On the crisis of the “liberalization policy” in the economics of interdependence

In spite of all protestations and exhortations it is a fact that trade liberalization, the modern version of free trade, is caught in a crisis. Professor Detlef Lorenz is here analysing the causes of this crisis and suggesting alternatives for a future liberalization policy.     

Trends towards regionalism in the world economy

The world economy has for some time been characterised by a growing generalised trend towards regionalism. This is often considered to be on a par with the formation of blocs, fragmentation of the trading system and a relapse into the disastrous conditions of the thirties. However, if regionalism is understood not as a defensive or aggressive policy of bloc building, as in the thirties, but as a regional grouping that is open towards the world economy, it appears to have something to offer as an alternative to the old international economic order.     

Notes on unequal exchange between developing and industrialised countries

Proponents of the theory of unequal exchange claim that the international division of labour is based on the exploitation of the developing countries by the industrialised countries. But the international division of labour allows the developing countries to import goods which they either could not produce themselves, or only at a higher price than they pay for the imports. The lower wage-levels in the developing countries may also help them to obtain employment at the expense of the industrialised countries. Low wages are therefore ultimately not a question of exploitation but of development priorities.     

Trans-frontier capital links between socialist enterprises

It seems reasonable to assume that the East European efforts concerning the functional viability of strictly socialist International Economic Organizations will also improve the chances for East-West corporations in the medium term. The further development of these organizations deserves therefore to be watched. Impulses radiating from this field may make it possible to change over to a qualitatively new kind of economic relations between East and West.     

International comparisons of common carrier rates and efficiency: The quest for objectivity

There have been few reliable comparisons of different countries' telephone rates, and fewer of the efficiency of their national common carriers. Yet such comparisons are needed if governments and others are to have objective yardsticks by which to judge the carriers' performance. The author reviews several of the more accurate comparative techniques now used in Europe, where the lack of effective control over public sector monopolies is becoming a major political issue in certain countries.     

How Will the Court Decide? – Tax Experts’ versus Laymen's Predictions

We conduct a survey of German tax professionals (tax advisors and revenue agents) and laymen to examine whether tax experts more accurately forecast the outcomes of five real cases from the German Federal Fiscal Court. With an average of 2.39 correct predictions among experts and an average of 2.49 correct predictions among laymen, our results reveal no significant difference in forecasting accuracy between the two groups. Additionally, neither general nor task-specific tax expertise increases the experts’ forecasting accuracy. This unpredictability of tax court decisions indicates that accounting rules and taxpayer penalties that rely on accurate predictions of tax court decisions may need to be re-evaluated. Moreover, our results indicate the existence of two types of ‘advisor bias’. First, tax advisors exhibit a significantly higher level of overconfidence in comparison to other experts (i.e. revenue agents) and laymen. In particular, they believe that they correctly predict, on average, 1.52 more cases than they actually do. Second, we find some evidence indicating that tax advisors acting as client advocates form stronger appeal recommendations than revenue agents.