SOCIAL INCOME AND PUBLIC SECTOR CORPORATIONS: A CASE STUDY OF THE GHANA FOOD DISTRIBUTION CORPORATION

The feasibility and impact of obtaining a pragmatic measure of social income is attempted in a case study of the Ghana Food Distribution Corporation for the period 1983–1986. Differences between conventional accounting income and social income are assessed with the conclusion that reliance on the conventional accounting model is likely to be misleading for the purposes of assessing performance. While the feasibility of measuring social income is demonstrated there is a need for more relevant information to be made publicly available and for consideration to be given to developing a broad range of financial and non-financial indicators of performance.     

Analyzing the standard deduction as a presumptive tax

Presumptive taxes can be found in the tax system of most developing countries and make sense when the desired tax base is difficult to measure, verify, and monitor. As a substitute for the desired tax base, the presumed tax base is derived from items that can be more readily monitored. Presumed taxes can also be found in developed countries, and examples include fixed depreciation schedules in place of asset-specific measures of decline in asset value, floors on deductible expenses, and the standard deduction. The authors analyze presumptive income taxation with an ultimate goal to initiate an approach to optimal presumptive taxation. This paper begins that task by analyzing the standard deduction in the individual income tax system in the United States.     

How Does Infrastructure Construction Affect Economic Development along the “Belt and Road”: By Promoting Growth or Improving Distribution?

ABSTRACT

The “Belt and Road Initiative” has involved deepening infrastructure construction along the “Belt and Road”. Using data from countries who have joined the “Belt and Road”, this study examines how infrastructure construction has affected economic development along the route. Findings show that infrastructure construction can promote economic growth and per capita output growth while improving income distribution of residents along the “Belt and Road”. Results also indicate that the effect of infrastructure construction on economic development is heterogeneous; such construction can substantially increase economic growth in developing countries but has no significant effect on economic growth in developed and emerging developing countries. Infrastructure construction can greatly improve residents’ income distribution in developed and developing countries but has no significant effect on residents in emerging developing countries. Collectively, these findings identify foreign direct investment and urbanization as important channels through which infrastructure construction can influence economic development.     

发达国家和发展中国家财政政策顺周期问题的研究与借鉴

国外关于发达国家和发展中国家财政政策顺周期问题的研究结果表明:(一)发达国家财政政策具有温和的逆周期性,即在经济上升期增加收入、减少支出、在经济下滑期减少收入、增加支出;也有一些研究成果认为发达国家的财政收入、财政支出具有顺周期性。(二)发展中国家财政收入、财政支出等政策变量,在经济上升期,具有快速增长的顺周期性;在经济下滑期,具有快速减少的顺周期性。     

Determination of inflation in an open economy Phillips curve framework: the case of developed and developing Asian countries

This paper investigates the determination of inflation in the framework of an open economy forward-looking as well as conventional backward-looking Phillips curve for eight Asian countries – Japan, Hong Kong, Korea, Singapore, Philippines, Thailand, China Mainland and India. Using quarterly data from the 1990s to 2005 and applying the instrumental variables estimation technique, we find that the output gap is significant in explaining the inflation rate in almost all the countries. Furthermore, at least one measure of international competitiveness has a statistically significant influence on inflation in all the countries. The differences in the developed and developing world are highlighted by the significance of agriculture related supply shocks in determining inflation in the case of developing countries. For all countries, the forward-looking Phillips curve provides a better fit compared to the backward-looking variant.     

Risk-adjusted profitability and stability of Islamic and conventional banks: Does revenue diversification matter?

Revenue diversification in banking offers opportunities and threats. Recent academic research shows that disadvantages may outweigh advantages, in terms of both volatility of profitability and bank riskiness. Literature on this topic in emerging countries and in the field of Islamic finance is limited: our aim is to empirically test if revenue diversity affects Islamic banks differently than conventional institutions. We analyze the impact of income diversification on profitability and firm-risk of banks in selected OIC countries, in the period 2007–2016, using a comprehensive dataset of 47 Islamic and 154 conventional banks, through diverse measures and econometric approaches. We find that diversification provides lower rewards for Islamic banks than conventional banks, with effects that are stronger for accounting-based measures rather than market-based metrics. Shares of non-interest income positively contribute to profitability regardless of the business model, whereas income diversification shows a not significant effect on the risk-adjusted profitability of Islamic banks. Moreover, we do not find any relationship between income diversification and stability for both conventional and Islamic banks.     

