In 2002, U.S. President George W. Bush initiated the deployment of a new ballistic missile defense system. 1 The move triggered vociferous international concerns, including a recent statement of Russia and China condemning U.S. plans as a destabilizing move. 2 Indeed, the move amounts to a withdrawal from the 1972 Anti-Ballistic Missile treaty. The U.S. position is that such missile defense systems only reduce the damage caused by an incoming strike, and therefore do not threaten international stability. This paper provides a careful formal analysis of how the unilateral acquisition of defensive weapons may affect the sustainability of peace. We consider a dynamic game in which two symmetric countries repeatedly decide to be peaceful or to attack. Peace is sustained in equilibrium by trigger strategies in which attacks are followed by permanent conflict. Under complete information, peace is sustainable if and only if the value of continued peace is greater than the temptation of launching a surprise attack. Because defensive weapons limit the possibility of retaliation, the unilateral acquisi-

We study the design of randomized controlled experiments when outcomes are significantly affected by experimental subjects' unobserved effort expenditure. While standard randomized controlled trials (RCTs) are internally consistent, the unobservability of effort compromises external validity. We approach trial design as a principal-agent problem and show that natural extensions of RCTs—which we call selective trials—can help improve external validity. In particular, selective trials can disentangle the effects of treatment, effort, and the interaction of treatment and effort. Moreover, they can help identify when treatment effects are affected by erroneous beliefs and inappropriate effort expenditure.

We posit that autocrats introduce local elections when their bureaucratic capacity is low. Local elections exploit citizens’ informational advantage in keeping local officials accountable, but they also weaken vertical control. As bureaucratic capacity increases, the autocrat limits the role of elected bodies to regain vertical control. We argue that these insights can explain the introduction of village elections in rural China and the subsequent erosion of village autonomy years later. We construct a novel dataset to document political reforms, policy outcomes, and de facto power for almost four decades. We find that the introduction of elections improves popular policies and weakens unpopular ones. Increases in regional government resources lead to loss of village autonomy, but less so in remote villages. These patterns are consistent with an organizational view of local elections within autocracies.

Ethnic favoritism is seen as antithetical to development. This paper provides credible quantification of the extent of ethnic favoritism using data on road building in Kenyan districts across the 1963–2011 period. Guided by a model, it then examines whether the transition in and out of democracy under the same president constrains or exacerbates ethnic favoritism. Across the post-independence period, we find strong evidence of ethnic favoritism: districts that share the ethnicity of the president receive twice as much expenditure on roads and have five times the length of paved roads built. This favoritism disappears during periods of democracy.