Does Tax Competition Reduce Corruption?

A vast literature asserts that competition among jurisdictions can mitigate corruption. However, empirical studies do not fully support such a conventional view. This paper points out a drawback of the conventional view, that is, it ignores the role played by the owners of immobile factors. Within a standard tax competition model, we amend the conventional view by incorporating the lobbying of the immobile factor owners, and show that fiscal decentralization can aggravate corruption. We also demonstrate that social welfare can be higher under decentralization than under centralization in some cases, whereas the immobile factor owners' lobbying will prevent such a superiority of decentralization from being the outcome. Moreover, we provide an example to show that a better policy outcome and a higher level of corruption can co‐exist, which contrasts with the general belief.     

How Do Carbon Taxes Affect Emissions? Plant-Level Evidence from Manufacturing

Environmental and Resource Economics - This paper investigates how carbon taxes affect emissions by examining British Columbia’s revenue-neutral carbon tax in the manufacturing sector. We...     

Does Tariff Induce Intellectual Property Right Protection and Reduce Incidence of Piracy?

We consider a model with North exporting a copyrighted product to South where there is IPR violation, and South exports a basic good to North. We examine the impact of North's imposition of import tariff on South's monitoring of IPR violation and the incidence of piracy. If South values IPR compliance “lowly”, then tariff imposition do not alter the pre‐tariff no monitoring equilibrium outcome but unambiguously raises the incidence of piracy. If IPR compliance is valued “highly” then tariff either switches the equilibrium outcome from not monitoring to monitoring or increases its rate. However, the incidence of piracy may increase.     

The Shifting Geopolitics of Russia’s Natural Gas Exports and Their Impact on EU-Russia Gas Relations

In the sphere of natural gas, Russia and the EU share an interdependent relationship: Russia is the single largest supplier of natural gas to the EU, while the EU is Russia’s largest gas export market. In May 2014, a deal was struck between Gazprom and the China National Petroleum Corporation to enable large-scale Russian gas exports to China. What impact could this deal have on the EU-Russia gas relationship? This article analyses Russia’s existing and proposed gas production and export infrastructure for the delivery of natural gas to Europe and to China, and the extent to which increased gas exports to the East could result in the limitation of Russian gas exports to Europe. It is concluded that, due to its dependence on new gas production in eastern Siberia and the construction of new, purpose-built pipeline infrastructure, the Gazprom-CNPC deal of May 2014 will not have a significant impact on Russia’s gas exports from north-western Siberia to the EU. The launch of talks aimed at delivering Russian gas from the Yamal Peninsula to China via the ‘western route’ opened the first possibility for Russia to balance its gas exports between East and West. However, this is unlikely to generate price competition between Europe and China, due to Gazprom’s inability to extract a ‘European’ price for its gas exports to China. This suggests that Gazprom will not re-direct significant volumes away from Europe towards China, but rather will seek additional export volumes.     

How Much Does Wind Power Reduce $$\text {CO}_{2}$$ Emissions? Evidence from the Irish Single Electricity Market

This paper evaluates the effect of wind generation on \(\text {CO}_{2}\) emissions using 2008–2012 historical data for the Irish Single Electricity Market. Wind generation displaces \(\text {CO}_{2}\) emissions, as expected, in line with the average system emissions. Over the whole period, wind generation avoided about 8.8 million tons of \(\text {CO}_{2}\), equivalent to about 12% of total system emissions. To understand what drives the level of abatement we evaluate the results by technology and determine that wind generation has similar effects on total emissions from CCGT and coal plants, due to the higher carbon content of coal. Each MWh of wind, however, replaces more generation from CCGTs than from coal plants, in proportion to their generation. We also test the hypothesis that as wind displaces baseload plants it pushes them to generate less efficiently, but find no evidence of a strong negative effect of wind on CCGT or coal plant efficiency. Finally wind displaces about 2.5% fewer emissions when the pumped storage plant is on outage, suggesting that wind is more effective when paired with a flexible system.     

Does Disclosure Reduce Pollution? Evidence from India’s Green Rating Project

Public disclosure programs that collect and disseminate information about firms’ environmental performance are increasingly popular in both developed and developing countries. Yet little is known about whether they actually improve environmental performance, particularly in the latter setting. We use detailed plant-level survey data to evaluate the impact of India’s Green Rating Project (GRP) on the environmental performance of the country’s largest pulp and paper plants. We find that the GRP drove significant reductions in pollution loadings among dirty plants but not among cleaner ones. This result comports with statistical and anecdotal evaluations of similar disclosure programs. We also find that plants located in wealthier communities were more responsive to GRP ratings, as were single-plant firms.     

CO2 Emissions and Income Dynamics: What Does the Global Evidence Tell Us?

