Thanks for visiting my website. I'm an economist in the Economic Research Department of the Federal Reserve Bank of Chicago. My research interests include political economy, social economics, economic development, economic history, and methodological issues in empirical research in the social sciences. Below you will find some of my published work, working papers, and information about my ongoing research.





A Framework for Eliciting, Incorporating, and Disciplining Identification Beliefs in Linear Models

(with Francis J. DiTraglia) Forthcoming at the Journal of Business and Economic Statistics

To estimate causal effects from observational data, an applied researcher must impose beliefs. The instrumental variables exclusion restriction, for example, represents the belief that the instrument has no direct effect on the outcome of interest. Yet beliefs about instrument validity do not exist in isolation. Applied researchers often discuss the likely direction of selection and the potential for measurement error in their papers but at present lack formal tools for incorporating this information into their analyses. As such they not only leave money on the table, by failing to use all relevant information, but more importantly run the risk of reasoning to a contradiction by expressing mutually incompatible beliefs. In this paper we characterize the sharp identified set relating instrument invalidity, treatment endogeneity, and measurement error in a workhorse linear model, showing how beliefs over these three dimensions are mutually constrained. We consider two cases: in the first the treatment is continuous and subject to classical measurement error; in the second it is binary and subject to non-differential measurement error. In each, we propose a formal Bayesian framework to help researchers elicit their beliefs, incorporate them into estimation, and ensure their mutual coherence. We conclude by illustrating the usefulness of our proposed methods on a variety of examples from the empirical microeconomics literature.

Journal of Econometrics, 209, 2019, pp. 376-390 (with Francis J. Ditraglia).

This paper studies identification and inference for the effect of a mis-classified, binary, endogenous regressor when a discrete-valued instrumental variable is available. We begin by showing that the only existing point identification result for this model is incorrect. We go on to derive the sharp identified set under mean independence assumptions for the instrument and measurement error. The resulting bounds are novel and informative, but fail to point identify the effect of interest. This motivates us to consider alternative and slightly stronger assumptions: we show that adding second and third moment independence assumptions suffices to identify the model. Click here for the NBER version that includes inference and additional results.

The Political Economy of Moral Conflict: An Empirical Study of Learning and Law Enforcement Under Prohibition

Econometrica, 84(2), 2016, pp. 511-570

The U.S. Prohibition experience shows a remarkable policy reversal. In only 14 years, a drastic shift in public opinion required two constitutional amendments. I develop and estimate a model of endogenous law enforcement, determined by beliefs about the Prohibition-crime nexus and alcohol-related moral views. In turn, the policy outcomes shape subsequent learning about Prohibition enforcement costs. I estimate the model through maximum likelihood on Prohibition Era city-level data on police enforcement, crime, and alcohol-related legislation. The model can account for the variation in public opinion changes, and the heterogeneous responses of law enforcement and violence across cities. Results show a 15\% increase in the homicide rate can be attributed to Prohibition enforcement. The subsequent learning-driven adjustment of local law enforcement allowed for the alcohol market to rebound to 60\% of its pre-prohibition size. I conclude with counterfactual exercises exploring the welfare implications of policy learning, prior beliefs, preference polarization, and alternative political environments. Results illustrate the importance of incorporating the endogenous nature of law enforcement into our understanding of policy failure and policy success.

State Capacity and Economic Development: A Network Approach

The American Economic Review, 105(8), 2015, pp. 2364-2409 (with Daron Acemoglu and James A. Robinson)

We study the direct and spillover effects of local state capacity in Colombia. We model the determination of state capacity as a network game between municipalities and the national government. We estimate this model exploiting the municipality network and the roots of local state capacity related to the presence of the colonial state and royal roads. Our estimates indicate that local state capacity decisions are strategic complements. Spillover effects are sizable, accounting for about 50 percent of the quantitative impact of an expansion in local state capacity, but network effects driven by equilibrium responses of other municipalities are much larger.

