size, decentralization and the interplay between economic development and nation building.
Between Benevolence and Corruption:
How Transparency in Pork-Barrel Affects Municipal Health
Alexsandra CAVALCANTI
University of Rochester
Introduction. Can transparency rules prevent corruption and improve public policy efficiency in federal transfers? Since 2000, Brazilian parliamentary amendments have operated through a system requiring numerous bureaucratic procedures, pre-conditions, and oversight by the Federal Court of Accounts. This changed with the introduction of "special transfers," which legislators created to reduce transaction costs and better serve poorer municipalities. Between 2019 and 2024, 1 this innovation created a dual system: special transfers and transfers with defined purposes. Special transfers deliver resources directly to beneficiaries without transparency requirements, effectively removing oversight from Brazil's main pork-barrel funding instrument. This research aligns with Weingast's (2025) work on federal transfers and corruption, and Beuve and Saussier's (2025) analysis of the rules-discretion trade-off in public contracts.
Hypothesis. Corruption Hypothesis: Reduced procedures and controls increase corruption, worsening public policies. Benevolent Hypothesis: Streamlined procedures enhance welfare by reducing transaction costs and directing resources to municipalities in need.
Data. This data collection encompasses health outcome metrics as dependent variables (including infant mortality rates, BCG vaccination coverage, prenatal care adequacy, and municipal health expenditure from 2019-2023) and federal transfers metrics as independent variables (comparing per capita amounts released through both traditional and special amendments from 2020-2023). These variables form the foundation for analyzing how different transfer mechanisms impact health outcomes in Brazilian municipalities.
Methodology. I employ a "before and after" difference model using accumulated values for independent variables, as health outcomes likely result from cumulative resource allocation overtime.
Results. The input variable model confirms the corruption hypothesis, showing special transfer amendments have smaller effects than ordinary amendments. While amendment values show no significant relationship with process indicators, output variables strongly support the corruption hypothesis. Regular transfers correlate with decreased infant mortality (though not statistically significant), while special transfers significantly associate with increased infant mortality (p<0.0001).
Conclusion. These findings suggest transparency and accountability mechanisms are crucial for public health outcomes. Further research is needed to understand the patterns of health indicator decline and the actual impacts of expedited municipal funding.
Inadvertent Learning:
The Information-Seeking Dilemma in Authoritarian Regimes
Ying CHI
Duke University
Information-seeking by the mass public in authoritarian regimes is more common than proposed in the existing literature, where the primary mechanism is the backfire effect of state censorship. My work challenges the literature's conventional assumptions, namely a correspondence between citizens' political sophistication and behavior, a dictator's accuracy in categorizing a citizen's political sophistication, and citizens' ability to infer what is politically risky from state behaviors, I propose a new theory of inadvertent learning. The theory builds on three main premises: (1) ordinary citizens' avoidance of political trouble, (2) the obscurity of a citizen's political sophistication, and (3) the ambiguity of political risk conveyed by state information policies. Basically, ordinary citizens seek political information without realizing it's politically risky. Upon realization of the risk, these previously politically indifferent citizens seek political information to avoid punishment for their political ignorance.
A theoretical implication is that changing state information policy results in different information-seeking behavior. To test this, I leverage a labor dispute that occurred in China and analyze aggregated internet data from both inside and outside the Great Firewall as well as data from a face-to-face, nationally representative survey conducted in 2018. Using a difference-in-differences strategy, I find that ordinary citizens were most likely to seek political information under two conditions: (I) when there was no state punishment and they were aware of the labor dispute, or (2) when state punishment was ambiguously communicated and they were unaware of the dispute. By contrast, politically sophisticated individuals exhibited heterogeneous responses: those with low initial awareness became more interested in the dispute, while those who were already aware significantly reduced their information-seeking behavior.
These findings are consistent with my theory. My study contributes to our understanding of the mass public in authoritarian settings by highlighting heterogeneity in citizens' response to government behavior. It distinguishes between politically sophisticated citizens and the broader mass public, who differ meaningfully in the trade-offs they make when seeking political information. More broadly, my findings illuminate the dynamics of state-society information transactions in authoritarian regimes, with potential long-term implications for patterns of preference falsification and public trust in the regime.
