Applied Economics Seminar Series. "Market Exposure, Civic Values, and Rules"
Published: 17 November 2024
27 November 2024. Dr Devesh Rustagi, University of Warwick
Dr Devesh Rustagi, University of Warwick
"Market Exposure, Civic Values, and Rules"
Wednesday, 27 November 2024. 15:00-16:30
Room 383, Adam Smith Business School
Abstract
Does markets exposure foster or erode civic values and rules necessary to constrain opportunistic behavior? Using a natural experiment on market location from Ethiopia, I compare individuals who are from the same clan and attend the same market but vary in their exposure to that market. I find a positive effect of market exposure on civic values and rule formation. This result arises because individuals trade primarily in livestock, which is prone to cooperation problem from asymmetric information and weak state capacity. I use vignette studies to show that societies develop different types of exchange structures to mitigate this problem, which then shapes civic values and rules. In societies far from markets, there is no need for civic values and rules, as individuals rarely attend markets and sell livestock eponymously within their social network. In societies near markets, ephemeral and impersonal nature of market exchange creates a demand for civic values and community sanctioning as lubricants to conclude exchange, otherwise individuals end up losing gains from trade. Exposure to markets without asymmetric information has no effect on civic values and rules, suggesting that prosperity and contact hypothesis are not the channels.
Bio
I am an Assistant Professor at the Department of Economics, University of Warwick. My research falls at the intersection of development economics, economic history, environmental economics, and political economy.
I study the origins and stability of civic values and institutions, how these forces interact, and the effect this interaction has on economic outcomes. I then build on these insights to design and evaluate public policies. I achieve this by combining quasi-experimental approaches and randomized field experiments with behavioral experiments. My current projects are based in Ethiopia, Germany, India, Switzerland, and the United Kingdom.
My work has been published in Science, American Economic Review, Journal of Development Economics, and Econometrica.
For further information, please contact business-seminar-series@glasgow.ac.uk.
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First published: 17 November 2024