Fernando M. Aragon

Polluting Industries and Agricultural Productivity: Evidence from Mining in Ghana

This paper examines the eect of polluting industries on agricultural productivity. The focus is on large-scale gold mining in Ghana which, similar to other fuel intensive activities, releases environmental pollutants with the potential to have negative eects on crop health and key agricultural inputs. Guided by a consumer-producer household framework, we estimate an agricultural production function that incorporates the eects of pollution. We nd that farmers located near gold mines experienced a reduction in total factor productivity of almost 40% between 1997 and 2005, relative to those farther away. Consistent with this result, we document higher concentrations of air pollutants and an increase in rural poverty near mines. We also explore whether mining could be aecting agricultural productivity in other ways, such as by reallocating workers or inducing changes in agricultural practices.

Intergovernmental Transfers and Fiscal Effort in Peruvian Local Governments

The purpose of this paper is to identify the causal relationship between intergovernmental transfers and fiscal effort. Empirical evidence from Peruvian municipalities supports a negative relation. The substitution effect is decreasing on the level of municipalities’ expenditure and tends to disappear for high-expenditure localities. Given this phenomenon, devolving responsibilities to sub-national governments might reduce fiscal effort and deteriorate fiscal balance especially among localities with lower fiscal capacity. A possible solution might be the inclusion of fiscal effort indicators in the intergovernmental transfer design.

The Effect of First Nations Modern Treaties on Local Income

Modern treaties have boosted incomes in First Nation communities and have led to more resource development, according to a new C.D. Howe Institute Report. In “The Effect of First Nations Modern Treaties on Local Income,” author Fernando M. Aragon shows that, beyond bettering First Nations economically, there are material benefits for resource companies and neighbouring communities.

Political Parties, Candidate Selection, and Quality of Government

Abstract This article explores empirically the relation between political parties’ institutions and quality of government. I focus on procedures used to nominate presidential candidates given the importance of candidate selection in party politics. Using a panel dataset of Latin American countries, I find robust evidence of a positive relation between the use of democratic procedures, such as primaries, and quality of government. To shed light on the mechanism, I examine why parties use primaries. I find evidence suggestive that the results are mostly driven by the increase in political competition and candidates’ pre-electoral incentives.

Re-Electing Politicians and Policy Outcomes Under No Term Limits: Evidence from Peruvian Municipalities

This paper examines whether, in the absence of term limits, re-elected politicians perform differently than their newly elected peers. Using a sharp regression discontinuity design and data from Peruvian municipalities, we find that having a re-elected mayor has few meaningful effects on local policy outcomes. The potential gains from re-electing politicians appear to be offset by rapid learning-by-doing and diminishing electoral incentives. Re-elected mayors exhibit better performance only early in the electoral cycle, and are less likely to run for and win an additional term. Overall, the results cast doubts on the advantages of re-electing experienced politicians.