Slavery in the US South was detrimental to economic development and concentrated wealth in the hands of a small elite. And yet, it was staunchly defended by the majority of the white population. While slaveowners' reasons for supporting slavery are well-documented, why the non-slaveowning majority supported the institution remains unclear. This paper exploits the competitive forces generated by the Westward Expansion to identify changes in slaveowners’ incentives to defend slavery. We show that these changes also determined non-slaveowners' support for the institution. We find that the planter elite was instrumental in shaping non-slaveowners’ voting behavior. We highlight two mechanisms: rent sharing with white wage laborers and political persuasion through media control. Our paper shows that economic power begets political power, allowing institutions that benefit only a small elite to prevail even in democracies.

This paper studies the effect of the US Civil War on the geography of racism in the US South. We construct a new dataset of the universe of soldiers enlisted in the Confederate army, their town of residence before the war, and their military deployment. We show that, after the war, towns whose soldiers participated in more high-casualty battles increased their support for racially conservative parties and discriminatory laws and engaged more in violence against Black Americans for generations to come. The effect is similar in size to and independent from the prevalence of slavery. These towns were more likely to develop a cultural attachment to the war heritage and transmit it to future generations, as indicated by the presence of memorial organizations, Confederate monuments, and the use of distinct Confederate names. The war's legacy persists, shaping hate crimes, white supremacist rallies, and police officer killings of Black Americans to this day.      

In this paper we study the effect of violent crime on residential and firms location decisions and their implications for segregation in cities. We do so by proposing a new instrument to exogenously predict violent crime in city centers. We base our instrument on chemical evidence that links local characteristics of the soil to lead poisoning, and medical results on the effect of lead poisoning on aggression. In particular, we exploit the national increase of lead poisoning in the United States in the post-WWII period, to compare cities with different levels of pH of city center soil that determines lead bioavailability. Using data from 325 U.S. cities, we show that the massive increase in violent crime experienced by city centers between 1960 and 1990 moved almost 26 million people to the suburbs. Firms followed by leaving the city centers and moving to the suburbs. We then show that the suburbanization process was characterized by "white flight". As city centers became more violent, white rich people moved to the suburbs while poor and black people stayed in the city center. This increase in violent crime is still shaping segregation in U.S. cities today, although violent crime in city centers has returned to lower levels.

Is dishonest behavior contagious? We answer this question by studying whether corruption scandals affect the propensity of supermarket customers to steal while using a self-service checkout system. Crucially, this system allows shoppers to engage in dishonest behavior by under-reporting the value of their shopping cart. Exploiting data from random audits on shoppers, we show that the probability of stealing increases by 16% after a local corruption scandal breaks. This effect is not driven by any change in material incentives. Suggestive evidence shows that it is driven by a reduction in the self-imposed cost of stealing triggered by emotions. 

Can political rallies affect the behavior of law enforcement officers towards racial minorities? Using data from 35 million traffic stops, we show that the probability that a stopped driver is Black increases by 5.74% after a Trump rally during his 2015-2016 campaign. The effect is immediate, specific to Black drivers, lasts for up to 60 days after the rally, and is not justified by changes in driver behavior. The effects are significantly larger among law enforcement officers whose estimated racial bias is higher at baseline, in areas that score higher on present-day measures of racial resentment, those that experienced more racial violence during the Jim Crow era, and in former slave-holding counties. Mentions of racial issues in Trump speeches, whether explicit or implicit, exacerbate the effect of a Trump rally among officers with higher estimated racial bias.

In this paper, we study how a positive economic shock to an illicit industry might foster migration. In 2010, a series of reforms to the U.S. health care system resulted in a shift in demand from legal opiates to heroin. This demand shock had considerable effects on Mexico, the main supplier of heroin consumed in the United States. We exploit variation in potential opium production at the municipal level in a difference-in-differences (DID) framework, which compares Mexican municipalities with different amounts of opium-suitable land before and after 2010. We find that people fled out of municipalities more suitable for opium production, many to areas close to the U.S. border and into the United States. This is due to the increase in violence and conflicts, as municipalities more suitable for opium became highly valuable to drug cartels. Overall, we estimate that the increase in the demand for heroin made almost 95,000 people migrate within Mexico and more than 20,000 emigrate to the United States.

