IDRE Seminar: Electoral Incentives and the Allocation of Public Funds

Speaker: Maurizio Mazzocco,
Associate Professor,
Department of Economics, UCLA

Date and time: March 28th, 2016 at 12 PM (Lunch will be served*)
Location: 5628 Math Sciences Building
RSVP: http://cfapps.ats.ucla.edu/cfapps/events/rsvp/RSVPNow.cfm?EveID=3502&SecID=3490

Abstract:
It is widely believed that politicians allocate public resources in ways to maximize political gains. But what is less clear is whether this comes at a cost to welfare; and if so, whether alternative electoral rules can help reduce these costs. In this paper, we address both of these questions by modeling and estimating politicians’ decisions to allocate public funds. We use data from Brazil’s federal legislature, which grants each federal legislator a budget to fund public projects in his state. We find that 26 percent of the public funds are distorted relative to a social planner’s allocation. We then use the model to simulate several potential policies reforms to the electoral system, including adopting approval voting and implementing term limits. We find that an approval voting system reduces the distortions by 7.5 percent. Term limits also reduce distortions, but come at the cost of more corruption, which makes it a welfare-reducing policy.

Speaker’s Bio:
Maurizio Mazzocco is an applied microeconomist whose research focuses on three areas of economics: family intertemporal decisions; heterogeneity in risk preferences and decisions under uncertainty; political economy and development economics. He received his Ph.D. from the economics department at the University of Chicago. In his research, Mazzocco makes use of the available data to uncover empirical patterns that can be used to understand the decisions of individuals in developing and developed countries. These patterns are used as the basis for developing theoretical models of individual decisions. The models are then employed to evaluate the potential effects of policies aimed at improving the individual welfare. Maurizio’s research involves substantial usage of High Performance Computing. He is one of the power users of UCLA’s main computing resource, i.e., Hoffman2 cluster, from Economics Department.

*Lunch will be ready at 11:45 AM.
**To ensure you have a space at the seminar, please RSVP ONLINE by March 24th, 2016.