Informality and Violence: Evidence from South Africa

Abstract: This paper studies the emergence of violence in legal markets, with a particular focus on the informal commuter transport sector in South Africa, where minibus taxis are integral to urban mobility. Despite being a legal sector, the taxi industry is plagued by significant and persistent violence, imposing substantial social costs. Using novel administrative data from the government’s operating license system, route-level pricing information, and a unique dataset of taxi-related violence compiled from print and online media, I examine the interplay between competition, firm growth, and violence. I leverage variation from a sudden decline in rail service quality to estimate the effect of local demand shocks on taxi-related violence in a difference-in-differences framework. The taxi associations most positively affected by this demand shock experience substantial increases in violence. Excess entry appears to be the main mechanism driving this result. These findings suggest firms do not internalize the costs of violence in ways that limit its occurrence when faced with economic shocks, highlighting the limits of private organizing in the absence of well functioning state institutions.

Spatial Wage Disparities and Sorting in a Middle-Income Country: Evidence from South Africa

Abstract: How do individual agglomeration gains in lower and middle income countries differ from those in high income countries? This paper uses a large administrative panel (2013-2019) of the universe of registered taxpayers in South Africa to estimate the magnitude of private sector agglomeration gains following best-practice methods in the empirical urban economics literature. The distribution of gains from density across the income distribution, and by industry and gender, as well as dynamic effects are presented. The estimation yields a result of 0.021 for the elasticity of wages with respect to density, considerably lower than estimates from other middle income countries that have relied on cross-sectional datasets that do not allow for the inclusion of individual fixed effects.

Cooperative governance: Traditional leaders and local government, with Dieter Von Fintel

Abstract: In many African countries dual systems of institutions exist. Modern, democratic governments exist alongside systems of traditional leadership, communal land tenure and customary courts. In South Africa, roughly a third of the population -18 million people- reside in areas under some form of traditional authority. This paper evaluates the impact of a reform allowing for the participation of traditional leaders on municipal councils on service delivery, spending outcomes and public perceptions. We create a new database by searching through and extracting detailed information from South African government gazettes and combine this with yearly panel data on municipal finances, service delivery and audit outcomes. Preliminary results suggest the participation of traditional leaders leads to limited changes in municipal service delivery and spending priorities, but coincides with an increase in irregular expenditure and a significant increase in protests in municipalities affected by the reform.

The Political Economy of Migration Restrictions under Apartheid, with Tomás Domínguez-Iino

Abstract: Non-democratic states often promote the development of strategic industries while simultaneously restricting internal migration. While such restrictions come at an aggregate efficiency cost due to the spatial misallocation of labor, they divert labor to sectors of the economy the regime considers strategically important to remain in power. Such sectors may be fiscally important, in that they represent a large share of the regime’s revenue, or politically important, in that they disproportionately represent the regime’s political base. In this paper, we study the case of Apartheid South Africa, where internal migration restrictions were imposed on the black population from 1923 until 1986. One key objective for the ruling regime was to divert captive labour to the mining and agricultural sectors, which were important sources of fiscal revenue and political capital, respectively. First, using micro-data from historic South African censuses, we show dramatic changes in migration patterns before and after restrictions were removed. Second, we complement our migration data with labor demand data, which we construct from mine-level archival records and historical agricultural censuses. Third, we estimate a multi-sector migration choice model, which we use to study how migration restrictions are endogenously chosen by the regime as complementary to the broader industrial policy context. (Draft soon)

Adaptive Investment With Land Tenure and Weather Risk: Behavioral Evidence From Tanzania (2024), with Martine Visser, Chalmers Mulwa, Mintewab Bezabih and Byela Tibesigwa, Journal of Economic Behavior and Organization, (Link)

Leaving the Hearth You Know: Internal Migration and Energy Poverty (2024), with Johanna Choumert-Nkolo, World Development, (Link)

Urban demand for cooking fuels in two major African cities and implications for policy (2024), with Ipsita Das, Marc Jeuland and Remidius Ruhinduka, PLOS Sustainability and Transformation, (Link)

Decision-Making in a Water Crisis: Lessons From the Cape Town Drought for Urban Water Policy (2020), with Johanna Brühl, Martine Visser and Gunnar Köhlin, Oxford Research Encyclopedia of Environmental Science. (Link)

Stacking up the ladder: A panel data analysis of Tanzanian household energy choices (2019), with Johanna Choumert-Nkolo and Pascale Combes-Motel, World Development, vol. 115, pages 222-235. (Link)