Violent, criminal, and terrorist organizations are often providers of many social services in direct competition with the state. In this paper, we show that these organization can use the provision of social services to gain support. This tactic is only effective when filling the void left by a weak state. We do so by studying the provision of natural disaster relief by the Pakistani state and the Taliban. We first look at the floods of 2010 that received an inadequate response from the government and show that support for the Taliban increased in the areas affected by the flood. These effects are concentrated in places were the Taliban likely provided help and where the state under-delivered the most. We then study an earthquake in 2005 that instead received a swift government response and show that the Taliban lost support in the areas affected. Alternate mechanisms such as anger against the incumbent, political competition, electoral participation, and religiosity do not account for these results.

The debate over police use of military equipment often revolves around the supposed trade-off between increasing police safety and reducing killings by the police. In this paper, I rely on institutional features that exogenously determine the distribution of military equipment to US police departments to show that, contrary to previous evidence, there is no such tradeoff: police militarization increases killings by the police and reduces police safety. Each year police militarization results in 64 additional killings by the police, 12,440 police officer assaults, and 2,653 police officer injuries.

Using new data at the police department level, I propose an identification strategy for estimating the causal effect that police militarization has on reducing violent crime. I show that previous estimates are likely to be contaminated by unobserved factors that simultaneously determine militarization and violent crime. Upon addressing this issue, I find a point estimate that is 20 times larger than those estimated previously. I then find that one-fourth of the effect of militarization is due to the displacement of violent crime to neighboring areas. Police departments overmilitarize because they do not consider this externality. These new findings have significant implications for the policy debate concerning the costs and benefits of police militarization. 

In the last generations most of the Western world has faced rapid secularization combined with large expansions in the welfare state. At the same time, many other countries have maintained high levels of religiosity and a more limited role for the state. I propose a model of intergenerational transmission of religious values and competition between the state and the church that shows how an increase in state efficiency can trigger this process of secularization and rise of the welfare state. At the same time, I show that this initial increase in state efficiency can be hard to attain. Due to the competition between the church and the state, agents may have incentives to sabotage the efficiency of the state, preventing the start of the secularization process. Finally, I provide empirical evidence in line with this model and show that consistent empirical results are only present when focusing on areas of the state that are in direct competition with the church.

This chapter explores recent advances in the economics literature that studies state-provided policing with a particular emphasis on the effects of policing on crime. I first present causal evidence on the link between the size of the police force and criminal activity. Then I discuss how the use of technology and various types of strategies can affect the effectiveness of the police. 

In this paper, we propose a framework to evaluate the subjective density forecasts of macroeconomists using micro data from the euro area Survey of Professional Forecasters (SPF). A key aspect of our analysis is the use of evaluation measures which take account of the entire predictive densities, and not just the probability assigned to the outcome that occurs. Overall, we find considerable heterogeneity in the performance of the surveyed densities at the individual level. However, it is hard to exploit this heterogeneity and improve aggregate performance by trimming poorly performing forecasters in real time. Relative to a set of simple benchmarks, density performance is somewhat better for GDP growth than for inflation, although in the former case it diminishes substantially with the forecast horizon. In addition, we report evidence of an improvement in the relative performance of expert densities during the recent period of macroeconomic volatility. However, our analysis also reveals clear evidence of overconfidence or neglected risks in expert probability assessments, as reflected in frequent occurrences of events which are assigned a zero probability. 

In this paper, we exploit micro data from the ECB survey of professional forecasters to examine the link between the characteristics of macroeconomic density forecasts (such as their location, spread, skewness, and tail risk) and density forecast performance. Controlling for the effects of common macroeconomic shocks, we apply cross-sectional and fixed effect panel regressions linking such density characteristics and density forecast performance. Our empirical results suggest that many macroeconomic experts could systematically improve their density performance by correcting a downward bias in their variances. Aside from this shortcoming in the second moment characteristics of the individual densities, other higher moment features, such as skewness or variation in the degree of probability mass given to the tails of the predictive distributions, tend—as a rule—not to contribute significantly to enhancing individual density forecast performance. 

We apply methods to evaluate the risk assessments collected as part of the ECB Survey of Professional Forecasters (SPF). Our approach focuses on direction-of-change predictions as well as the prediction of more specific high and low macroeconomic outcomes located in the upper and lower regions of the predictive densities. For inflation and GDP growth, we find such surveyed densities are informative about future direction of change. Regarding high and low outcome events, the surveys are most informative about GDP growth outcomes and at short horizons. The upper and lower regions of the predictive densities for inflation appear less informative.