Building Trust in the State with Information: Evidence from Urban Punjab

(with Adnan Khan, Mahvish Shaukat, and Andreas Stegmann), Journal of Public Economics, 202, October 2021: 104494.

Abstract: Can communication designed to increase support for government policy and shift perceptions of state capacity redress deep-rooted mistrust in state institutions? This paper finds providing information on past state effectiveness, highlighting citizens’ cooperation in enabling past effectiveness or appealing to religious authorities’ support for government policy have limited impact on support for policy, perceptions of state capacity and trust in the state in Pakistan. This holds true on average and across important dimensions of heterogeneity after comparing treatment effects to those induced by an experimenter demand treatment. This paper highlights the limits of using information to build trust in state institutions, and the importance of measuring experimenter demand.

Groundwater Management under Heterogeneous Land Tenure Arrangements

(First author, with Steven Helfand and Ariel Dinar), Resource and Energy Economics, 62, November 2020: 101203.

Abstract: We develop a groundwater extraction model that considers the Marshallian inefficiency associated with sharecropping and use data from Pakistan to simulate the impact of an open access regime and of optimal management on groundwater extractions, the state of the aquifer, and annual net benefits through time. We also evaluate a price instrument as a mechanism of inducing optimal extractions. Under both open access and optimal management, we observe notable differences in groundwater extractions and the water table level between the tenure model (which considers the behavior of both owner cultivators and sharecroppers) and the baseline model (which includes the behavior of only owner cultivators). We also find a modest difference in the aggregate net benefits generated by the two models. The results offer new insights—vis-à-vis land tenure heterogeneity—into the evaluation of more effective policies for groundwater management and aquifer sustainability.

To adopt, or not to adopt, ‘why’ is the question: A case for clean kiln technologies in developing countries

(with Faiza Sharif), Journal of Cleaner Production, 257, June 2020: 120553.

Abstract: In this paper, we compare two brick kiln technologies—the Bull’s Trench Kiln (BTK) and the Induced Draft Zigzag Kiln (ZZK)—through a transdisciplinary approach by focusing on two questions: do ZZKs tend to be cleaner than BTKs? Will operating ZZKs generate any reasonable economic and social benefits? To answer the first question, we collected and tested stack emission samples from two kilns: a newly constructed ZZK in Punjab, Pakistan and a conventional BTK located close to the ZZK. To address the second question, we conducted a cost-benefit analysis of the two types of kiln technologies using primary data on input and output quantities and prices from the sample kilns. The environmental results show that the ZZK emitted significantly less amount of harmful gases and particulate matter compared to the BTK. The economic analysis demonstrates that ZZKs improve both discounted private welfare and discounted social welfare compared to BTKs. For policymakers, we also outline recommendations to facilitate the technology transition to ZZKs. Our findings provide a case for the adoption of ZZKs in developing countries and for environmental policymakers to facilitate the technology transition.

Under Review

Groundwater utilization under varied farm-level characteristics: Evidence and policy from a developing country context

(First author, with Ariel Dinar and Steven Helfand), Revise and Resubmit at Water Resources Research

An earlier version is available as IFPRI PSSP Working Paper 15, Washington DC: International Food Policy Research Institute, January 2014.

Abstract: We use a panel dataset of rural households in Pakistan to estimate the allocative inefficiency of groundwater, compare it across heterogeneous farms, and quantify its effect on land productivity. Heterogeneity (farm type) includes agricultural tenure, farm size, access to surface water and location on a watercourse. Estimation results show that sharecroppers have lower levels of technical inefficiency than owner-cultivators, although there was a high degree of inefficiency for both types. This suggests that sharecroppers compensate for other deficiencies—such as access to credit, capital, or irrigation—through superior technical efficiency. The results for the allocative efficiency of groundwater show significant differences in the utilization of groundwater across tenure, farm size, access to surface water and location on a watercourse. We also find that on average farms could increase income by 10 percent by allocating groundwater efficiently. The combination of empirical and policy results could help fill a knowledge gap about management alternatives for sustainable and productive use of groundwater in developing countries.

