THE POLITICAL ECONOMY OF QUOTA RENTS IN A DYNAMIC INTERNATIONAL TRADE MODEL*

This paper considers the implications of allowing quota rents to become capitalized. Capitalized quota rents crowd out physical capital in savers’portfolios, reducing the capital stock. Capitalization of quota rents also makes removal of the quota politically more difficult, since those currently alive may not be able to fully compensate the losers before the losers die. I use an overlapping generations model to provide examples which illustrate the difficulty of removing a quota once its rents have been fully capitalized. This work has implications for any policy which could lead to capitalized rents.     

Oil rents, corruption, and state stability: Evidence from panel data regressions

We examine the effects of oil rents on corruption and state stability exploiting the exogenous within-country variation of a new measure of oil rents for a panel of 30 oil-exporting countries during the period 1992–2005. We find that an increase in oil rents significantly increases corruption, significantly deteriorates political rights while at the same time leading to a significant improvement in civil liberties. We argue that these findings can be explained by the political elite having an incentive to extend civil liberties but reduce political rights in the presence of oil windfalls to evade redistribution and conflict. We support our argument documenting that there is a significant effect of oil rents on corruption in countries with a high share of state participation in oil production while no such link exists in countries where state participation in oil production is low.     

The Evolution of Income Composition Inequality in Italy, 1989–2016

We study the evolution of inequality in income composition in terms of capital and labor income in Italy between 1989 and 2016. We document a rise in the share of capital income accruing to the bottom of the distribution, while the top of the distribution increases its share of labor income. This implies a falling degree of income composition inequality in the period considered and a weaker relationship between the functional and personal distribution of income in Italy. This result is robust to various specifications of self-employment income; nonetheless, it hinges crucially on the treatment of rental incomes. While the dynamics of imputed rents has brought about a more equitable distribution of capital incomes across the income distribution, that of actual rents has led to higher concentration of capital incomes at the top in the decade preceding the outbreak of the financial crisis. Finally, we conceptualize a rule of thumb for policy makers seeking to reduce income inequality in the long run.     

Regulating a Monopolist with Unknown Demand: Costly Public Funds and the Value of Private Information

In this paper, we analyze the optimal regulation policy when the regulated firm has better information concerning the market demand than the regulator. We show that introducing a cost on public funds into the Planner's objective function does not lead to qualitative results similar to those obtained by introducing distributional considerations. In particular we show that under constant marginal cost the full information policy is not implementable and that the optimal regulatory policy results in informational rents. The social value of private information and the firm's informational rents are both increasing functions of the cost of the public funds.     

Democracy,rent seeking,public spending and growth

Does democratization imply faster growth, less corruption and less inefficiency? Past studies yield ambiguous results on the effects of democracy on economic performance and growth. We develop a simple two-sector endogenous growth model that shows both very young and mature democracies grow faster than countries in mid stages of democratization, producing a ‘U’ effect. This effect results from the pattern of rent seeking as it diverts from the provision of public goods. Rent-seekers act as monopolistic competitors. Initially, more democracy increases their number, raising aggregate rents. However, rents per rent-seeker fall with the number of rent seekers. Due to this crowding effect and the increased competition among rent seekers, aggregate rents fall in mature democracies. Thus, rents show an ‘inverted-U’ effect in relation to democracy. We find fairly robust supportive evidence for the latter.     

机遇管理与企业竞争优势

本文从企业成长过程中所面临的问题出发,运用机遇管理理论分析了企业辨识、评价、利用和营造机遇的运行机制,阐释了企业发展过程中机遇管理的重要性和必然性。从经济学的视角来看,企业的竞争优势来源于经济租金,经济租金可以分为基于低成本和差异化的张伯伦租金、基于资源和能力的李嘉图租金、基于知识和创新的熊彼特租金。本文分析了企业机遇管理在企业获取经济租金、建立竞争优势中的作用,分析了机遇管理与低成本和差异化、资源和能力、知识和创新之间的关系。本文认为,机遇管理有利于获得与维持企业租金：企业通过机遇管理有助于实现低成本和差异化,获取张伯伦租金;有助于企业获得稀缺资源,提高能力,获取李嘉图租金;有助于企业积累知识,促进创新,获取熊彼特租金。本文从经济学的角度分析了企业竞争优势的来源,论证了企业租金的来源正是企业竞争优势的来源,探索了企业通过机遇管理建立竞争优势的新方法、新途径。     

Oil,Laws, and Female Labor Force Participation

Despite the rapid rise of women’s education and the fall of their fertility rates in the Middle East and North Africa (MENA), female labor force participation (FLFP) rates remain low. This paper argues that oil and gas rents and Islamic family law jointly matter. Controlling for country and year fixed-effects in a long panel dataset, it shows that per capita oil and gas rents reduce FLFP rates in countries with Islamic family law more than others. The results are robust to econometric methodology and to controlling for the interaction of rents and all other time-constant factors that are common across the MENA region, such as culture, social norms, and institutions. Moreover, the results cannot be replicated by substituting historical plough use, a strong predictor of gender discrimination, in place of Islamic family law. Policy implications are discussed.     

