Daniele Curzi

Effect of democratic reforms on child mortality: a synthetic control analysis

BACKGROUND The effects of political regimes on health are unclear because empirical evidence is neither strong nor robust. Traditional econometric tools do not allow the direction of causality to be established clearly. We used a new method to investigate whether political transition into democracy affected child mortality. METHODS We used a synthetic control method to assess the effects of democratisation on child mortality as a proxy of health in countries that underwent transition from autocracy to democracy that lasted for at least 10 years between 1960 and 2010. Democracy was indicated by a score greater than 0 in the Polity2 index. We constructed synthetic controls (counterfactuals) based on weighted averages for factors such as child mortality, economic development, openess to trade, conflict, rural population, and female education from a pool of countries that remained autocracies during the study period. RESULTS Of 60 countries that underwent democratic transition in the study period, 33 met our inclusion criteria. We were able to construct good counterfactuals for 24 of these. On average, democratisation reduced child mortality, and the effect increased over time. Significant reductions in child mortality were seen in nine (38%) countries, with the average reduction 10 years after democratisation being 13%. In the other 15 countries the effects were not significant. At the country level yhe effects were heterogeneous, but the differences did not correlate with geographic, economic, or political indicators. The effect of democratisation, however, was stronger in countries with above average child mortality before transition than in countries with below average child mortality. INTERPRETATION Our results are consistent with the interpretation that democratic reforms have the greatest effects when child mortality is a direct concern for a large part of the population. Future research could focus on identifying the precise mechanism through which the effects emerge. FUNDING European Union 7th Framework Programme and KU Leuven Methusalem Fund.

Quality upgrading, competition and trade policy: evidence from the agri-food sector

This paper analyses the extent to which the reduction of import tariffs as a measure of import competition affects the quality upgrading of the food products exported to the European Union (EU). This relationship is studied using a ‘distance to the frontier’ model which is based on a non-monotonic relationship between competition and innovation. Quality is inferred from trade data using an innovative method recently proposed by Khandelwal. The results strongly support the existence of a non-monotonic relationship between competition and quality upgrading, with varieties close to the world frontier being more likely to upgrade quality in response to an increase in import competition. This relationship holds true for both developing and developed countries and is even stronger for countries/products targeted by specific FDI policies. Moreover, there is a strong positive relationship between the diffusion of EU voluntary standard and quality upgrading.

Trade collapse, quality and food exports

This article revisits the so-called ‘Collapse in Quality’ hypothesis, according to which, during the 2008–2009 crisis, higher quality goods experienced a stronger export reduction compared to low-quality ones. Using disaggregated trade data from three European countries that traditionally export high-quality food products – France, Italy and Spain – we do not find any econometric evidence supporting this hypothesis. In contrast, we provide preliminary evidence for the concurrent hypothesis, namely that firms reduced their markup to preserve market share.

Imported Intermediate Inputs and Firms’ Productivity Growth: Evidence from the Food Industry

Imported goods play a central role in determining the gains from trade. Using detailed trade and firm-level data for Italy and France, we investigate the relationship between trade integration, imported intermediate inputs and firm performance in the food industry. Our main findings show that an increase in import competition spurs firm-level productivity growth. Furthermore, the productivity growth effect attributable to imported intermediate inputs is significantly stronger than the effect due to imported final products. In addition, we find that new imported inputs are of particular importance, especially for Italian food firms, though less so for the French firms. Finally, the productivity growth effect of trade integration tends to be asymmetric across firms: more productive firms gain more from trade integration. These stylised facts have interesting policy implications.

Tasters' bias in wine guides' quality evaluations

Using a new database on Italian wines rated by the Guida dei Vini di Veronelli from 2004 to 2009, we show that the tasters’ quality evaluations are affected by two sources of personal bias, namely generosity and personal preferences towards certain types of wine characteristics.

The (lack of) international harmonization of EU standards: import and export effects in developed versus developing countries

ABSTRACT This article studies the effect of the lack of international harmonization in agri-food standards on international trade flows focusing on the European Union (EU). The EU is characterized by high level of protectionism, which makes it an ideal case study. We measure the differences in countries’ level of ‘protectionism’ by applying an index of aggregation of non-tariff measures to data on maximum residue levels on pesticides and veterinary drugs allowed by countries on agri-food products. The restrictiveness of countries standards’ is compared with the one imposed by the Codex Alimentarius, which is considered as non-protectionist. The EU emerges as the most rigorous standards setter. The higher standards imposed by the EU affect in particular imports from developing countries, while it facilitates its exports, irrespective of the level of development and standard restrictiveness set by the importing countries.

Trade Liberalization and Child Mortality: A Synthetic Control Method

We study the causal effect of trade liberalization on child mortality by exploiting 41 policy reform experiments in the 1960-2010 period. The Synthetic Control Method for comparative case studies allows to compare at the country level the trajectory of post-reform health outcomes of treated countries (those which experienced trade liberalization) with the trajectory of a combination of similar but untreated countries. In contrast with previous findings, we find that the effect of trade liberalization on health outcomes displays a huge heterogeneity, both in the direction and the magnitude of the estimated effect. Among the 41 investigated cases, 19 displayed a significant reduction in child mortality after trade liberalization. In 19 cases there was no significant effect, while in three cases we found a significant worsening in child mortality after trade liberalization. Trade reforms in democracies, in middle income countries and which reduced taxation in agriculture reduce child mortality more.