Juan Felipe Riaño

PhD Job Market Candidate

I’m an Applied Microeconomist with research interests spanning the fields of Political Economy, Development Economics, and Economic History. My current research agenda focuses on the determinants of state capacity in developing countries and the long-term impact of conflict and historical institutions on economic development.

My job market paper studies the extend, functioning, and consequences of bureaucratic nepotism. I estimate the impacts of top manager’s kinship favoritism in the promotion, compensation, and performance of workers in the public sector; and argue why anti-nepotism legislation might be ineffective.

I expect to graduate in 2022 and will be available for interviews at the 2022 ASSA/AEA and 2022 EJME/EEA virtual meetings.

Research Areas: Development Economics, Political Economy, Economic History

Education

PhD in Economics, UBC, Expected
M.A in Economics, Universidad de los Andes, 2013
B.A in Economics, Universidad de los Andes, 2011
B.Sc. in Industrial Engineering, Universidad de los Andes, 2014

Awards

At the University of British Columbia

Academic Achievement Award (Faculty of Arts Graduate Award), 2020
President’s Academic Excellence Initiative PhD Award, 2020
Doctoral Fellowship (Four Year Fellowship), 2015 – 2019
International Tuition Award, 2015 – 2021

At Universidad de los Andes

Master Scholarship (Scholarship Industrial Engineering Department) 2011 – 2013
Undergraduate Scholarship (Beca `Quiero Estudiar’) 2007 – 2013

Grants

Centre for Innovative Data in Economics Research (CIDER)

  • Grant in Innovative Data, Project: The Political Economy of Corporate Voting, 2021
    Grant in Innovative Data, Project: Collateral Damage: The Secret War in Laos, 2019
    Grant in Innovative Data, Project: Bureaucratic Nepotism, 2018

Center for the Study of Security and Drugs (CESED)

  • Grant, Project: Conflict, Education, and Structural Transformation, 2011 – 2013

Center of American Studies (CEE)

  • Thesis Grant, Project: US Aid and Political Agenda-Setting, 2011 – 2012

JOB MARKET PAPER

This paper provides the first systematic empirical examination of bureaucratic nepotism and anti-nepotism legislation in an entire modern bureaucracy. By linking confidential information on family ties and administrative employer-employee records for the universe of civil servants in Colombia, I uncover three sets of empirical findings.  First, I provide evidence on the pervasiveness of close family connections in the public administration and demonstrate its negative relationship with the performance of public sector agencies. Second, by further exploiting within-bureaucrat variation in family connections generated by the turnover of top bureaucrats, I show how family connections to top non-elected bureaucrats distort the compensation and promotion of workers. Bureaucrats receive higher salaries and are more likely to be hierarchically promoted when related to top managers. However, consistent with the extraction of private rents instead of better screening of workers, I find that connected promotees are negatively selected in terms of public sector experience, education, and performance. Finally, I evaluate an anti-nepotism legislation reform by exploiting a sharp discontinuity in the set of family connections restricted by this law. I demonstrate the limited effectiveness of this reform and show how bureaucrats strategically responded to this policy change by substituting margins of favoritism and reshuffling within the public administration.[GO TO PAPER]

WORKING PAPERS

(with Leopoldo Fergusson and Horacio Larreguy)
We develop a model of the politics of state capacity building undertaken by incumbent parties that have a comparative advantage in clientelism rather than in public goods provision. The model predicts that, when challenged by opponents, clientelistic incumbents have the incentive to prevent investments in state capacity. We provide empirical support for the model’s implications by studying policy decisions by the Institutional Revolutionary Party (PRI) that affected local state capacity across Mexican municipalities and over time. Our difference-in-differences and instrumental variable identification strategies exploit a national shock that threatened the Mexican government’s hegemony in the early 1960s. The intensity of this shock, which varied across municipalities, was partly explained by severe droughts that occurred during the 1950s. [GO TO PAPER]

