Research

This paper studies how firms react to tribal forest rights. In 2008, India granted forest management rights to 200 million tribal individuals, including the right to informed consent with developers seeking to acquire tribal forestland. Using a novel firm-level panel and a difference-in-difference design, we find: i) firms acquire less land in tribal areas after the policy; 2) Total factor productivity increases, and; 3) large, unproductive firms are less affected by the policy. These results are consistent with a model of firm production with transaction costs for encroachment. To study conservation implications, we obtain deforestation permits awarded to developers and show that infrastructure-driven deforestation declines after the policy. Overall, our results imply that the policy was successful from a conservation standpoint. From a development standpoint, they imply that conservation policy is not necessarily anti-development but, rather, shifts the composition of economic activity toward larger industry.

This paper studies off-target impacts of place-based policy in the context of Colombia’s war on drugs. Aerial fumigation of coca crops was the pillar of the country’s anti-drug strategy, until the practice was banned in 2015 due to environmental concerns. Using a novel atmospheric dispersion model and a two-way fixed effects design, we show that wind drift from targeted spraying inflicted significant damage on legitimate, non-targeted agriculture. Difference-in-differences estimates show that, after the ban, municipalities previously exposed to aerial spraying experienced only a minimal rebound in crop production. These findings illustrate the persistence of negative spillovers from targeted policy, where the collateral damage outlasts the policy itself.