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BEGIN:VEVENT
UID:7baf7b52de6ad1aeea4b64ca0b405648
CATEGORIES:Seminars
CREATED:20260612T122430
SUMMARY:Lunch Seminar: Silvia Vannutelli (Northwestern University) and Maddalena Ronchi (Kellogg School of Management Northwestern University)
DESCRIPTION;ENCODING=QUOTED-PRINTABLE:<p><strong><span style="font-size: 12pt; font-family: 'Times New Roman', se
 rif;">The Value of Information for Regulatory Enforcement</span></strong></
 p><p>Abstract:</p><p class="MsoNormal" style="text-align: justify;"><span s
 tyle="mso-fareast-font-family: 'Times New Roman';">Regulatory enforcement o
 ften depends on information produced by agents who may have incen</span><sp
 an style="mso-fareast-font-family: 'Times New Roman';">tives to distort it.
  We study this tension in the context of the Italian Court of Auditors, whe
 re&nbsp;</span><span style="mso-fareast-font-family: 'Times New Roman';">lo
 cal public finance auditors report to national judges. We model this proces
 s as involving two&nbsp;</span><span style="mso-fareast-font-family: 'Times
  New Roman';">frictions: imperfect detection of irregularities and incentiv
 es to underreport them. A reform&nbsp;</span><span style="mso-fareast-font-
 family: 'Times New Roman';">that randomized auditor assignments provides a 
 natural experiment that potentially increases</span><span style="mso-fareas
 t-font-family: 'Times New Roman';">the first friction (by reducing local kn
 owledge) while reducing the second one (by increasing</span><span style="ms
 o-fareast-font-family: 'Times New Roman';">independence). Combining novel a
 dministrative data with a machine-learning-based measure</span><span style=
 "mso-fareast-font-family: 'Times New Roman';">of fiscal risk, we find that 
 enforcement increased and became better targeted toward high-risk&nbsp;</sp
 an><span style="mso-fareast-font-family: 'Times New Roman';">municipalities
 . We trace this improvement to the transmission channel: randomly assigned&
 nbsp;</span><span style="mso-fareast-font-family: 'Times New Roman';">audit
 ors report more irregularities, especially in high-risk municipalities and 
 where pre-reform&nbsp;</span><span style="mso-fareast-font-family: 'Times N
 ew Roman';">local ties were strongest. Experienced judges translate these i
 mproved signals into enforce</span><span style="mso-fareast-font-family: 'T
 imes New Roman';">ment, concentrating deliberations on high-risk cases. The
  results suggest that in this setting,</span>the benefits of auditor indepe
 ndence dominate the costs of reduced local knowledge.&nbsp;</p>
DTSTAMP:20260612T185510Z
DTSTART:20260618T130000Z
DTEND:20260618T140000Z
SEQUENCE:0
TRANSP:OPAQUE
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