MIGRATION,SOCIAL NETWORKS,AND CREDIT: EMPIRICAL EVIDENCE FROM PERU

We seek evidence of the causal relationship between migration, social networks, and the probability of receiving credit in a developing country where credit markets are weak and internal migration is common. Migrants may face binding asymmetric information constraints as they often lack collateral. Social networks can help mitigate these constraints. Conversely, migrants might face higher liquidity constraints and might, therefore, demand more credit than nonmigrants. The effect of migration on participation in the credit market is thus ambiguous. Compounding this, migration and credit may be jointly determined. We utilize rich data from Peru to establish the net effect of migration on credit and the role that social networks play in this relationship.     

The Post‐Socialist Growth Machine: The Case of Hungary

When the concept of growth machine was created more than twenty years ago, it seemed unlikely that it would ever reach Eastern Europe. Now, about fifteen years after the beginning of the post‐socialist transformation, the growth machine is also part of urban politics in the former socialist countries. This article will try to fill a gap in growth machine research, examining this concept in a post‐socialist environment through the case of Hungary. The concept of growth machine is based on a powerful argument about a coalition promoting economic growth, and shows considerable flexibility around the Western world. Although in post‐socialist Eastern Europe the interlocked political and economic power accumulation is the same, there are significant differences both in terms of the composition and operation of the growth machine. The Hungarian example shows that the post‐socialist growth machine is strongly shaped by the socialist legacy of the region. Its operation is also influenced by the elite transformation after the collapse of socialism and the presence of powerful external actors, like the nation state or transnational investors. Moreover, the contemporary social context is very supportive, since the political and economic interests are closely connected and the counter‐movements are relatively weak. We develop a theoretical framework, supported by examples of urban development in two Hungarian cities that offer interesting differences in their political and economic environment. Lorsque le concept de machine de croissance a été créé il y a plus de vingt ans, on pouvait douter qu’il touche un jour l’Europe de l’Est. Aujourd’hui, environ quinze ans après le début de la transformation post‐socialiste, la machine de croissance y fait aussi partie de la politique urbaine. L’article tente de combler les lacunes dans la recherche sur la machine de croissance en étudiant ce concept dans l’environnement post‐socialiste au travers du cas de la Hongrie. Basé sur un argument décisif relatif à une coalition encourageant la croissance économique, le concept présente une souplesse considérable au sein du monde occidental. Même si, dans l’Europe de l’Est post‐socialiste, l’accumulation imbriquée de pouvoir politique et économique est semblable, d’importantes différences existent à la fois en termes de composition et de fonctionnement de la machine de croissance. L’exemple hongrois montre que la conformation de la machine de croissance post‐socialiste doit énormément à l’héritage socialiste de la région, De plus, son fonctionnement est influencé par la mutation des élites après l’effondrement du socialisme et par la présence de puissants acteurs extérieurs tels l’État‐nation et les investisseurs transnationaux. En outre, le contexte social contemporain est très favorable, puisque les intérêts politiques et économiques sont étroitement liés et les mouvements d’opposition relativement faibles. L’article élabore un cadre théorique, étayé par des cas d’aménagement urbain dans deux grandes villes hongroises présentant d’intéressantes différences dans leur environnement politique et économique.     

AN OPEN SHOP, WAGE BARGAINING, AND TAXATION--A NOTE

In a social custom model of union membership with wage bargaining,higher levels of company taxes lower wages while having uncertainemployment effects. A higher marginal income tax rate increasesemployment. Changes solely in the level of income taxation,retaining marginal rates, have ambiguous wage and employmentconsequences. Endogenising union membership therefore does notalter the effects of tax changes in comparison to a right-tomanagemodel with exogenously fixed level of density.     

Tax Overpayments, Tax Evasion, and Book-Tax Differences

A strictly risk-averse manager makes joint decisions on a firm's tax payments and book profit declarations according to accounting standards. It is analyzed how the incentives to overpay or evade taxes and to inflate book profits are influenced by (1) the composition of the manager's remuneration, (2) the ability to control the manager's actions, (3) the costs of making untruthful profit declarations, and (4) the tax rate. If the firm's owner or the government take into account these effects when pursuing their own objectives, the changes in tax payments and book profit declarations become theoretically more ambiguous.     

Tax Liability and Tax Evasion in a Competitive Labor Market

In a competitive labor market, a change in the legal incidence of a tax on labor will not alter employment if tax obligations are fulfilled. However, this irrelevance result may no longer apply if taxes can be evaded. In particular, a shift from payroll to income taxes will lower employment. This will be the case if workers exhibit constant absolute risk aversion, have a utility function, which is strongly separable in income and the disutility from working, and the penalty for evasion is not proportional to the amount of taxes evaded. Accordingly, tax evasion opportunities can make the legal incidence of a tax on labor an important determinant of its economic incidence.