Category: Public Policy

My session is on Nov 22, 2014.

10:00 – 11:45 a.m.
Session 22B
Macroeconomics and International Economics
Organizers: Yu Hsing, Southeastern Louisiana University
Session Chairs: Lirong Liu, Sam Houston State University
Papers: “Tax Evasion through Trade Intermediation: Evidence from Chinese Exporters”
Xuepeng (Paul) Liu, Kennesaw State University (Contact Author)
Huimin Shi, Renmin University of China
Michael Ferrantino, The World Bank

“Total Factor Productivity and China’s Miraculous Growth: An Empirical Analysis”
Jianhua Zhang, The People’s Bank of China (Hangzhou)
Chunxia Jiang, Middlesex University Business School (Contact Author)
Peng Wang, The People’s Bank of China

“Do Governments Both Respond to and Counteract International Pressure for Democracy and Human Rights?”
Judith Kelley, Duke University
Yuqing Hu, The George Washington University (Contact Author)

“The Distributional Effects of Monetary Policy in an Open Economy”
Ying-Syuan Li, Fu-Jen Catholic University (Contact Author)

“Targeting with High Priority Violation Policy: An Empirical Analysis”
Lirong Liu, Sam Houston State University (Contact Author)
Zhou Yang, Robert Morris University

Discussants: Ying-Syuan Li, Fu-Jen Catholic University
Chunxia Jiang, Middlesex University Business School
Xuepeng (Paul) Liu, Kennesaw State University
Yuqing Hu, The George Washington University
Lirong Liu, Sam Houston State University

International World Congress, 6-10 June 2014, Dead Sea, Jordan

My presentation:

Slides download: IEA_June_6_2014

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An undergoing paper coauthored with Judith Kelley


The international community is often striving to promote political and human rights reforms in recalcitrant countries. As the study of such efforts has matured, there has been growing concern that although governments may undertake the desired reforms they may counteract them by switching from the targeted type of misconduct into another spillover type of misconduct. Unfortunately, the simple correlations between the intervention and behavioral changes cannot lead to casual conclusions, as they can be caused by the intervention or other factors, or it is a result of reverse casualty, that is the pressure targets aberrant countries. These various explanations of a correlation make it essential to scrutinize the data for the presence of the theorized causal mechanisms. This article presents a framework for assessing the plausibility of counteraction. Specifically, counteraction requires conditional behavioral shifts, that is, international pressure should be accompanied not only by deterioration in the spillover behavior but also by improvements in the targeted behavior. It then revisits two prior studies, one finding that human rights shaming is associated with more physical terror, the other that international election monitors harm governance. In neither case do we find evidence of the required causal mechanisms of the counteraction. Lastly, the article discusses how exacting the standards of evidence should be in the study of policy actions that affect vulnerable populations. It thus contributes methodologically, revisits important prior findings, and raises important normative questions.


Since the end of the Cold War, international election monitoring has been widely practiced by organizations all over the world. By directly observing the electoral process and evaluating the outcomes, it pressures governments to hold democratic elections. Studies have shown that election monitoring missions can play a positive role in facilitating democracy by deterring fraud, increasing confidence in the electoral process, and serving as third-party mediators (Bjornlund, 2004; Hyde, 2007). Monitors are able to effectively prevent election malpractices such as stuffing the ballot boxes and electoral violence (Hyde, 2007; Daxecker, 2012) on the election-days. However, there is another unnoticeable trend that might undermine the effectiveness of international monitoring, that is, the incumbents may strategically adapt their tactics by shifting away from overt election-day cheating to subtle manipulation, which is less likely to be observed and criticized (Daxecker, 2012) and which might be more harmful for the governance (Simper and Donno, 2012). International election monitoring, a widely accepted tool for democracy promotion, is now facing new challenges.

Not many economists have studied the issue on international election monitoring and manipulation, but it has attracted significant attention from political scientists, among whom there is a growing body of literature in an endeavor to measure or explain the effects of international monitoring.

A large volume of theories focuses on manipulation as a way to win elections. Elections generate public information that affects how the incumbent interacts with other elites and citizens (Little, 2012b), during which manipulation is considered as a hidden action to distort public information (Kuhn, 2012) and reports from international monitors of good reputation can help render election results credible (Magaloni, 2009; Ferson, 2011).

Other theories argue that international benefits such as international investment, foreign aid, preferential trade agreements and military support give electoral autocrats the incentive to invite international observers and manipulate elections to minimize international criticism (Beaulieu and Hyde, 2009; Hyde, 2011). Economic and political stability, transparency, and democratic political institutions are examples of valued and rewarded state-level characteristics.  For countries that are not perceived to possess the characteristic have an increased incentive to modify their behavior in order to gain more international benefits and to signal their commitment to skeptical or indifferent audiences (Hyde, 2011b).

