Making Subsidies Work: Rules versus Discretion
研究了一个大型公共投资补贴项目，发现按客观规则评分高的企业和地方政客偏好的企业都能创造更多就业，但后者每新增一个就业的成本更高；仅用客观规则可降低单位成本11%，仅用自由裁量则增加42%。
We estimate the employment effects of a large program of public investment subsidies to private firms that ranked applicants on a score reflecting both objective rules and local politicians' discretion. Leveraging the rationing of funds as an ideal Regression Discontinuity Design, we characterize the heterogeneity of treatment effects and cost‐per‐new‐job across inframarginal firms and estimate the cost‐effectiveness of subsidies under factual and counterfactual allocations. Firms ranking high on objective rules and firms preferred by local politicians generated larger employment growth on average, but the latter did so at a higher cost per job. We estimate that relying only on objective criteria would reduce the cost per job by 11%, while relying only on political discretion would increase such cost by 42%.