Coexistence of nonprofit, for-profit and public sector institutions

If nonprofit organizations are superior institutions in resolving informational asymmetry and resulting contract failure, why do nonprofit (NPs), for-profit (FPs) and government/public institutions (GPs) survive in the same industry? This article explicitly models the nonconvex budget set for the consumer that arises through the juxtaposition of the inefficiencies and contract failures that occur in the three sectors. Because the consumer is willing to trade quality for efficiency and price, varying market shares for NPs, FPs and GPs can exist in the same industry. The theory offered complements the functionalist explanation of the existence of nonprofits advanced by Weisbrod and Hansmann using a micro-analysis.     

Managerial compensation and incentives in for-profit and nonprofit hospitals

Differential economic behavior of for-profit and nonprofit institutionscan be manifest in both output and input markets. When behaviorin output markets is difficult to observe, behavior in inputmarkets can be useful proxies. We examine monetary compensationand its composition between base salary and bonus, and the associatedincentive structures, in the U.S. hospital industry. Our datapermit controlling for interinstitutional differences in thescope and complexity of jobs having the same titles, as wellas differences in organization size and other variables. Wefind (1) total monetary compensation for the two top executivejobs is substantially higher in the for-profit sector; and (2)the composition of compensation as between base salary and bonusdiffers materially across forms of organization, bonuses beingabsolutely and relatively greater in the for-profit sector.Particularly noteworthy is the finding that for-profit hospitalsutilize compensation mechanisms that, by involving larger contingentcomponents, provide stronger incentives - greater rewards -as compared with nonprofit hospitals, for performance that ismore easily monitored. While our findings are consistent withmore than one model of comparative organizations differ in theirgoals and, hence, in the kinds of managers they demand and thereward structures they offer. Nonprofit organizations may pursueobjectives that reflect greater concern about collective goodsor other outputs that are more difficult to measure and reward.Alternatively, nonprofits, confronted by a nondistribution constrainton the payout of profit to managers, may lack incentives forefficiency, and so may pursue other goals such as a quiet life.Such differential objective functions, together with the differentialconstraints on the distribution of profit to managers, havetwo kinds of implications. (1) Nonprofit and for-profit organizationsmay attract different kinds of managers, especially at the toplevels, because nonprofits prefer working for a nonprofit organizationand, hence, may offer a lower supply price to them. (2) Thetwo types of organizations can be expected to offer differentialcomposition of compensation as between base salary and performance-basedbonus, providing different incentives for managers. Our analysisis positive in character, the goal being to identify systematicdifferences in organization behavior.     

Managerial rewards and the behavior of for-profit,governmental, and nonprofit organizations: evidence from the hospital industry

Studies of mixed industries frequently focus on differential behavior between for-profit and either nonprofit or governmental producers. Substantially less is known about differences among governmental, religious nonprofit, and secular nonprofit organizations. We examine the compensation of hospital CEOs to assess the extent to which these three organizational forms pursue similar objectives. Compensation levels, the use of salaries versus bonuses as proxies for weak versus strong incentives, and the criteria organizations use to determine bonuses are analyzed. We conclude that the CEO incentive contracts at religious nonprofit, secular nonprofit, and governmental hospitals imply substantive differences in the behavior of these organizations.     

Population size and the size of government

We examine the effect of population size on government size for a panel of 130 countries for the period between 1970 and 2014. We show that previous analyses of the nexus between population size and government size are incorrectly specified and fail to consider the influence of cross-sectional dependence, non-stationarity and cointegration. Using a panel time-series approach that adequately accounts for these issues, we find that population size has a positive long-run effect on government size. This finding suggests that effects of population size that increase government size (primarily due to the costs of heterogeneity, congestion, crime and conflict) dominate effects that reduce government size (primarily due to scale economies).     

Government size,government debt and globalization

This article empirically investigates the effect of globalization on government size and debt. Using panel heterogeneous cointegration techniques to a panel of developing and developed countries, it finds that globalization reduces government size and debt. In terms of components of globalization, government size is found to increase with trade openness but decreases with financial, social and political globalization. On the other hand, government debt increases with financial and trade openness but decreases with social and political globalization. The evidence is robust to different estimation methods and different samples. Our data also indicate unidirectional causality running from globalization measures to government size and debt.     

