VALUING AND ACCOUNTING FOR LOAN GUARANTEES

To achieve certain policy objectives, governments frequentlyprovide private borrowers with loan guarantees that cover someor all of the risk that the borrower will be unable to repaythe loan. Such guarantees are extremely valuable, and theirvalue increases with the riskiness of the underlying asset orcredit, the size of the investment, and the duration of theloan. The flip side of a guarantee's value to a lender is itscost to the government. Such a cost is not explicit but is realnevertheless. When providing guarantees, governments thereforemust establish accounting, valuation, and risk-sharing mechanisms.This article describes methods of valuing guarantees; reportsestimates of the value of guarantees in different settings;and summarizes new methods of accounting designed to anticipatelosses, create reserves, and channel funds through transparentaccounts to ensure that the costs of guarantees are evidentto government decisionmakers.      

Tax Administration Reform and Taxpayer Compliance in India

This paper evaluates effects on tax compliance of simple reforms in personnel policy in the Indian income tax administration. Taxpayers voluntarily disclosing higher incomes are currently assigned to special assessment units. To avoid this, high income taxpayers have an added incentive to understate their incomes. Empirical evidence consistent with this hypothesis is found. It explains spillover effects of enforcement efforts across assessment units. We incorporate these spillovers in estimating revenue effects of increased support staff. The results imply significant compliance gains would accrue from expanded staff employment and changes in assignment procedures for staff and taxpayers.     

Subgame perfect implementation: A necessary and almost sufficient condition

We present a necessary and almost sufficient condition for subgame perfect implementation of social choice correspondences. In societies with at least three individuals, any social choice correspondence which satisfies no veto power and our necessary Condition α is subgame perfect implementable. Thus Condition α is analogous to monotonicity which, by Maskin's celebrated characterization, is necessary and, in a similar way, almost sufficient for Nash implementation.     

Contemporary Phase of Globalization: Does It Have a Serious Downside?

Abstract

There are many who logically or illogically regard the contemporary phase of economic globalization as a negative, harmful, destructive, marginalizing and malevolent influence. Notwithstanding its positive welfare implications, it has been a serious source of national, regional and global economic problems for many economies, both developing and advance industrial ones. Partial blame for the fall 2008 meltdown of the global financial market does justly go to globalization. It is also blamed for uneven distribution of income within and between countries. Consequently global policy environment has turned globalization-unfriendly. Without negating the affirmative aspects of globalization and its welfare-enhancing contributions, this article focuses on the negative aspects of the contemporary phase of economic globalization.     

A Kiss of Life for the Withering Doha Round of the Multilateral Trade Negotiations?

Abstract

Notwithstanding the gallant intensions, the Doha Round of multilateral trade negotiations (MTNs) proved to be egregiously problem-prone. It went down in the history of multilateral trade as the first round to be suspended. Potsdam was the final link in this chain of breakdowns. While the G-8 leaders supported the DDA, their trade delegations did not seem to abide by the public pronouncements of their leaders. This article delves into the anatomy of this failure and points toward the salient factors that led to it. There is an imperious need for resuscitating the Doha Round and for the key players to be flexible and take some decisive steps forward. The round is too important for the community of trading economies to be allowed to collapse. Revival is a possible and credible objective. A two-stage revival process is suggested in this article.     

The Chinese and Indian Economies: Comparing the Comparables

Both China and India were noted for their prowess and prosperity in the remote past, but in the recent past they went into a precipitous decline and became marginal economies, known for large impoverished masses and economic stagnation. Early in the 21st century, China and India are once again being seen as two emerging economic powers of the global economy. The closing decades of the 20th century were remarkable for both the economies. China in particular turned in a stellar economic performance. In the beginning of the 21st century, it was even being seen as the economic super power of the future. It has emerged as a low-cost manufacturing juggernaut invading global markets in a sizeable array of products, with a high and rapidly rising level merchandise exports and imports. In comparison, India's post-1991 growth performance has shown improvement. Although its success in the services sector exports is noteworthy, its economic performance did not match that of China. The economic weight of China and its integration into the global economy is going to continue to increase, and India could follow suit. This article compares and contrasts the two emerging-market economies of Asia, their soaring global significance and global integration and draws policy related lessons from it.     

Willingness to Pay for Golden Rice in India: A Contingent Valuation Method Analysis

We estimated students’ willingness to pay for golden rice by using the double-bounded contingent valuation method. We found that nearly 55% of the students are willing to buy golden rice at the same price as that of conventional rice, and around 85% at a certain discount. The estimated mean willingness to pay is a 4% price premium. Furthermore, we found that global (food security) and personal (health) benefit perceptions have a positive significant influence, and risk perceptions and sociodemographic variables have an insignificant influence on willingness to pay for golden rice. Overall, our findings indicate that India has a potential market for golden rice.     

Indian Economy: Growth Performance and Prospects of Transitioning the Growth Trajectory

After a prolonged period of underperformance, Indian economy picked up momentum during the 1980s and 1990s. After 2001, it even had a period of stellar economic growth and the real gross domestic product growth rate came tantalizingly close to double digit. Optimists began to believe that India could emulate China's sustained superlative economic performance. The author argues that this amounts to stretching optimism. There is still a long list of macroeconomic reform and restructuring measures that have been ignored. Whether it will be able to emulate China will essentially depend on doing what was left undone in the past.