THE ECONOMICS OF MUNICIPAL SOLID WASTE

This article examines the generation and management of municipalsolid waste through the lens of economics. The authors estimatethat the global burden of municipal solid waste amounted to1.3 billion metric tons in 1990, or two-thirds of a kilogramof waste per person per day. Industrial countries account fora disproportionately high share of the world's waste relativeto their share of world population, while developing countriesaccount for a disproportionately high share of the world's wasterelative to their share of world income. Analyses across countriesand over time reveal that the generation of municipal solidwaste is positively related to variations in per capita incomeand that the generation of municipal solid waste per capitadoes not vary with population size among countries with comparableper capita income. Practices for collecting, processing, and disposing of municipalsolid waste vary widely across countries, generally in accordwith the nature of the waste stream and key environmental andeconomic features. The least efficient practices tend to befound in developing countries, creating serious threats to localenvironmental quality and public health. Although considerableevidence indicates that the generation and management of wasteis sensitive to income and price variables, natural incentivesto overuse common property and the presence of inter- generationalexternalities both suggest that private economic behavior willnot yield socially optimal outcomes in this area. Communityintervention may be needed to promote the social good, withevidence accumulating in support of arrangements involving theparticipation of private firms. The authors' calculations alsosuggest that improvements made now in the handling of hazardouswaste will be far less expensive in discounted terms than undoingin the future the damage being caused by current practices.Addressing these issues from a rational societal perspectivewill become increasingly urgent in the future, especially inthe developing countries, where the authors project that municipalsolid waste will increase at an annual rate of 2.7 percent throughthe year 2010.      

From the global income tax to the dual income tax: Recent tax reforms in the Nordic countries

The paper discusses the recent drive toward a system of dual income taxation (DIT) in the Nordic countries. The pure version of this system combines progressive taxation of labor and transfer incomes with a proportional tax on income from capital at a level equal to the corporate income tax rate. The paper considers the motives for the introduction of this new income tax system, ranging from abstract theoretical arguments to very pragmatic considerations. While the Nordic DIT system violates the principles of the conventional personal income tax, it is argued that it may in fact be more in line with the philosophy of a true Haig-Simons comprehensive income tax. It is also suggested that the DIT system may cause fewer distortions to resource allocation than the conventional income tax. On the debit side, the paper points out several practical problems of taxing income from small enterprises under the differentiated income tax.     

A SIMPLER CONSUMPTION-BASED ALTERNATIVE TO THE INCOME TAX FOR SOCIALIST ECONOMIES IN TRANSITION

The tax systems of socialist economies in transition will distortresource allocation, create inequities, and cause administrativeheadaches if not reformed. These countries have weak tax administrations,lack experience with mass taxes based on voluntary compliance,and need to encourage domestic saving and foreign investment.This article suggests an alternative to the conventional incometax that is more suited to these conditions. Attempting to tax real economic income raises complicated timingissues (when to recognize income and allow deductions) and mayrequire complex adjustments for inflation. The simplified alternativetax (SAT) avoids these complications and provides a generalincentive for saving and investment less subject to abuse ordistortions than tax holidays and other tax gimmicks in voguein countries emerging from socialism. The key elements of the SAT are separate taxes on income fromlabor and capital, immediate deduction for all business expenditures,no deduction for interest, and no taxation of interest or dividends.(Interest could be treated as under an income tax, at some cost.)Although the marginal effective tax rate is zero, the governmentshares in extraordinary returns to investment. The article discussespotential problems (including distributional implications, taxlosses, and foreign tax credits) as well as advantages of theSAT.      

Valuation Weights,Linear Dynamics and Accounting Conservatism: An Empirical Analysis

Residual income models provide an important theoretical link between equity valuation and financial statement variables. While various researchers have developed models of how accounting policy impacts on the structure of these models, empirical support for these models is at best weak and frequently contradictory. In this paper, we develop an analytical model, which identifies the dependency between valuation weights in residual income models and the associated structure of earnings information dynamics and accounting conservatism. In contrast to many earlier studies, we find strong evidence of conservatism in our reformulation of the linear dynamics. We proceed to test our predictions of the dependency of the weights on two measures of conservatism, the conventional measure of price‐to‐book ratio and the recent measure of a C‐Score index developed by Khan and Watts (2009) and find that the empirical results accord well with our theoretical predictions in the case of the former but not the latter measure.     

