Enhancing Enforcement through Religious Institutions: Experimental Evidence from Pakistan’s Power Sector
(with Robin Burgess, Michael Greenstone, Faraz Hayat & Usman Naeem)
The ability of governments to expand energy access runs aground when state capacity is limited. Weak enforcement creates a leaky bucket as electricity theft and unpaid bills go unchecked. As a result, energy access gets curtailed, especially for the poor. Together with the government of Pakistan, we are evaluating a novel intervention that seeks to shift social norms on the payment of electricity in areas beyond the reach of the state. Influential agents, notably local religious institutions (mosques), will deliver messages against electricity theft in treatment communities. A separate treatment arm provides financial incentives to pay for electricity. We use our experimental estimates to derive demand curves for electricity and theft using a simple theoretical model to quantify the fiscal value of the enforcement intervention. Our study takes place in Khyber Pakhtunkhwa, a rural, poor, and highly religious area of Pakistan where theft is widespread, making it an ideal setting to test if this is a cost-effective solution. Our proposal builds on a long-term engagement with the highest levels of the federal government in Pakistan.
Funding: IGC (£108k), J-PAL ($75k), Weiss Fund ($93k)
Heterogeneous Impacts of Market Integration:
Evidence from Pakistan's Motorways
(with Faraz Hayat & Usman Naeem)
Across the world cranes and excavators are abuzz building out and upgrading transportation infrastructure. As markets within and across countries become more integrated, the ability for firms to trade flourishes. Such integration, however, creates winners and losers, with some firms reaping the rewards while others perish. If this means the exit of unproductive firms, aggregate productivity may rise. Yet in the presence of other constraints, even productive firms may be slow to take advantage of infrastructure as it is built, muting its potentially transformative effects. This project studies the heterogeneous impacts of expanding transportation infrastructure and how these effects translate to changes in the spatial distribution of economic activity.
Drawing on a vast administrative dataset of all formal firms in Pakistan, we examine the rollout of several large-scale motorways that were designed to connect the north and south of the country. This data, based on income and sales tax filings, provides information on firm performance, including quantities, prices, trade, and buyer-supplier networks. Using quasi-exogenous variation in motorway access we examine the firm-level responses to the arrival of motorways (such as how networks, products offered, and prices shift). A spatial trade model is used to understand the aggregate and heterogeneous consequences of these motorways.
Funding: STEG (£15k)
The General Equilibrium Effects of Electricity Access:
Evidence from Myanmar
(with Robin Burgess, Michael Greenstone, Niclas Moneke & Nicholas Ryan)
[Permanently on hold following military coup in February 2021]
There is a conviction that energy is transformative for economic growth. Yet, we have little evidence for how this transformation happens. Studies at an aggregate level find massive gains in productivity from electrification, whereas field experiments find limited demand for grid and off-grid electricity among the poor. Recent evidence suggests the returns to rural electrification may be smaller than previously thought. When, then, do large investments in electrification represent a sensible use of public funds?
To answer this question, we will evaluate a massive electrification drive in Myanmar which aims to bring access to 100%, up from 42% today, by 2030. Our focus is on both the aggregate and the micro levels, consisting of a nationwide evaluation that monitors economic outcomes as infrastructure expands across the country and an embedded experiment that varies electrification access by subsidising connections. This will allow us to analyse the aggregate, microeconomic, and spillover effects from a large-scale infrastructure intervention. We draw on an unprecedented geospatial administrative dataset covering every single pole, line, and transformer in the country and exploit a distance-based threshold that determines village eligibility for electrification in a given phase to arrive at estimates on the effect of expanding electricity access.
Funding: IGC (£167k)