Let’s Call their Bluff: The Politics of Econometric Methodology

Jean-Paul Azam ()

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Abstract: This short paper focuses on econometric issues raised by intentional government interventions aimed at influencing some politically sensitive outcomes. It first presents an example where multiple regression analysis provides quite a misleading diagnosis about foreign aid and immigration that can be rectified by using a causal analysis based on instrumental variables. It then offers a simple theoretical framework to bring out the basic information asymmetries affecting the game between the econometrician and the policy maker and their implications for the choice of instruments in a near-identification strategy. This approach is shown to provide a strong political judgement in the case of the armed violence between local governments and "Maoist" insurgents in eight states of India. Proper econometric analysis shows that the initiative of the insurgency cannot be blamed on the rebels.

Keywords: Econometric policy evaluation; Preference proxies; Two-stage approach (search for similar items in EconPapers)
Date: 2019
Note: View the original document on HAL open archive server: https://hal.science/hal-04423402v1
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Published in Peace Economics, Peace Science and Public Policy, 2019, 25 (4), pp.UNSP 20190029. ⟨10.1515/peps-2019-0029⟩

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Journal Article: Let’s Call their Bluff: The Politics of Econometric Methodology (2019)
Working Paper: Let’s Call their Bluff: The Politics of Econometric Methodology (2019)
Working Paper: Let’s Call their Bluff: The Politics of Econometric Methodology (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04423402

DOI: 10.1515/peps-2019-0029

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