Entry into a Foreign Market: Foreign Direct Investment versus Licensing

We compare foreign direct investment (FDI) and technology licensing as two modes of entry into a foreign market. While direct entry via FDI dissipates rents in the host country, opportunistic competition from a licensee may erode rents in the entrant's other markets. Since FDI increases competition in the host country while licensing stifles it. welfare is higher under FDI than under licensing.     

Enduring rents

Rent seeking is often studied with reference to a contemporaneous rent evaluated at a point in time. We study the social cost of rent seeking when rents endure over time, but may have to be re-contested because of imperfect rent protection, or may disappear because of deregulation. The present value of a contested rent measures the social cost of rent seeking, irrespective of imperfect rent protection and the prospect of deregulation. Rent seeking is discouraged by the inability of governments to commit to protect rents and by their inability to commit to rent-generating regulations and policies. Moreover, lasting deregulation can preempt a substantial fraction of the potential rent seeking cost.     

Rent seeking and the economics of corruption

The paper studies the influence of Tullock (West Econ J 5:224–232, 1967) and the rent-seeking literature more generally on the study of corruption. The theoretical corruption literature with its emphasis on principal-agent relationships within government and rent creation by corruption politicians has largely, but not entirely, overlooked that contestable rents encourage unproductive use of real resources in seeking these rents. As a consequence, the literature underestimates the value of corruption control and the cost of corruption itself.     

Measuring resource scarcity in non-renewable resource with an application to oil and natural gas in Alberta

In this paper annual Canadian exploration data are used to estimate a multiple-output translog exploration cost function. A new definition of depletion is introduced and its estimated coefficient is found to be statistically significant. The fitted cost function parameters are then used to obtain estimates of the marginal costs of exploration for oil and gas. Our estimated marginal exploration costs are smaller than in previour studies because we have allowed for technical progress which offsets the depletion effects. These marginal cost estimates are employed, along with previous estimates of exploration rents, to measure resource scarcity. We find some evidence for the increased scarcity of oil and gas in Alberta. For oil there is a 10.1% per year increase in scarcity along the trend line while for natural gas there is a 2.4% per year increase in scarcity along the trend line.     

瑞士个人产权住宅房屋低拥有率形成机制的深入研究

瑞士作为一个人均收入较高的发达国家,但国民购房的意识却非常淡漠,大部分人宁愿选择以租赁的方式解决居住问题。瑞士人拥有产权房屋的比例在西欧发达国家中所占比例最少,只占所有国民的34%,其中美国为62.5%,法国45%,本文通过对分布在瑞士5个州的1998户居民的抽样调查数据分析来探求该现象的合理解释。通过对众多相关要素的分析来对个人住房拥有率进行剖析,其中,特别对拥有和租赁的相对成本进行了重点研究,因为它与房屋售价、租赁价格与拥有后的使用成本密切相关,在上述影响因素中,产权人的使用成本与所得税政策、预期房屋价格上涨息息相关。本文也综合权衡了按揭贷款现行标准、租赁控制和各种政策对租赁房屋供给量所产生的影响,通过对税收、按揭标准、价格水平等因素进行一系列分析,估算出这些变量对房产拥有率的影响程度。本文得出以下结论:高房价——相对于租金对家庭收入来说是导致瑞士国民拥有住房比例较低的最重要影响因素。     

Labor Market Information Acquisition and Downsizing

We study the optimal mechanism for downsizing the public sector which takes into account different informational constraints (complete versus asymmetric information on each worker’s efficiency) and political constraints (mandatory versus voluntary downsizing). Under complete information, the optimal structure of downsizing (who is laid‐off and who is not) does not depend on the political constraint and is determined by the (marginal) cost of retaining a worker in the public sector. Since this cost includes his opportunity cost in the private sector, information acquisition on opportunity costs affects the structure of downsizing. Under asymmetric information, the political constraints determine which workers obtain information rents and therefore affect the structure of downsizing. An increase in the precision of the information on workers’ opportunity costs may increase or decrease social welfare depending on its impacts on the information rents.     

Developmental Rent Management Analysis: Learning,Upgrading, and Innovation

In this article, I construct an original analytical framework, called the developmental rent management analysis (DRMA), for the analysis of rents and rent management. This framework is based on the premise that successful rent management depends on political and institutional arrangements to produce incentives and pressures for technical upgrading and innovation. This is because, while rents are created for a variety of purposes, rent outcomes — whether growth-enhancing or growth-reducing — depend on a set of political, institutional, and market conditions that take place formally and informally. Therefore, the key objective of the DRMA framework is to understand how a country’s politics, institutions, and industries are configured to incentivize and compel industrial upgrading. Thus, DRMA enables a broader and more complex understanding of the various factors at play in the process of development. I provide an illustrative application of the DRMA framework using the Vietnamese experience of adopting third-generation technology in the telecommunications industry.     

