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3191. HKS Faculty Research Working Paper Series

Author:
Maciej Kotowski
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
This paper investigates the formation of production and trading networks in an economy with general interdependencies and complex property rights. The right to exclude,a core tenet of property, grants asset owners a form of monopoly power that influences granular economic interactions. Equilibrium networks reflect the distribution of these ownership claims. Inefficient production networks may endure in equilibrium as firms multi-source to mitigate hold-up risk. Short supply chains also reduce this risk, but may preclude the production of complex goods. A generalized Top Trading Cycles algorithm, applicable to a production economy, identifies equilibrium outcomes in the model. Such outcomes can be decentralized via a price system.
Topic:
International Trade and Finance, International Affairs, Intellectual Property/Copyright, and National & provincial initiatives
Political Geography:
America

3192. Corporate Purpose in Play: The Role of ESG Investing

Author:
John Gerard Ruggie
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
On August 19, 2019, the U.S. Business Roundtable (BR), comprising the CEOs of more than 200 of America’s largest corporations, issued a new mission statement on “the purpose of a corporation” (BR, 2019a). The press release noted that each periodic update on principles of corporate governance since 1997 had endorsed the principle of maximizing shareholder value. In contrast, the new statement commits signatory CEOs “to lead their companies for the benefit of all stakeholders – customers, employees, suppliers, communities and shareholders” (BR, 2019b). “[Milton] Friedman must be turning in his grave,” a Fortune magazine article declared (Murray, 2019)
Topic:
International Affairs
Political Geography:
Global Focus

3193. Bound to Happen: Explanation Bias in Historical Analysis

Author:
Richard Zeckhauser
Publication Date:
09-2019
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
This paper argues that historical analysis, necessarily written with hindsight, often underestimates the uncertainties of the past. We call this tendency explanation bias. This bias leads individuals – including professional historians – to imply greater certainty in causal analyses than the evidence justifies. Their analyses will treat what is plausible to be probable. We offer a few intuitions about why explanation bias exists, its relation to other well-established psychological biases, what it leads to, and how it might be combatted. Appreciating the depth of uncertainty and ignorance in our world is critical for accurately understanding, interpreting, and drawing from the past to illuminate the present and the near future
Topic:
International Affairs
Political Geography:
Global Focus

3194. Targeted Debt Relief and the Origins of Financial Distress: Experimental Evidence from Distressed Credit Card Borrowers

Author:
Will Dobbie
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
We study the drivers of financial distress using a large-scale field experiment that offered randomly selected borrowers a combination of (i) immediate payment reductions to target short- run liquidity constraints and (ii) delayed interest write-downs to target long-run debt constraints. We identify the separate e?ects of the payment reductions and interest write-downs using both the experiment and cross-sectional variation in treatment intensity. We find that the interest write-downs significantly improved both financial and labor market outcomes, despite not taking effect for three to five years. In sharp contrast, there were no positive e?ects of the more immediate payment reductions. These results run counter to the widespread view that financial distress is largely the result of short-run constraints.
Topic:
International Affairs
Political Geography:
Global Focus

3195. The Intergenerational Effects of Parental Incarceration

Author:
Will Dobbie
Publication Date:
09-2019
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
We estimate the causal effects of parental incarceration on children’s short- and long-run outcomes using administrative data from Sweden. Our empirical strategy exploits exogenous variation in parental incarceration from the random assignment of criminal defendants to judges with different incarceration tendencies. We find that the incarceration of a parent in childhood leads to a significant increase in teen crime and significant decreases in educational attainment and adult employment. The effects are concentrated among children from the most disadvantaged families, where criminal convictions increase by 10 percentage points, high school graduation decreases by 25 percentage points, and employment at age 25 decreases by 29 percentage points. In contrast, there are no detectable effects among children from more advantaged families. These results suggest that the incarceration of parents with young children may significantly increase the intergenerational persistence of poverty and criminal behavior, even in affluent countries with extensive social safety nets.
Topic:
International Political Economy, International Affairs, and Prisons/Penal Systems
Political Geography:
Global Focus

3196. Measuring Bias in Consumer Lending

Author:
Will Dobbie
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
This paper tests for bias in consumer lending using administrative data from a high-cost lender in the United Kingdom. We motivate our analysis using a new principal-agent model of bias, which predicts that profits should be higher for the most illiquid loan applicants at the margin if loan examiners are biased. We identify the profitability of marginal applicants using the quasi-random assignment of loan examiners. Consistent with our model, we find significant bias against immigrant and older applicants when using the firm’s preferred measure of long-run profits, but not when using the short-run measure used to evaluate examiner performance. Keywords: Discrimination, Consumer Credit
Topic:
Debt, International Political Economy, and International Affairs
Political Geography:
Global Focus

3197. Using Behavioral Insights to Improve Truancy Notifications

Author:
Todd Rogers
Publication Date:
09-2019
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Many states mandate districts or schools notify parents when students have missed multiple unexcused days of school. We report a randomized experiment (N = 131,312) evaluating the impact of sending parents truancy notifications modified to target behavioral barriers that can hinder effective parental engagement. Modified truancy notifications that used simplified language, emphasized parental efficacy, and highlighted the negative incremental effects of missing school reduced absences by 0.07 days compared to the standard, legalistic, and punitively-worded notification—an estimated 40% improvement. This work illustrates how behavioral insights and randomized experiments can be used to improve administrative communications in education.
Topic:
International Relations and International Affairs
Political Geography:
Global Focus

3198. The Roaring of the Alpha Males (and the Silence of the Lambs)

Author:
Mira Oklobdzija
Publication Date:
09-2019
Content Type:
Commentary and Analysis
Institution:
Foreign Policy In Focus
Abstract:
Self-restraint is one of the most important litmus tests for distinguishing between humans and other social animals. Major human leaders, both past and present, often fall short in this regard. Instead, particularly as they mobilize their countries for war, these leaders compete for the distinction of being the alpha male.
Topic:
Gender Issues and Gender Based Violence
Political Geography:
Global Focus

3199. Creating Fossil-Fuel-Free Communities Globally

Author:
Emanuel Pastreich
Publication Date:
09-2019
Content Type:
Commentary and Analysis
Institution:
Foreign Policy In Focus
Abstract:
Now that the movement to address climate change at the systemic and cultural level has gained unprecedented momentum, it is critical for us to establish a viable alternative economy that committed citizens around the world can join. The basic unit of that economy should be fossil-fuel-free (FFF) communities. In these FFF (fossil-fuel-free) communities, to be built from the ground up, nothing eaten or consumed, no form of transformation or communication employed, and no aspect of housing, furniture or utensils will contain fossil fuels (including plastics or fertilizers). Nor will any of these items be produced, transported, or manufactured using fossil fuels.
Topic:
Climate Change, International Affairs, and Social Movement
Political Geography:
Global Focus

3200. It’s Not Too Late for Rojava

Author:
Edward Hunt
Publication Date:
09-2019
Content Type:
Commentary and Analysis
Institution:
Foreign Policy Research Institute
Abstract:
As Turkey continues its devastating military assault on Rojava, the Kurdish-led region of northeastern Syria, officials in Washington are facing a critical decision: allow Turkey to prevail in its campaign of ethnic cleansing against the Kurds or take action to protect them. The Turkish invasion, which began on October 9, has been devastating for Rojava. According to the United Nations, nearly 180,000 people, including 80,000 children, have been displaced. At the start of the attack, Turkish officials announced that Turkish-led forces had killed more than 200 Kurdish militants. About a week later, Kurdish officials said that more than 200 civilians had been killed.
Topic:
International Security and International Affairs
Political Geography:
Turkey