PUBLIC MANAGEMENT REFORM UNDER STRESS - The Ukrainian civil service experience

This article presents a heuristic continuum for the development and reform of civil service systems, drawing implications for the usefulness of western civil service reforms to the current Ukrainian situation. The authors argue that the current reform ideology common to western democracies may not be appropriate when applied to Ukraine and other nascent states.     

Delayed integration as a possible remedy for the race to the bottom

It has been a long-standing concern in the literature that household mobility implies a serious threat to redistributive taxation. This paper considers the effects of delayed integration of migrants into the redistributive system of the target country. We argue that delayed integration may introduce a time consistency problem into governments' tax plans that reduces a region's incentive to undercut other regions' tax rates and can bring tax competition to a halt. Due to delayed integration, rich migrants cease to benefit from the lower tax rate in the current period. At the same time, the region's promise of a low rate in the future lacks credibility, since delayed integration locks in migrants once they are settled. We also explore the case where poor recipients of social assistance are mobile, while the rich are immobile.     

The role of the european union in environmental taxation

The paper considers the extent to which environmental taxation should be coordinated by, or assigned to, the European Union (EU) rather than its member states. An economic interpretation of the principle of subsidiarity forms the main organizing principle for the discussion. Since the signing of the Maastricht Treaty in 1992, this principle has governed the boundary between the roles of member states and the Union. The paper considers the application of subsidiarity to the assignment of policy responsibility for environmental taxation between the EU and national governments, highlighting the role of both environmental and economic spillovers from uncoordinated national policy and problems of integration of environmental taxes with other areas of policy.     

To harmonize or to compete? That's not the question

Neoclassical public economists stress economic distortions induced by differential taxation and therefore favour harmonization; political economists focus on political distortions and therefore reject harmonization. However, policy choices on the possibility frontier between economic and political distortions tend to be biased: economic advisers, politicians and interest groups typically favour harmonization. Harmonization is, moreover, undermined by incentives to re-establish tax differences. Both activities prevent the possibility frontier from being simply a menu of choice. Popular referenda and functional, overlapping, competing jurisdictions (FOCJs) are institutions able to reduce political distortions and to shift the possibility frontier.     

Insurance and Incentive Effects of Transfers among Regions: Equity and Efficiency

When productivity shocks across regions are less-than-perfectlycorrelated, there are gains from federation, even if the regionsare identical ex ante. For the federation to provide insurancefor these productivity shocks, it must introduce some sort ofequalizing transfer programme among regions. But any suchtransfer programme induces a form of moral hazard as well, ifregions still have some control over their own policies. Oneof the implications of this moral hazard is that the progressivityof the overall (regional together with federal) tax system willbe increased when the federal transfer programme is expanded.     

Variable population size issues in models of decentralized income redistribution

We examine the distributive implications of decentralized redistribution in a federation with mobility. From a regional perspective, redistribution involves variable populations. As distribution and population issues are normatively inseparable, regional social preferences should exhibit reasonable properties in both respects. Critical-level (CL) utilitarianism does so. In autarky, CL utilitarian governments implement an egalitarian solution. With free mobility some degree of inequality always proves optimal when critical levels are fixed. Egalitarianism can be reached as a Nash equilibrium if and only if average incomes are used as variable critical levels. Since this is unacceptable on efficiency grounds we conclude that under reasonable assumptions egalitarian outcomes do not survive in fiscal games.     

Should the Power to Redistribute Income be (De-)Centralized? An Example

This paper deals with two questions which have recentlyreceived considerable attention in both the political debateand the academic literature: First, are fiscal programs largeror smaller when they are (de-)centralized? Second, should suchprograms be (de-)centralized? We answer these questions withina politico-economic model in which voters choose the parametersof a linear income tax taking into account how taxes affect laborsupply and migration decisions. It is shown that a decentralizedpolitical system may lead to a smaller government budget. Theconcept of a veil of ignorance is used to analyze the desirabilityof a decentralized system. It is argued that a decentralizedsystem is preferred under the veil of ignorance only if individualsare not too risk-averse and the income distribution is not toopolarized.     

Fiscal decentralization and macroeconomic management

The purpose of this paper is to address a central question in fiscal federalism - whether or not fiscal decentralization implies serious risks for fiscal discipline and macroeconomic management for the nation as a whole. This paper addresses this important issue by drawing upon the existing evidence regarding macro management and fiscal institutions in federal and unitary countries. This is supplemented by cross country regression analysis plus the analysis of two case studies: the Brazilian federation and the unitary regime in China. The main conclusion of the paper is that decentralized fiscal systems offer a greater potential for improved macroeconomic governance than centralized fiscal regimes. This is because the challenges posed by fiscal decentralization are recognized and they shape the design of countervailing institutions in federal countries to overcome adverse incentives associated with incomplete contracts or the “common property” resource management problems or with rent seeking behaviors. JEL Code E6 · H7 · H1     

State actors and international forest certification policy: Coalitions behind FSC and PEFC in federal Argentina

Forest certification has been so far described as a non-state, market-driven form of private governance developed by non-state actors. However, bureaucracies can influence the effects of these programs in many ways, using their competencies to either enhance or restrict non-state certification schemes. The objective of our work is to analyze the role state agencies played in the forest certification standard development processes in Argentina, including the related coalition building strategies. Our hypotheses are that forest certification is not an activity among merely private actors, but that state agencies do play a small but necessary role in creating favorable frame conditions, and in standard formulation and scheme establishment. Coalitions built around production-oriented state agencies and strong political sectors have a stronger influence in the formulation of standards of forest certification schemes than coalitions between conservation-oriented bureaucracies and environmental NGOs. In order to understand the process of standard formulation for FSC and PEFC in Argentina, data on the different schemes were collected from public statements from stakeholder organizations, written summaries of debates of schemes from both public meetings and meetings by the groups writing the standards, and statements from the agencies in charge of writing the standards. The results show that in Argentina, FSC was temporarily useful to the forestry sector and landowners as a quick solution and hence was supported even by utilitarian state agencies. In light of an evolving operational PEFC scheme four years later, this support by state agencies was dropped and shifted towards the more landowner-friendly PEFC. After this dynamic in the coalition building process, FSC was on a decline in Argentina.     

Multilevel governance and broadband infrastructure development: Evidence from Canada

This paper investigates the contributions of digital infrastructure policies of provincial governments in Canada to the development of broadband networks. Using measurements of broadband network speeds between 2007 and 2011, the paper analyzes potential causes for observed differences in network performance growth across the provinces, including geography, Internet use intensity, platform competition, and provincial broadband policies. The analysis suggests provincial policies that employed public sector procurement power to open access to essential facilities and channeled public investments in Internet backbone infrastructure were associated with the emergence of relatively high quality broadband networks. However, a weak essential facilities regime and regulatory barriers to entry at the national level limit the scope for decentralized policy solutions.