Business, Government & the International Economy

Business, Government & the International Economy

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    • November 2023
    • Case

    Nourishing Communities: Brighter Bites Approach to Childhood Nutrition

    By: David E. Bell, Forest Reinhardt and Ai-Ling Jamila Malone

    • 2023
    • Working Paper

    Geographies of Discontent: Public Service Deprivation and the Rise of the Far Right in Italy

    By: Simone Cremaschi, Paula Rettl, Marco Cappelluti and Catherine E. De Vries

    Electoral support for far-right parties is often linked to geographies of discontent. We argue that public service deprivation, defined as reduced access to public services at the local level, plays an important role in explaining these patterns. By exploiting an Italian reform that reduced access to local public services in municipalities with fewer than 5,000 residents we demonstrate that far-right support in national elections increased more after the reform in affected municipalities than in unaffected ones. We use geo-coded individual-level survey data and party rhetoric data to explore the mechanisms underlying this result. Our findings suggest that exposure to the reform increased concerns about immigration, and that far-right parties increasingly linked public services to immigration in their rhetoric after the reform. These demand and supply dynamics help us understand how public service deprivation shapes geographic patterns in far-right support.

    • 2023
    • Working Paper

    Geographies of Discontent: Public Service Deprivation and the Rise of the Far Right in Italy

    By: Simone Cremaschi, Paula Rettl, Marco Cappelluti and Catherine E. De Vries

    Electoral support for far-right parties is often linked to geographies of discontent. We argue that public service deprivation, defined as reduced access to public services at the local level, plays an important role in explaining these patterns. By exploiting an Italian reform that reduced access to local public services in municipalities with...

    • 2023
    • Working Paper

    The Political Economy of a 'Miracle Cure': The Case of Nebulized Ibuprofen and Its Diffusion in Argentina

    By: Sebastian Calónico, Rafael Di Tella and Juan Cruz Lopez Del Valle

    We document the diffusion of nebulized ibuprofen in Argentina as a treatment for COVID-19. As the pandemic spread, this clinically unsupported drug reached thousands of patients, even some seriously ill, despite warnings by the regulator and medical societies. Detailed daily data on deliveries for all towns in one of the largest provinces suggests a role for “rational” forces in the adoption of a miracle cure: towns adopt it when neighbors that adopt it are successful in containing deaths (a learning effect), even after controlling for the average adoption of peers. Results from a survey are consistent with learning. They also reveal a large role of beliefs: subjects that are classified as “Right” are more likely adopt and to learn, while those that are “Skeptical” report an increase in their demand when primed with the regulator’s ban.

    • 2023
    • Working Paper

    The Political Economy of a 'Miracle Cure': The Case of Nebulized Ibuprofen and Its Diffusion in Argentina

    By: Sebastian Calónico, Rafael Di Tella and Juan Cruz Lopez Del Valle

    We document the diffusion of nebulized ibuprofen in Argentina as a treatment for COVID-19. As the pandemic spread, this clinically unsupported drug reached thousands of patients, even some seriously ill, despite warnings by the regulator and medical societies. Detailed daily data on deliveries for all towns in one of the largest provinces suggests...

About the Unit

The BGIE Unit conducts research on, and teaches about, the economic, political, social, and legal environment in which business operates. The Unit includes scholars trained in economics, political science, and history; in its work, it draws on perspectives from all three of these disciplines.

The following demonstrates one way of classifying the approaches the Unit takes to learning and teaching.

  • The Unit examines the “rules” and policies established by government and other non-business institutions that affect business in the United States.
  • The Unit turns to history to understand the origins of today’s business environment as well as some of the alternatives that have emerged from time to time.
  • The Unit examines other countries’ business environments and their historical development.
  • The BGIE group is deeply interested in the impact of globalization and the way rules are emerging to govern international economic transactions as globalization proceeds.