Dynamics and Acceptance of Contractual Terms for Agri-Food Systems in Transition: A Best Worst Scaling Experiment in Italy
Luan Stefano CILIBERTI
University of Perugia
The sustainability transition scenario imposes economic agents in the agri-food systems to adapt their production choices to new environmental and quality requirements. Contractual arrangements are a relevant solution to organize and coordinate decisions between farmers and buyers in socio-technical regimes, negotiating the adoption of quality standards and sustainable techniques to meet new consumers requests and form of public support.
Accordingly, the aim of the research is twofold. First, it is an original attempt to combine the Multi-Level Perspective on Sustainability Transition framework with the Neo-lnstitutional Economics approach to shed light on the role of contractual arrangements and their clauses in the transition towards sustainability. Second, the work investigates and provides empirical evidence of farmers' preferences towards the acceptance of specific contractual terms referring to both long-standing and emerging terms referred to innovative practices and standards developed in local niches, aimed to combine private and goals into contractual arrangements governing business activities and relationships in modern agri-food regimes.
To analyse preferences of a sample of 472 Italian farmers towards the incorporation of both traditional and innovative contractual terms (related to sustainable practices, quality thresholds, technical assistance and digitalised monitoring and control, price, and so on) a type 2 best-worst scaling id adopted. Moreover, latent-class conditional logit models are run to check for the key role played by heterogeneous individual characteristics of respondents and their farms.
First empirical evidence reveal that producers are mostly attracted by traditional clauses related to fixed prices, contract duration rather than high-quality and environmental requirements. A preliminary interpretation is that that to promote novel sustainable practices developed in niches among a wider arena of farmers through contractual arrangements, the role of endogenous institutions and arrangements is pivotal and should be further explored.
Stakeholder Governance and Ownership Arrangements:
A Discriminant-Alignment Approach
Luan CORREA MAIA VALERIA
Baylor University
The New Stakeholder Theory (henceforth NST) (McGahan, 2021) holds promise for a renewed perspective on how organizations attract, contract with, and remunerate different actors who make valuable contributions to organizations (Klein et al., 2012). NST conceives value creation as an outcome of different firm-specific contributions by stakeholders who own and deploy valuable resources (McGahan, 2023). These investments are a crucial tool for value creation due to their causal ambiguity and inimitability (Barney, 1986; 1991), and in many situations, stakeholders are responsible for making those investments (Bridoux & Stoelhorst, 2022). What is less clear is the proposed solution that those who make these firm-specific investments should hold residual control rights (Barney, 2018), which are rights associated with making decisions over the deployment of resources in ways not specified by contracts (Hart & Moore, 1990). If sharing residual control rights can incentivize investments, they may also lead to organizational hazards by actors who hold property rights over valuable resources to the firm (Coff, 1999; Bowman & Swart, 2007). Absent restrictive underlying conditions, such as homogeneous agents (Libecap, 1989) and strong relational contracts (Bridoux & Stoelhorst, 2016), decentralized ownership claims increase governance costs (Foss & Klein, 2023). Thus, we propose a discriminant-alignment approach to how varying levels of uncertainty and stakeholder homogeneity affect choices over structures of property rights. While firm-specific investments by stakeholders are important, there are other less costly ways of sharing property rights to incentivize acts of productive entrepreneurship (Baumol, 1990) by organizational members under situations of uncertainty (Foss et al., 2008). Entrepreneurs must exercise their judgments while controlling for the hazards of unproductive entrepreneurship by third parties. These problems are compounded by heterogeneity and uncertainty, which require organizational adaptation and flexibility (Sarta, Durand & Vergne, 2021). In these scenarios, entrepreneurs must hold concentrated residual control rights to exercise Coasian authority (Coase, 1937), with ownership seen as a low-cost means for the exercise of judgment, the channeling of resources for their most valued uses, and the division of tasks, roles, and payments associated with incentivizing stakeholder investment (Foss & Klein, 2018).
