Short Bio & Research Activity


Francesco Trebbi I am Professor of Business and Public Policy 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 Berkeley, I was Canada Research Chair and Professor of Economics at the University of British Columbia Vancouver School of Economics (currently on leave) and Assistant Professor of Economics at the University of Chicago Booth School of Business. I received my PhD in Economics from Harvard University in 2006.

My academic research focuses on political economy and applied economics more broadly. I have worked on political institutions and their design, elections, political behavior, campaign finance, lobbying, and regulation. I have also worked on the political economy of development, ethnic politics, and conflict. My primary teaching interests are in political economy, applied economics, and applied econometrics.


Recent Working Papers


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

Abstract

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.

Making Policies Matter: Voter Responses to Campaign Promises (with Cesi Cruz, Phil Keefer, and Julien Labonne)

Abstract

Do campaign promises matter? We combine a structural model and a large-scale field experiment disseminating candidate policy platforms in Philippine mayoral elections to show how voters respond to campaign promises. Voters who randomly received information about current campaign promises are more likely to vote for candidates closer to their own preferences and those also informed about past promises reward incumbents who fulfilled them. The structural model shows that campaigns operate through both learning and psychological mechanisms, and that vote buying, while important, is not the sole driver of voter behavior.

Endogenous Networks and Legislative Activity (with Nathan Canen and Matt Jackson)

Abstract

We develop a model of endogenous network formation as well as strategic interactions that take place on the resulting network, and use it to measure social complementarities in the legislative process. Our model allows for partisan bias and homophily in the formation of relationships, which then impact legislative output. We identify and structurally estimate our model using data on social and legislative efforts of members for each of the 105th110th U.S. Congresses (1997-2009). We find large network effects in the form of complementarities between the efforts of politicians, both within and across parties. Although partisanship and preference differences between parties are significant drivers of socializing in Congress, our empirical evidence paints a less polarized picture of the informal connections of members of Congress than typically emerges from congressional votes alone. Finally, we show that our formulation is useful for developing relevant counterfactuals, including the effect of political polarization on legislative activity (and how this effect can be reversed), and the impacts of networks in the congressional emergency response to the 2008-09 financial crisis.

Hall of Mirrors: Corporate Philanthropy and Strategic Advocacy (with Marianne Bertrand, Matilde Bombardini, Ray Fisman, and Brad Hackinen)

Abstract

Information is central to designing effective policy and policymakers often rely on competing interests to separate useful from biased information. In this paper we show how this logic of virtuous competition can break down, using a new and comprehensive dataset on U.S. federal regulatory rulemaking for 2003-2016. For-profit corporations and non-profit entities are active in the rule-making process and are arguably expected to provide independent viewpoints. Policymakers, however, may be less than fully aware of the financial ties between some firms and non-profits – grants that are legal and tax-exempt, but hard to trace. We document three patterns which suggest that these grants may distort policy. First, we show that, shortly after a firm donates to a non-profit, that non-profit is more likely to comment on rules on which the firm has also commented. Second, when a firm comments on a rule, the comments by non-profits that recently received grants from the firm’s foundation are systematically closer in content to the firm’s own comments, relative to comments submitted by other non-profits. Third, the final rule’s discussion by a regulator is more similar to the firm’s comments on that rule when the firm’s recent grantees also commented on it. We discuss two interpretations of the evidence. While the negative welfare consequences of a “comments-for-sale” scenario are immediate, we show that, even if corporate grants’ only effect is to relax the grantee’s budget constraint, this can also lead to distorted policy making.

Factions in Nondemocracies: Theory and Evidence from the Chinese Communist Party (with Patrick Francois and Kairong Xiao)

Abstract

This paper investigates, theoretically and empirically, factional arrangements within the Chinese Communist Party (CCP), the governing political party of the People’s Republic of China. Our empirical analysis ranges from the end of the Deng Xiaoping era to the current Xi Jinping presidency and it covers the appointments of both national and provincial officials using detailed biographical information. We present a set of new empirical regularities within the CCP, including substantial leadership premia in the Politburo and Central Committee, intra-faction competition for promotions, and systematic patterns of cross-factional mixing at different levels of the political hierarchy. An organizational economic model suited to characterizing factional politics within single-party nondemocratic regimes rationalizes the data in-sample and displays excellent out-of-sample performance.