Empirical Examination of the Effects of Competition and Regulation on Public Universities and Colleges＇ Performance in China

Competition and regulation are indispensable entities for a university＇s improved performance. Using university rating as an index to performance, empirical analyses with the data from 145 public universities and colleges in China show that increased competition in the education service market is associated with higher university＇s （college＇s） performance. And increased competition in R＆D may make a quadratic effect on university＇s （college＇s） performance. University＇s performance improves when a university is directed as a branch of the central government because they enjoy some degree of management flexibility more than the local government controlled ones. A major implication of the study is the need to reform competition and regulation for improving universities and colleges＇ operating performance in China.     

Education and the Public Goods Type of Social Capital: Are the Well Educated Free Riding in the Provision of Public Goods?

In the previous literature, education has been found to promote the individual’s investment in social capital. However, little is known about its effect on the public goods type of social capital as many of the studies have used generalized measures of social capital. Using survey data from Japan with information on participation in neighborhood associations and community activities, we find that individuals with higher education are no more likely than those with compulsory minimum education to invest in the public goods type of social capital. Nor do we find evidence that the more educated free ride on the less educated in the provision of public goods.     

When Italian economics “Was Second to None”. Luigi Einaudi and the Turin School of Economics

Abstract

The article is dedicated to the work of a group of economists that was an important expression of a fertile season of Italian economics, in the period from the mid-1890s to the end of 1930s, which developed around the figure of Luigi Einaudi, and earlier, around that of his master Cognetti de Martiis. This School expressed a range of thought of high value in the political and economic sphere. In the economic field, the School established a fertile relation between historical–empirical work and economic theory; in the political field it investigated the relation between freedom and economic order.     

Network Access Regulation and Competition Policy: An Assessment of the “Direct-Plus-Opportunity Cost” Regime and Policy Options

A fundamental issue when determining competition policy, especially in vertically integrated industries, is the formulation of interconnection charges. Recently an influential set of theories on network access price has been put forward under the broad heading of direct-plus-opportunity cost regime (DOCR). This paper deals with two distinct but related aspects of DOCR. The first part of the paper considers the policy implications of an access regime determined by DOCR. Its compatibility in attaining contestable outcomes in the final goods market and its effect on welfare gains, especially producer's surplus, are evaluated. Secondly, the paper empirically applies a version of DOCR to the UK contract gas market, and the simulated outcomes and possible scenarios are considered.     

Special Interest Group Formation in the United States: Do Special Interest Groups Mirror the Success of their Spatial Neighbors?

Special interest groups exert a great deal of influence over political outcomes in the United States. Understanding the determining factors for the formation of special interest groups is important. However, the literature has excluded the role of spatial neighbors. This article employs spatial econometric techniques to discriminately analyze the factors determining the number of special interest groups in a state. While geographic location is not a factor, gross state product, state general expenditures, union membership, and the percentage of manufacturing employment relationships between states are crucial in the formation of special interest groups across states.     

Rethinking the Foundation of the Original Institutional Economics Policy and Reform Program: Reactions to Thomas C. Leonard’s “Illiberal Reformers”

John R. Commons, among other original institutional economists, argued for the interests of the common people against the power of vested interests in politics and business. Against this backdrop, a new book by Thomas C. Leonard contends that, in fact, these same economists were actually “illiberal” and only promoted the interests of certain groups, such as Anglo-Saxon men, and were against the progression of minority populations, women, or the disabled. But Leonard’s argument that these economists were “illiberal,” and that their entire reform program related to the role of government in the economy and the creation of the administrative state, is essentially defunct. As Leonard (2016 Leonard, Thomas C. Illiberal Reformers: Race, Eugenics and American Economics in the Progressive Era. Princeton, NJ: Princeton University Press, 2016. [Google Scholar], xiv) writes in the prologue, “expertise in the service of the administrative state, what progressives call social control, has survived the discredited notions once used to uphold it.” We respond to Leonard’s book by offering a direct critique of the arguments he makes. We argue that Leonard — at least partially — takes the founders’ view on these issues out of context, and that even where some of their views would be refused by today’s institutional economists, it does not mean that the entire reform project is rejected.     

Dependence of Informal Interest Rates and Level of Lenders’ Influence in the Informal Loan Market in Thailand

Informal finance with usurious interest rates seems to be the last resort for the poor in many developing countries. In Thailand, informal credit lenders can freely set up extortionate interest rates and use controversial enforcement actions to pressure borrowers to repay loans, because that legal enforcement is not practical due to the low punishment levels for those lenders. Despite widespread interest in the determinants of the informal interest rates, it remains a largely unexplored area. This study investigates whether level of lenders’ influence over the borrower, and some characteristics of the borrowers, are related to informal interest rates, enabling the rates to be classified into particular categories. Ordered logistic regression is used to analyze the data. The investigation was based on information collected in a survey presented to a sampled population of 694 participants from Bangkok, Nonthaburi, Phathum Thani, and Samut Prakan where the number of informal loans during the last seven years is highest when compared to other regions of the country. The results suggest that the level of lenders’ influence over the borrower in order to obtain a loan correlates with the informal interest rates applied. Moreover, some characteristics of a borrower, i.e., debt-to-income ratio and high level of familiarity between an informal lender and a borrower, also significantly affect the rates.     

Regulation of Quality and the Ratchet Effect: Does Unverifiability Hurt the Regulator?

The paper considers a regulatory relationship in which the quality of the output produced by the firm may be hard to verify. When the regulators commitment power is unlimited, one finds that unverifiability always hurts the regulator. Here it is shown that this need no longer be the case if the regulators commitment power is limited. If unverifiability makes the regulator offer low-powered incentive schemes, the firms rent from having private information about the technology is reduced. In long-term relationships, such a reduction in the information rent mitigates the ratchet effect, and by means of numerical examples it is shown that this positive effect of unverifiability may dominate the standard static cost of unverifiability.     