进一步完善我国企业所得税区域优惠政策

区域税收优惠政策对促进区域经济协调发展具有重要作用。本文在分析我国现行企业所得税区域优惠政策存在问题和介绍部分发达国家和发展中国家施行的较为成功的区域税收优惠政策的基础上,就完善我国企业所得税区域优惠政策提出了设想和建议。     

Uncertainty and Export Performance: Evidence from 18 Countries

We study a sample of nine developed and nine developing countries to evaluate the questions of how foreign income uncertainty and real exchange rate (RER) uncertainty impact international trade and how those impacts vary according to stage of development. RER uncertainty has a negative and significant impact on export growth for six of the nine less developed countries in our sample, while it has an insignificant effect for a majority of the developed countries. In both groups, foreign income uncertainty has a more pervasively significant (and frequently larger) influence on trade than does RER uncertainty.     

Personal Income Taxes in Developing Countries

Comparative work on income taxes in developing countries hascommonly looked at average tax rates. These rates are oftenconstructed by dividing revenue collections by some measureof private or personal income. Recent controversies have, however,focused on the incentive effects of marginal tax rates. Thisarticle develops and applies a simple methodology to comparemarginal official tax rates across a sample of fifty developingcountries. As would be expected given differences in fiscalcapacity, the poorest and the lower-middle-income countriesimpose relatively low marginal rates, and the rates for theupper-middle-income and developed countries are higher. Conversely,several low-and lower-middle-income countries' tax thresholdsstart at income levels which are low relative to their meanincome when compared with those of developed countries. Theresults warn against trying to derive information on the disincentiveeffect of a country's tax schedule from the highest marginalrate; our data show that this is not an accurate indicator ofoverall disincentive effects.     

The effects of the structure of banking market and funding strategy on risk and return

This paper analyses the implications of bank market power and funding structure for risk and return. It employs a sample of 978 banks in 55 countries leading up to the 2008 financial crisis to test for two related hypotheses. First, competition reduces internal capital as the level of market power increases when banks use internal funding to diversify into non-interest income generating activities. Building on these results and employing various specifications of Lerner index and funding strategy, the second test suggests that the relatively low insolvency risk among banks in emerging and developing countries during 2000–2007 is attributed to the high degree of market power and the use of internally generated funds.     

How International Exchange, Technology, and Institutions Affect Workers: An Introduction

In a world of deepening trade links, rapid technological change,and weakening institutions, workers in rich and poor countriesalike are concerned about their incomes and the security oftheir work. In contrast to the substantial quantity of analysison industrial countries, relatively little careful work hasbeen done on these issues in developing countries, especiallyin the context of the recent globalization of economic relations.Empirical work suggests that disequalizing trends in some developingcountries may have been caused by the entry of low-income countriessuch as China into world production or by the greater qualityand technological requirements of contemporary trade in goods.Whatever the source, these results raise questions about theviability of institutional mechanisms for supporting the incomesecurity and working conditions of workers. Many labor marketregulations are already ineffective owing to weak enforcementcapabilities. However, in most developing countries, there willbe a rising fraction of workers in formal labor contracts, risingdemands for formal mechanisms for dealing with income insecurity,and a potentially larger role for unions in an important segmentof the work force. Thus, it is of increasing importance to setthe policy and institutional framework in a fashion that isboth consistent with competitive pressures and supportive ofworkers' participation and security.     

A quantitative analysis of inflation as a tax on the underground economy

Inflation rates are more dispersed and are persistently higher in developing countries. This paper quantifies the importance of the public-finance motive for inflation in the presence of a tax-evading sector, the underground economy. The approach is motivated by the observation that the underground economy is especially large in poor countries. The analysis builds on a general equilibrium monetary model with two production sectors, where income in one of the sectors cannot be taxed. A benevolent government finances its budget using an optimal combination of the income tax rate and the inflation rate. The model is first calibrated to the U.S. economy and is then used for a cross-country simulation. The resulting relationships between the size of an underground economy, inflation rate, income tax rate and the share of seigniorage in the government revenue rationalize the cross-country data quantitatively well.     

