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.
