Elena Stella

Can transparency requirements deter organized crime, and what are the long-run consequences on local economies? I exploit Italy's 2013 anti-mafia reform, which mandated police vetting for firms bidding on public contracts. Using detailed procurement records and newly collected police data, I develop a machine-learning approach to identify suspected firms that systematically avoid vetting despite high predicted bidding activity. The reform effectively deters suspected firms from participating in procurement: they contract in size, exit at higher rates, and shift business away from public contracts. Procurement becomes more competitive and less geographically concentrated, with increased entry and reallocation toward out-of-province contractors. Despite this substantial shift away from local firms, employment and income remain stable while new firm creation increases in affected areas, suggesting transparency stimulates entrepreneurship rather than harming local economies.

This paper provides novel evidence on how political connections distort environmental regulatory enforcement in Maharashtra's Sugar Industry, using a unique natural experiment that creates simultaneous bidirectional variation in political access. We exploit a political crisis in Maharashtra, India, which caused some sugar mills to suddenly lose political connections while others gained it. Combining novel data on regulatory punishment, environmental & operational outcomes for sugar mills, we find that mills losing political access experience significantly higher enforcement rates, while mills gaining connections face no change in regulatory pressure. This effect is driven entirely by discretionary enforcement rather than complaint-driven inspections. Using granular emissions monitoring data, we show that this is not driven by changes in environmental performance by mills who lose political connections, while mills gaining connections significantly increase pollution-hiding behavior yet face no regulatory consequences. These findings demonstrate systematic heterogeneity in environmental enforcement in a weak institution setting.