Competitive Relationship Building
Alvaro DELGADO-VEGA and Spencer Pantoja
University of Chicago
This paper examines how a central actor - termed a "Principal" - can maintain strategic alliances with multiple subordinate actors ("Agents") who are in direct conflict with each other, particularly under the threat of intervention by a competing Principal. The core motivation stems from historical and contemporary geopolitical dynamics, where Great Powers must sustain alliances with countries that have mutually antagonistic interests (e.g., U.S. support for both Israel and Saudi Arabia, or Germany's alliance with both Russia and Austro-Hungary before WWI). These alliances are inherently fragile: neglecting one party may open the door for a rival power to poach the disaffected agent, undermining the original alliance.
To study this dynamic, the authors build a formal model where two Principals compete over the influence of two Agents. Each Principal attempts to extract policy concessions from the Agents by offering endorsements or "support" - a form of rent transfer - while the Agents respond strategically based on the support they expect to receive. The challenge lies in designing a relational contract that keeps both Agents loyal, despite their conflicting goals and the presence of an alternative Principal who can disrupt the alliance.
Through a game-theoretic framework, the paper explores different strategic postures a Principal might take-such as Loyalty, Opportunism, or Protection - and demonstrates how timing, commitment, and the credibility of threats and promises shape equilibrium outcomes. One of the key findings is that the competing Principal (as a second mover) has a strategic advantage by being able to selectively target the weakest flank of the incumbent Principal's alliance. These insights contribute to our understanding of international diplomacy, organizational politics, and strategic coalition-building in competitive environments
The Relevance of Central Bank Communication –
Does It Really Build Trust?
Eliza HALATEK
University of Warsaw
Central bank communication is currently one of the key themes in policy studies. This communication shapes general inflation expectations, thereby influencing the market by affecting decisions made by individuals and investors. Public expectations are closely tied to trust in the messages conveyed by central bank governors and executives. As such, formal announcements, reports and speeches serve as a valuable source for investigating monetary policy. While the literature has made significant progress in exploring central bank communication and trust, there remains a gap in analyzing the content of speeches of the above-mentioned representatives. In this study I apply text mining techniques, including sentiment analysis and information extraction, to speeches by representatives of the European Central Bank. Firstly, I use topic modeling methods based on advanced machine learning, identifying the core subjects of the commented speeches. Furthermore, to address the issue of emotional tone of these talks, potentially relevant to reception of news by expert and non-expe1t groups, I perform sentiment analysis. Using the trust data from Eurobarometer for the period 2017-2024 on a sample of 27 countries and econometrics combined with supervised machine learning techniques, I address the question of whether the ongoing ECB communication is linked with the level public trust across the respondents from the European Union member countries.
The Impact of Infrastructure on Shaping Cross-Border Consumption Between Hong Kong and Mainland China
Jing HAN and Xijie Gao
The Chinese University of Hong Kong
This study examines how improvements in cross-border infrastructure affect northbound consumption-the cross-border spending behavior of Hong Kong residents in Mainland China. Using transaction-level data, we find that better infrastructure leads to a significant increase in the number of cross-border orders and a decrease in average order value at the city level. These effects are especially pronounced in cities with higher levels of digitalization.
Further industry-level analysis reveals that the decline in average order value is not driven by changes in consumption categories, but rather occurs within sectors. This shift is primarily driven by newly entered merchants, suggesting that improved access may be enabling more small or micro-sized businesses to participate in the cross-border consumption market.
Ongoing work aims to verify the relationship between new merchants and small enterprises, and to further decompose price effects by merchant size. By focusing on cross-border consumer behavior between two institutionally distinct regions-Hong Kong and Mainland China-this research contributes to our understanding of how infrastructure and institutional environments jointly shape digital market access, pricing dynamics, and consumption allocation.
