Maximiliano Garcia

Working Papers

Governing the (Privatized) Commons: Evidence from the introduction of Water Boards. (with Jose Belmar).

Abstract

This paper studies the role of legally empowered users' organizations when river waters are allocated through private property in a context of weak state enforcement. Our analysis is based on a novel dataset that integrates administrative records, geographic information, and satellite imagery. Using different identification strategies, we show that the establishment of such organizations limits the creation of conflicting new property rights, and results in the redistribution of water towards users more exposed to over-extraction by others, primarily due to improved enforcement of extant property rights. This redistribution increases agricultural yield, mostly among large downstream farmers. A misallocation test suggests that these organizations reduce misallocation caused by the natural advantage of upstream users to over-extract. Our results provide micro-evidence of the consequences of effective governance for both allocative efficiency and equity under water scarcity.

Image: our estimates of Water Consumption at the farm level, for the Aconcagua River basin, that goes from the Andes (right) to the Pacific Ocean (left).

Punishing Mayors Who Fail the Test: How Do Voters Respond to Information About Educational Outcomes?(with Loreto Cox and Francisco Gallego). R&R at the Journal of Development Economics.

Abstract

This paper explores the electoral effects of providing information on the educational outcomes of municipal schools when the mayor is running for reelection. We designed and implemented an experiment in Chile whereby we sent 128,033 letters to voters in 400 randomly selected polling stations. The letters included information on past test scores for local public schools (levels and changes), and either average or maximum outcomes for comparable municipalities. We find that information on educational outcomes affects turnout, which translates almost one to one into votes for the incumbent mayor. Voters respond to educational results in levels and to letters that have average results as a benchmark. The results are concentrated in polling stations with bad educational outcomes, which reduce turnout and thus votes for the incumbent, especially if such outcomes come as news to voters. The results appear to be stronger in contexts where information is scarcer.

Image: people reduces incumbent mayors' support (y-axis) when we reveal they had poor perfomance (x-axis, left), but do not increase it when we reveal they had good performance.

"Rugged Individualism" and Moral Values (with Samuel Bazzi and Martin Fiszbein).

Abstract

The United States is among the most individualistic societies in the world. However, unlike Western European individualism, which is imbued with moral universalism, America's "rugged individualism" is instead particularistic. We link this distinctive cultural configuration to the country's frontier history. The frontier favored self-reliance, but also rewarded cooperation, which could only be sustained through strong, local group identities. We show that counties with longer frontier history are more particularistic, displaying stronger opposition to federal taxes relative to state taxes, stronger communal values, less charitable giving to distant counties, and fewer online friendships with people in distant counties. At the same time, connections across counties display assortative matching on frontier history, highlighting the important role of culture in bridging disparate areas of the country. Overall, our results shed new light on moral values and the divergence of American and European individualism.

Image: People in more individualistic counties (red crosses) have their friends geographically closer: the same share of friends (y-axis) is in average located at a shorter distance (x-axis).

Work in Progress

Privatization, Political Competition and Accountability. Draft coming soon!

Abstract

The literature has found positive impacts of privatization --i.e. transferring the property of a public company to private ownership-- on various outcomes, including child mortality. I exploit within-country variation in political competition and the staggered privatization of water supply companies to show that privatization has positive impacts (lower child mortality) only in the least competitive counties, while it does not affect outcomes in more competitive areas. I study how the political environment affects the decision to privatize. My results provide a direct comparison of private versus public management, conditional on different levels of political accountability, suggesting that conditional on external oversight, markets and political accountability are substitutes.

Image: The estimated reduction in Child Mortality (x-axis), by quantile of Political Competition (y-axis): Privatization improves child mortality when competition is low, but not when competition is high.

Climate Change costs and Water Governance (with Jose Belmar).

Market Power and Water Governance

Teaching

At Boston University, I have been a Teaching Fellow of Finance and Environmental Economics at the graduate level, and of Applied Economics, Advanced Macroeconomics, Statistics and Sports Economics.

Previously, at University of Chile, I was a Teaching Fellow and head of TAs of Microeconomic Theory I, Econometrics I and Econometrics II at the graduate school, and of International Trade, Industrial Organization, Economic History, Microeconomic Theory, Econometrics and Public Finance at the college level.

In addition, I also worked as a TF at PUC - Chile (graduate Political Economy), Universidad Adolfo Ibanez (Econometrics), and also teached as an instructor at the J-PAL LAC Executive Course (Introduction to Stata) and San Ignacio High-School (Social Contemporary Issues).

Contact

Email address: maxgar@bu.edu

BU website