Most of the existing theories adopt the signaling (Hyde, 2011b), decision-theoretic (Lehoucq, 2003; Fearon, 2011) or game-theoretic approach (Little, 2012b), in which inviting monitors are seen as a signal of a government’s commitment of democracy, and the incumbents face the tradeoffs between increasing their probability of winning elections and the chance that they will be captured for committing fraud and the associated decrease in legitimacy, credibility, or aid, so they strategically achieve an equilibrium in which the marginal cost of manipulation equals the expected marginal benefits of international support or winning the election. However, none of the models consider the more general equilibrium in combination of the short-run objective of election victory and long-run objective of development (such as gaining international benefits), or give out a benchmark that the international monitoring can be beneficial or harmful.

Regarding the empirical research, a lot works have been done to show the association between international monitoring, election manipulation and government outcomes, but few directly test the casual relationship. One possible reason is that any cross-national study attempting to examine the domestic effects of international observers would be plagued by endogeneity problems. At the aggregate level it is difficult to distinguish between an election that is clean because of the presence of international observers and an election that would have been clean regardless of their presence. One may use counterfactuals to make a persuasive argument, but demonstrating causality using cross-national evidence would be nearly impossible.

Nevertheless, there are still a handful of papers testing the casual effects of international monitoring on manipulation and a variety of other governance outcomes. For example, Hyde (2010) presented the first field-experimental study in international election monitoring, in which the international observers were randomly assigned in the 2004 Indonesia presidential election. By examining the micro level electoral data, she found that incumbent presidential candidate performed better in internationally-monitored villages and the presence of observers had a measurable effect on the votes cast. Simpser and Donno (2012) tested the effects of high-quality monitoring on governance, in which they instrumented for election monitoring by identifying sources of variation in the likelihood of monitoring. They used regional rate of high-quality election monitoring as IV, because changes in the operation of monitoring organizations are likely to affect the probability of monitoring in the region where the organization specializes, but unlikely to affect governance directly or via other channels. Both of the examples provide evidence of the casual relationship, but since they implicitly rely on the assumption that politicians manipulate the election in order to win more votes, they thus neglect other possible channels through which the international election monitoring can impact the governance.


Beaulieu, Emily, and Susan Hyde. 2009. “In the Shadow of Democracy Promotion : Strategic Manipulation, International Observers, and Election Boycotts.” Comparative Political Studies, 42: 392-415.

Bhirnlund, Eric. 2004. Beyond Free and Fair: Monitoring Elections and Building Democracy. Washington DC and Baltimore, MD: Woodrow Wilson Center Press and Johns Hopkins University Press.

Daxecker, Ursula. 2012. “All Quiet on Election Day? International Election Observation and Incentives for Violent Manipulation in African Elections.” Journal of Peace Research, forthcoming.

Fearon, James. 2011. “Self-Enforcing Democracy.” The Quarterly Journal of Economics, 126: 1661-1708.

Hyde, Susan. 2007. “The observer Effect in International Politics: Evidence from a Natural Experiment.” World Politics, 60 (1): 37-63.

Hyde, Susan, and Angela O’Mahony. 2010. “International Scrutiny and Pre-electoral Fiscal Manipulation in Developing Countries.” The Journal of Politics, 72 (3): 690-704.

Hyde, Susan. 2011. “Catch Us if You Can: Election Monitoring and International Norm Creation.”American Journal of Political Science, 55 (2): 201-462.

Hyde, Susan. 2011. The Pseudo-Democrat’s Dilemma: Why Election Observation Became an International Norm. Cornell University Press.

Hyde, Susan. 2012. “Does Information Facilitate Self-Enforcing Democracy? The Role of International Election Monitoring.” Working paper.

Lehoucq, Fabrice. 2003. “Electoral Fraud: Causes, Types, and Consequences.” Annual Review of Political Science, 6: 233-256.

Kelley, Judith. 2008. “Assessing the Complex Evolution of Norms: The Rise of International Election Monitoring.” International Organization, 62: 221-255.

Kelley, Judith. 2012. Monitoring Democracy: When International Election Observation Works, and Why It Often Fails. Princeton University Press.

Kuhn, Patrick. 2012. “To Protest or Not: The Election Losers’ Dilemma.” Manuscript.

Little, Andrew. 2012. “Elections, Fraud, and Election Monitoring in the Shadow of Revolution.” Quarterly Journal of Political Science, 7: 249-283.

Little, Andrew. 2012. “Fraud and Monitoring in Noncompetitive Elections”. Working Paper.