Legal Personality for Bodies of Nature as a New Way of Environmental Protection
Juan JIMENZ
University of British Columbia
Motivation: The prevailing legal framework for environmental protection traditionally views nature as a resource to be exploited for human benefit. This anthropocentric view has 1contributed significantly to the degradation of ecosystems and the extinction of species. In response to these challenges, some countries have adopted a groundbreaking approach by granting legal personality to bodies of nature. This recognizes them as rights-bearing entities capable of suing and being sued in court, similar to legal fictions like corporations. Notable examples include the Whanganui River in New Zealand, the Ganges and Yamuna rivers in India, the Magpie River in Canada, and the Atrato River in Colombia. In these cases, local communities have demonstrated how the degradation of these rivers directly impacted their livelihoods and have been granted the right to represent these rivers in court. This legal empowerment helps avoid coordination failures and power asymmetry when filing class actions, which previously complicated the protection of these rivers.
This innovative legal approach aims to shift the perspective from viewing nature merely as a resource to recognizing it as a subject of rights. By doing so, it promotes the conservation and restoration of ecosystems. However, the actual impact of this legal innovation on environmental protection remains to be fully understood. As more nations consider this approach, it will be crucial to assess its effectiveness in preserving ecological health and supporting the communities that depend on these natural resources.
In this paper: I study first whether granting legal personality to bodies of nature enhances environmental protection by reducing pollution and promoting sustainable resource management. Specifically, I provide empirical evidence on the impact of this legal innovation on water quality and deforestation. Secondly, I try to show that the mechanisms underlying this legal innovation are consistent with reducing costs associated with coordination failures in collective environmental protection actions.
Methodology and data: I use a difference-in-differences (DID) approach to assess the impact of granting legal personality to bodies of nature on environmental outcomes. I specifically compare changes in water quality and deforestation rates between main river courses that have implemented these legal changes and their unaffected tributaries. To measure these changes, I utilize satellite imagery from the USGS and NASA to track water quality and deforestation rates in these areas.
Institutional Safeguards and Perceived Tenure Security:
A Comparative Analysis
Dmitrii KARTASHKOV
University of Turin
This research investigates how institutional and cultural factors shape individuals' perceived property tenure insecurity across countries. While formal property rights systems are well studied, less is known about the subjective perception of security in one's housing situation-especially among populations in rental, informal, or precarious tenure arrangements. I use cross-national survey data collected by PRINDEX to estimate how formal institutional environment (proxied by Rule of law from World Bank Doing Business) and informal institutional environment (proxied by generalized trust from World Value Survey) impact perceived tenure security, controlling for household characteristics and socio-economic status.
The analysis is based on an ordered probit model, as the dependent variable-self-reported housing tenure insecurity-is measured on an ordinal Likert scale. The model incorporates individual-level variables (income, education, household size and property ownership) alongside country-level institutional indicators (the model is multi-level). To compare the effects across subgroups, I perform predictive margins and contrast analyses and examine how marginal effects differ between institutional regimes and cultural contexts.
Preliminary findings suggest that rule of law significantly reduces perceived tenure insecurity across the distribution, particularly in the upper quantiles where insecurity is most acute. Trust, however, has moderately stronger effects, suggesting that informal environment is crucial for better functioning of property institutions. Individuals without formal property documents experience disproportionately high insecurity, higher in countries with strong formal institutions.
These results highlight the importance of both formal institutions and sociocultural context in shaping tenure perceptions. While strengthening legal protections is necessary, it is not sufficient; addressing informal norms, cultural attitudes, and trust in governance appears equally vital. The research contributes to the literature on property rights, housing policy, and institutional economics by foregrounding the subjective dimension of tenure security and offering empirical evidence across diverse national contexts.
Further work that I am planning is subsample analysis by the type of ownership (proprietors/renters and people living with relatives); addressing endogeneity concerns by using Instrumental Variable analysis (instrumenting enforcement of formal rule with efficiency of court system).
Grand Corruption, News, and Sovereign Spreads
Aleksei KISELEV and Vladimir Zabolotskiy
European University Institute
Weak economic institutions lead to increased macroeconomic volatility and reduced growth. Therefore, the condition of domestic institutions is a relevant risk factor for international sovereign creditors, and it should influence sovereign debt pricing. But how do the creditors become aware of a weakening legal system or the deterioration of property rights protection? And how do their changing perceptions affect the economy of the sovereign debtor?
