Oana Borcan PhD Candidate Home Address: Kaptensgatan 20D, Apt. 38 Gothenburg, SE 41459 Sweden Mobile Phone: +46 (0)735 560 114 E-mail: oana.borcan@economics.gu.se Office: Vasagatan 1, Box 640 Gothenburg, SE 405 30 Phone: +46 (0)31 786 6513 Web page: www.oanaborcan.com Citizenship: Romanian Primary Fields: Political Economy and Development Economics Secondary Fields: Economics of Education; Long-Run Growth Desired Teaching: Development Economics Political Economy Economics of Education Applied Microeconometrics Dissertation Title: Economic Determinants and Consequences of Political Institutions Expected Completion Date: November 2015 Preliminary Defense (completed June 2015): Discussant Andrea Tesei, Queen Mary University of London Graduate Studies:,, 2010 to present Ph.Lic. Economics, September 2013 Advisors: Professor Ola Olsson and Associate Professor Andreea Mitrut Queen Mary University of London,, Spring 2015 Visiting Student Sponsor: Professor Randi Hjalmarsson Brown University, Economics Department, Fall 2013 Visiting Student Sponsor: Professor Louis Putterman Undergraduate Studies: M.Sc. courses, B.A. Economics (with distinction),, 2008-2010 B.A. courses in Informatics, Cybernetics Faculty, Academy of Economic Studies, Bucharest, Romania, 2006-2008 1
Teaching Experience: Lecturer, Political Economy and Policy Instruments in Environmental Economics (Master), 2015 Course Coordinator, with Prof. Måns Söderbom, Basic Statistics (Undergraduate), 2013-2014 Teaching Assistant, Basic Econometrics (Undergraduate), 2012-2014 Teaching Assistant, Mathematics (Ph.D. level), 2012 Supervisor theses in applied microeconometrics (undergraduate), 2012-2015 Published Papers: The Impact of an Unexpected Wage Cut on Corruption: Evidence From a Xeroxed Exam (with Mikael Lindahl and Andreea Mitrut), Journal of Public Economics, December 2014, Volume 20, pp. 32-47. Working Papers: The Benefits of Local Party Alignment in National Elections [job market paper] Fighting Corruption in Education: What Works and Who Benefits? (with Mikael Lindahl and Andreea Mitrut), Gothenburg University Working Paper in Economics, No. 612, February 2015 (link), revise and resubmit at American Economic Journal: Economic Policy. State History and Economic Development: Evidence from Six Millennia (with Ola Olsson and Louis Putterman), Brown Working Paper 2014-8, July 2014 (link). Curbing Adult Student Attrition: Evidence from a Field Experiment (with Raj Chande, Michael Luca, Michael Sanders, Xian-Zhi Soon, Netta Barak-Corren, Elizabeth Linos, Elspeth Kirkman, and Sean Robinson), Harvard Business School Working Paper, No. 15-065, February 2015 (link). Work in Progress: Returns to school and teacher quality (with Mikael Lindahl and Andreea Mitrut) Other publications: The Neolithic Transition and State Formation (with Ola Olsson and Louis Putterman) Ethnocentric favoritism, ethnic polarization and corruption tolerance evidence from Bosnia and Herzegovina (with Adnan Habibija) The educational outcomes of politicizing schools Variation in sub-national QoG in Romania, Book chapter in Charron, N., V. Lapuente and B. Rothstein eds., Quality of Government and Corruption from a European perspective, Edward Elgar, 2013 Nord-Vest, in Charron, N., V. Lapuente and B. Rothstein eds. Measuring the Quality of Government in the EU and Sub-national Variation, Report for the European Commission Directorate-General Regional Policy Directorate, December 2010. 2
Relevant Work Experience: Advisor, Behavioural Research Centre for Adult Skills and Knowledge, Behavioural Insights Team, London, Sep - Dec 2014 Research Assistant, Quality of Government Institute, Gothenburg, 2010-2011 Seminars and Conference Presentations: Workshop on Political Economy & Public Finance, IEB Barcelona, 2015 Applied Microeconomics Seminar, Queen Mary University, London, 2015 ERMAS Conference Cluj-Napoca, Romania, 2014, 2015 Contemporary Economics Issues, University of East Anglia (Invited speaker), 2014 RES Conference Manchester, UK, 2014. Annual PhD Conference,, 2014 Applied Micro Lunch Seminar, Brown University, 2013 Development Economics Workshop,, 2013, 2015 Economics of Education and Education Policy workshop, The Institute for Evaluation of Labour Market and Education Policy (IFAU), Uppsala, 2013 EEA/ESEM Conference, Gothenburg, Sweden, 2013 DIAL Development Conference, Paris, France, 2013 11th European Development Research Network (EUDN) PhD Workshop, Toulouse School of Economics, 2012 Nordic Conference in Development Economics (NCDE), Sweden, 2012 NEUDC Conference, Harvard University, US, attended, 2013 EEA/ESEM, Spain, attended, 2012 Awards and Grants: Department Award for Best Published Paper in 2014,, 2014 Jan Wallander and Tom Hedelius grant ( 10,000), 2014-2015 Siamon Stiftelsen Travel Grant, 2013 Paul and Marie Berghaus and Adlerbertska Stipendiefonden grants ( 7,500), 2009-2014 Erasmus Scholarship,, 2008 Best Research Paper Award and Merit scholarships, Academy of Economic Studies, Bucharest, 2006-2008 Professional Affiliations: European Economic Association Royal Economic Society Anti-Corruption Research Network, Transparency International Other activities: Organizer, department seminar series, fall 2014 PhD student volunteer, the EEA Annual Congress, Gothenburg, 2013 Vice-president PhD Association at the School of Business, Economics and Law, 2012-2013 Languages: Romanian (native), English (fluent), French, Spanish and Swedish (conversational). 3