(with Felipe Valencia Caicedo)
As part of its Cold War counterinsurgency operations in Southeast Asia, the US government conducted a "Secret War" in Laos from 1964-1973. This war constituted one of the most intense bombing campaigns in human history. As a result, Laos is now severely contaminated with UXO (Unexploded Ordnance) and remains one of the poorest countries in the world. In this paper, we document the negative long-term impact of conflict on Laotian economic development, using highly disaggregated and newly available grid-cell data on bombing campaigns, satellite imagery, and development outcomes. We find that bombings have a negative, significant and economically meaningful impact on nighttime lights, expenditures and poverty rates. Almost 50 years after the conflict officially ended, bombed regions are poorer and growing at slower rates than unbombed areas. A one standard deviation increase in the total pounds of bombs dropped is associated with a 33% decrease in nightlights. To tackle the potential endogeneity of bombing, we use as instruments the distance to the Vietnamese Ho Chi Minh Trail as well as to US military airbases outside Laos established before the conflict started. Using census data at the village and individual levels, we show the deleterious impact of bombing and UXOs in terms of health, education, structural transformation, and rural-urban migration. [GO TO PAPER]

(with Leopoldo Fergusson & BK Song)
Can the media determine the success or failure of institutional reforms? We study the adoption of secret voting in the US and the role of media in this arguably crucial step to improve democracy. Using a difference-in-difference identification strategy and a rich dataset on local newspapers, we find that areas with high levels of media penetration exhibited multiple improvements in democratization outcomes following the adoption of the electoral reform. Specifically, the press contributed to the decrease in partisan attachment and support for dominant parties. It undermined the unintended consequence of the manipulation of electoral boundaries and the fall in turnout. We consider multiple concerns about our identification strategy and address the potential endogeneity of newspapers using an instrumental variable approach that exploits the introduction of wood-pulp paper technology, and woodland coverage at the county level in 1880. Exploring the heterogeneous effects of our results, we argue that the media mattered through the distribution of information to voters, and the increase of public awareness about political misconduct. [GO TO PAPER] 

(with Horacio Larreguy & Mariano Sánchez-Talanquer)
The extent to which authoritarian regimes use coercive, relative to redistributive, strategies to manage social dissent exhibit significant variation across the territory they govern. We argue that the incidence of different authoritarian tactics to deal with dissent depends on the coercive capacity of the state, which autocrats often inherit from the past. Where autocrats facing increasing discontent can rely on their capacity to coerce regime dissidents, they are more likely to eschew redistributive strategies. In contrast, dissent increases the likelihood of redistribution where autocrats lack readily-available tools for coercion. We provide empirical support for this argument primarily using a difference-in-differences identification strategy that exploits three sources of variation. First, we use a land reform that between 1910 and 1992 redistributed more than 50% of Mexico’s agricultural land. Second, we exploit a wave of dissent around the 1960s. Finally, we use municipal data on the availability of loyal semi-formal militias to coerce dissidents. Our results indicate that, when confronted with dissent, the PRI regime redistributed relatively less land in municipalities with more rural militia presence. We also show that, in those municipalities, events expressing social discontent were more successfully deterred. The study sheds light on how state coercive capacity shapes authoritarian strategies. [GO TO PAPER]

PUBLISHED WORK

(with Leopoldo Fergusson and Ana Maria Ibáñez)

We examine the long-term impact of violence on educational attainment, with evidence from Colombia’s La Violencia, a period of intense political violence in the mid-twentieth century. We find that individuals exposed to violence during and especially before their schooling years experience a significant and economically meaningful decrease in years of schooling. Exploring consequences beyond human capital accumulation, we show that exposed cohorts also engage in economic sectors that typically employ less qualified labor and are less likely to transition to jobs in manufacturing and services (relative to agriculture). Violence thus appears to place obstacles in the process of transitioning to more modern sectors, potentially affecting the structural transformation that may occur as income increases. [GO TO PAPER]

(with Leopoldo Fergusson and Carlos Molina)