This paper utilises a case study documented by Enikolopov et al. (2018) to explore the aspects of this learning process. We analyse how financial markets responded to a series of grand corruption exposes published on Alexei Navalny's blog in 2008-20I I. His exposes were shown to have a causal negative impact on the share prices of the largest state-owned enterprises (SOEs), but they also highlighted the weak economic institutions that allowed corrupt practices to flourish. This approach effectively turned Navalny's platform into what he himself called an "online showcase of how the legal system operates."
Employing daily and intraday data, we show that these corruption news significantly increased Russia's sovereign spreads by an average of 2.5 basis points per exposure event, with cumulative effects reaching 40 basis points (or $700 min of debt interest payments per year). We also document that the sovereign spread response was invariant to the size of the exposed SOE, suggesting a broader macroeconomic effect beyond their immediate fiscal implications, as we presumed. Finally, market reactions peaked during 2008-2009 before attenuating later, consistent with a Bayesian learning process whereby investors sequentially updated their beliefs about the state of domestic economic institutions.
To rationalise these findings, we develop a sovereign debt and default model featuring imperfect information about institutional quality. We model a country as either possessing normal institutions that can constrain SOE managers' rent-seeking behaviour, or weak institutions that cannot and, therefore, render grand corruption more widespread and taxing for the economy. Frequent corruption revelations serve as a noisy signal for creditors and affect sovereign spreads by increasing the perceived default probability, as weak institutions decrease available economic resources.
Our findings contribute to understanding how institutional deterioration translates into measurable economic costs.
Effects of Marital Property Rights on Female Labor Force Participation: Evidence from Vietnam
Sylvia Cesar and Jenny LE
Georgetown University
In 1936, the French colonial government introduced a new Civil Code in North and Central Vietnam that recognized communal and separate property regimes in marriage, granting married women legal claims over household assets. Southern Vietnam, by contrast, retained the default regime in which husbands held legal control over all household property. Using Vietnam's 1989 Census and exploiting the policy discontinuity along the Central - Southern borders, we find that women born during the period of legal divergence in the Central side were significantly more likely to be employed, even decades after the two regions became unified under the same institution in 195 9. This effect is only observed among women from the ethnic group subject to the law change, and is not explained by gender imbalances, exposure to the war, or differences in human capital investment. No significant effect is found for men's labor force participation. Drawing on more recent household surveys, we find that second-generation women in the region with early exposure to progressive marital property law remain more likely to hold legal claims over household land. To examine how property rights affect women's welfare, we analyze intrahousehold bargaining outcomes, including expenditure shares between household members, fertility decisions, and elderly female mortality.
This project contributes to two strands of literature. First, it speaks to the literature on women's property rights. While studies from Africa and the U.S. - contexts with high divorce rates - often find asset ownership discourages female tabor supply, we show that in Vietnam's low-divorce setting, property rights can instead enable women's tabor market participation by ensuring access to the returns on their labor. Second, the paper contributes to the literature on the interaction between formal institutions and cultural norms. While culture is often seen as persistent, our findings suggest that legal reforms, such as marital property rights, can durably reshape gender norms and household dynamics.
Shaping Innovation: Decoding Institutions in Developing Economies with Machine Learning
Van Thinh NGUYEN
University of Osaka
This study investigates how institutional environments influence technological innovation in private firms across 126 developing countries, addressing a critical gap in comparative public policy. Drawing on Williamson's institutional analytical framework (1998), it examines how formal rules of the games and firm ownership shape innovation outcomes, defined as new products or processes.
The research hypothesizes that strong institutions enhance innovation, with foreign-owned firms outperforming domestic ones, though weak institutions may moderate these effects. Using 2023-2026 World Bank Enterprise Surveys and Business Ready data, covering over 200,000 firms, the study employs a dual-method approach.
A Logit Multilevel Model tests causal relationships, accounting for firms nested within countries, while Random Forest, a machine learning technique, predicts innovation and ranks institutional predictors. To address endogeneity, the methodology incorporates firm- and country-level controls, robustness checks, and explores historical legal origins as instrumental variables. Random Forest's feature importance scores guide variable selection, enhancing causal inference.
