How do redistributive institutions transform the relationship between resource extraction and regional development in high-income democracies? Large energy projects are now widely expected to deliver tangible benefits to affected communities, and benefit-sharing institutions have emerged as a preferred mechanism to channel these gains. Yet because these benefits are funded through non-tax, windfall revenues that political economy theories associate with rent-seeking and distorted spending, it is unclear whether such institutions truly foster development or simply repackage familiar pathologies. This paper examines the Columbia Basin Trust (CBT), created in 1995 to compensate communities affected by the Columbia River Treaty in British Columbia, Canada. Using the synthetic control method, we estimate that windfalls distributed by the CBT generate a small but positive cumulative effect on local economic development, roughly adding an additional year of growth over a decade. Additionally, analysis of grant allocations suggests that politically experienced and long-tenured directors do not systematically steer funds toward their home regions, indicating limited pork-barrel behaviour. Taken together, these results suggest that while standard political economy accounts of unearned income may be too pessimistic, benefit sharing is no panacea for growth.
Publication Alert
My recent research note with Carola Binder on the difficulties of using standard, off the shelf Large Language Models (LLM) and labeled data to study emotion in central bank communications is now out at the National Institute Economic Review. Our key insight is that central bank communication is both lexically and subjectively difficult for people to understand.
Publication Alert
My paper with Dominik Duell and Will Lowe on ECB communication and support for the EU is forthcoming at the Journal of Political Institutions and Political Economy. This journal is becoming one of my favourite journals to read so I am so excited that this paper finally landed here. We show that while people are persuaded by central bank news and update their beliefs accordingly, how much they do so depends on their support for the European project and the ECB.
Automated Detection of Emotion in Central Bank Communication: A Warning
Senior Visiting Fellow: LSE Data Science Institute
Happy to announce that I am now a senior visiting fellow at the LSE’s Data Science Institute. Whilst here, I will be working on a project related to bank branch closures in the UK and their effects on Political and Economic perceptions and behaviours.