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This dissertation explores empirically the role of government in addressing contemporary public health pressing issues. The first chapter studies the entrance of state-owned pharmacies to provide access to affordable pharmaceutical drugs. This is joint work with Juan Pablo Atal from University of Pennsylvania, José Ignacio Cuesta from Stanford University, and Felipe González from Queen Mary University of London. We find that public pharmacies sell the same drugs at a third of private pharmacy prices, because of stronger upstream bargaining and downstream market power in the private sector but are of lower quality. Leveraging the decentralized entry of public pharmacies to local markets in Chile, we show that public pharmacies induced market segmentation and price increases in the private sector, benefiting the switchers to the public option but harming the stayers. We conclude that the countrywide entry of public pharmacies would reduce yearly consumer drug expenditure and significantly outweigh the costs of the policy.In the second chapter, in joint work with Pablo Muñoz from Universidad de Chile, we ask how governments can improve healthcare provision in public hospitals. To this end, we study a reform in Chile that aimed to improve public service provision by dramatically changing the way government institutions recruit high-ranking civil servants. We focus on the impact of the policy on public hospital performance and examine the underlying mechanisms through which public managers affect public health outcomes. The paper shows that the policy reduced hospital mortality around 8%, an effect that persisted after three years. We also find that the policy changed the pool of CEOs by displacing older doctors with no management training in favor of younger CEOs with either undergraduate degrees in management or doctors with master’s degrees or diplomas in management. We find that the reform affected hospital mortality mostly when newly appointed managers had managemen

Profit shifting by multinational corporations is thought to reduce tax revenue around the world. While transfer pricing regulations are meant to curtail profit shifting, there have been rising concerns that a sophisticated tax advisory industry can limit their effectiveness. This paper provides a comprehensive analysis of how firms and tax advisors respond to the introduction of standard regulations aimed at limiting profit shifting. Using administrative tax and customs data from Chile in difference-in-differences event-study designs, we find that the reform was ineffective in reducing multinationals’ transfers to lower-tax countries and did not significantly raise tax payments. At the same time, interviews with tax advisors reveal a drastic increase in tax advisory services. The qualitative interviews also allow us to identify and then quantitatively confirm a common tax planning strategy in response to the reform. These results illustrate that when enforcement can be circumvented by sophisticated tax planning, it can benefit tax consultants at the expense of tax authorities and taxpayers.