Nidhiya Menon - Spatial Decentralization and Program Evaluation: Theory and an Example

Title: Spatial Decentralization and Program Evaluation: Theory and an Example

Abstract: This paper proposes an instrumental variable method for program evaluation that only requires a single cross-section of data on the spatial intensity of programs and outcomes. The instruments are derived from a simple theoretical model of government decision-making in which governments are responsive to the attributes of places and their populations, rather than to the attributes of individuals, in making allocation decisions across space, and have a social welfare function that is spatially weakly separable, that is, that the budgeting process behaves as if it is multi-stage with respect to administrative districts and sub-districts. The spatial instrumental variables model is then estimated and tested with a single cross-section of Indonesian census data.  The results offer support to the identification strategy proposed but also highlight some critical issues affecting validity.

Presenter: Nidhiya Menon, Brandeis University

The program coordinator of this seminar is Diana Contreras Suarez. If you would like to subscribe to the Melbourne Institute Seminar Series email list, please contact Diana.