Firm size,sectors and countries as sources of variety in innovation

This paper aims at providing a comprehensive empirical appraisal of the nature, extent and sources of variety in innovation in industry across Europe. The results presented in the empirical section of this paper are based on a unique database (SIEPI) containing data drawn by the second Community Innovation Survey (CIS2) for 10 countries, 22 manufacturing sectors and three firm-size classes. This database has allowed us to look beyond the sectoral aggregate statistics provided by Eurostat and explore in detail the differences in innovation processes both within and across European countries and manufacturing industries. Further, the SIEPI database has been used to identify the determinants of the variety in innovation across Europe. In particular, the analysis focuses on the relative importance of sector-specific, context-specific and firm-size factors in driving firms’ innovative behaviours and performances.     

Fractionalization and the size of government

I study the effect of voters with a group-based social conscience. Voters care more about the well-being of those belonging to their own group than the rest of the population. Within a model of political tax determination, both fractionalization and group antagonism reduce the support for redistribution. Whereas within group inequality increases support for redistribution, inequality between groups has the opposite effect. These results hold even if a poor group forms a majority. Using a panel constructed from US micro data, I find support for the hypothesis that within race inequality increases redistribution while between race inequality decreases redistribution.     

Fiscal federalism,jurisdictional competition,and the size of government

Fiscal federalism is commonly held to reduce the size of government, but how does it do so: through shrinking the welfare state, cutting government consumption, or reducing public investment? This paper examines tax competition under fiscal federalism through the lens of imperfect competition theory, derives new empirical implications from different theories of fiscal federalism, and tests those hypotheses with new variables and data. Cross-national statistical results show that jurisdictional competition under fiscal federalism is associated with reductions in the administrative expense of government but not the size of the welfare state. Moreover, the apparent impact of fiscal federalism with a high degree of jurisdictional competition is larger than that estimated in previous research. Once the models have been appropriately specified, the United States is no longer an outlier among high-income democracies on either government consumption or social spending. Close examination of the data reveals that some fiscally federal systems better approximate a “market-preserving model” and others a “capital-privileging” or “state-corroding” model.     

Openness,country size,and government size: Additional evidence from a large cross-country panel

A body of influential research has suggested that there is a negative association between country size and government size and between country size and openness, and these may account for the positive association between openness and government size. Estimation of several models from 41-year panel data for over 150 countries indicates that while pooled OLS estimates support the foregoing scenario, when cross-country heterogeneity is taken into consideration through the fixed-effects format, there is little evidence of a negative association of country size with either government size or openness. Therefore, it does not seem likely that positive association between openness and government size arises due to the mediating role of country size.     

Centralization and the size of government in Canada

The determinants of the growth of government in Canada over the period 1926–90 are examined. Of particular interest is whether changes in the degree of centralization have affected the public sector's share of GDP. Unlike other studies using time-series data, the effect of decentralization toward the provincial/state and toward the local levels of government are measured separately. Empirical estimates provide strong support for the conclusion that citizen mobility acts as an important constraint on the growth of government.     

Economic performance,government size,and institutional quality

This paper studies the empirical link between government size, institutions and economic activity using a panel of 140 countries over 40 years. Our results, robust under different econometric techniques, show mostly a negative effect of government size on output, while institutional quality has generally a positive impact. Moreover, the detrimental effect of government size on economic activity is stronger the lower institutional quality, and the positive effect of institutional quality on output increases with smaller government sizes.     

Democratic reversals and the size of government

While the fiscal and redistributive consequences of democracy is one of the central debates in political economy, most empirical studies analyze this question solely in the context of transitions to democracy. In this paper, we explore the consequences to taxation of democratic reversal using the systematic disenfranchisement of African Americans in the US South between 1880 and 1910. Following the federally-imposed extension of the franchise to the former slaves during Reconstruction (1865–1877), Southern states erected a series of legal restrictions, such as literacy tests and poll taxes, aimed primarily at preventing Southern African Americans from registering to vote. Using an original dataset of local and state taxes and a difference-in-differences estimation strategy, we demonstrate that the adoption of literacy tests for voting eligibility in each state was followed by a significant decline in tax revenues that is highly correlated to the share of each county's population who was African American. We also find that black disenfranchisement led to a shift of the tax burden onto urban counties and a greater reliance on indirect taxation. Our results survive a battery of robustness checks, alternative specifications and additional tests of the redistributionist thesis. The findings are not only consistent with standard models of redistribution following democratization, but also indicate that the elasticity of taxes with respect to enfranchisement is substantial and larger than the one suggested by the cross-national literature.     