Expected findings suggest that high-quality institutions, particularly regulatory efficiency and dispute resolution, significantly boost innovation, with policy implications for streamlining regulations and strengthening legal frameworks. The study's comparative approach reveals regional variations, informing tailored policies for low- and middle-income countries. By integrating advanced methodologies, this research contributes to understanding institutional dynamics in developing economies, offering actionable insights for fostering innovation and sustainable development.
Keywords: innovation, machine learning, institutional environment, developing countries
Divide and Rule: Oligarchic Networks and Patronal Politics
Silviya NITSOVA
University of Manchester
State capture by extremely wealthy elites is a widespread phenomenon in developing democracies, yet the mechanisms through which it works and the impact it has on political and policy outcomes remain poorly understood. I develop a network-based approach to studying captured institutions. Focusing on the national legislature and using social network and regression analyses of unique quantitative data and original interview-based evidence on the case of Ukraine (2014-2025), I demonstrate that oligarchs seek to defend their wealth by promoting as members of parliament individuals who are linked to them via interpersonal ties.
More specifically, I uncover the hidden networks of interpersonal connections between oligarchs and legislators by employing a network-based measurement strategy on 137 oligarchs and more than 800 legislators across two parliamentary convocations (2014-2019, 2019-2025), leveraging unique administrative and investigative data collected through a combination of automated and manual techniques.
I discover that more than 20% of legislators in each of the two convocations under investigation are either directly or indirectly connected to oligarchs or oligarchs themselves. In line with my theoretical expectations, I find that the connections between oligarchs and legislators take the form of a highly fragmented, weakly connected, and decentralized network with distinct clusters, in which oligarchs occupy central positions, and influence the adoption of policies related to oligarchs' economic interests.
I further explore the resilience of these networks in the face of an external shock-Russia's full-scale invasion of Ukraine-and their influence on legislative politics and policymaking beyond policies directly affecting the narrow economic interests of oligarchs, highlighting patterns of inter-oligarchic cooperation and competition.
The study has important implications for the scholarship on money in politics, oligarchy, state capture, political connections, neopatrimonialism, legislative politics, political parties, and political representation.
A Theory of Moral Authority:
Moral Choices Under Network Externalities
Avner Greif and 0eivind Evan SCHOEYEN
The Arctic University of Norway
Individuals frequently confront moral choices, such as determining charitable contributions or selecting social policies in elections. In navigating these decisions, many defer to the judgments of moral authorities-leaders within self-selected moral communities whose choices shape the behavior of their followers. Examples include religious leaders, elected officials, educators, and social media influencers. These moral authorities establish moral standards, rendering deviations psychologically costly for adherents. Existing models of moral behavior, however, neither account for nor capture this phenomenon. This paper develops a representative-agent model to explain the prevalence of moral authorities and identify the factors governing their influence in eliciting costly actions from followers.
Keywords: Morality, moral authority, moral unraveling, moral network externalities, moral choices, moral community
JEL classification: DO2, D1O, N3O, D71, Z12
Banking on Family: Why Family Ownership Networks Matter
for the Survival of Russian Banks
Alexander SOLDATKIN
University of Oxford
This study addresses a central puzzle in institutional economics: how do firms survive in environments with weak formal rules and poor contract enforcement? Investigating Russia's banking sector, where 80% of institutions have failed since the 1990s, I argue that conventional financial models are insufficient. Instead, I posit that dense kinship networks function as a critical institutional substitute, providing informal governance benefits where formal market and regulatory mechanisms falter.
To test this, I employ a novel methodology that makes previously opaque relationships empirically tractable. I constructed a unique graph database from official Central Bank of Russia disclosures, mapping ownership and kinship ties across more than 1,400 banks and approximately 127,000 bank-quarter observations from 2004 to 2023. Using time-varying Cox proportional hazards and logistic survival models and controlling for a full suite of financial indicators, I analyse how the architecture of these informal networks influences institutional survival.
The empirical analysis reveals that the structure of informal ties is paramount. Family network density, which facilitates superior coordination, significantly enhances bank survival probability, with dense ties increasing survival odds by 63%. This protective effect intensifies during systemic stress, providing 26.6% additional protection during the 2008 and 2014-15 crises-precisely when formal institutions are most strained.