Tax evasion lies at the core of the relationship between citizens and the state: it reflects the level of trust in the state and compliance with society's implicit social contract. However, empirically analyzing tax evasion is challenging, particularly because there are few direct and reliable measures. We conduct list experiments on a large sample of households to estimate how frequently consumers are willing to be complicit in value added tax (VAT) evasion, as well as the extent of social desirability bias in respondent answers. Around 20 percent of respondents agree to make purchases without a receipt in order to avoid paying VAT; surprisingly, they are not ashamed to admit this openly. Evasion is more prevalent in places with more informality and less physical presence of the state, as well as among poorer, less educated individuals and those who disregard the rule of law. [GO TO PAPER]

(with Leopoldo Fergusson and Carlos Molina)

Exchanging one’s vote for particularistic benefits—practices usually grouped under clientelism—is often thought to weaken programmatic links between citizens and politicians and disincentivize public good provision, as well as undermine voter autonomy and the ideal role of elections. However, empirically analyzing this key phenomenon for the working of democracies entails formidable challenges. We conduct list experiments on a large sample of households to estimate the incidence of clientelistic vote buying, as well as the extent to which respondents refrain from openly recognizing this behavior. Nearly one out of every five respondents engage in clientelism, and, surprisingly, they do not feel ashamed to admit it. Guided by the existing literature and systematically verifying the sensitivity of the results to model specification, we examine the robust correlates of clientelism and discuss the implications of our key findings. [GO TO PAPER]

WORK IN PROGRESS

(with Neil Lloyd)
This project investigates the hypothesis that the low levels of self-employment and informal sector activity in contemporary South Africa can be linked to the legacy of labour recruitment in South Africa’s gold mining industry. At the outset of the Witwatersrand gold rush (1886) labour was largely sourced from outside of South Africa: Southern Mozambique, Botswana, even China. However, during the early 1900’s a series of events culminated in the expansion of recruitment to African men within South Africa. These events included the collapse of the Witwatersrand Native Labour Association (WNLA) as a centralized recruitment agency, the decision by the Transvaal government to repatriate around 30,000 Chinese workers, and a recession in the Cape province which led the governor to encourage recruiters to expand their operations to the Cape’s ‘native reserves’. We combine historical recruitment data with contemporary, geo-coded survey data to estimate the long run impact of the centralized mining recruitment on contemporary self-employment. Our research design exploits the historical borders of districts selected for recruitment, as well as the historical location of private sector recruiters prior to the re-establishment of a monopsony in 1918.

(with Thorsten Rogall)
Estimates suggest that over their lifetime 1 in 1,000 black men and boys can expect to be killed by the US police (Edwards et al., 2019). A recent, very prominent example is the death of George Floyd by the hands of a white police officer in Minnesota. What explains this recurring police violence against African vAmericans? Is it systematic racism? a generalized culture of violence? We believe these questions, or any question, on how to understand and possibly prevent violence is utterly important. In this project, we will empirically assess whether today’s police violence can be traced to historical Lynchings in the US. And if so, what the exact magnitudes and mechanisms of transmission are.

University of British Columbia (Vancouver, BC, Canada)

ECON 544 - Political Economy, Institutions, and Business, Graduate Level (2019, 2020)
ECON 541 - Economic Development, Graduate Level (2019)
ECON 326 - Methods of Empirical Research in Economics, Undergraduate Level (2016-2018)
ECON 325 - Introduction to Empirical Economics, Undergraduate Level (2016-2018)

Universidad de los Andes (Bogotá DC, Colombia)

ECON 4651 - Empirical Applications in Political Economy, Graduate Level (2013, 2014)
ECON 4212 - Advanced Macroeconomics Business Cycles, Graduate Level (2012, 2013)
IIND 2401 - Engineering Economics, Undergraduate Level (2011, 2012)
ECON 2105 - Game Theory, Undergraduate Level (2010, 2011)
ISIS 1207 - Java Programming, Undergraduate Level (2009, 2010)
MATE 2711 -Mathematical Methods for Economists, Undergraduate Level (2008, 2009)