Country experience in providing for basic needs

The basic needs approach to development--i.e., providing such basic needs as health and education to the poorest sectors of the population--replaced a previous emphasis on general economic development. Basic needs include food, nutrition, health services, education, water, sanitation, and shelter. A World Bank study to evaluate the success of developing countries in meeting their populations' basic needs discloses great disparity among countries. The study used literacy and life expectancy figures for the evaluation. All developing countries had improved their provision of basic goods and services in the time between 1960 and 1977, but the improvement was not uniform. The countries' previous performance in this area and the national level of per capita income influenced their improved performance. Countries having egalitarian income distributions tended to perform better than would have been expected from the per capita income alone; countries with maldistributed incomes tended to perform worse. The following 3 types of economies were most successful in providing basic goods/services for their populations: 1) rapidly growing, market-oriented economies; 2) centrally planned economies; and 3) "mixed" economies with welfare intervention. Very poor economies, those with rapid growth and no substantial poverty reduction, and those with moderate growth and moderate poverty reduction were less successful. Macroeconomic frameworks can provide guidelines.     

THE MARKET FOR DEVELOPING COUNTRY DEBT: The Nature and Importance of Its Shortcomings

There are two problems in the market for developing countrydebt: one is the immediate crisis. What do we do about the largevolume of outstanding debt? A more subtle but no less importantproblem is that because contracts are un-enforceable and lendershave incomplete information about risk, capital is mis-allocated.This article examines the latter problem and reviews the natureand causes of the unenforceability. It shows that unenforceabilityresults in higher interest rates on smaller and shorter-termloans than would otherwise be available and discourages investmentin developing countries. Similarly, unenforce-ability can explainthe perverse timing of capital flows to developing countries,causing credit to flow into the country when income is high,and out when income is low. The article then analyzes the riskassociated with three types of information asymmetries: informationabout the borrowers' ability to repay, willingness to repay,and use of the loan proceeds. These asymmetries, the authorargues, reinforce the effects of unenforceability. The prospectsfor remedying the immediate crisis are discussed, as is theneed to be certain that the proposed solutions do not aggravatethese problems.      

Do market capitalization and stocks traded converge? New global evidence

In this paper, we examine convergence of stock markets. Our empirical exercise is based on 11 different panels, which together consist of 120 countries. The richness of the dataset allows us to disaggregate countries into panels, such as high income, middle income, low income, OECD, CSI, and developing country panels. In addition, we construct regional panels, such as those representing the Arab States, East Asia and the Pacific, South Asia, Latin America and the Caribbean, and Sub-Saharan Africa. Our main finding is that, based on the conditional convergence model, convergence of stock market capitalization and stocks traded is found for four panels, namely the high and low-income panels, the OECD panel, and the Sub-Saharan African panel. The speed of convergence is high, in most cases between 20% and 30%.     

Population growth. Its magnitude and implications for development

A summary of the 1984 World Development Report is provided. The 3 major points stressed in the report were: 1) rapid population growth adversely affects development, 2) governments must adopt policies to reduce fertility, and 3) policies adopted by many countries have effectively reduced fertility. World population growth began accelerating at 0.5%/year in the 18th century, and by 1950 the annual acceleration rate was 2%. Most of the increase in population size is occurring in less developed countries, and this increase is due in part to the recent decline in mortality experienced by these countries. Of the 80 million individuals who will be added to the world's population in 1984, 70 million will be in the developing countries. Since 1965 the population growth rate for developing countries as a group declined from 2.4% to 2%. However, because of the high proportion of younger aged individuals in developing countries, the decline in fertility is expected to level off. According to World Bank population projections, the world population will stabilize at around 11 billion in 2150. During the interium, the population of developing countries will increase from its present level of 3.6 billion to 8.4 billion, and the population of developed countries will increase from 1.2 billion to 1.4 billion. These projections are probably overly optimistic. The adverse impact on development of rapid population growth is due to several factors. 1st, resources which could be used for investment must instead be used to fulfill the consumption needs of an increased number of people. 2nd, increases in the labor force must be absorbed by the agricultural sector, and this reduces agricultural productivity. 3rd, rapid population growth increases management problems. The adaption of policies by governments to reduce fertility is a necessary step in halting population growth. For poor families, children provide economic security. Therefore, governments must act to improve the economic conditions for poor families if they hope to reduce population growth. Education and job opportunities must be expanded and social security provided for the elderly. In the past it was assumed that fertility would only decline when urbanization, industrialization, and income reached a certain level. It is now known that appropriate policies can effectively reduce fertility even in the absence of economic advancement. Fertility declines are more closely related to increases in literacy and life expectancy than to increases in the gross national product. Family planning programs in China, Colombia, Egypt, India, Indonesia, Korea, Sri Lanka, and Tunisia have reduced fertility far below the level normally associated with the income levels prevailing in those countries.