Little, Daniel. 2011. Varieties of Social Explanation. Westview Press.

Magaloni, Beatriz. 2009. “The Game of Electoral Fraud and the Ousting of Authoritarian Rule.” American Journal of Political Science, 54(3): 751-765.

Shleifer, Andrei, 2002. “The Memu of Manipulation.” Journal of Democracy, 13: 36-50.

Simpser, Alberto, and Daniela Donno. 2012. “Can International Election Monitoring Harm Governance?” The Journal of Politics, 74 (2): 501-513.

Project with Domenick, presented today. It has been great to work with him.

Slides Here. All summer classes end today! 🙂


  • Increasing weight of sub-Saharan Africa in global health as a result of fast population growth

The Challenges

  • Healthcare Workers Shortages and Emigration
    • Sub-Saharan Africa has 11% of the world’s population, 25% of global disease burden, with only 3% of the world’s health workers.
    • ~20,000 African healthcare workers leave annually.
    • 12% of all African physicians are currently in the US, UK or Canada.
    • Each medical professional leaving Africa costs the continent $184,000, the total cost is ~$4 billion annually.
  • Urban-Rural Healthcare Disparities
    • Urban residents have 3x greater access to doctors and 2x access to Nurses than their rural counterparts.
    • Turnover rates highest amongst rural practitioners.
    • Current short-term financial incentives for doctors in rural areas prove to be inadequate and cost significant resources.

ACTORS’ Approach

  • Incentivize rural healthcare practice by financing physician and clinician medical education in return for commitment to work in rural areas.
  • Work with local and national governments to provide better living and working conditions for healthcare workers in rural areas, creating long-term incentives to reduce turnover rates.
  • Strengthen national educational infrastructure by providing education abroad and increasing the number of health professionals.



  • Cooperate with international foundations (Gates Foundation, WHO, World Bank etc.) for funding. Rural doctors can be used to implement international initiatives.
  • Local and regional governments provide housing/medical resources for rural doctors.

Long Term

  • Lower doctor emigration increases taxable income, lessens waste of national education funding.
  • Better rural healthcare reduces economic burden of disease and illness.
  • Human capital accumulates from improved health and education, which enhances the economy

Appendix: policy memo to Nigeria


To:                   Goodluck Jonathan

President, Federal Government of Nigeria

From:               Yuqing Hu

Analyst, Attract Clinicians to Rural Sub-Saharan Africa (ACTORS)

Date:                August 13, 2012

Re:                   Confront the Human Resources Challenges in the Health Sector of Rural Nigeria


The health sector in Nigeria is characterized by wide disparities between urban and rural areas in health status, service delivery, and resource availability. In particular, the rural areas have been persistently suffering from shortages of skilled medical personnel at the primary health care level, and it is largely attributed to the massive emigration of healthcare workers to west and to oil rich nations of the Middle East. However, the current incentives providing allowance and subsidy for rural workers have proven to be inadequate. The purpose of this memo is to introduce a scholarship program run by ACTORS that aims to address the brain drain, and provide recommendations for the government of Nigeria to facilitate the successful implementation of the program.

ACTORS: Attract Clinicians to Rural sub-Saharan Africa

ACTORS’ approach focuses on expanding the medical education, incentivizing medical students to work in (rural) sub-Saharan Africa, and improving the medical infrastructure in rural areas. The core is the scholarship program for medical education that is funded by global health organizations including the World Bank and Bill and Melinda Gates Foundation. It covers the tuition fees for medical students in exchange for their commitment to work for a period of time in rural sub-Saharan Africa. The doctor outflow in Nigeria occurs partly because the low income and unsatisfactory working conditions in (rural) Nigeria cannot help students to recoup their high education costs. When scholarship lowers their costs, graduates’ desire of seeking better pay abroad is thus reduced. It also enables poor students who would otherwise not attend medical schools to receive education, thus enlarge the pool of educated healthcare workers. However, the scholarship program is only a starting engine and it relies on external funding, while ACTORS aims to create a virtues circle that realizes the self-renewal of human resources in the health sector of rural sub-Saharan Africa. To achieve this goal, ACTORS will need the collaboration from the government of Nigeria.


The local and national government of Nigeria should administrate the medical training organization for quality control, establish a fair and efficient mechanism to allocate students to working places and training organizations, provide housing and other benefits for the rural workers, and add resources to the local hospitals or clinicians based on the feedback from ACTORS.

