Working Papers

“Attitudes toward Immigrants, Information Shocks and Hate Crime” with Jake Bradley, Facundo Albornoz, Silvia Sonderegger and Devesh Rustagi

Submitted to the Review of Economic Studies
Available also from CAGE Working Paper No. 802/2026 [PDF]

There are concerns over the rise in populism and hate crimes targeting minorities in democracies. We examine whether national information shocks triggered by political events play a role. Focusing on two UK events that revealed nationwide anti-immigrant sentiment, we document counterintuitive results: large, persistent surges in hate crimes in the post-event periods in areas with pro-immigrant, rather than anti-immigrant, attitudes. We show that the xenophobic minority residing in pro-immigrant areas experience stronger belief shocks from these events, inducing them to update their beliefs about social acceptability of hate. Our findings highlight how heterogeneous priors interact with national events to amplify xenophobic behaviour.

“Political Competition and Tax Expenditures: A Machine Learning Approach to 121 years of U.S. Laws“ [ JMP]

Tax complexity imposes significant costs on society, yet we know little about its political determinants. Does political competition drive tax complexity? I examine this question in the context of the US. I capture political competition by the closeness of elections and tax complexity by the prevalence of tax expenditures (TEs) (exemptions, deductions, and credits). I use machine learning to identify TEs in a novel dataset of over 3.1 billion words of legislative text built from the State Session Laws spanning 121 years (1900-2020). I find that overall political competition leads to fewer TEs. Importantly, this effect varies by party control. When elections are close, Republican-led legislatures enact more TEs than Democrats, particularly when campaign contributions from wealthy donors are large. Their strategy is to obfuscate the true tax burden on high-income earners by increasing tax complexity via TEs in order to win elections. These results challenge the conventional view that political competition uniformly improves policy outcomes, showing instead that its effects depend on partisan incentives.

“Tax Expenditure and Transparency Laws in the U.S.“ with Dario Tortarolo

We study to what extent the implementation of evaluation laws affects reported tax expenditures. We exploit the staggered introduction of tax incentives evaluation laws (TIELs) in US states, from 1999 to 2019. Using a novel digitized database of states’ tax expenditures and an event study approach based on the year these laws were enacted, we show that evaluation laws matter for transparency. We find that following the implementation of TIELs, reported tax expenditures increased on average by 14%, equivalent to about 2.44 billion USD at 2023 prices. This effect persists even four years after the laws are introduced. However, we find no changes in states’ tax revenues and direct spending after the TIELs were passed, which indicates that the observed higher reported tax expenditures correspond to previously hidden undisclosed tax expenditures provisions. We explore some mechanisms and find that the results are driven by states that are “making progress” in strengthening evaluation practices and by those that have a long budget cycle. Moreover, we explore potential electoral consequences for the ruling party. We find no effect on incumbent voting share. Finally, using text analysis to identify tax expenditure provisions in the tax legislation, we do not find a similar transparency effect in trying to make tax expenditure clauses more understandable for taxpayers.

Work in progress

“The Political Distraction Game: Social Divisiveness and Economic Policy in U.S. State Legislatures” with Elliott Ash and Jean-Paul Carvalho

Publications

“Venezuela at the stage of macroeconomic collapse: A historical and comparative analysis” (with Jose Manuel Puente), Journal America Latina Hoy (2020).

This paper conducts a historical and comparative analysis of GDP for 192 countries over the period 1980-2018 using data from the IMF. Results show that Venezuela lost 49.32% of its total GDP in just five years (2014-2018). This negative performance represents the worst macroeconomic performance in magnitude and duration in Venezuela history (1950-2018), the worst in Latin America and the second worst in the world during the period 1980-2018.

Book Chapters