This paper analyzes the co-evolution of two major determinants of social welfare, namely, income and carbon emissions. In particular, by using a distribution dynamics approach based on Markov chains, we investigate the shape and behavior of the joint distribution of per-capita income and carbon dioxide emissions. We arrive at several interesting conclusions, especially in the context of international negotiations on climate change. First, evidence does not support theoretical models predicting the existence of a poverty-environment trap. Specifically, in the long-run two main groups of countries will emerge: poor versus polluting countries. Second, the typical development path leads initially to high emission levels and, subsequently, to high income. Third, the convergence process towards the stationary distribution is very slow. Finally, for carbon emissions, whenever it is observed, the environmental Kuznets curve seems to be only a transitory phenomenon.     

Does Women’s Labor Force Participation Reduce Domestic Violence? Evidence from Jordan

Enhancing women’s labor force participation is seen as a way to promote their empowerment and improve their well-being and that of their children. The empirical literature on the relationship between women’s employment status and domestic violence is less clear-cut. Using quantitative data from Jordan in 2007, this study explores the effect of women’s employment, as measured by their participation in paid work outside the home, on reported domestic violence, controlling for the potential endogeneity of women’s employment, which might bias the relationship between employment and domestic violence. Without taking endogeneity into account, the regression results suggest that a woman’s participation in paid work enhances violence by her husband. After controlling for endogeneity, these results turn out to be insignificant, which suggests that women’s work status has no causal influence on marital violence. Differentiating between various types of domestic violence provides weak evidence that women’s employment lowers sexual violence.     

Why Has the Fraction of Nonstandard Workers Increased? A Case Study of Japan

This paper explains the secular increase of nonstandard workers in Japan, whose share of employment increased from 17 to 34% between 1986 and 2008. Changes in labor force and industrial compositions account for one quarter of the increase of nonstandard workers. Product‐demand fluctuation and the introduction of information and communication technologies increased firms' usage of nonstandard workers, but its quantitative effects are limited. The increase of nonstandard workers was concentrated among new entrants to the labor market, male workers of younger cohorts, and female workers of all cohorts, suggesting that the declining importance of the long‐term employment relationship is a major cause for the increase of nonstandard workers.     

The fate of the tropical forest: Carbon or cattle?

Small-scale afforestation/reforestation projects under the Clean Development Mechanism (CDM) of the Kyoto Protocol will sequester atmospheric carbon and facilitate carbon trading but they face significant implementation challenges among the rural poor households and communities that are meant to adopt and benefit from them. Avoiding deforestation - a controversial carbon reduction option now under climate policy discussion - shows promise though for both forest conservation and poverty alleviation among indigenous forest peoples.     

Does self-fulfilment of the inflation expectation exist?

This study examines the causal relationship between the actual and expected inflation in the U.S., using the bootstrap Granger full-sample causality test and sub-sample rolling-window estimation test to illustrate the self-fulfilment of inflation expectations. The full-sample result indicates that there is a bidirectional causality between the actual and expected inflation, showing the possibility of self-fulfilment of inflation expectations which illustrates that inflation is driven by inflation expectation. However, considering structural changes in two series, we find that the short-run causal nexus between the actual and expected inflation using full-sample data are fraudulent. By adopting a time-varying rolling-window approach to revisiting the dynamic causal relationships, this article identifies that the actual inflation has both positive and negative impacts on the expected inflation in distinct sub-periods. Nevertheless, inflation expectation exerts only negative effects on the actual inflation. The results point out that the self-fulfilment of inflation expectations does not exist. Given the bidirectional nexus between the actual and expected inflation, keeping a low and stable inflation is critical to price stability and anchoring of inflation expectation.     

Does complexity explain the structure of trade?

This paper analyzes whether complexity, measured by the number of skilled tasks that are performed in production, explains countries’ commodity trade structure. We modify the Romalis ( 2004 ) model to incorporate advantage differences in complexity across commodities together with differences in the number of mistakes made by workers in the production process in developed and developing countries as a source of comparative advantage. Our model predicts that the share of developed countries in world trade increases with products’ complexity. Empirical tests confirm this prediction. Moreover, we find that complexity complements the explanation provided by skill‐intensity on countries’ commodity trade structure.     

Does privatization of daycare affect maternal employment?

This article is the first attempt to examine the privatization effects of daycare centres on the employment of mothers with preschool children. Analysing newly constructed municipality-level data for 2000, 2005 and 2010 in Japan, the results suggest that an increased proportion of private daycare centres has positive effects on mothers’ labour force participation, and the effects are large for municipalities in Tokyo metropolitan area.     

