Developing megacities face severe congestion externalities but lack the fiscal and enforcement capacity for textbook regulation. In its absence, unregulated private provision emerges across services like waste, sanitation, water, and transport. We ask whether limited, feasible regulation can leverage these informal markets to deliver public services at scale, focusing on trash collection in Accra, Ghana. Using novel data, we document an imperfect but functioning market: households pay informal tricycle collectors for door-to-door service, yet prices remain too high for universal access, and final disposal occurs largely at illegal dumpsites. We identify a single feasible lever — subsidies for formal, environmentally controlled disposal — and evaluate it using a new structural model of urban waste collection and disposal. To estimate the model, we combine survey experiments eliciting household demand, a custom app recording transactions and tricycle routes, and a field experiment randomising dumping fees. A modest subsidy captures roughly 80% of the first-best welfare gain, substantially reducing environmental damages and generating larger gains at lower cost than planned infrastructure expansion. Limited price-based regulation can align informal private initiative with social objectives even where state capacity is weak.

Presentations: (2025) LSE Environment Camp, LSE IO-DEV Workshop, CURE, Guest Lecture at Kyiv School of Economics; (2026) LMU Munich, Paris School of Economics, University of Warwick, CEMFI, Stanford GSB, Stanford Doerr School of Sustainability, MIT, UBC, University of Toronto, Stockholm University, Universitat Pompeu Fabra, Berkeley ARE

Funders & Partners: International Growth Centre (IGC), STICERD, Innovations for Poverty Action (IPA), DataPlas Ghana

Do industrial policies that promote clean energy offer a "ray of hope" increasing a country's economic growth and welfare whilst simultaneously reducing carbon emissions? We study the impact of Chinese solar subsidies whose implementation by cities coincided with a dramatic fall in global solar prices. We construct new panel data on city-level solar policies, patenting and output. Using synthetic-difference-in-differences between 2004-2020, we find that production and innovation subsidies were more effective than demand-side (installation) subsidies in generating large and persistent increases in local innovation, firm numbers, output and exports. However, demand policies are most effective at reducing pollution. We build and estimate a quantitative model with endogenous innovation that takes into account business stealing and knowledge spillovers. Through the lens of this model we show that: (i) the local effects remain substantial at the aggregate level; (ii) Industrial policy explain almost two-fifths of the decline in the global cost of solar panels and over a third of the increase in Chinese innovation; (iii) Innovation subsidies are much more cost-effective than demand and production subsidies; and (iv) solar industrial policies increased Chinese welfare by 1% to 2.3%, almost as much as existing estimates of WTO Accession.

Presentations: (2023) NBER Summer Institute EEE, Stanford SITE; (2026) ASSA Annual Meeting in Philadelphia

The internal structure of cities is shaped by localised production and residential externalities. Lack of sanitation gives rise to negative externalities in the form of pollution and disease transmission. Sanitation investments might therefore be essential to allow for people to tolerate density and for positive agglomeration externalities to emerge; thereby turning population density from a downside into an upside. To investigate this hypothesis, we assemble an address-level data set spanning the entire construction period of the Parisian sewage network during the 19th century. We first present event studies examining changes in firm density, residential density, land values, and disease incidences. We then leverage an urban model to estimate the impact of sewers on the strength of agglomeration and city structure. Through counterfactual analyses we examine the impact, cost-benefit, and alternative placements of sewers. Finally, we asses the extent to which sewers displaced pollution to the Parisian suburbs, affecting their long-term development.