Steven Poelhekke’s research while affiliated with Vrije Universiteit Amsterdam and other places

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Publications (56)


Timing of effects. Notes The graphs are based on event study regressions. We estimate the following specification for the sample of districts with a college-educated democratic mayor (left panel) and the sample of districts without (right): ln(Yijkpt)=β0+β1ElecYeark,-2+β2ElecYeark,0+β3ElecYeark,1+β4ElecYeark,≥2+μi+ωjt+δpt+ϵijkpt\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$ln(Y_{ijkpt}) = \beta _0 + \beta _1 ElecYear_{k,-2} + \beta _2 ElecYear_{k,0} + \beta _3 ElecYear_{k,1} + \beta _4 ElecYear_{k,\ge 2} + \mu _i + \omega _{jt} + \delta _{pt} + \epsilon _{ijkpt}$$\end{document}, where e.g. ElecYeark,-2\documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{wasysym} \usepackage{amsfonts} \usepackage{amssymb} \usepackage{amsbsy} \usepackage{mathrsfs} \usepackage{upgreek} \setlength{\oddsidemargin}{-69pt} \begin{document}$$ElecYear_{k,-2}$$\end{document} is a (lead) dummy that equals one if in district k the democratic mayor election occurs two years later. Dots indicate point estimates and lines indicate 90% confidence intervals based on standard errors clustered at the district level. The sample period is 2000–2004.
Democratization, leader education and growth: firm-level evidence from Indonesia
  • Article
  • Full-text available

February 2023

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88 Reads

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2 Citations

Journal of Economic Growth

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Steven Poelhekke

Does the economic success of democratization depend on newly elected leaders’ characteristics? We exploit the unique Indonesian democratization process, where districts exogenously democratized in different years. In a census of manufacturing plants, employment drops by 5% in districts that elect a non-college educated mayor, while employment stays constant under college graduates. Non-college educated mayors substantially raise taxation but provide less infrastructure, do not spend more on social programs, and are more often involved in corruption cases. Other leader attributes and district characteristics, as well as tests for pre-treatment trends, for selection on unobservables, and for close elections do not explain away the important role of leaders’ education in shaping local policies and growth.

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Follow the money: Does the financial sector intermediate natural resource windfalls?

November 2022

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2 Reads

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11 Citations

Journal of International Money and Finance

Why is the financial sector underdeveloped in resource-rich economies? Using a large panel dataset, we find slower growth in both financial sector deposits and private sector lending in countries that experience an unexpected natural resource windfall as measured by shocks to exogenous world prices. This effect is driven by countries with repressed financial systems and weak governance structures. The smaller role for the financial sector is accompanied by a stronger role of governments in channeling financial capital into the economy. The lack of private financial intermediation of natural resource windfalls hampers the development of the financial sector, which we interpret as evidence for a resource curse in financial development.



Pushing one’s luck: Petroleum ownership and discoveries

July 2021

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25 Reads

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7 Citations

Journal of Environmental Economics and Management

We present a new dataset that tracks changes in legal ownership regimes in the petroleum sector between 1867 and 2008 for a panel of countries. We document that foreign ownership has been taken over by partnerships as the leading ownership regime, while domestic ownership is on the rise again in recent years. We use this dataset to examine whether institutional change in the petroleum sector leads to more oil and gas exploration and discoveries. On average, switching to majority foreign ownership is related to up to a quarter of a standard deviation more discoveries than under majority domestic ownership. Switching to partnership is positively related to drilling activity, but is less likely to be linked to many more discoveries. Petroleum exploration and discoveries may thus be endogenous to industry-specific institutional change.


Good mine, bad mine: Natural resource heterogeneity and Dutch disease in Indonesia

March 2021

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44 Reads

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27 Citations

Journal of International Economics

We analyze the local effect of exogenous shocks to the value of mineral deposits on a panel of manufacturing plants in Indonesia. We introduce heterogeneity in natural resource extraction methods, which helps to explain the mixed evidence found in the ‘Dutch disease’ literature. In districts where mineral extraction is relatively capital intensive, mining booms cause virtually no upward pressure on manufacturing wages, and both producers of more heavily traded and relatively less-traded manufacturing goods benefit from mining booms in terms of employment. In contrast, labor-intensive mining booms drive up local wages such that heavily traded goods producers respond by reducing employment.





Example: the optimal carbon tax as a function of the discount rate.
Scenarios for the optimal carbon tax.
How expensive should CO2 be? Fuel for the political debate on optimal climate policy

November 2019

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47 Reads

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21 Citations

Heliyon

Most people are convinced that climate change is a threat and that it should somehow be dealt with. It is also clear that CO2 emissions are still too cheap and must be priced higher to sufficiently curtail emissions. Yet how high should a carbon tax be? Answering this question requires scientific insights on the costs and benefits of a carbon tax but also ethical – and thus political – judgements on how we value the damages from climate change that will happen in the near and in the far future. This paper discusses the key tradeoffs for policy makers, reviews the evidence on the social cost of carbon, and discusses global and unilateral policy options. It finds that a price of $77 per metric ton of carbon is defensible if we give 95% weight to damages occurring two generations (or 50 years) from now but higher if we want to further reduce the risk of catastrophic change. It is best implemented as part of trade agreements and in combination with R&D investment. : Economics Keywords: Economics



Citations (39)


... 1 Besides, the literature has given special emphasis to the education of political leaders. Political leaders with higher educational attainment are, for example, found to promote economic growth (Besley et al.,2011;Jain et al., 2023), to foster education (Diaz-Serrano & Pérez, 2013;Lahoti & Sahoo, 2020), and to reduce corruption (Pelzl & Poelhekke, 2023). ...