Conversely, the study reveals the contingent value of formal ownership structures. While foreign ownership offers extraordinary protection in normal times (a 482% increase in survival odds for a fully foreign-owned bank), it becomes a profound liability during periods of geopolitical tension, with each percentage point of foreign ownership reducing survival odds by 28.1%.
These findings provide robust empirical support for the theory of institutional substitution, demonstrating that informal, relationship-based governance can be more resilient than seemingly secure formal ownership arrangements. By offering a new framework to quantify the value and structure of these networks, this research illuminates how firms adapt to institutional voids and manage geopolitical risk.
Treasury Bonds and Government Cohesion:
Estimating the Political Bite of Bond Vigilantes
Matteo VASCA
University of Naples Federico II
The United States' recent pause on international tariffs following bond market turmoil in April 2025 exemplifies the influence of so-called "bond vigilantes". The term was coined to describe the informal watchdog role played by treasury bond traders in monitoring government decisions. Bond markets are known to react swiftly to various government outcomes, including fiscal policy and political uncertainty (e.g., Leippold and Matthys, 2022). However, evidence that governments also systematically respond to bond market movements remains scarce.
This paper offers the first empirical analysis of short-term governmental responses to bond vigilantes. Specifically, it examines a targeted form of reaction: changes in the level of cohesion within the governing coalition. Coalition governments are increasingly common across Western democracies, and rely heavily on internal cohesion for effective governance. In fact, a lack of cohesion can obstruct policy implementation and intensify uncertainty (Alesina and Drazen, 1991).
The analysis centers on Italy, a noteworthy case among Western democracies due to frequent coalition governments and persistently high public debt. Even modest bond market fluctuations can significantly impact debt refinancing costs by raising interest rates (Roubini et al., 1989; Codogno et al., 2003; Mosley, 2003). Italy's bond market has become increasingly sensitive, with a rising preference for bonds as trading assets rather than safe long-term holdings. In fact, the share of Italy's debt held by institutional investors and non-residents has risen up to 85% in recent decades, while domestic households have passed from holding 40% of debt in 1997 to less than 5% in 2018 (Arbogast, 2020).
To measure government cohesion, the paper applies text analysis tools to parliamentary speeches delivered by governing party members. Following Hager and Hilbig (2020), higher closeness in the content of speeches across governing coalition partners is interpreted as greater policy alignment, and serves as a proxy for government cohesion.
Results show that cohesion increases following surges in government bond yields. The analysis includes an instrumental variable strategy based on international bond market shocks. A placebo test further confirms the unique effect of bond markets, revealing no significant relationship between Italian stock market movements - via the FTSE-MIB index -and government cohesion.
Digital Convenience, Dietary Consequences:
How Online Transactions Drive Processed Food Consumption
and Medical Expenditure
ZEESHAN
New Delhi Institute of Management
India's digital revolution is reshaping communication and commerce and transforming what households eat. Using nationally representative data from over 106,000 urban households from the 2022-23 National Sample Survey, this study examines how access to online food purchasing affects processed food consumption and associated health expenditures. We find that households purchasing online food consume over 600 Kcal per capita per day from processed food, nearly 2S% of their total calorie intake, and spend 43% more on processed food than those purchasing offiine. Instrumental variable estimates-using telecommunication tower density as a proxy for digital access-reveal a causal link, showing that online purchasing increases processed food calorie intake by over 150%. Crucially, this dietary shift translates into a 41 % increase in monthly medical expenditure, underscoring the health cost of the digital food environment. These results raise urgent policy questions: How can digital platforms promote healthier diets? Can online marketplaces be regulated like traditional food systems? Our findings call for targeted digital nutrition literacy campaigns, algorithmic accountability in food app promotions, and taxation or labeling norms for ultra-processed foods sold online. As India's urban population becomes increasingly digitally connected, this study provides timely evidence of the need to align e-commerce growth with public health and food system sustainability goals.
