Corruption and Growth Under Weak Identification

The goal of this paper is to revisit the influential work of Mauro [1995] focusing on the strength of his results under weak identification. He finds a negative impact of corruption on investment and economic growth that appears to be robust to endogeneity when using two-stage least squares (2SLS). Since the inception of Mauro [1995], much literature has focused on 2SLS methods revealing the dangers of estimation and thus inference under weak identification. We reproduce the original results of Mauro [1995] with a high level of confidence and show that the instrument used in the original work is in fact 'weak' as defined by Staiger and Stock [1997]. Thus we update the analysis using a test statistic robust to weak instruments. Our results suggest that under Mauro's original model there is a high probability that the parameters of interest are locally almost unidentified in multivariate specifications. To address this problem, we also investigate other instruments commonly used in the corruption literature and obtain similar results.

Emerging Identities in Colonial Tunisia: "Alliancist" and Zionist Representations in Tunis prior to World War I

By 1900 the Jewish community of Tunisia witnessed the emergence of new competing identities: “assimilationist” of the Alliance Israelite Universelle, termed “Alliancist,” and Zionist. Strikingly, two members of the same family in Tunis, Raymond Valensi, President of the AIU Regional Committee, and Alfred Valensi, President of the Zionist Federation, led the struggle for their separate causes. In his discussion of identity in the modern world, Homi Bhabha asks, "How do strategies of representation or empowerment come to be formulated in the competing claims of communities…where, despite shared histories of …discrimination, the exchange of values, meanings and priorities…may be profoundly antagonistic…?" It is in this context that the claims of the Alliance and Zionism will be examined prior to World War I, based on the Archives of the AIU and on such secondary sources as the indispensable work of Paul Sebag. The tensions between the Alliancists and Zionists continued until the outbreak of World War II, as the French-speaking Jews of Tunisia sought to define their individual and collective identities.

A Simple Statistical Test of Violation of the Weak Axiom of Cost Minimization

A problem with a practical application of Varian.s Weak Axiom of Cost Minimization is that an observed violation may be due to random variation in the output quantities produced by firms rather than due to inefficiency on the part of the firm. In this paper, unlike in Varian (1985), the output rather than the input quantities are treated as random and an alternative statistical test of the violation of WACM is proposed. We assume that there is no technical inefficiency and provide a test of the hypothesis that an observed violation of WACM is merely due to random variations in the output levels of the firms being compared.. We suggest an intuitive approach for specifying a value of the variance of the noise term that is needed for the test. The paper includes an illustrative example utilizing a data set relating to a number of U.S. airlines.