Recent Publications

Nourishing Communities: Brighter Bites Approach to Childhood Nutrition

By: David E. Bell, Forest Reinhardt and Ai-Ling Jamila Malone
  • November 2023 |
  • Case |
  • Faculty Research
Related

Geographies of Discontent: Public Service Deprivation and the Rise of the Far Right in Italy

By: Simone Cremaschi, Paula Rettl, Marco Cappelluti and Catherine E. De Vries
  • 2023 |
  • Working Paper |
  • Faculty Research
Electoral support for far-right parties is often linked to geographies of discontent. We argue that public service deprivation, defined as reduced access to public services at the local level, plays an important role in explaining these patterns. By exploiting an Italian reform that reduced access to local public services in municipalities with fewer than 5,000 residents we demonstrate that far-right support in national elections increased more after the reform in affected municipalities than in unaffected ones. We use geo-coded individual-level survey data and party rhetoric data to explore the mechanisms underlying this result. Our findings suggest that exposure to the reform increased concerns about immigration, and that far-right parties increasingly linked public services to immigration in their rhetoric after the reform. These demand and supply dynamics help us understand how public service deprivation shapes geographic patterns in far-right support.
Keywords: Election Outcomes; Electoral Behavior; Political Affiliation; Political Culture; Public Service; Political Elections; Policy; Government and Politics; Surveys; Geographic Location; Immigration; Europe; Italy
Related

The Political Economy of a 'Miracle Cure': The Case of Nebulized Ibuprofen and Its Diffusion in Argentina

By: Sebastian Calónico, Rafael Di Tella and Juan Cruz Lopez Del Valle
  • 2023 |
  • Working Paper |
  • Faculty Research
We document the diffusion of nebulized ibuprofen in Argentina as a treatment for COVID-19. As the pandemic spread, this clinically unsupported drug reached thousands of patients, even some seriously ill, despite warnings by the regulator and medical societies. Detailed daily data on deliveries for all towns in one of the largest provinces suggests a role for “rational” forces in the adoption of a miracle cure: towns adopt it when neighbors that adopt it are successful in containing deaths (a learning effect), even after controlling for the average adoption of peers. Results from a survey are consistent with learning. They also reveal a large role of beliefs: subjects that are classified as “Right” are more likely adopt and to learn, while those that are “Skeptical” report an increase in their demand when primed with the regulator’s ban.
Keywords: COVID-19; Health Care and Treatment; Health Pandemics; Adoption; Behavior; Governing Rules, Regulations, and Reforms; Learning
Related

JPMorgan Chase in Paris

By: Joseph L. Bower, Dante Roscini, Elena Corsi and Michael Norris
  • October 2023 |
  • Case |
  • Faculty Research
In 2019, Daniel Pinto, President and COO of JPMorgan Chase, has to make a recommendation to the bank’s Chairman and CEO, Jamie Dimon, about where to physically locate the bank’s European trading operations after Brexit takes effect in 2020. The decision-making process considered a range of European locations, including Dublin, Amsterdam, Frankfurt, and Paris, and ultimately Pinto is left with a choice between Frankfurt and Paris. The case describes the decision-making process and gives an overview of JPMorgan’s history in France and the French government’s efforts to make the country more economically competitive to lure banks moving from London in the wake of Brexit.
Keywords: Change Management; Banks and Banking; Financial Markets; Cross-Cultural and Cross-Border Issues; Globalized Firms and Management; Globalized Markets and Industries; Banking Industry; Europe; European Union; France; United Kingdom
Related

