Short Bio & Research Activity

Francesco Trebbi I am the Bernard T. Rocca Jr. Chair and Professor at the University of California, Berkeley Haas School of Business. I am also Research Associate at the National Bureau of Economic Research (NBER) and Research Fellow of the Centre for Economic Policy Research (CEPR). Before joining UC Berkeley, I was Canada Research Chair and Professor of Economics at the University of British Columbia Vancouver School of Economics and Assistant Professor of Economics at the University of Chicago Booth School of Business. I received my PhD in Economics from Harvard University.

My academic research focuses on Political Economy and Applied Microeconomics broadly defined. I have worked on political institutions and their design, elections and political campaigns, behavior in legislatures, campaign finance, lobbying, banking and regulation. I have also worked on topics related to the political economy of development, corruption, ethnic politics, and intra-state conflict. I have interests in Finance, Development Economics, and Macroeconomics. My primary teaching interests are in Political Economy, Applied Econometrics, Macroeconomics, and Data Science.

I am a Co-Director of the NBER Political Economy Program (POL).

Recent Working Papers

The Cost of Regulatory Compliance in the United States (with Miao Ben Zhang)


We quantify the compliance costs of regulation in the U.S. for the period 2003-2014 in terms of labor input costs borne by establishments and firms. Detailed establishment-level occupation microdata, in combination with occupation-specific task information, allow us to recover the share of an establishment's wage bill that can be attributed to workers engaged in supervision and adherence to regulations, rules, government specifications, safety guidelines, and any other task associated with compliance. Since labor is the primary component of regulatory compliance spending for large portions of the U.S. economy, we are able to consistently trace the extent of the regulatory costs borne by producers across industries and regions. Regulatory costs account for 1.3 percent of the total wage bill on average. The paper also addresses the issue of returns to scale in regulatory compliance, showing that regulatory costs as a share of a firm wage bill decrease for firms above 430 employees, while increase below such threshold. Finally, we present a methodology for decoupling the role of firm-specific regulatory burden from the firm's endogenous compliance effort.

Minority Underrepresentation in U.S. Cities (with Federico Ricca)


This paper investigates the patterns of minority representation in U.S. municipal governments and of minority voter registration for the period 1981-2020. We report substantial levels of strategic underrepresentation of African American, Asian, and Latino voters in U.S. local politics. Disproportionality in the representation and in voter registration rates of minority groups are widespread, but stronger where racial or ethnic minorities are electorally pivotal. Underrepresentation is determined by the combination of several endogenous institutional features, starting from systematic disparity in voter registration, strategic selection of electoral rules, city's form of government, council size, and pay of elected members of the council. We provide causal evidence of the strategic use of local political institutions in reducing electoral representation of minorities based on the U.S. Supreme Court narrow decision of Shelby County v. Holder (2013), which removed Voting Rights Act (VRA) Section 4 coverage requirements for a specific subset of U.S. localities. In VRA-covered municipalities, changes to voting procedures required preclearance by the Department of Justice, a process designed to prevent racially discriminatory actions. Post 2013, previously VRA-covered municipalities quickly revert to levels of minority underrepresentation and underregistration identical to those of non-covered municipalities, reducing overall proportionality in minority representation and registration.

Political Parties as Drivers of U.S. Polarization: 1927-2018 (with Nathan Canen and Chad Kendall)


The current polarization of elites in the U.S., particularly in Congress, is frequently ascribed to the emergence of cohorts of ideologically extreme legislators replacing moderate ones. Politicians, however, do not operate as isolated agents, driven solely by their preferences. They act within organized parties, whose leaders exert control over the rank-and-file, directing support for and against policies. This paper shows that the omission of party discipline as a driver of political polarization is consequential for our understanding of this phenomenon. We present a multi-dimensional voting model and identification strategy designed to decouple the ideological preferences of lawmakers from the control exerted by their party leadership. Applying this structural framework to the U.S. Congress between 1927-2018, we find that the influence of leaders over their rank-and-file has been a growing driver of polarization in voting, particularly since the 1970s. In 2018, party discipline accounts for around 65% of the polarization in roll call voting. Our findings qualify the interpretation of – and in some cases subvert – a number of empirical claims in the literature that measures polarization with models that lack a formal role for parties.

Did U.S. Politicians Expect the China Shock? (with Matilde Bombardini and Bingjing Li)


In the two decades straddling China's WTO accession, the China Shock, i.e. the rapid trade integration of China in the early 2000's, has had a profound economic impact across U.S. regions. It is now both an internationally litigated issue and the casus belli for a global trade war. Were its consequences unexpected? Did U.S. politicians have imperfect informa- tion about the extent of China Shock's repercussions in their district at the time when they voted on China's Normal Trade Relations status? Or did they have accurate expectations, yet placed a relatively low weight on the subconstituencies that ended up being adversely affected? Information sets, expectations, and preferences of politicians are fundamental, but unobserved determinants of their policy choices. We apply a moment inequality approach designed to deliver unbiased estimates under weak informational assumptions on the informa- tion sets of members of Congress. This methodology offers a robust way to test hypotheses about the expectations of politicians at the time of their vote. Employing repeated roll call votes in the U.S. House of Representatives on China's Normal Trade Relations status, we formally test what information politicians had at the time of their decision and consistently estimate the weights that constituent interests, ideology, and other factors had in congressio- nal votes. We show how assuming perfect foresight of the shocks biases the role of constituent interests and how standard proxies to modeling politician's expectations bias the estimation. We cannot reject that politicians could predict the initial China Shock in the early 1990's, but not around 2000, when China started entering new sectors, and find a moderate role of constituent interests, compared to ideology. Overall, U.S. legislators appear to have had accurate information on the China Shock, but did not place substantial weight on its adverse consequences.

Investing in Influence: Investors, Portfolio Firms, and Political Giving (with Marianne Bertrand, Matilde Bombardini, Raymond Fisman, and Eyub Yegen)


Campaign finance laws aim to limit an individual’s influence over the political process. We show that corporate ownership may be an important mechanism by which institutional investors circumvent such constraints and increase their influence. Using data on the political giving and ownership of all 13-F investors during 1980-2018, we show the probability that a firm’s Political Action Committee (PAC) donates to a politician supported by an investor’s PAC nearly doubles after the investor acquires a large stake, and when an investor obtains a board seat, there is a five-fold increase in the probability that a firm donates to a politician supported by the investor. This increase in similarity of political giving coincides precisely with the acquisition election cycle, and is not driven by selection into specific politically strategic acquisitions, as convergence in political behavior is observed even for exogenously determined acquisitions caused by stock index inclusions. Further, we show that portfolio firms’ PAC expenditure experiences a relatively large shift at the acquisition date relative to past giving, whereas no such pattern is observed for institutional investors. We argue that these findings are best explained by investors influencing portfolio firm giving, suggesting that PAC giving may be another means by which influential shareholders impact corporate decision-making, in a manner that amplifies investors’ political voice.