Finding Eldorado: Slavery and Long-Run Development in Colombia

Journal of Comparative Economics, 40(4), 2012, pp. 534-564 (with Daron Acemoglu and James A. Robinson)

Slavery has been a major institution of labor coercion throughout history. Colonial societies used slavery intensively across the Americas, and slavery remained prevalent in most countries after independence from the European powers. We investigate the impact of slavery on long-run development in Colombia. Our identification strategy compares municipalities that had gold mines during the 17th and 18th centuries to neighboring municipalities without gold mines. Gold mining was a major source of demand for slave labor during colonial times, and all colonial gold mines are now depleted. We find that the historical presence of slavery is associated with increased poverty and reduced school enrollment, vaccination coverage and public good provision. We also find that slavery is associated with higher contemporary land inequality.

The Myth of the Frontier

in Dora Costa and Naomi Lamoreaux (eds.), Geography, Institutions, and the Knowledge Economy, The University of Chicago Press, 2011 (with James A. Robinson)

One of the most salient explanations for the distinctive path of economic and political development of the United States is captured by the 'Frontier (or Turner) thesis'. Turner argued that it was the presence of the open frontier which explained why the United States became democratic and, at least implicitly, prosperous. In this paper we provide a simple test of this idea. We begin with the contradictory observation that almost every Latin American country had a frontier in the 19th century as well. We show that while the data does not support the Frontier thesis, it is consistent with a more complex 'conditional Frontier thesis.' In this view, the effect of the frontier is conditional on the way that the frontier was allocated and this in turn depends on political institutions at the time of frontier expansion. We show that for countries with the worst political institutions, there is a negative correlation between the historical extent of the frontier and contemporary income per-capita. For countries with better political institutions this correlation is positive. Though the effect of the frontier on democracy is positive irrespective of initial political institutions, it is larger the better were these institutions. In essence, Turner saw the frontier as having positive effects on development because he already lived in a country with good institutions.

Prosperity, Inequality and Elites: The Determinants of Political Office-holding in Nineteenth Century Antioquia

in Adolfo Meisel and Maria Teresa Ramirez (eds.), Colombian Economic History in the Nineteenth Century, Fondo de Cultura Economica, 2010 (with James A. Robinson)

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Civil Liberties and Social Structure

(with Selman Erol)

Governments rely on a variety of forms of coercion to aggregate distributed information relevant to governmental objectives --from the prosecution of regime stability threats to terrorism or epidemics--. To do so, they exploit the existing social structure, as reliable information will often come from friends and acquaintances. Civil liberties, in turn, restrict the government's ability to exercise such coercion. We present an equilibrium theory of the joint determination of social structure and civil liberties. The depth of civil liberties shapes citizens' decisions on how intensely and with whom to socialize. Features of the social structure such as its cohesiveness and the extent of segregation, in turn, shape the government's willingness to enforce civil liberties protections such as search and seizure restrictions, standards of proof, and equal treatment under the law. We show that the relationship between civil liberties and social structure is mediated by a commitment problem by the government, and that this commitment problem is in turn mediated by the strength of civil society. We also show that segregation and unequal treatment sustain each other, characterize when unequal treatment against a minority or a majority can be sustained, and how equilibrium social cohesiveness and civil liberties respond to the arrival of widespread surveillance technologies, shocks to collective perceptions about the likelihood of threats or the importance of privacy, or to community norms such as codes of silence.

The Political Economy of Immigration Enforcement: Conflict and Cooperation under Federalism

(with Alberto Ciancio)

Selection forces often confound the effects of policy changes. In the immigration enforcement context, we tackle this challenge tracking arrested immigrants along the deportation pipeline, isolating local and federal efforts. 80% of counties exhibit strategic substitutabilities in responding to federal enforcement, while the federal level is very effective at directing its efforts toward cooperative counties. We estimate that changes in the profile of immigration cases, and not weakened federal efforts, drove the reduction in deportations following a 2011 shift in federal priorities. Reducing immigration-court discretion and removing their dependence from the executive would have a significant impact on deportations.