Words Can Hurt: How Political Communication Can Change the Pace of an Epidemic

By: Jessica Gagete-Miranda, Lucas Argentieri Mariani and Paula Rettl
  • 2023 |
  • Working Paper |
  • Faculty Research
While elite-cue effects on public opinion are well-documented, questions remain as to when and why voters use elite cues to inform their opinions and behaviors. Using experimental and observational data from Brazil during the COVID-19 pandemic, we study how leader cues influence decisions about issues of direct personal relevance, such as social distancing. We first document a divergence in mobility and excess-death trends between municipalities with different concentrations of Bolsonaro voters. Second, we provide evidence from two pre-registered survey experiments confirming that these differences are likely explained by Bolsonaro cues polarizing the electorate regarding COVID-19-related issues. We then explore whether voters react to Bolsonaro’s cues as a way to make decisions with little cognitive effort (heuristics) or to express group membership (expressive utility). We conclude that while his supporters follow his cues to protect their social-political identity, the drivers of his opponents’ reactions are mixed.
Keywords: Elites; Public Engagement; Politics; Political Affiliation; Political Campaigns; Political Influence; Political Leadership; Political Economy; Survey Research; COVID-19; COVID-19 Pandemic; COVID; Cognitive Psychology; Cognitive Biases; Political Elections; Voting; Power and Influence; Identity; Behavior; Latin America; Brazil
Related

The Effect of Childhood Environment on Political Behavior: Evidence from Young U.S. Movers, 1992–2021

By: Jacob R. Brown, Enrico Cantoni, Sahil Chinoy, Martin Koenen and Vincent Pons
  • 2023 |
  • Working Paper |
  • Faculty Research
We ask how childhood environment shapes political behavior. We measure young voters’ participation and party affiliation in nationally comprehensive voter files and reconstruct their childhood location histories based on their parents’ addresses. We compare outcomes of individuals who moved between the same origin and destination counties but at different ages. Those who spend more time in the destination are more influenced by it: Growing up in a county where their peers are 10 percentage points more likely to become Republicans makes them 4.7 percentage points more likely to become Republican themselves upon entering the electorate. The effects are of similar magnitude for Democratic partisanship and turnout. These exposure effects are primarily driven by teenage years, and they persist but decay after the first election. They reflect both state-level factors and factors varying at a smaller scale such as peer effects.
Keywords: Political Parties; Government and Politics; Age; Residency; Voting
Related

Coordination and Bandwagon Effects: How Past Rankings Shape the Behavior of Voters and Candidates

By: Riako Granzier, Vincent Pons and Clémence Tricaud
  • October 2023 |
  • Article |
  • American Economic Journal: Applied Economics
Candidates’ placements in polls or past elections can be powerful coordination devices for both parties and voters. Using a regression discontinuity design in French elections, we show that candidates who place first by only a small margin in the first round are more likely to stay in the race, win, and win conditionally on staying in than those who place second. The impacts are even larger for ranking second instead of third, and also present for third instead of fourth. Rankings’ effects are largest when candidates have the same political orientation (making coordination more important), but remain strong when only two candidates qualify for the second round (and coordination is not needed). They stem from allied parties agreeing on which candidate should drop out, voters coordinating their choice, and the “bandwagon effect” of desiring to vote for the winner. We find similar results in two-round elections across 19 other countries.
Keywords: Strategic Voting; Coordination; Bandwagon Effect; Regression Discontinuity Design; French Elections; Voting; Political Elections; Behavior; France
Related

Product Variety, the Cost of Living, and Welfare Across Countries

By: Alberto Cavallo, Robert C. Feenstra and Robert Inklaar
  • October 2023 |
  • Article |
  • American Economic Journal: Macroeconomics
We use the structure of the Melitz (2003) model to compute the cost of living and welfare across 47 countries, and compare these to conventional measures of prices and real consumption from the International Comparisons Project (ICP). The cost of living is inferred without directly using ICP prices of traded goods, but instead relying on output prices, openness, domestic trade costs and product variety measured by the counts of barcodes or firms. We find that welfare is lower than indicated by real consumption for most countries, but similar in certain Asian countries and similar or higher in some European countries.
Keywords: Macroeconomics; Trade
Related
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Business, Government & the International Economy Unit
Harvard Business School
Morgan Hall
Soldiers Field
Boston, MA 02163
BGIE@hbs.edu