Developing countries spend vast sums on subsidies. Beneficiaries are typically selected via either a proxy-means test (PMT) or through a decentralized identification process led by local leaders. A decentralized allocation may offer informational or accountability advantages, but may be prone to...

Standard models of hierarchy assume that agents and middle managers are better informed than principals about how to implement a particular task. We estimate the value of the informational advantage held by supervisors – middle managers – when ministerial leadership – the principal –...

This paper argues that redrawing subnational political boundaries can transform ethnic divisions. We use a natural policy experiment in Indonesia to show how the effects of ethnic diversity on conflict depend on the political units within which groups are organized. Redistricting along group...

Evidence on the implementation of India's National Rural Employment Guarantee Act suggests that the available work is often rationed by local leaders in poor areas, and that this is an important factor limiting the scheme's impact on poverty. The paper offers explanations for this empirical...

We study a simple model of a decentralized market game in which firms make directed offers to workers. We focus on markets in which agents have aligned preferences. When agents have complete information or when there are no frictions in the economy, there exists an equilibrium that yields the...

The paper provides a theoretical framework for analyzing policy formation among independent authorities operating in an interdependent environment. This is then applied to the analysis of optimal monetary policy in a stochastic two-country model with rational expectations. The main conclusions...