2025 Fall Seminar Series Seminar: Kwadwo Frempong, Chinmay Korgaonkar, & Fatemeh Lashkaripour University of Kentucky

Decentralization and Economic Integration: Gross County Product (GCP) Impacts of Decentralization in Kenya

Author: Kwadwo Frempong

Abstract: Kenya’s 2010 Constitution introduced an ambitious decentralization reform, transferring substantial political, administrative, and fiscal authority to 47 counties to reduce regional inequalities and strengthen local development. More than a decade later, evidence on its economic effects remains limited. This study examines how fiscal decentralization has influenced county-level economic performance, measured through Gross County Product (GCP), during the first decade of devolution. Using annual panel data for 47 counties from 2013–2022, the analysis employs a dynamic ARDL model, complemented by cross-sectional regressions and fixed-effects estimations, to capture both short-run adjustments and long-run relationships. The results show that expenditure decentralization has a consistently positive and significant effect on GCP, while revenue decentralization exhibits short-run adjustment costs but positive long-run associations as administrative capacity matures. Year effects indicate a structural upward shift in county performance after devolution, though disparities persist. Overall, the study demonstrates that fiscal decentralization can promote subnational growth when supported by strong institutional and administrative capacity and equitable policy design. 

Capital Cost Recovery Reforms and Corporate Investment in India's Manufacturing Sector

Author: Chinmay Korgaonkar

Abstract: Governments regularly use tax incentives to encourage capital investment, yet empirical evidence on their effectiveness in low- and middle-income countries remains limited. Further, while several studies examine bonus depreciation in the United States, comparatively little is known about other policy measures such as the investment allowance. This study advances the literature by examining two distinct tax policy measures for investment under Indian income tax law: additional first year depreciation (comparable to the bonus depreciation) and the investment allowance. I estimate the causal effect of these incentives on investment in eligible assets by Indian manufacturing corporate firms. The findings aim to improve our understanding of how distinct tax incentives influence investment decisions in a large middle-income country.

Trade Shocks and Alcohol Positivity in Fatal Crashes: Evidence from U.S. Commuting Zones

Author: Fatemeh Lashkaripour

Abstract: This paper examines whether import competition from China affects alcohol involvement in fatal road crashes in the United States. I combine the long-difference import exposure measure of Autor, Dorn, and Hanson (2013) with detailed toxicology data from the Fatality Analysis Reporting System (FARS) for 1991–2007. Using an instrumental variables strategy based on China’s export growth to other high-income markets, I estimate the causal effect of trade shocks on changes in the share of fatally injured adults who test positive for alcohol. Across a range of specifications, the estimated effects are small, precise, and statistically indistinguishable from zero. The evidence indicates that trade-induced declines in manufacturing employment did not translate into higher rates of alcohol involvement in fatal crashes. However, among women ages 18–64, import exposure is associated with a modest but statistically significant decline in alcohol positivity. Overall, the results suggest that the behavioral margin captured by alcohol-positive fatalities responds weakly, if at all, to trade-driven economic disruption.