Development Economics

Spring 2020
Seminar 14

1. The “Do Leaders Matter?” paper shows that a leader’s death

a. Has no effect on growth
b. Accelerates growth
c. Slows down growth
d. Changes growth pattern
e. Is often a consequence of slow growth

2. In the “Do Leaders Matter?” paper, the authors focus only on leaders that died from
natural causes and accidents. Why?
a. To avoid too many observations
b. To solve the omitted controls problem
c. To solve the heteroscedasticity problem
d. To solve the reverse causality problem
e. Because only in this case something can change in their country

3. In the “Do Leaders Matter?” paper, the authors include countries where leaders did not
die in office. Why?
a. Because in these countries, leaders matter too
b. To estimate time fixed effects
c. To predict how these countries would perform if their leaders died
d. To increase the sample size
e. To reduce estimation standard errors

4. (By E. Krivosheya, edited by Roman) Why did Jones and Olken (2001) focus on the
natural deaths of the leaders in their study?
a. Leaders rarely quit power before they die
b. Leaving power for other reasons has reverse causality problem
c. Bad leaders are less willing to quit than good ones
d. Leaders who leave the office voluntarily do not affect growth rates
e. Leader changes unlike deaths are improperly measured

5. In the “Do leaders matter?” study by Jones and Olken, the hypothesis is confirmed if the
J-statistic constructed by the authors is between some a and b such that
a. a<0<b
b. 0<a<b=∞
c. -∞=a<b<0
d. 0<a<b<∞
e. 0<a=b
6. In the “Regulation and Distrust” paper, what is the causal relationship between the two
phenomena?
a. More regulation causes less distrust, no reverse causality
b. More regulation causes more distrust, no reverse causality
c. More distrust causes less regulation, no reverse causality
d. More distrust causes more regulation, no reverse causality
e. More regulation causes more distrust, more distrust causes more regulation

7. In the model of the “Regulation and Distrust” paper, why is regulation needed?
a. To redistribute wealth from rich to poor
b. To regulate the amount of trust between people
c. To control negative externalities of private business
d. To help entrepreneurs start a new business
e. To fight corruption

8. The personality of a country leader has a strong impact on country development. True,
false, or uncertain?

9. What are the major stylized facts being explained by the “regulation and distrust” paper?
Discuss the major building blocks of the model: in which sequence the decisions are
made (choice of culture, choice of regulation, choice of occupation) and what drives such
decisions.