SNF Agora Faculty Seminars: Alice Xu

• Alice Xu 
• Ph.D. Candidate in the Department of Government at Harvard University 
• Paper title: “Segregation and the Spatial Externalities of Inequality: Public Goods and Political Polarization in Urban Brazil

Abstract:

Why do some cities provide more public goods than others? What accounts for spatial inequality in provision? Conventional wisdom claims that racial diversity undermines collective investments in public goods. In this paper, I show that socioeconomic diversity, instead, generates a form of collateral cooperation for public goods. I demonstrate how decades of rapid migration of displaced rural poor migrants to cities resulted in forms of urban class- and race-based segregation that continue to marginalize communities in informal settlements today. I argue that socioeconomically integrated (non-segregated) cities have a higher incidence of negative spatial externalities of inequality (e.g., crime, contamination) that spill over from impoverished localities. Such neighborhood effects, in turn, induce the middle-class’ preferences for public goods that address these effects, while decreasing the perceived relative efficacy of private solutions (e.g., private guards, personal firearms). Thus, socioeconomic integration –through this externalities mechanism– enables preference convergence on the public provision of services in place of private options. In contrast, segregation polarizes the urban electorate along class lines. To test the argument, I propose an instrument for segregation that interacts rural-to-urban predicted migration (i.e., shift-share instrument) of the rural poor with the destination locality’s “urban form.” I combine this quasi-experimental strategy with a neighborhood-level measures of class- and race-based segregation and an original face-to-face survey of preferences with over 4,000 households across 420 of the total 456 neighborhoods in the megacity of São Paulo, Brazil. Beyond the formation of affective attitudes from intergroup contact, the analysis introduces self-interest in reducing intergroup externalities as a new mechanism that drives cooperation for public goods. Using embedded mechanism vignettes, I distinguish this mechanism from alternatives mechanisms –e.g., racial tolerance/prejudice, social affinity– proposed in the literature.