The Trump Administration Attacks the Stigler Report on Digital Platforms

President Trump’s 2020 Economic Report finally confronts the issue of antitrust enforcement both in the traditional economy and in the digital one. While it criticizes the demand for more antitrust enforcement on the ground of insufficient evidence, it dismisses the conclusions of the Stigler Report on a purely a priori argument, ignoring all the evidence contained in the report. 

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The World Bank’s “Papergate”: Censorship Is Not the Best Way to Stop Development Aid From Fueling Corruption

A new study of World Bank data finds that aid disbursement to highly aid-dependent countries coincides with sharp increases in bank deposits in offshore financial centers. According to The Economist, the World Bank refused to release the study. Afterward, its chief economist resigned. Here is the full content of the allegedly-censored paper. 

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How Allowing a Little Bit of Dissent Helps the Chinese Government Control Social Media

A new study on three major social networks in China finds that tolerating small, relatively free platforms helps the Chinese government maintain sufficiently high market-level censorship in an overall low-pressure environment. However, larger platforms censor more content than small competitors.

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Data-Driven Ideology: The Problem With Economists’ Takeover of Policymaking

According to New York Times journalist Binyamin Appelbaum’s recent book The Economists’ Hour, economics is not the unbiased science that it pretends to be, but a useful tool that politicians have used in class warfare for the last forty years on behalf of the elite. However, his entertaining narrative raises some questions. The Stigler Center will host an event with Appelbaum on January 28. 

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How Do Members of Congress React to the Potential of Lucrative Private Sector Employment?

Many fear that the potential for well-paid post-elective jobs can make legislators give rewards to their future employers. A new study finds that career prospects in the private sector do induce legislators to leave office and that US senators become more moderate before they voluntarily leave office through the revolving door. They also become more productive and more aligned with the priorities of special interest groups.   

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Should We Let Facebook Decide the Next President of the United States?

Facebook admitted that only a binding regulation on political ads could prevent private corporations from influencing the outcome of US presidential elections. Without such regulation, digital platforms can favor a candidate by altering (or maintaining) their policies on digital advertising. Trump’s campaign was much more effective than Clinton’s in using micro-targeting to shape voters’ preferences in 2016, a new study shows. Facebook decided to confirm the same policies for the 2020 election.  

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Who Benefits When State Governments Award Incentives to Politically-Connected Companies?

A new study finds that a company is nearly four times more likely to receive an economic incentive in a state where the company makes political contributions to state-level candidates. The results also show that awarding economic incentives to politically-connected firms is not the most effective use of taxpayer funds. 

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Western Multinationals Can Improve Workers’ Safety, If They Want to: The Case of Bangladesh

In 2013, one of the largest factories in Bangladesh collapsed, killing 1,134 workers. Many multinationals committed to improving safety standards. A new study shows that Western corporations can improve labor standards in developing countries, without harming their competitiveness. The result is even more compelling because the study is co-funded by multinationals.  

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The Reality of Inequality and Its Perception: Chile’s Paradox Explained

While conventional indicators show a significant decline in inequality, the perception among Chile’s citizens is that inequality has greatly increased. The development model Chile followed since the 1980s was successful in generating growth and reducing poverty. But it did not function properly in a middle-income country.  

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High-Priced Acquisitions of Tech Startups Do Not Always Stimulate More Innovation

What seems to be a big reward to innovation ultimately reduces the incentive to innovate, argues a new Stigler Center working paper by Krishna Kamepalli, Raghuram Rajan, and Luigi Zingales. Their analysis of Google and Facebook’s acquisitions shows that “It is dangerous to apply twentieth-century economic intuitions to twenty-first-century economic problems.”  

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