Screen Now, Save Later? The Trade-Off between Administrative Ordeals and Fraud (co-authored with Shan Aman-Rana and Sandip Sukhtankar) Screening requirements are common features of fraud and corruption mitigation efforts around the world. Yet imposing these requirements involves trade-offs between higher administrative costs, delayed benefits, and exclusion of genuine beneficiaries on one hand and lower fraud on the other. We examine these trade-offs in one of the largest economic relief programs in US history: The Paycheck Protection Program (PPP). Employing a database that includes nearly 11.5 million PPP loans, we assess the impact of screening by exploiting temporal variation in the documentation standards applied to loan applications for loans of different values. We find that screening significantly reduced the incidence and magnitude of various measures of loan irregularities that are indicative of fraud. Moreover, our analysis reveals that a subset of borrowers with a checkered history strategically reduced their loan application amounts in order to avoid being subjected to screening. Borrowers without a checkered history engaged in this behavior at a much lower rate, implying that the documentation requirement reduced fraud without imposing an undue administrative burden on legitimate firms. All told, our estimates imply that screening led to a $737 million reduction in losses due to fraud.
Interruptions in local self-government are a common feature of both external imperial rule and centralized authoritarianism. Due to their similarities, the literature on historical legacies has considered both kinds of interruptions as potentially legacy-producing. But under which specific circumstances do these denials of local political autonomy actually lead to sustained changes in political behavior? We develop a novel framework that elucidates when interruptions in local self-rule will produce political legacies, and when they will fail to do so. Two factors are crucial: the duration of interruption and the scope of repression. Enduring interruptions characterized by encompassing repression are the most likely to generate persistent changes. Contrariwise, transient interruptions characterized by limited repressiveness are unlikely to produce legacies. Given our theory’s broad character, we conduct empirical analyses in two markedly different settings: Poland, which was split between three major empires, and Brazil, where a military regime externally installed appointed mayors in a large number of cities. Our results demonstrate that interruptions in local self-government have varying potential to create legacies.
Conquering powers routinely adopt state-directed nationalization projects that seek to make the boundaries of the nation coterminous with the (newly expanded) boundaries of the state. To this end, they implement policies that elevate the economic status of individuals who embrace the national identity of the conquering power and discriminate against those who do not. This article develops a formal model that illuminates when such policies succeed or fail. We show that the effectiveness of discrimination hinges on the perceived longevity of rule by the conquering power. If the popular perception is that such rule will be short-lived, then discrimination will backfire, as dissident parents exert greater effort to transmit the marginalized national identity to their children. This intense intergenerational socialization more than compensates for the negative wealth effects of discrimination. If, on the other hand, rule under the conquering power is perceived to be long-lasting, then discrimination will achieve the aims for which it is intended. Case studies on the Chilean occupation of Tacna, Perú (1880-1929) and the Prussian occupation of the Danish-German border region of Schleswig-Holstein (1866-1920) illustrate the logic of the model.