| Abstract: |
We document that support for the ruling party (“partisanship”) increases the take-up of government programs in which participation is costly. The take-up rates of a large-scale Indian loan-guarantee program for firm financing, Mudra loans, diverged across low- and high-partisanship electoral districts but only months after the widely-advertised program’s launch, once rulers and the media related take-up rates to party success. In loan-level administrative data, borrowing firms’ risk, interest rates, subsequent default rates, and access to bank branches did not vary with partisanship. Regular-loan issuance, which captures local firms’ demand and banks’ supply of credit, did not vary with partisanship either. The effects were larger in more contested districts.
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Biography:
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Professor D’Acunto’s research interests are in the areas of beliefs and consumer/corporate financial decision-making, inequalities, and FinTech. In these areas, Professor D’Acunto studies the formation of beliefs and the financial decision-making of households and corporations as well as how regulation and the financial sector can manage decision-making through robo-advising and other AI-based tools. His work has been published in top academic journals such as the Journal of Political Economy, the Review of Economic Studies, the Review of Financial Studies, the Journal of Financial Economics, Proceedings of the National Academy of Sciences (PNAS), and the Journal of Economic Perspectives.
Professor D’Acunto’s work has been awarded two Cubist Systematic Strategies Awards for Outstanding Research, the Best Registered Report Award from the Society of Financial Studies, and has been covered multiple times in popular media outlets, such as The Economist, the Wall Street Journal, Bloomberg, the Washington Post, The American Interest, Reuters, as well as in international media outlets, such as the World Economic Forum, the Daily Mail, the Globe and Mail, Die Welt, Haaretz, La Stampa, Dinheiro Vivo, and Al Balad, among others.
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