References: Professor Ola Olsson Tel: 46 (0)31-786 1341 Email: Ola.Olsson@economics.gu.se Professor Mikael Lindahl Tel: 46 (0)31-786 6729 Email: Mikael.Lindahl@economics.gu.se Associate Professor Andreea Mitrut Tel: 46 (0)31-786 1256 Email: Andreea.Mitrut@economics.gu.se Professor Louis Putterman Box B, Brown University Providence, RI 02912 USA Tel: +1 (401) 863-3837 Email: Louis_Putterman@brown.edu Dissertation Abstract: Political institutions are inextricably linked with economic development. Political structures which secure property rights, enforce contracts and foster cooperation are crucial drivers of economic growth, and the dynamics of economic growth contribute to shaping institutions over time. The last decades progress in poverty alleviation has no doubt been enhanced by the growing understanding of the economic implications of institutions as the rules of the game. However, many challenges remain, as more often than not, political institutions fall short of their ideal role of promoting development. One such challenge is the widespread incidence of corruption, a phenomenon that affects more than two thirds of the world (as mapped by Transparency International). It is therefore of critical importance to understand where government structures and authorities fail, what are the ramifications of dysfunctional institutions in the economy and how the feedback loop from the economy contributes in shaping institutions for better or worse. My thesis sets out to answer these questions through four empirical essays on economic determinants and consequences of political institutions. The thesis opens with a broad perspective on the link between the state throughout history and the past and current economic performance on nations. The rest of the chapters zoom in on a particular form of government failure endemic corruption with concrete illustrations of its harmful impact on key areas in development: the human capital formation and the democratic exercise. Specifically, chapters two and three identify causal links between public sector wages, monitoring and incentives and corruption in education. Chapter four examines clientelististic electoral politics, showing that local politicians aligned with the party in power influence national elections by, inter alia, vote buying and electoral fraud. In Chapter One, State History and Economic Development: Evidence from Six Millennia (joint with Ola Olsson and Louis Putterman), we revisit the relationship between state experience and economic development. We complete the coding of an extant indicator of state presence from 3500 BCE forward for all countries in the world. We outline a theoretical framework, set in a Malthusian growth model, where accumulated state experience increases fiscal capacity but might have a negative effect on productivity when centralized power becomes excessive. The predictions of the model are tested in an empirical analysis where we introduce our 4
extended state history variable. Our key finding is that, both as early as 1500 and today, the level of economic development is a concave not a linear function of accumulated state history. In Chapter Two, The Impact of an Unexpected Wage Cut on Corruption: Evidence From a Xeroxed Exam (joint with Mikael Lindahl and Andreea Mitrut), we investigate how corruption responds to an income loss. To overcome the problem of endogenous changes in bureaucrats wages, we make use of a quasiexperimental setting: We exploit an unexpected 25% wage cut incurred in 2010 by all Romanian public sector employees, including the public education staff. In the absence of direct observation of corruption, we provide an objective measure for the prevalence of malfeasance through (changes in) corruption-inflated scores at the highstakes high school school-exit exam. The exam taking place one month after the wage cut announcement was highly standardized, it accounted for 100% of the university admission criteria, and for this reason scores were known to be vastly inflated through mass cheating and bribery. We rely on a dataset containing exam and administrative data on the universe of Romanian schools. To measure corruption we use a Difference-in- Differences design and compare changes in exam outcomes from 2007 to 2010 between public and private schools, as the latter were not affected by the policy. We find that the wage loss induced better exam outcomes in public than in private schools and we attribute this difference to increased corruption by public educators. This is also in line with court evidence from an unprecendented number of trials of corruption following the 2010 exam. In Chapter Three, Fighting Corruption in Education: What Works and Who Benefits? (joint with Mikael Lindahl and Andreea Mitrut), we investigate the efficiency and distributional consequences of a corruption fighting initiative in Romania targeting the endemic fraud in the same high-stakes high school exit exam. Following the trials accompanying the surge in corruption in 2010, the Ministry introduced CCTV monitoring of the exam and credible punishment threats. The CCTV implementation was gradual, with 25 counties installing monitoring devices in 2011 and the rest in 2012. Using data covering the universe of students in 2009-2012, we apply a Difference-in-Differences strategy to compare scores change in early relative to late installers. We find that punishment coupled with monitoring was effective in reducing corruption. Comparing the performance on the high-stakes and a low stakes exam suggests that punishment threats had a large effect on reducing corruption. The key contribution of the paper is in estimating the heterogeneous impact for students of different poverty status. We show that fighting corruption led to a worrisome score gap increase between poor and non-poor students. Using additional data from an elite university admission, we show that the poor students had reduced chances to enter top high education. In Chapter Four, The benefits of Local Party Alignment in National Elections (my job market paper), I provide robust evidence that local officials deliver votes for their parties in national elections. I use a sharp regression discontinuity design with closely-contested Romanian local elections in June 2012. I find up to 5.4 percentage points increased turnout in government-aligned localities at the July 2012 referendum launched by the governing coalition to dismiss the president. Turnout was crucial in the referendum, as a minimum participation of 50% of all voters was required. Instead, I find no direct electoral alignment advantage in terms of turnout or vote shares in subsequent parliamentary elections. The referendum alignment effect is driven by rural areas, with less educated and more manipulable voters. This along with the contrasting results at legislative elections, and extra heterogeneity tests suggest that local politicians mobilize voters successfully when: i) the voter commitment problem is overcome (unlike the vote, turnout is observable); ii) vote buying is common; iii) there is weak local competition and monitoring of incumbents. I also show suggestive evidence that after the referendum, local revenues increase in aligned localities and higher referendum turnout also drives higher legislative elections turnout and vote shares for the government coalition. 5