Women, Rails, and Telegraphs: An Empirical Study of Information Diffusion and Collective Action

(with Angel Iglesias and Pinar Yildirim)

How is collective action shaped by social interactions, and how are social interactions mediated by the availability of networked information technologies? To answer these questions, we study the Temperance Crusade, the first instance of organized political mobilization by women in the U.S. This wave of protest activity against liquor dealers spread between the winter of 1873 and the summer of 1874, covering more than 800 towns in 29 states. We first provide causal evidence of social interactions driving the diffusion of the protest wave, and estimate the roles played by information traveling along railroad and telegraph networks. We do this relying on exogenous variation in the rail network links generated by railroad worker strikes and railroad accidents. We also develop an event-study methodology to estimate the complementarity between rail and telegraph networks in driving the spread of the Crusade. We find that railroad and telegraph-mediated information about neighboring protest activity were main drivers of the diffusion of the protest movement. We also find strong complementarities between both networks. Using variation in the types of protest activities of neighboring towns and in the aggregate patterns of the diffusion process, we also find suggestive evidence of social learning as the mechanism behind the effect of information on protest adoption.

Identifying Causal Effects in Experiments with Social Interactions and Non-Compliance

(with Francis J. DiTraglia, Rossa O'Keefe-O'Donovan, and Alejandro Sanchez)

This paper shows how to use a randomized saturation experimental design to identify and estimate causal effects in the presence of social interactions—one person’s treatment may affect another’s outcome–and one-sided non-compliance–subjects can only be offered treatment, not compelled to take it up. Two distinct causal effects are of interest in this setting: direct effects quantify how a person’s own treatment changes her outcome, while indirect effects quantify how her peers’ treatments change her outcome. We consider the case in which social interactions occur only within known groups, and take-up decisions do not depend on peers’ offers. In this setting we point identify local average treatment effects, both direct and indirect, in a flexible random coefficients model that allows for both heterogenous treatment effects and endogeneous selection into treatment. We go on to propose a feasible, kernel-based estimator.

Matching Pennies on the Campaign Trail: An EmpiricalStudy of Senate Elections and Media Coverage

(with Pinar Yildirim)

We study the strategic interaction between the media and Senate candidates during elections. While the media is instrumental for candidates to communicate with voters, candidates and media outlets have conflicting preferences over the contents of the reporting. In competitive electoral environments such as most US Senate races, this can lead to a strategic environment resembling a matching pennies game. Based on this observation, we develop a model of bipartisan races where media outlets report about candidates, and candidates make decisions on the type of constituencies to target with their statements along the campaign trail. We develop a methodology to classify news content as suggestive of the target audience of candidate speech, and show how data on media reports and poll results, together with the behavioral implications of the model, can be used to estimate its parameters. We implement this methodology on US Senatorial races for the period 1980-2012, and find that Democratic candidates have stronger incentives to target their messages towards turning out their core supporters than Republicans. We also find that the cost in swing-voter support from targeting core supporters is larger for Democrats than for Republicans. These effects balance each other, making media outlets willing to cover candidates from both parties at similar rates.

Forced Displacement and De Facto Land Reform in Rural Colombia

(with Francis J. Ditraglia)

Between 1990 and 2010, civil conflict in Colombia led to the forceful displacement of more than six million people from rural areas. Displacement flows were closely associated with intense violence in the form of massacres and public assassinations, and with the geographic spread of paramilitary armed groups. We propose and empirically test a model that rationalizes the form and the distribution of violence observed, as well as the dynamics of the displaced population flows. We argue that population displacement was not a byproduct of conflict; rather, it was purposefully induced to expropriate land from the displaced. Because population losses are costly to local landed elites, subtle features of the land distribution are key to understanding the patterns of violence and displacement. In particular, because violence is non-rivalrous and hard to target, places with more landless or small landowning families require more displacement, and hence more violence, per unit of land expropriated. Indeed, we find that greater land inequality -- in the form of a larger share of landless or small landowning families -- led to less violence and displacement in the cross section. Our model also predicts that the most acute episodes of violence constitute a strategy to induce tipping points in the displacement dynamics. We detect such tipping behavior empirically in our reduced form results, and go on to confirm it within our structural model. In the process we propose a new methodology to address potentially serious measurement bias in the available data on forced displacement.

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Click the picture to watch a video of the spread of the Crusade





Federal Reserve Bank of Chicago

230 South LaSalle Street

Of. 11-226

Chicago, IL 60604

© 2017 by Camilo García-Jimeno.