Student Allocation

As the country with the best medical education resources in sub-Saharan Africa, Nigeria relies less on overseas education than other African countries. The medical training can run in three tiers. The first tier is the national level universities: students across the nation who are willing to work in rural areas can apply to ACTORS scholarship. In this process, the federal ministry of education can establish a centralized system, in which the government sets the quota for scholarship students in each region and in each medical school. The quotas should be based on the availability of regional education resources and medical infrastructure, as well as the regional demand for doctors. ACTORS helps design an efficient algorithm such that the centralized system makes the allocation matching the preferences of most students. The second tier is the community level medical training. The government should organize the local medical training sessions, so that the allocated physicians can train their assistants. The second tier multiplies the local capacity for the primary care services. The third tier is the primary and secondary education. The government should improve the enrollment rate for primary and secondary education, since it not only enlarges the pool for eligible scholarship applicants and trainable assistants, the literacy of the Nigerian people can also add to the human capital which can boost the economy.

Quality Control

Since applicants have signed the contract with ACTORS, they are required to work for a period of time in the rural areas. In this period, the government is responsible to pay them salary, and provide other benefits such as housing. However, there involve risks that the rural healthcare workers might break the contract and emigrate, or shirk their duty.

To minimize the risks, there are three ways that the government could do. First, the government can provide the deferred benefits. After the physicians complete work, ACTORS will evaluate their work and confer several different honorary titles according to their service qualities, and report to the local government in confirmation of the completion and the quality. The government then provides different benefit packages to the workers based on ACTORS’ report, and these benefits could be in the form of healthcare insurance, society security and child care subsidy. The healthcare workers have the incentive to do well and comply with the contract. Moreover, since the longer working history is associated with better benefits, they also have incentives to renew the contract and extend their stay in the rural areas. The second way is to increase punishment for breaking contracts. The third way is to value the feedback from rural health workers. As physicians are working, they are responsible for providing feedback to ACTORS, and the advisory board of ACTORS will analyze the feedback and give the local government suggestions regarding the need for infrastructures and medical facilities. The feedback is reliable as it comes from the front line workers. The corresponding improvement of the working and living conditions for those workers can create a feeling of being respected and valued, and strengthen their willingness to stay in the rural area, and also it enlarges the region’s capacity for healthcare services.

Presentation on Global Health & Human Rights Seminar. I ran out of time before finishing the last few pages 😦 Seems to me that doing sufficient practice is most useful in getting away from nervousness.

Slides Here. Below are some highlights:

  • Health System in UK Overview
    • Devolved System: England, Scotland, Northern Ireland, Wales
    • 3rd largest in Europe: behind France and Germany
    • 87% public funded
    • Expenditure growing in the past decade
      • Demographic trends: aging population, increasing life expectancy
      • Improvement in clinical outcomes, technology, and quality stands
      • Greater speed to access to hospitals and primary care services
  • Legal Basis
    • National Health Service Act 1946
      • Created NHS in 1948
    • NHS Constitution
      • 7 guiding principles
      • Rights & Responsibilities
  • Organization
    • Secretary of State for Health
    • Department of Health and NHS Executive
    • Strategic Health Authorities
    • Primary care trusts & HNS trusts (secondary care)
  • Delivery
    • Physicians
    • Hospitals
    • Government
    • Private insurance funds
  • Financing
    • National Health Service (NHS) (87%) : mainly from general taxation
    • Private health insurance (12%): higher standard
    • Other: pay directly out-of-pocket
  • Current Situations
    • Advantage
      • NHS is cheap by international standards
      • Level of health in UK is similar to that in other developed countries
      • Avoided many problems of insurance based health care systems
      • NHS has continued to be popular
    • Disadvantage
      • Insufficient resources
      • Not sensitive to consumer preferences
      • Inefficient transfer of resources

PDF Slides Download

My presentation at Global Health & Human Rights seminar. Below are some highlights:

What is World Bank?

  • History
    • Established in Bretton Woods Conference 1944 to rebuild Europe
    • Evolved to concentrate on meeting the basic needs for the developing world
  • Organization Structure
    • World Bank Group v.s. World Bank
  • Leadership
    • Boards of governors
    • Board of directors
  • Units
    • Regional units
    • Network units

What does World Bank do?

  • Mission and Goals
    • Fight poverty and strengthen sustainable development
    • 8 Millennium Development Goals
  • Activities
    • In developing countries
    • Through loans and grants
    • Fields including human development, agriculture and rural development, environmental protection, infrastructure, and governance
  • Human Rights and Development
    • Non-explicit: activities have human rights dimension
  • Health, Nutrition and Population
    • Strengthen health system through result-based financing
    • Focus: access to health services, childhood nutrition, HIV/AIDS

Impacts & Results

  • Overview
    • $17 billion, 605 projects, over 30 international partnerships