Endogenous Local Government Formation and Nation Building (joint with Serhii Abramenko)

How does local government amalgamation affect public goods provision, economic activity, and nation building? We focus on an administrative reform in Ukraine between 2015-2020, during which smaller local councils (LCs) had the opportunity to voluntarily amalgamate in order to keep a substantially larger portion of their tax revenues and gain greater autonomy over the local administration. By investigating the determinants of the willingness to amalgamate, we show that some of the pre-reform characteristics, such as tax revenues, the share of native Russian speakers, and political preferences, were not substantial predictors of the amalgamation. We first show that the reform positively impacted district level personal income tax collection. Secondly, by employing previously unused data on standardized college entrance exam results, we estimate a staggered difference-in-differences model and show that the reform did not affect the Ukrainian test scores significantly. For math results, it led to a 0.07 standard deviation decrease after four years of exposure. Utilizing the same staggered design, we show that the reform led to 0.06 standard deviations increase in log nightlight intensity per capita after four years of exposure. Finally, using a nationally representative repeated cross-sectional survey, we document the greater self-identification as Ukrainian as opposed to Russian in rural areas.