Reference:

Is country leaders’ education relevant for policy making? The case of the Covid-19 pandemic
Democratization, leader education and growth: firm-level evidence from Indonesia

Journal of Economic Growth

... When there is sufficient money available in economic system, it could then stimulate economic growth, increasing economic performance of real sectors, and then reducing unemployment rate. Vice versa, when there is insufficient money available, the economy will be in a sluggish phase, and the economy will face contractionary situation (Beck & Poelhekke, 2017;Dornbusch et al., 2008;Mankiw, 2016;Ziegenbein, 2021). ...

Follow the money: Does the financial sector intermediate natural resource windfalls?
  • Citing Article
  • November 2022

Journal of International Money and Finance

... This article also contributes to a branch of the natural resource curse focused on resource revenue volatility (van der Ploeg & Poelhekke, 2009;van der Ploeg & Poelhekke, 2010). To mitigate the negative impacts of volatility, the literature recommends industrial diversification (Wiig & Kolstad, 2012;Noor & Erickson, 2023), buffer funds (van der Ploeg & Venables, 2011), restrictive trade controls (Mashayekhi, 1978;Langarudi & Radzicki, 2013), dynamic adjustment of government expenditures (Moxnes, 1983;Langarudi et al., 2011), and income redistribution policies (Langarudi, 2020). ...

The Pungent Smell of 'Red Herrings': Subsoil Assets, Rents, Volatility and the Resource Curse
  • Citing Article
  • January 2010

SSRN Electronic Journal

... Про схожі процеси, але вже на теренах Африки, пишуть європейські та африканські автори. Наприклад, такі, як Джина Портер [4], Роберто Бонфатті та Стівен Поелхекке [5], Ремі Джедваб, Едвард Кербі та Александер Мораді [6], Ібрагім Халіл Абдуссалам [7], Шеху Тіджані Юсуф [8], Нвачукву Обіакор та Абуома Агаджелу [9], Барбара Нтомбі Нгвенья [10], та інші. ...

From Mine to Coast: Transport Infrastructure and the Direction of Trade in Developing Countries
  • Citing Article
  • January 2013

SSRN Electronic Journal

... The second is the negative impact. Resourceseeking IFDI has promoted the expansion of resource-intensive manufacturing, forming a scale effect, which to some extent has aggravated environmental pollution [29], easily leading to ecological crises or a "resource curse" [30]. General research believes that the rapid development of IFDI expands the scale of domestic production activities, especially leading to the scale expansion of polluting industries, causing excessive consumption of natural resources and an increase in total pollution emissions, thereby resulting in lower GTFP [31]. ...

Green Havens and Pollution Havens
  • Citing Article
  • January 2012

SSRN Electronic Journal

... An empirical challenge in this topic concerns issues of endogeneity, specifically due to possible selection into treatment (Brunnschweiler and Poelhekke, 2021). The mining boom is assumed to be exogenous since it was generated by global demand and not local supply shifts (Radetzki et al., 2008;Farooki and Kaplinsky, 2013;Singleton, 2014). ...

Pushing One's Luck: Petroleum Ownership and Discoveries
  • Citing Article
  • January 2021

SSRN Electronic Journal

... We established linear models as well as models with moderating effects by including the 1-year lag of the testing variables of interest to strengthen the causality and address endogeneity concerns. Building upon previous sectoral research (Brunnschweiler & Poelhekke, 2021;Mollah et al., 2021), we formulated our research models by incorporating country and year dummy variables to establish a FEs model in regression analysis (Equation (1)). To capture both the time-series and cross-sectional dimensions of the data, we employed the least squares dummy variable (LSDV) approach (Gujarati, 2014), which is commonly utilized in the literature (Singh et al., 2022). ...

Pushing one’s luck: Petroleum ownership and discoveries
  • Citing Article
  • July 2021

Journal of Environmental Economics and Management

... Regulations governing reclamation obligations by mining permit holders are a crucial aspect of maintaining a balance between the need for economic development through the exploitation of natural resources and environmental protection. In Indonesia, with its abundant mineral resources, mining activities have become one of the main pillars of the economy (Pelzl & Poelhekke, 2021;Syahrir et al., 2020). However, the negative impacts caused by mining activities, such as environmental damage, pollution, and the loss of productive land, demand firm and effective regulations. ...

Good mine, bad mine: Natural resource heterogeneity and Dutch disease in Indonesia
  • Citing Article
  • March 2021

Journal of International Economics

... The environmental cost of CO 2 emissions isn't limited to just the immediate impact. Studies have placed a value of $77 per metric tonne of CO 2 emissions, considering the damage that unfolds across two generations (approximately 50 years) [58]. This value can potentially increase further if we factor in the long-term effects of climate change and extreme weather events. ...

How expensive should CO2 be? Fuel for the political debate on optimal climate policy

Heliyon

... We rely on this literature, which highlights the motivation of political leaders to build roads to extend their capacity to govern, to construct our instrumental variable for proximity to the road networks. In so doing, we follow a large literature that shows that non-economic factors play determining roles in the propensity of African governments to invest in the construction of public infrastructure (Bonfatti et al., 2019;Jedwab and Storeygard, 2021;Burgess et al., 2015;Herbst, 2014). In constructing our instrumental variable, we assume that African leaders would built roads to facilitate territorial administration by easing the movement of administration officials and military troops from the capital power center to the rest of the country, and from one location to another (Herbst, 2014;Muller-Crepon et al., 2020). ...

Priority Roads: The Political Economy of Africa's Interior-to-Coast Roads
  • Citing Article
  • January 2019

SSRN Electronic Journal