Maha Rehman

I study how firms adapt to economic disruptions and crises in environments shaped by weak institutions, financial frictions, and infrastructural constraints. Broadly, I study the mechanisms through which shocks reshape resource allocation, behaviour, and productivity in developing economies.

Across two interrelated streams, I investigate:

1. Adaptive misallocation — how shock-induced reallocations generate persistent inefficiencies at the firm level.
2. Behavior and networks in crises — investigating how individual decisions and social structures interact to shape outcomes during public health and environmental shocks.

These projects are unified by a central question: how institutional constraints condition adaptation, often leading to inefficiency rather than enhanced productivity.

My recent work shows that when firms anticipate limited government support, they rationally over-adapt by substituting public goods through costly self-provisioning. This behaviour ultimately undermines long-term productivity and resilience. I formalise this mechanism in a model of adaptive misallocation, where policy uncertainty drives over-investment in short-term defensive strategies, distorting capital allocation and entrenching inefficiency.

Methodologically, I combine experimental and quasi-experimental designs with tools from empirical industrial organization and applied theory. I use dense urban contexts as natural laboratories to unpack behavioral models, identify misaligned incentives, and test institutional reforms. This empirical foundation informs structural modeling and policy design, with the aim of generating scalable reforms that improve industrial productivity, strengthen public goods provision, and enhance state capacity—particularly in South Asia. I am currently pursuing my PhD at Cornell University.

You can explore my research, policy writing, and teaching here, or connect with me on the platforms below:

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