网络产业收入监管激励问题研究

对具有自然垄断特性的网络产业,各国都对其收入实施严格的监管。而如何采取具有激励作用的收入监管,历来是经济学家研究的重点。对该方面进行的综述性研究表明,在不对称信息存在的情况下,采取基于成本的收入监管机制,监管机构不得不对低效率企业的产出进行扭曲,同时高效率企业获得信息租金;而采取基于价格的收入监管机制,在考虑了企业的努力程度时,低效率企业的努力程度将受到向下的扭曲,同时高效率企业获得信息租金。分析还表明,在基于价格的收入监管机制下,价格机制的选取和激励问题可以分开考虑。     

Rent Rigidity,asymmetric information,and volatility bounds in labor markets

Two thirds of US unemployment volatility is due to fluctuations in workers' job-finding rate. In search and matching models, aggregate productivity shocks generate such fluctuations: via inputs in the matching technology, they affect the rate at which workers and firms come into contact. Quantitatively, this mechanism has been found to be negligible in a calibrated textbook model, but also more than sufficient if wages are completely rigid. We study a weaker concept of rigidity based on worker rents (wages in excess of the value of unemployment). We show that volatility is subject to an upper bound if worker rents are weakly procyclical, thus at best rigid. Quantitatively, with Rent Rigidity, the mechanism accounts for at most 20% of the variance of the job-finding rate. In light of this result we reexamine the question whether asymmetric information on gains from trade amplifies fluctuations. We analyze a series of bargaining solutions, and conclude that asymmetric information at best makes rents rigid. Our analysis provides a unifying perspective on a very lively debate.     

Taxation base in developing countries

Informal sectors are larger in developing countries than in rich countries. This is a result of higher fixed costs of entry into the formal economy in developing countries. We show that raising barriers to entry is consistent with a deliberate government policy for raising tax revenue. By generating market power, and hence rents, for the permitted entrants, market entry fees foster the emergence of large taxpayers. The rents can be readily confiscated by the government through entry fees and taxes on profits at a low administrative cost. The relevance of the theory is assessed with a sample of 64 countries. Empirical analysis supports the results of the paper.     

COOPERATION, COOPTATION, AND REBELLION UNDER DICTATORSHIPS

Dictatorships are not all the same: some are purely autocratic but many exhibit a full panoply of seemingly democratic institutions. To explain these differences, we develop a model in which dictators may need cooperation to generate rents and may face a threat of rebellion. Dictators have two instruments: they can make policy concessions or share rents. We conclude that when they need more cooperation dictators make more extensive policy concessions and share fewer rents. In turn, when the threat of rebellion is greater, they make larger concessions but also distribute more spoils. Assuming that policy concessions require an institutional setting of legislatures and parties, we test this prediction statistically for all dictatorships that existed between 1946 and 1996.     

Chicago's water market: dynamics of demand,prices and scarcity rents

Chicago and its suburbs are experiencing an increasing demand for water from a growing population and economy and may experience water scarcity in the near future. The Chicago metropolitan area has nearly depleted its groundwater resources to a point where interstate conflicts with Wisconsin could accompany an increased reliance on those sources. Further, the withdrawals from Lake Michigan is limited by the Supreme Court decree. The growing demand and indications of possible scarcity suggest a need to reexamine the pricing policies and the dynamics of demand. The study analyses the demand for water and develops estimates of scarcity rents for water in Chicago. The price and income elasticities computed at the means are -0.002 and 0.0002 respectively. The estimated scarcity rents ranges from $0.98 to $1.17 per thousand gallons. The results indicate that the current prices do not fully account for the scarcity rents and suggest a current rate with in the range $1.53 to $1.72 per thousand gallons.     

Technology,property rights and organizational diversity in the software industry

Why do open- and closed-source productions co-exist? To address this question, the paper studies the viability of distinct systems for software development. The model shows that: (a) for low design costs of modularity, both open- and closed-source productions are viable systems; (b) closed-source production is more likely to be adopted the greater the expected rents on software; and (c) production efficiency is not a necessary condition for the stochastic stability of a system to obtain. These three results can shed light on the emergence of organizational diversity in the software industry. The paper adds to the literature in three ways: first, it considers property rights and technology as endogenous variables in the process of system design; second it argues that in producing software multiple equilibrium designs may exist; and third, it shows that, in because of high rents and low design costs of modularity, production inefficiency can be persistent.