Alexander "Xander" Slaski

The first essay (which is also my job market paper), “Bargaining Power and State Capacity: Evidence from Multinational Investment in the Oil Sector,” focuses on the allocation of resource rents between multinational corporations (MNCs) and host governments. The allocation of these rents hinges on the nature of bargaining between MNCs and host governments. In order to explore the drivers of bargaining power, I leverage contract-level data on investments by MNCs in Latin America and find that high levels of corruption lead to significantly lower rents for host governments. It also focuses on partisan politics and demonstrates that “leftist” governments consistently get better deals in their negotiations with MNCs. This paper is, to the best of my knowledge, the first to empirically measure bargaining power between states and MNCs using real-world contract data.

The paper argues that in cases of low state capacity, rents are captured at different stages in the bargaining process, leading to a lower share of rents for the host country. These “shadow rents” explain why some countries receive contract terms that are so much worse than in other cases. The core theoretical and empirical findings support the notion that corruption undermines the ability of the state to capture resource rents. The results point to the central role of transparency in determining the degree to which states benefit from foreign investment in the resource sector. Moreover, this paper explains why contract terms change over time and adds empirical evidence to the debate about the conditions under which bargaining power shifts from firms to states. Broadly, the paper has implications for both economic development and redistribution, given that in resource-rich environments the share of government take directly affects government budgets and what portion of the economic benefit of resources are kept within the borders of the host state. 

Apart from my central dissertation work, I am also working on several other related projects, as highlighted in my CV. One of these papers, “When Investing Is “Winner Take All'': Interstate Competition for Investment and the Use of Incentives” (with Sarah Bauerle Danzman) examines the conditions under which states must offer generous incentives packages to attract foreign investors. Using deal-level financial incentive data, we explore the systematic covariates of state- and firm-level attributes that explain variations in incentives. We look at the factors that drive investment incentives across countries in Latin America, and then compare subnational differences in deals in Brazil. In contrast to the most prominent explanation of incentives, compensation for an otherwise less attractive investment locations, we find that incentives are primarily driven by competition between states and regions for investment.

I'm also working on a paper that quantifies the effects of President Trump's tweets on the value of the Mexican peso, in an effort to measure the effect of the US presidency on the economy of Mexico. Additionally, I have two early stage papers that explore other aspects of foreign direct investment. The first is entitled "Foreign Direct Investment and Environmental Attitudes" and is co-authored with Celeste Beesley. In that paper, we assess how individuals in Latin America perceive polluting versus "clean" FDI. The second, co-authored with Sarah Bauerle Danzman, assesses how political decentralization affects investment flows and the degree to which subnational governments provided investment incentives.