Keywords: Processed food, Online food purchase, Digital infrastructure, Urban India, Calorie intake, Medical expenditure
"Farming Alone":
Decollectivization and the Fall of Rural Elections in China
Jiaqi ZHAO, Zhi-An Hu, and Zhuo Nie
Peking University
This study examines how the lack of community cooperation experience in early life affects citizens' local public participation decades later, focusing on the long-term impact of the collapse of rural collective communes in communist China on rural election turnout. Despite severe inefficiency in agricultural production, commune members worked together to meet government quotas in grain procurement and build local public goods before the decollectivization. Exploiting the dissolution of communes as a natural experiment, we show that rural residents exposed to the collapse of socialist collectives before early adulthood exhibit lower turnout in contemporary rural elections. In terms of mechanisms, we find that exposure to decollectivization impedes the formation of social trust, suggesting that the lack of teenage experience in local cooperation creates generations with weak social bonds and less enthusiasm for local public affairs. The effect of decoilectivization is smaller in villages with tighter informal social interaction or stronger communist propaganda. These findings shed light on the persistent impact of community cooperation experience in early life on political behavior and provide a voter-side explanation for the fall of China's rural elections.
Agenda Setting in the Boardroom:
Disclosed Uncertainty and Family Control
Yi ZHOU
Cheung Kong Graduate School of Business
This paper investigates whether family firms strategically use external uncertainty to achieve internal governance objectives. We propose an "agenda-setting" hypothesis, positing that controlling families may instrumentally disclose trade policy uncertainty to justify consolidating their control, even when their underlying business operations are not substantially affected. This separates the public narrative of risk from its tangible economic impact.
To test this, we examine Chinese A-share listed family firms from 2007-2023. Leveraging the 2018 US-China trade war as an exogenous shock, our causal identification strategy is built on decoupling disclosed from actual risk. We construct two distinct measures in firm level: Trade Policy Uncertainty (TPU), a text-based measure of uncertainty disclosed in firms' annual reports, and Trade Policy Exposure (TPE), which measures a firm's actual economic reliance on the U.S. market using pre-shock customs data. We then compare the effects of both measures on key aspects of family governance.
Our results reveal a stark divergence that strongly supports the agenda-setting hypothesis. We find that firms disclosing high TPU are significantly more likely to increase their control and ownership concentration post-shock. Conversely, firms with high actual TPE - those genuinely at risk - show the opposite tendency, becoming more likely to decrease family ownership stakes.
Our findings demonstrate that corporate disclosure can be a strategic political tool, used not merely to inform but to shape internal governance outcomes.
The Hidden Catalyst of Firm's Collaborative Innovation:
The Role of Government-Firm Face-to-Face Interactions
Jiayi ZHU
Tsinghua University
This study analyzes a large-scale dataset of mobile phone signaling records from a telecommunications provider for a northern Chinese city to examine how face-to-face interactions between government officials and firm employees influence firm co-creation. Our findings reveal that government-firm face-to-face interactions significantly enhance collaborative innovation, measured by joint patent filings. This effect is more pronounced for co-creation with partners in different industries, nonlocal partners, and partners with weak relations. Furthermore, interactions with regional and generalist government agencies exhibit stronger impacts on co-creation than those with central or specialized agencies. Mechanism analysis, drawing on social network theory and centrality measures, suggests that the value of government-firm face-to-face interactions stems from government agencies' central positions within broad interaction netw9rks, which facilitate information sharing. These results remain robust in instrumental variable analyses using average geographic distances between government offices and firms as an instrument.
This study makes three key contributions. First, it redefines the value of face-to-face interactions by positioning governments as critical network orchestrators whose physical engagement catalyzes cross-boundary innovation, advancing research beyond private-sector collaboration. Second, it demonstrates how institutional hierarchy (regional vs. central) and functional scope (generalist vs. specialized) condition the efficacy of government-firm engagement, offering a nuanced framework for understanding collaborative innovation. Thus, it pioneers the use of high-resolution trajectory data to measure cross-sector interactions at scale, overcoming limitations of self-reported or archival data and establishing a novel empirical basis for studying institutional roles in innovation ecosystems. These contributions collectively bridge gaps in understanding how formal institutional actors actively shape innovation through spatial and relational mechanisms.