Research

Working Papers

• Cooperatives, Competition, and Compensation
  Abstract

  How does the allocation of ownership and control rights within firms affect responses to shocks? I study this question in the context of a pro-competitive reform in India that impacted cooperative manufacturing firms and their competitors. The reform removed firm-size restrictions on the production of “reserved” items, increasing competition for incumbents in “de-reserved” product markets. Using a difference-in-differences approach, I find that supplier cooperatives (SCs), owned and controlled by producer-members who supply material inputs, are resilient to the shock and move away from the production of de-reserved items. SCs increase the share of their income spent on materials relative to similar non-cooperatives, with evidence of downward adjustments in labor spending. On the other hand, worker cooperatives (WCs), owned and controlled by employees of the firm, face a sharp decline in revenue and are less likely than their non-cooperative counterparts to respond by picking up items that are not directly affected by the reform. Spending on labor does not fall as much as revenue for WCs, which is in line with the immediate interests of membership, but adjustments to labor inputs vary significantly across employment categories.
• Equilibrium Effects of Incentivizing Public Services (with Utkarsh Kumar)
  Abstract

  We study the equilibrium effects of subsidizing public services in the presence of vertically differentiated public and private suppliers by evaluating one of India’s largest welfare schemes, the Janani Suraksha Yojana (JSY), which subsidized childbirth at public health institutions. JSY did not improve health outcomes despite a substantial increase in take-up of institutional care, and we document three equilibrium responses that explain this policy failure. First, JSY led to a mismatch in patient risk across health facilities. High-risk mothers sorted out of the highest-quality care at private facilities into lower-quality public facilities. Second, only wealthier mothers sorted out of public facilities into more expensive private facilities in response to congestion and deteriorating care at public hospitals. Third, private hospitals increased prices without improvements in healthcare quality in states where eligibility was not universal, further crowding out higher-risk and poorer mothers. These findings point to the need for complementary public policies in addition to a subsidy like JSY.

Work in Progress

• Withholding Taxes: Implications for Trade in Services and Base Erosion (with Alexander Klemm and Li Liu)
  Abstract

  International trade in intangibles can be conducive to tax-driven reporting, with multinationals importing services from low-tax jurisdictions to deflate profits in higher-tax environments. Given their potential to counter this form of base erosion, withholding taxes (WHTs) on payments for services have featured extensively in ongoing reforms of the international tax architecture. In this study, we build a model of reporting decisions when firms have economic activities in one country and affiliates in others. We then test the predictions of this model using newly compiled data on treaty and non-treaty WHT rates for 100+ developing countries over 2009-2021. While there is no significant relationship between WHTs and services trade in general, we find that these taxes do have a strong negative impact on imports of relevant services from known low-tax jurisdictions. Our findings suggest that WHT can serve as a useful tool for countries to combat base erosion without drastic changes to aggregate service flows.
• Complementarity and Substitution in Import Tax Evasion (with Michael Best, Nada Eissa, Joseph Okello, Jakob Rauschendorfer, and Sandra Sequeira)

Policy Publications

• Drivers and Implications of Import Tax Evasion in Uganda (with Michael Best, Nada Eissa, Joseph Okello, Jakob Rauschendorfer, and Sandra Sequeira). 2023. International Growth Centre Project Report.

• Scalable Business Models for Alternative Biomass Cooking Fuels and Their Potential in Sub-Saharan Africa (under Dalberg Advisors). 2017. World Bank Energy Sector Management Assistance Program (ESMAP) Working Paper.

• Bridging the Gap Between Growth and Development (with Tanoubi Ngangom). In Global Goals, National Action: Making the Post-2015 Development Agenda Relevant to India, edited by Vikrom Mathur and Ritika Passi. London: Global Policy and Observer Research Foundation.

• India’s Economic Footprint in the Developing World (with Shubh Soni). August 2015. Observer Research Foundation Issue Brief 100.