Seminar 218, Psychology and Economics (Joint with Development and Planning Seminar): How Research Affects Policy: Experimental Evidence from 2,150 Brazilian Municipalities
Seminar | November 18 | 4-5:30 p.m. | 648 Evans Hall | Note change in date and time
Gautam Rao, Harvard University
Link to Working Paper
ABSTRACT: This paper investigates if research findings change political leaders' beliefs and cause policy change. Collaborating with the National Confederation of Municipalities in Brazil, we work with 2,150 municipalities and the mayors who control their policies. We use experiments to measure mayors' demand for research information and their response to learning research findings. In one experiment, we find that mayors and other municipal officials are willing to pay to learn the results of impact evaluations, and update their beliefs when informed of the findings. They value larger-sample studies more, while not distinguishing on average between studies conducted in rich and poor countries. In a second experiment, we find that informing mayors about research on a simple and effective policy (reminder letters for taxpayers) increases the probability that their municipality implements the policy by 10 percentage points. In sum, we provide direct evidence that providing research information to political leaders can lead to policy change. Information frictions may thus help explain failures to adopt effective policies.