ERC FUNDED PROJECTS

This research proposal explores the political economy of international development assistance (aid) directed towards social expenditures, examined through the lens of a particular financial quandary that has been ignored in the literature despite having important economic and political repercussions. The quandary is that aid cannot be directly spent on expenditures denominated in domestic currency. Instead, aid needs to be first converted into domestic currency whereas the foreign exchange provided is used for other purposes, resulting in a process prone to complex politics regarding domestic monetary policy and spending commitments. The implications require a serious rethink of many of the accepted premises in the political economy of aid and related literatures. It is urgent to engage in this rethinking given tensions between two dynamics in the current global political economy: a tightening financial cycle facing developing countries versus an increasing emphasis in international development agendas of directing aid towards social expenditures. The financial quandary might exacerbate these tensions, restricting recipient government policy space despite donor commitments of respecting national ownership. The proposed research examines these implications through the emerging social protection agenda among donors, which serves as an ideal policy case given that social protection expenditures are almost entirely based on domestic currency. This will be researched through a mixed-method comparative case study of six developing countries, combining quantitative analysis of balance of payments and financing constraints with qualitative process tracing based on elite interviews and documentary research. The objective is to re-orient our thinking on these issues for a deeper appreciation of the systemic political and economic challenges facing global redistribution towards poorer countries, particularly with respect to the forthcoming Sustainable Development Goals.

1 459 529 €

Start date: 2015-05-01, End date: 2020-04-30

In most European countries social insurance programs, like welfare, unemployment insurance and disability insurance are characterized by low reemployment rates. Therefore, governments spend huge amounts of money on active labour market programs, which should help individuals in finding work. Recent surveys indicate that programs which aim at intensifying job search behaviour are much more effective than schooling programs for improving human capital. A second conclusion from these surveys is that despite the size of the spendings on these programs, evidence on its effectiveness is limited. This research proposal aims at developing an economic framework that will be used to evaluate the effectiveness of popular programs like offering reemployment bonuses, fraud detection, workfare and job search monitoring. The main innovation is that I will combine economic theory with recently developed econometric techniques and detailed administrative data sets, which have not been explored before. While most of the literature only focuses on short-term outcomes, the available data allow me to also consider the long-term effectiveness of programs. The key advantage of an economic model is that I can compare the effectiveness of the different programs, consider modifications of programs and combinations of programs. Furthermore, using an economic model I can construct profiling measures to improve the targeting of programs to subsamples of the population. This is particularly relevant if the effectiveness of programs differs between individuals or depends on the moment in time the program is offered. Therefore, the results from this research will not only be of scientific interest, but will also be of great value to policymakers.

550 000 €

Start date: 2008-07-01, End date: 2013-06-30

This project has the potential to radically change current understanding of cultic and social transformation in the post-exilic temple community of Jerusalem (c. 6th-4th centuries BCE), an important formative phase of ancient Judaism. “BABYLON” draws on recent, ground-breaking advances in the study of cuneiform texts to illuminate the Babylonian environment of the Judean exile, the socio-historical context which gave rise to the transformative era in Second Temple Judaism. In particular, these new data show that the parallels between Babylonian and post-exilic forms of cultic and social organization were substantially more far-reaching than presently recognized in Biblical scholarship. “BABYLON” will study the extent of these similarities and explore the question how Babylonian models could have influenced the restoration effort in Jerusalem. This goal will be achieved through four sub-projects. P1 will study the social dynamics and intellectual universe of the Babylonian priesthood. P2 will finalize the publication of cuneiform archives of Babylonian priests living in the time of the exile. P3 will identify the exact areas of change in the post-exilic temple community of Jerusalem. P4, the synthesis, will draw from each of these sub-projects to present a comparative study of the Second Temple and contemporary Babylonian models of cultic and social organization, and to propose a strategy of research into the possible routes of transmission between Babylonia and Jerusalem. The research will be carried out by three team members: the PI (P1 and P4), a PhD in Assyriology (P2) and a post-doctoral researcher in Biblical Studies specialized in the Second Temple period (P3 and P4). The participation of the wider academic community will be invited at two moments in the course of the project, in the form of a workshop and an international conference. “BABYLON” will adopt an interdisciplinary approach by bringing together Assyriologists and Biblical scholars for a much-needed dialogue, thereby exploding the artificial boundaries that currently exist in the academic landscape between these two fields.

1 200 000 €

Start date: 2009-09-01, End date: 2015-08-31

Subjective data play an increasing role in modern economics. For instance, new welfare measurements are based on people’s subjective assessments of their happiness or their life satisfaction. A problem of such measurements is that people have no incentives to tell the truth. To solve this problem and make those measurements incentive compatible, I will introduce a new market institution, called Bayesian markets. Imagine we ask people whether they are happy with their life. On Bayesian markets, they will trade an asset whose value is the proportion of people answering Yes. Only those answering Yes will have the right to buy the asset and those answering No the right to sell it. Bayesian updating implies that “Yes” agents predict a higher value of the asset than “No” agents do and, consequently, “Yes” agents want to buy it while “No” agents want to sell it. I will show that truth-telling is then the optimal strategy. Bayesian markets reward truth-telling the same way as prediction markets (betting markets) reward people for reporting their true subjective probabilities about observable events. Yet, unlike prediction markets, they do not require events to be objectively observable. Bayesian markets apply to any type of unverifiable truths, from one’s own happiness to beliefs about events that will never be observed. The present research program will first establish the theoretical foundations of Bayesian markets. It will then develop the proper methodology to implement them. Finally, it will disseminate the use of Bayesian markets via applications. The first application will demonstrate how degrees of expertise can be measured and will apply it to risks related to climate change and nuclear power plants. It will contribute to the political debate by shedding new light on what true experts think about these risks. The second application will provide the first incentivized measures of life satisfaction and happiness.

1 500 000 €

Start date: 2016-01-01, End date: 2020-12-31