Working Papers

Political Identity and Foreign Aid Efficacy: Evidence from Pakistani Schools

(with Andreas Stegmann)

[Preliminary draft available on request]

Abstract: We conduct a field experiment to study whether concerns to preserve an anti-liberal self-image affect low cost, private school owners’ willingness to explore a collaboration with a liberal Pakistani NGO. While explicitly revealing the NGO’s liberal motivation to school owners has a significant impact on beliefs about the NGO’s objectives, on average, we find only limited evidence that treated school owners are less willing to explore a collaboration with our partner NGO. However, heterogeneous treatment effects suggest that differences in political identity cause negative reactions among the minority of school owners expressing conservative beliefs during a seemingly unrelated follow-up survey.

Forecasts: Consumption, Production, and Behavioral Responses

(with Husnain A. Fateh, Matthew Gibson, Fatiq Nadeem, and Arman Rezaee)

[Preliminary draft available on request]

Abstract: Economic theory predicts forecasts are an important determinant of welfare. In developing countries, however, limited information and human capital may make it difficult for agents to produce accurate, precise forecasts. This plausibly limits the scope for optimal responses to uncertain future events. Focusing on air pollution, we explore how urban residents in the developing world solve forecasting problems in the presence of constraints on information and human capital. We implement a randomized controlled trial in Lahore, Pakistan to study the effects on forecast consumption, production, and behavioral responses from two randomized interventions in Lahore, Pakistan: 1) provision of one-day ahead air pollution forecasts; and 2) general forecasting training aimed at reducing behavioral biases. On average, subjects exposed to forecasts are willing to pay roughly 60 percent of the cost of mobile internet access to continue receiving them. Both interventions reduce air pollution forecast error, and receipt of forecasts increase demand for protective masks. These results document substantial demand for forecasts among urban residents in the developing world. They suggest that modest educational interventions may durably improve forecasting-relevant human capital.

Let Us Breathe!

(with Ali Habib and Amna Shahab)

An earlier version is available as IGC Research Project Report E-21019-PAK-1, London: International Growth Center, March 2021.

Abstract: Air quality in lower and lower-middle income countries has considerably deteriorated over the past many years, affecting human capital and welfare. Even though many developing countries have strong air pollution rules and regulations on paper—with a comprehensive set of ambient air quality and emission standards—their air quality outcomes continue to stagnate. Why? We deconstruct this problem using Pakistan—a developing country with a rich history of environmental regulation but acute air pollution—as a case study, demonstrating that regulatory deficiencies, resource and capacity constraints, and imperfect information prevent environmental institutions from achieving their objectives. Poorly designed standards—governed by a command-and-control approach—paltry budgets, and missing data on source emissions and ambient air quality inhibit environmental institutions’ ability to monitor and enforce air quality regulations. Understanding how much citizens value better air quality (willingness to pay), employing source apportionment studies, and harnessing the “informal regulator” (civil society) offer opportunities to fill policy gaps and improve compliance.

Ongoing Projects

Does conservation messaging reduce urban water consumption?

(with Agha Ali Akram and Syed M. Hasan)

Supported by the United Nations Development Programme with funds totaling $40,000

[Preliminary draft available on request]

Abstract: Cities in developing countries often lack water meters to gauge volumetric consumption, which inhibits water utilities’ capacity to price the resource. Given the difficulty of establishing volumetric pricing schemes in unmetered settings, do informational nudges provide water utilities an effective alternative to incentivize households to reduce their water consumption? To answer this question, we conduct a randomized controlled trial in Islamabad, Pakistan. Our treatment includes three different intervention materials: an infographics poster depicting water conservation tips; a calendar with a religious message on water conservation (religious calendar); and a calendar with a message on potential financial loss due to water scarcity (loss aversion calendar). We find that the intervention material pushes the willingness to conserve in the right direction for most respondents in our treatment arms. Our results suggest that informational messages offer policymakers a low-cost alternative to nudge urban households to conserve water in their homes.

Belief formation, signal quality, and information sources: Experimental evidence on air quality from Pakistan

(with Matthew Gibson, Shotaro Nakamura, and Arman Rezaee)

Supported by the International Growth Center with funds totaling £35,000

Does the disclosure of third-party information on firm emissions increase regulatory compliance?

(with Michael Greenstone and Usman Naeem)

Supported by the International Growth Center with funds totaling £32,000