Gergely Ujhelyi: Research
Political economy & the organization of government
“Don't Hatch The Messenger? On the Desirability of Restricting the Political Activity of Bureaucrats,” with Jean Guillaume Forand [paper]
We provide a formal welfare analysis of Hatch Act type regulations that limit bureaucrats’ political activities. These activities can be a valuable form of communication between voters and the government, but they can spoil or crowd out better sources of information, and they have policy costs. In many cases, banning political activities is optimal.
Since 2013, Indian legislative elections offer a “None Of The Above” (NOTA) option to voters. We use this policy to study the behavior of protest voters, borrowing techniques from Industrial Organization to estimate a structural model of voter demand for candidates. We find that without NOTA, most protest voters abstain. Others scatter their votes among several small parties and hence have little impact on the election outcome. Read more on the IGC blog.
Politicians can ensure that public sector positions are occupied by their supporters by varying the amount of required political services and associated compensation in otherwise similar positions. The predictions of our model are borne out in the Argentine public sector, showing that political conditions at the time of hiring have long-lasting effects on wages.
Civil service rules can create stability in government by weakening politicians’ incentives to time spending decisions to the electoral cycle. In US states, we find evidence of political budget cycles in highway expenditures under political patronage but not under civil service.
Insulating bureaucrats from politicians may lead to the insulation of politicians from voters. As a result, society may have to choose between having better politicians or having better bureaucrats – having both may not be possible. This paper provides a formal welfare evaluation of civil service reform. It discusses improved bureaucrat selection, protection from politics, tenure, and other civil service rules.
G. Ujhelyi (2014): “Civil Service Rules and Policy Choices: Evidence from US State Governments,” American Economic Journal: Economic Policy 6(2), 338-380. [published]
In US state governments, the introduction of civil service protections caused politicians to shift public spending away from the reformed bureaucracies and towards lower level governments. The reallocation of expenditures led to reduced long-term investment by state governments. Read more on the LSE American Politics and Policy blog.
Corruption experience is a weak predictor of reported corruption perceptions, and some of the factors commonly found to “reduce” corruption, such as economic development, democratic institutions or Protestant traditions, are associated with a lower corruption perception index holding experience constant.
Campaign finance limits may be undesirable even if campaign contributions distort policies. Limits affect the entry of interest groups and can lead to different distortions, and even more lobbying. I show this in a common agency model with budget constrained lobbies and endogenous entry.
P. Fredriksson, E. Neumayer, and G. Ujhelyi (2007): “Kyoto Protocol Cooperation: Does Government Corruption Facilitate Environmental Lobbying?” Public Choice 133(1-2), 231-251. [published] [final manuscript]
The answer seems to be ‘yes.’ Environmental lobbies appear to be more successful in getting the Kyoto Protocol ratified in countries that have a higher corruption index.
“Political Institutions, Interest Groups, and the Ratification of International Environmental Agreements,” with Per Fredriksson. [paper]
Public policies & economic development
“Family Financing and Aggregate Manufacturing Productivity in Ghana,” with Andrea Szabó [paper]
In hypothetical choice situations, respondents in our South African sample exhibit pronounced happiness-seeking behavior. They also perceive little conflict between own happiness and other relevant determinants of choice such as sense of purpose and family happiness.
A. Szabó and G. Ujhelyi (2015): “Reducing Nonpayment for Public Utilities: Experimental Evidence from South Africa,” Journal of Development Economics 117, 20-31. [published] [final manuscript] [online appendix] [supplementary materials]
Our randomized water education campaign among low-income South African households achieved large reductions in nonpayment. Surprisingly, however, this is not driven by an increase in consumers’ knowledge, showing that education campaigns can affect behavior through channels other than increased information.
C. Juhn, G. Ujhelyi, and C. Villegas-Sanchez (2014): “Men, Women, and Machines: How Trade Impacts Gender Inequality,” Journal of Development Economics 106, 179–193. [published] [final manuscript] [online appendix]
Trade liberalization improves the labor market outcomes of women relative to men among blue-collar workers. This works by inducing exporting firms to use technology where these workers have a comparative advantage. Data from Mexico is consistent with our model.
C. Juhn, G. Ujhelyi, and C. Villegas-Sanchez (2013): “Trade Liberalization and Gender Inequality,” AER Papers & Proceedings, 103(3), 269–273. [published]
The case for limiting misleading advertising is less clear-cut in oligopolistic markets, where misinformation can offset underproduction. Combining taxes with other policies such as government advertising may be beneficial when firms undertake quality improving investments that are complementary to misinformation.
“Social Learning with Subjective Communication and Self-Selection,” with Péter Kondor. [paper]