THE CONCEPT OF EFFECTIVE SUBSIDY AND ITS APPLICATION TO THE CANADIAN FLOUR MILLING INDUSTRY*

The export subsidy has been a perennial bone of contention to competing exporters of various commodities in international trade, particularly in agricultural trade. A typical example is the world trade in flour. Export subsidies on flour exports by large competitors are generally thought to be one of the main causes of the decline in the Canadian share of the world flour market. Previous studies have been confined to an analysis of nominal subsidy rates on flour; quantifications are needed to estimate the effectiveness of the subsidies in fuller terms. Therefore, it is desirable to develop an appropriate concept for treating export subsidies explicitly. The present study attempts to develop a model to estimate the effectiveness of export subsidies net of input distortion so as to arrive at “the effective rate of subsidy.” Then, the mode! so developed is applied to the U.S. and Canadian exports of flour. The results show that Canada had negative effective rates of subsidy throughout the years 1960-61 to 1969-70 while the U.S. rates remained positive during this entire period. These estimations provide quantification of the disadvantage caused for Canadian flour exports by export subsidies on flour by large competitors. A fin ?étudier explictement les primes ?exporiations ont Aeté une source continuelle de mé-sentente entre les exponateurs compétitifs des diverses marchandises au sein du marché international. Ceci est paniculièremeni vrai en ce qui a trait au marché agricole. Un exemple lypique est le marché mondial des farines. ?on croit que i'une des principals causes de la baisse de la part Canadienne dans le marché mondial des farines sont les primes ?exporiations accordées aux gros compétiteurs. Les études précédenles furenl limitées à?analyse de taux nominal de subventions sur les farines; des estimations quan-titatives sont nécessaires afin ?évaluer ?efficacile des subventions en termes plus précis. Done, it est necessaire de développer un concept approprté afin ?étudier les primes ?exporiations explicitement. La préseme étude tente de développer un modèle ?évaluation de ?efficacité des primes ?exporiations libres de loutes déformations afin ?obtenir “un taux efficace de subvention.” Ce modèle est alors appliqué aux exportalions Américaines el Canadiennes de farine. Les résultats démontrent que le Canada possèdait des “taux efficaces de subventions” négalifs pendant les années 1960-61 à 1969-70 el que les taux Américains demeurerent positifs durant la même période. Ces résultats nous donnent la dimension du désavantage causé aux exportalions Canadiennes de farine par les primes ?exporiations accordees aux gros compétiteurs.     

Distortionary taxation and the free-rider problem

This paper derives a version of the Samuelson rule which takes into account that a distortionary Ramsey-tax system is used to finance public-goods provision. Individuals have private information about their public-goods preferences. Moreover, individuals differ in their productive abilities. The incidence of taxation in the Ramsey model implies that more productive individuals have a lower willingness to pay for public goods than less productive individuals. They are therefore tempted to understate their valuation of public goods and less productive individuals are inclined to exaggerate theirs. The paper characterizes an optimal rule for taxation and public-goods provision that eliminates these biases.     

On the optimality of optimal income taxation

The Mirrleesian model of income taxation restricts attention to simple allocation mechanism with no strategic interdependence, i.e., the optimal labor supply of any one individual does not depend on the labor supply of others. It has been argued by Piketty (2009) [12] that this restriction is substantial because more sophisticated mechanisms can reach first-best allocations that are out of reach with simple mechanisms. In this paper, we assess the validity of Piketty?s critique in an independent private values model. As a main result, we show that the optimal sophisticated mechanism is a simple mechanism, or, equivalently, a Mirrleesian income tax system.     

Income Tax, Property Tax, and Tariff in a Small Open Economy

Why do some countries enjoy high economic growth rates while some suffer in “low-growth traps”? Why are tax policies in different countries so different? Some suggest that it is exactly these differences in government policies which contribute to the difference in economic growth rates. This paper considers a small open economy which sustains its economic growth by adopting new technologies. When the value of initial wealth is “relatively small,” policies which promote growth most result in the highest welfare. In other cases, policies that discourage growth most may be welfare-maximizing.     

