Social and Behavioral Sciences Commons^™

We investigate the classic question of how the provision of a local publicly-provided good--air quality--varies with the degree of decentralization of policymaking. Exploiting exogenous variation in the natural topography of the United States to instrument for the number of local government jurisdictions in a metropolitan area, we show that areas with more jurisdictions have significantly lower air quality, and significantly higher concentrations of the toxic air pollutants most closely associated with cancer and non-cancer health risks. Moreover, we estimate that this increase in pollution lowers housing values by at least 3%. By contrast, local drinking water quality--a publicly-provided good not …

Can private sector participation (PSP) in the piped water sector improve child health? I use child-level data from 39 African countries during 1986-2010 to show that PSP decreases diarrhea among urban-dwelling, under-five children by 2.6 percentage points, or 16% of its mean prevalence. Children from the poorest households benefit most. PSP is also associated with a 7.8 percentage point increase in school attendance of 7-17 year olds. Importantly, PSP increases usage of piped water by 9.7 percentage points, suggesting a possible causal channel explaining health improvements. To attribute causality, I exploit time-variation in the private water market share controlled by …

What drives governments with similar revenues to provide very different amounts of goods with private sector substitutes? Education is a prime example. I use exogenous shocks to Brazilian municipalities' revenue during 1995-2008 generated by non-linearities in federal transfer laws to demonstrate two things. First, municipalities with higher income inequality or higher median income allocate less of a revenue shock to education and are less likely to expand public school enrollment. They are more likely to invest in public infrastructure that is broadly enjoyed, like parks and roads, or to save the shock. Second, I find no evidence that the quality …

This paper exploits exogenous variation in the natural topography of the United States to estimate the causal impact of inter-jurisdictional competition on income growth. We find that doubling the number of county governments in a metropolitan area leads to a 17% increase in the average annual growth rate of earnings per employee over 1969-2006, and a 10% increase in 2006 income per employee. Decomposing income effects using 2000 Census worker-level data, we find that approximately half of the effect stems from making workers more productive, while the other half comes from changing the composition of the workforce and inducing workers …

This article discusses the potential of private sector participation (PSP) to improve the urban water supply in South Asia. I first provide background on the literature linking a safe and adequate water supply with malnutrition, morbidity, and mortality. To better understand the selection mechanism underlying the decision to undergo PSP, I then analyze factors associated with the award of private water contracts worldwide. I next present empirical evidence that PSP in water is associated with a lower incidence of diarrheal disease and higher rates of access to piped water among young children in urban Africa. Finally, I conclude by reviewing …