Abstracts Economics

Essays on the Impact of Information Technology and Criminal Capital on Political and Economic Outcomes

by Nikita Melnikov

In the first chapter of the dissertation, joint with Sergei Guriev and Ekaterina Zhuravskaya, we show how the expansion of 3G mobile internet, on average, reduces government approval. This effect is present only when the internet is not censored, and it is stronger when the traditional media are censored. 3G helps expose actual corruption in government: revelations of the Panama Papers and other corruption incidents translate into higher perceptions of corruption in regions covered by 3G networks. Voter disillusionment also had electoral implications: in Europe, 3G expansion led to lower vote shares for incumbent parties and higher vote shares for the antiestablishment populist opposition. In the second chapter of the dissertation, I analyze how the expansion of 3G mobile internet increased political polarization in the United States: after gaining access to 3G, Democratic voters became more liberal in their political views, while Republican voters became more conservative. This increase in polarization largely did not take place among existing social media users. Instead, following the arrival of 3G, experienced social media users from both parties became more pro-Democratic, whereas less-experienced users became more pro-Republican. This divergence is partly driven by differences in news consumption between the two groups: after the arrival of 3G, experienced internet users decreased their consumption of Fox News, increased their consumption of CNN, and became better informed. In the third chapter of the dissertation, joint with Maria Micaela Sviatschi and Carlos Schmidt-Padilla, we study how territorial control by criminal organizations affects economic development. We exploit a natural experiment in El Salvador, where the emergence of these criminal organizations was the consequence of an exogenous shift in US immigration policy that led to the deportation of gang leaders from the United States to El Salvador. Using a spatial regression discontinuity design, we find that individuals in gang-controlled neighborhoods have less material well-being, income, and education than individuals living only 50 meters away but outside of gang territory. None of these discontinuities existed before the arrival of the gangs. A key mechanism behind the results is that gangs restrict individuals' freedom of movement, affecting their labor market options.