Measuring moral judgement and the implications of cooperative education and rule-based learning

The Defining Issues Test (DIT), developed by Rest (1986) , measures a person's level of moral development using hypothetical social dilemmas. Although the DIT is useful for measuring moral development in social settings, it might not adequately capture an individual's moral judgement abilities in solving work‐related problems ( Weber, 1990 ; Trevino, 1992 ; Welton et al., 1994 ). In the present study, the moral judgement levels of 97 accounting students were measured over a 1 year period using two separate test instruments, the DIT and a context‐specific instrument developed by Welton et al. (1994) . The test scores are significantly higher on the DIT than the Welton instrument (between the instruments and over time), suggesting that accounting students use higher levels of moral reasoning in resolving hypothetical social dilemmas and lower levels of moral reasoning in resolving context‐specific dilemmas. The difference in test scores was highest during cooperative education (work placement programme), implying that the environment is a significant determinant on students’ test scores.     

Capabilities, innovation and competitive advantage

This special issue was aimed at advancing the literature examining the role of capabilities in innovation-based competitive strategy. Whilst the innovation literature has over the years moved away from its ‘product innovation’ pre-occupation to capture the role of other forms of innovation in value creation, the capability view has progressed from its ‘rigid’ or ‘static’ view to a ‘dynamic’ view in an effort to capture market dynamism. Despite the recent theoretical advancements the dynamic capability view still lacks a strong empirical base. Contributors to the capability literature over the recent years have adopted multiple research methods to capture capabilities that include cross-sectional designs, case studies and longitudinal studies. Within this backdrop, the articles that were selected for this special issue covers both conceptual and empirical approaches to examine the relationship between capabilities and technical and non-technical innovations and performance outcomes. This essay provides a future research agenda to advance this promising research field. It highlights the need for clearer conceptualizations and development of measures of dynamic capabilities, environmental conditions that underpin the development of dynamic capabilities within the firm and research into the much debated relationship between dynamic capabilities and competitive advantage and organizational performance.     

Design von Informationsfeedback in Regelenergiemärkten

Information feedback is a much debated issue on balancing power markets: which information on past auctions should be published and when? The article analyzes advantages and disadvantages of different feedback policies applied to the example of the Swiss balancing power market. Our main conclusion is that the publication of the marginal bid is usually recommendable. This is often not the case for additional information (e.g. extramarginal bids). However, the answer depends on the specific market design and the market structure.     

Integrated production planning with sequence-dependent family setup times

This paper proposes an integrated optimization model of aggregate production planning (APP), family disaggregation planning, and family scheduling problems in hierarchical production planning (HPP) systems considering sequence-dependent family setup times. The model obtains the optimal production plan for each product type and product family in each period, together with the globally optimal production sequence of product families in all planning periods. The proposed model is tested with randomly generated experimental data consistent with what is prevalent in the manufacturing industry and its results are compared with those of the traditional HPP models. Our results show that the integrated model realizes greater cost savings.     

The evolution of Indian accounting standards: Its history and current status with regard to International Financial Reporting Standards

This paper addresses the adoption and applicability of International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB) to India. Specifically, the paper highlights some major areas where the country lacked harmonization with IAS in 1993 and the rapid congruence with IAS in the decade that followed. The attempt to achieve congruence with IAS appears to be more a by-product of the country's rapid economic growth rather than its catalyst. However, continued growth and the attraction of foreign capital to domestic ventures will depend on the transparency of the financial dealings. The Institute of the Chartered Accountants of India, (ICAI), India's standard setting body, is increasingly attempting to provide this transparency by revisions and additions to accounting standards, and by Exposure Drafts which aim to bring India more in line with International Financial Reporting Standards.