The Political Economy of Policy Reform in the Philippines: 1992–1998

Accurately measuring Turkey's informal sector is important for policymaking. We utilize household income‐expenditure surveys to examine this sector's income underreporting. The Pissarides‐Weber approach hypothesizes that data would reflect such underreporting as “excess food consumption”. Our results suggest informal sector members spend more than their formal sector counterparts with comparable reported income levels. Using this information, we estimate the average size of the true informal sector to be about 1.25 times the official estimate. The informal sector accounts for around 83% of officially reported disposable income. Therefore, true Turkish disposable income is (25%)?(83%), roughly 21% larger than the officially estimated magnitude.     

Advancing the Multilateral Regional Cooperation in Economy and Trade with the Scheme Reform of Zero Tariffs

China＇s tariff arrangement in the transition period after ＂entry to WTO＂ influences the process of the multilateral trade system in the world. Establishing the free trade area and customs union according to WTO/GATS 1994 article 24, or according to authorizing the clause （Enabling Clause ） to sign the regional trade agreement between developing countries or signed the protocol of economic integration taking promoting and serving the liberalization of trade as purpose according to WTO/GATS article 5, include the regional trade agreement in the multilateral trade system frame to standardize, supervise and coordinate to China, reduce trade protectionism and improve the multilateral trade system＇s influence in the world greatly. Drawing lessons from CEPA and China the system of the manoeuvre ahead of time of overall ＂entry to WTO＂ of ASEAN Free Trade Area and arrange, accelerate multilateral regional cooperation in economy and trade, zero tariff scheme reform favors route choice.     

Identifying the “financialization” of the nonfinancial corporation in the U.S. economy: A decomposition of firm-level balance sheets

This paper develops the concept of the “financialization” of the nonfinancial corporation (NFC) by laying out the key stylized facts describing NFC financial behavior between 1950 and 2014 via a detailed decomposition of firm-level balance sheets. In the existing literature, the concept of the “financialization of the nonfinancial corporation” remains ambiguous; as such, clarification of the trends that have occurred in NFC financial behavior is an important prerequisite for analyses of why NFC behavior has changed and with what consequences. By systematically delineating the evidence for the “financialization” of NFCs, this paper contributes to the literature by establishing precisely how NFC financial behavior has changed in the post-1980 U.S. economy. The growing “financialization” of nonfinancial corporations is summarized by an increased share of financial assets in NFC portfolios, increasing indebtedness and equity repurchases among large firms, and deleveraging among smaller firms. The paper concludes by introducing the behavioral insights gained by approaching these stylized facts from a conceptual standpoint emphasizing the interdependence of portfolio and financing decisions and, thus, the links between the changes in financial behavior across NFC balance sheets.     

Work Incentives and Labor Supply Effects of the ‘Mini-Jobs Reform’ in Germany

We analyze the work incentives and labor supply effects of the so-called mini-jobs reform (subsidies of social security contributions to people with low-earnings jobs) introduced in Germany in April 2003. The analysis is based on a structural labor supply model embedded in a detailed tax-benefit microsimulation model for which we use the German Socio-Economic Panel (GSOEP). Our simulation results show that the likely employment effects of the mini-jobs reform will be small. The small positive participation effect is outweighed by a negative hours effect among already employed workers. The fiscal effects of the reform are also likely to be negative. We conclude that the analyzed mini-jobs reform is not an effective policy to increase employment of people with low earnings capacity.*We thank the German Science Foundation (DFG) for financial support under the research program Flexibilisierungspotenziale bei heterogenen Arbeitsmärkten (project STE 681/5-1).     

Enlargement and Institutional Reform in the European Union: Separate or Connected Issues?

In this paper, I analyze how the enlargement process is connected to the currently proposed institutional reforms in the European Union. Although the official claim is that enlargement requires reform, the relationship between both processes needs clarification. The use of unanimity voting for policy issues leads to substantial deadlock in the current Union, a problem that could be solved by the introduction of (qualified) majority voting. Moreover, in view of its current inflexibility enlargement would only marginally decrease the Union's capacity to make decisions. Under qualified majority rule, enlargement is likely to have little or no effect on flexibility given the distribution of preferences of the member-states. Also, if qualified majority voting is used, enlargement would decrease the power of the current member-states in a future Union, especially the larger ones. This, and the possibility for current member-states to link enlargement with specific policy demands, could be the crucial factors in the timing and shaping of the enlargement process.     

Institutionalism and the “Common Man” Through the Lens of Philip Klein: Business Cycles,the Public Sector,and Keynes’s Economics

This article reviews and assesses Philip Klein’s work on business cycles and macroeconomics, the public sector, and the economics of John Maynard Keynes. The article makes several findings. First, Klein built on the pioneering efforts of Wesley Mitchell to advance the development of cycle indicators and to outline an eclectic theory of cycles that remains useful for synthesizing a broad literature. Second, Klein’s essays on macroeconomics contain enduring discussions of the malleability of the “natural” rate of unemployment and the value of a behavioral approach to expectations. Third, he refocused the institutionalist attention on the public sector by introducing “higher efficiency” and other concepts to help explain how government policy plays a role in economic life. Fourth, Klein emphasized the role of fiscal policy in moderating business cycles. Fifth, his work points in the direction of today’s post-Keynesian institutionalism, both by stressing that Keynes was “profoundly institutionalist” in his approach and by arguing that conjoining Keynes and institutionalism would provide a stronger foundation for macroeconomic theory and policy.