How Low Can It Go? Analysing the Political Economy of Carbon Market Design and Low Carbon Prices

Despite the ascendency of carbon pricing as a key regulatory strategy for governing anthropogenic climate change, insufficient attention has been paid to the issue of price discovery in emission trading schemes, now the dominant form of carbon pricing globally. By analysing the political economy of carbon market design, this paper highlights a number of design features that are instrumental in depressing carbon prices across the world’s emission trading schemes, keeping them well below those considered necessary to spur deep emission reductions in order to avoid catastrophic global warming. In doing so, it advances critiques of carbon trading by illuminating the extent to which carbon markets manifest as expressions of specific power relations rooted in the political economy of advanced capitalism, with low prices ensuring minimal disruption to business as usual.     

How Feasible is Carbon Sequestration in Korea? A Study on the Costs of Sequestering Carbon in Forest

In recent years, carbon sequestration has become a more attractive policy in Korea due to the increasing trend of marginal cropland and enhanced public awareness on adverse climate change phenomena. This study aims to calculate the unit costs of carbon sequestration programs through afforestation in Korea and examine the cost-effectiveness of programs. The basis of our simulation is an econometric land use share model, and province level of aggregated panel data are used for model estimation. Four scenarios are considered depending on whether the program includes the harvest and which tree species are planted. The approach of sequestration program is to pay the landowners to convert their lands to forest for a period of time in exchange of fixed annual payment in addition to tree establishment cost. Our results show that the unit cost varies from $122 to $486 per ton of carbon stored depending on the scenarios and payment levels. We found that the carbon sequestration can be a cost-effective mitigation policy in Korea although it is not the least cost option.     

Does a 'shadow workforce' of inactive nurses exist?

The entire population of inactive nurses in Vermont was surveyed to determine if a "shadow workforce" exists. The notion that large numbers of nurses are available to return to work is not supported by this study. Desirable benefits for those wishing to return are discussed.     

Does Technological Innovation Really Reduce Marginal Abatement Costs? Some Theory,Algebraic Evidence,and Policy Implications

The existing literature models innovation in pollution control as a reduction in marginal abatement costs. We show that this assumption is inappropriate for production process innovations such as fuel switching. Algebraically, we examine the effects of different innovation types on marginal abatement cost curves, showing that some desirable innovations increase marginal abatement costs. Empirically, we estimate marginal abatement costs for sulfur dioxide by measuring the output distance function for electric power in Korea. Regression results confirm that production process innovations did raise marginal abatement costs in this case. One policy implication: economic instruments do not always provide stronger innovation incentives than command-and-control policies.      

Does the sophistication of use of unemployment insurance evolve with experience?

Abstract The subject of this paper is the repeat use of UI/EI benefits in Canada. The first objective is to investigate empirically the pattern of adjustment that UI users exhibit over a multiple claim horizon. Our secondary objective is to investigate a behavioural channel that might potentially underlie observed adjustment effects, namely, individual learning effects. We estimate an econometric model of how certain features of their claims change as they file subsequent claims. We find strong empirical patterns suggesting that there does appear to be some sort of an adjustment process; beneficiaries tend to approach a desired value for these particular facets of their UI claims. There appears to be some process of growing sophistication of UI use – which some might label ‘gaming the system’– reflecting the adjustment of claims and the concomitant employment patterns to the provisions and rules of the regime. We also uncover evidence in favour of the existence of individual learning effects.     

Natural or unnatural selection? The end of lending relationships for small businesses

We investigate the situation where small business borrowers and banks end their lending relationships. If credit allocation is efficient, banks terminate their relationships with risky borrowers. Alternatively, small business borrowers are more likely to end their relationships when they have poor investment opportunities and do not require borrowed funds. However, if the soft budget constraints of banks or credit crunches are a significant problem, banks are likely to continue their relationships with risky firms or end their relationships with nonrisky firms, which is representative of an unnatural credit allocation. Using Japanese firm-level data, we show empirically that these relationships end naturally, with natural credit allocation supported even during the recent global financial crisis.     

Export performance of developing countries: Does landlockedness matter?

Landlockedness imposes additional costs on trade and reduces international competitiveness. This paper examines the determinants of export performance in developing countries, within a comparative perspective of landlocked developing countries (LLDCs) and non‐landlocked developing countries, by using a standard gravity modeling framework. The study covers data from 1995 to 2015. The results suggest that despite recent trade policy reforms, the overall export performance of LLDCs is lower than that of non‐landlocked developing countries due to the inherent additional trade costs associated with landlockedness. The conventional wisdom that export performance is aided by economic openness also applies to LLDCs, but distance‐related trade costs have a greater negative impact on exports from LLDCs than on other developing countries. The immediate trade policy challenge for LLDCs is therefore to create a more trade‐friendly environment by lowering tariffs, reforming exchange rates and entering into regional trade agreements.