Generalized Synthetic Control Method for Causal Inference with Time-Series Cross-Sectional Data
Difference-in-differences (DID) is commonly used for causal inference in time-series cross-sectional data. It requires the assumption that the average outcomes of treated and control units would have followed parallel paths in the absence of treatment. In this paper, I propose a method that not only relaxes this often-violated assumption, but also unifies the synthetic control method (Abadie, Diamond and Hainmueller 2010) with linear fixed effect models under a simple framework, of which DID is a special case. It imputes counterfactuals for each treated unit in post-treatment periods using control group information based on a linear interactive fixed effect model that incorporates unit-specific intercepts interacted with time-varying coefficients. This method has several advantages. First, it allows the treatment to be correlated with unobserved unit and time heterogeneities under reasonable modelling assumptions. Second, it generalizes the synthetic control method to the case of multiple treated units and variable treatment periods, and improves efficiency and interpretability. Third, with a built-in cross-validation procedure, it avoids specification searches and thus is transparent and easy to implement. Monte Carlo results show that this method performs well with small numbers of control units and pre-treatment periods. An empirical example of Election Day Registration and voter turnout in the United States is provided. [Award, PDF, Examples]
Conditionally accepted. Political Analysis.
(Package and codes will be posted soon; sample codes are available upon request.)
Why Do Authoritarian Regimes Allow Citizens to Voice Opinions Publicly?
Why would an authoritarian regime allow citizens to voice opinions publicly if the exchange of information among citizens spurs social instability as has been often alleged? In this paper, we develop a game theoretic model and show that an authoritarian regime can strengthen its rule by allowing citizens to communicate with each other publicly. From the government’s perspective, such communication has two interrelated functions. First, if public communication reveals a shared feeling of dissatisfaction towards government policies among the citizens, the government will detect the danger and improve policies accordingly. Second, and perhaps more interestingly, public communication disorganizes the citizens if they find themselves in disagreement over the policies. We show that the government allows public communication if and only if it perceives sufficient heterogeneity in preferences among the citizens. The model also illustrates that public communication could serve as a commitment device ensuring government responsiveness when it faces high dissatisfaction, which in turn makes the government better off than with private polling.[PDF]
with Jidong Chen. Conditionally accepted. The Journal of Politics.
How Much Should We Trust Estimates from Multiplicative
Interaction Models? Simple Tools to Improve Empirical Practice
Regressions with multiplicative interaction terms are
widely used in the social sciences to test whether the relationship between an outcome and an independent variable changes depending on a moderating variable. Despite much advice on how to use interaction models, two important problems are currently overlooked in empirical practice. First, multiplicative interaction models are based on the crucial assumption that the interaction effect is linear, which fails unless the effect of the independent variable changes at a constant rate with the moderator. Second, reliably estimating the effect of the independent variable at a given value of the moderator requires sufficient common support. Replicating nearly 50 interaction effects recently published in five top political science journals, we find that these core assumptions fail in a majority of cases, suggesting that a large portion of findings based on multiplicative interaction models are artifacts of misspecification or are at best highly model dependent. We propose simple diagnostic tests to assess the validity of these assumptions and offer flexible modeling strategies for estimating potentially nonlinear interaction effects. [PDF, Code]
with Jens Hainmueller and Jonathan Mummolo.
Awakening Leviathan: the Effect of Democracy on State Capacity, 1960-2009
with Erik H. Wang.
-- awarded the 2015 Malcolm Jewell Award for the best graduate student paper presented at the SPSA annual meeting.
Although researchers have often considered democracy and state capacity to be key predictors of cross-national variations in human welfare, few have investigated the relationship between the two variables themselves. We argue that democratization may have a positive, causal effect on state capacity. Employing a time-series cross-national dataset from 1960 to 2009, we document that democratization leads to a substantial increase in state capacity in the long run. Our results prove robust to a rich set of potential confounders and alternative coding of key variables. To further address the problem of endogeneity, we use an instrumental variable strategy that exploits exogenous variations in regional democratic diffusions. We also provide suggestive evidence that democratization enhances state capacity through increasing political contestation. [PDF]
The Policy Effects of the Partisan Composition of State Government
How much does it matter which party controls the government? On one hand, campaign positions and roll-call records suggest that contemporary American parties are very ideologically polarized. On the other hand, the existing evidence that electing Democrats into office causes the adoption of more liberal policies is surprisingly weak. We bring clarity to this debate with the aid of a new measure of the policy liberalism of each state in each year 1936-2014, using regression-discontinuity and dynamic panel analyses to estimate the policy effects of the partisan composition of state legislatures and governorships. We find that until the 1980s, partisan control of state government had negligible effects on the liberalism of state policies, but that since then partisan effects have grown markedly. Even today, however, the policy effects of partisan composition remain small relative to differences between states---less than one-tenth of the cross-sectional standard deviation of state policy liberalism. This suggests that campaign positions and roll-call records may overstate the policy effects of partisan selection relative to other factors, such as public opinion. [PDF]
with Devin Caughey and Chris Warshaw.
China's Ideological Spectrum
We offer the first large scale empirical analysis of ideology in contemporary China to determine whether individuals fall along a discernible and coherent ideological spectrum, and whether there are regional and inter-group variations in ideological orientation. Using principal component analysis (PCA) on a survey of 171,830 individuals, we identify one dominant ideological dimension in China. Individuals who are politically conservative, who emphasize the supremacy of the state and nationalism, are also likely to be economically conservative, supporting a return to socialism and state-control of the economy, and culturally conservative, supporting traditional, Confucian values. In contrast, political liberals, supportive of constitutional democracy and individual liberty, are also likely to be economic liberals who support market-oriented reform and social liberals who support modern science and values such as sexual freedom. This uni-dimensionality of ideology is robust to a wide variety of diagnostics and checks. Using post-stratification based on census data, we find a strong relationship between liberal orientation and modernization---provinces with higher levels of economic development, trade openness, urbanization are more liberal than their poor, rural counterparts, and individuals with higher levels of education and income and more liberal than their less educated and lower-income peers. [PDF,Data]
with Jennifer Pan.
Media Coverage: NYT, WSJ, FP, ChinaFile
Making Democracy Work: Culture, Social Capital and Elections in China
This paper aims to show that culture is an important determinant of the effectiveness of formal democratic institutions, such as elections. We collect new data to document the presence of voluntary and social organizations and the history of electoral reforms in Chinese villages. We use the presence of village temples to proxy for culture, or more specifically, for social (civic) capital. The results show that villages with temples experience much larger increases in public goods after the introduction of elections. Additional results rule out obvious alternative interpretations and suggest that generalized trust enhances village public goods provision, while personalized trust does not. [PDF]
with Gerard Padro-i-Miquel, Nancy Qian and Yang Yao. NBER Working Paper No. 21058.
Outspoken Insiders: Political Connections and Citizen Participation in Authoritarian China
Given widespread perceptions of risk and uncertainty in nondemocratic systems and developing democracies, why do some citizens still take action and make complaints to authorities? The resource mobilization model identifies the importance of time, money, and civic skills as resources that are necessary for participation. In this paper we build on this model and argue that political connections – close personal ties to someone working in government – can also constitute a critical resource, especially in contexts with weak democratic institutions. Using data from both urban and rural China, we find that individuals with political connections are more likely to contact authorities with complaints about government public services, despite the fact that they do not have higher levels of dissatisfaction with public service provision. We conduct various robustness checks, including a sensitivity analysis, and show that this relationship is unlikely to be driven by an incorrect model specification or unobserved confounding variables. [PDF]
with Lily L. Tsai.