Knowledge that Transforms

We propose a model to study when an intermediate action can serve as a stepping stone that enables the elimination of a harmful norm. While the intermediate action may facilitate the first “step,” it may also become a new norm. We derive intuitive conditions for stepping stones, which depend on the relative size of social penalties and intrinsic utility benefits. We propose an econometric approach to testing whether an intermediate action is a stepping stone, and apply it to original data on female genital cutting in Somalia. The analysis shows that the intermediate action may become the new norm.

This paper investigates the effect of voters’ short-term memory on political outcomes by considering politics as a collective learning process. We find that short-term memory may lead to cycles of polarization and consensus across parties’ platforms. Following periods of party consensus, short-term memory implies that there is little variation in voters’ data and therefore limited information about the true state of the world. This in turn allows parties to further their own interests and hence polarize by offering different policies. In contrast, periods of polarization and turnover involve sufficient variation in the data that allows voters to be confident about what the correct policy is, forcing both parties to offer this policy.

Social movements are catalysts for crucial institutional changes. To succeed, they must coordinate members’ views (consensus building) and actions (mobilization). We study union leaders within Myanmar’s burgeoning labor movement. Union leaders are positively selected on both ability and personality traits that enable them to influence others, yet they earn lower wages. In group discussions about workers’ views on an upcoming national minimum wage negotiation, randomly embedded leaders build consensus around the union’s preferred policy. In an experiment that mimics individual decision-making in a collective action setup, leaders increase mobilization through coordination.

We model populism as the dissemination of a false “alternative reality,” according to which the intellectual elite conspires against the populist for purely ideological reasons. If enough voters are receptive to it, this alternative reality—by discrediting the elite's truthful message—reduces political accountability. Elite criticism, because it is more consistent with the alternative reality, strengthens receptive voters' support for the populist. Alternative realities are endogenously conspiratorial to resist evidence better. Populists, to leverage or strengthen beliefs in the alternative reality, enact harmful policies that may disproportionately harm the non-elite. These results explain previously unexplained facts about populism.

This paper reviews the main motivations and arguments of my work on comparative development, colonialism, and institutional change, which was often carried out jointly with James Robinson and Simon Johnson. I then provide a simple framework to organize these ideas and connect them with my research on innovation and technology. The framework is centered around a utility-technology possibilities frontier, which delineates the possible distributions of resources in a society both for given technology and working via different technological choices. It highlights how various types of institutions, market structures, norms, and ideologies influence moves along the frontier and shifts of the frontier, and it provides a simple formalization of the social forces that lead to institutional persistence and those that can trigger institutional change. The framework also enables us to conceptualize how, during periods of disruption, existing—and sometimes quite small—differences can have amplified effects on prosperity and institutional trajectories. In this way, it suggests some parallels between different disruptive periods, including the onset of European colonialism, the spread (or lack thereof) of industrial technologies in the nineteenth century, and decisions related to the use, adoption, and development of AI today.

A college degree offers a pathway to economic mobility for low-income students. Using a multisite randomized controlled trial combined with administrative and survey data, we demonstrate that intensive advising during high school and college significantly increases bachelor’s degree attainment among lower-income students. We leverage unique data on preadvising college preferences and causal forest methods to show that these gains are primarily driven by improvements in initial enrollment quality. Our results suggest that strategies targeting college choice may be a more effective and efficient means of increasing degree attainment than those focused solely on affordability.

Applicants to schools, colleges, and jobs hedge by applying to a broad range of options, including reaches, matches, and safeties. We develop a simultaneous-search framework that rationalizes this practice. In this framework, the admissions process is correlated across schools so that if an applicant is rejected by one school, she is more likely to be rejected by more selective schools. We find that an applicant then optimally targets both safeties and reaches. We characterize how the optimal portfolio varies with the applicant’s beliefs, risk attitudes, and application costs and offer an algorithm that delivers the optimal portfolio in polynomial time.

We study how individual political views shape firm behavior and labor market outcomes using new microdata from Brazil. We first show that business owners are considerably more likely to employ copartisan workers. This phenomenon is in part driven by the overlapping of political and social networks. Multiple tests—surveys, event studies, analyses of wage premia and promotions within the firm, and a field experiment—further highlight how business owners’ political preferences directly influence firms’ employment decisions. A channel of political discrimination appears more relevant than one of political quid pro quo between firms and politicians.

This paper studies, through a randomized field experiment involving community health workers in Pakistan, if public sector organizations can improve worker performance by investing in their mission motivation. The findings reveal that training aimed at strengthening mission motivation improves workers' performance in their core responsibility of monthly household visits, as well as in multiple tasks performed during and outside these visits. This holistic improvement in performance leads to improved health outcomes for children in the communities served by these workers. These results highlight the importance of promoting organizational missions as a strategy to improve public sector performance in low-income countries.

We show that the strong negative effect of higher mortgage rates on cash-out refinancing reflects substitution into other borrowing products, not large changes in total new household borrowing. We exploit plausibly exogenous changes in interest rates due to unconventional monetary policy surprises to show that changes in cash-out and other borrowing are roughly offsetting. The elasticity of new household borrowing with respect to mortgage rates is low and varies little with the borrower’s outstanding mortgage rate. Our results suggest that the cash-out refinance channel of unconventional monetary policy is weak and not path dependent.