Voter turnout and the size of government

This paper uses Swedish and Finnish municipal data to investigate the effect of changes in voter turnout on the tax rate, public spending and vote-shares. A reform in Sweden in 1970, which overall lowered the cost of voting, is applied as an instrument for voter turnout in local elections. The reform increased voter turnout in Sweden. The higher voter turnout resulted in higher municipal taxes and greater per capita local public spending. There are also indications that higher turnout decreased the vote share for right-wing parties. I use an individual survey data set to conclude that it was in particular low income earners that began to vote to a greater extent after the reform.     

制度变迁中的个人、企业和政府

个人、企业和政府是市场经济运行中三个不同的行为主体,有着各自的目标函数。本文通过论述三个行为主体目标函数的一致性与冲突性,试图从制度变迁的路径中揭示出行为主体相互作用或相互博弈的经济学问题。一、市场经济条件下行为主体目标函数的一致性在市场经济条件下,个人的目标函数是收入最大化,企业的目标函数是利润最大化,政府的目标函数是发展最大化(经济发展是对政府的充分就业、物价稳定和经济增长三个目标的概括)。这三个行为主体的目标函数具有一致性,表现在两个方面:一是相互的制度界定是其发展的必要条件;二是共享的价值理念是其发展的充分条件。     

Efficient government size: France in the 20th century

The benefits and costs of government suggest an efficient government size. We investigate efficient government size by analyzing the relation between public spending and real GDP for France in the period 1896–2008. The results show a co-integration nonlinear relationship. Our time-series data on France represents one of the longest periods studied in literature. Our empirical findings suggest that efficient government size measured by public spending was reached when public spending was around 30% of GDP. Conclusions point to particularities of countries that suggest efficient government size is specific to different countries.     

Growth maximizing government size,social capital,and corruption

Our paper intersects two topics in growth theory: the growth maximizing government size and the role of Social Capital in development. We modify a simple overlapping generations framework by introducing two key features: a production function à la Barro together with the possibility that public officials steal a fraction of public resources under their own control. As underlined by the literature on corruption, Social Capital affects public officials' accountability through many channels which also affect the probability of being caught for embezzlement and misappropriation of public resources. Therefore, in our endogenous growth model such probability is taken as a proxy of Social Capital. We find that maximum growth rates are compatible with Big Government size, measured both in terms of expenditures and public officials, when associated with high levels of Social Capital.     

Decentralization and regional government size in Spain

The aim of this paper is to investigate the impact of fiscal decentralization on the size of regional governments in Spain, by controlling for economies of scale, interregional heterogeneity and institutional framework. We study it over 1985 to 2004 using a panel dataset of seventeen spanish regions. The results can be easily summarized. Firstly, it supports the classic public goods theory of a trade-off-between the economic benefits of size and the costs of heterogeneity. Secondly, it doesn??t reject the ??Leviathan?? hypothesis and neither does the ??common pool?? hypothesis. Thirdly, by contrast, the paper partly rejects the ??Wallis???? hypothesis. It argues that government size is mediated by financial resources obtained through intergovernmental grants, consistent with welfare economics and positive economic policies. We conclude that later advances in the decentralisation process must be compatible with the goal of reducing fiscal imbalances that emanate from the vertical structure of fiscal power.     

市场诱致、政府推动与金融结构变迁

金融结构变迁的动因可归结为市场诱致和政府推动.市场诱致金融结构变迁是因为金融结构对经济发展的响应、金融企业追逐利润的本性和竞争淘汰机制的存在,政府推动是因实现"追赶战略"和克服"市场失灵"而介入金融结构变迁.从微观角度看.市场力量诱致金融结构变迁通过投资者对金融产品的选择得以实现,金融产品之间的马歇尔需求交叉弹性决定了金融结构变迁的强度;政府力量通过制度结构变迁对单个金融企业的激励和抑制效应推动金融结构变迁.     

Fiscal policy,government size and EMU business cycle synchronization

We provide new evidence on the effects of fiscal policy and government size on pairwise business cycle synchronization in EMU. A novel time-varying framework is employed to estimate business cycle synchronization and subsequently a panel approach is used to establish the role of fiscal variables in determining the pairwise synchronization observations across time. The findings suggest similarities in the size of the public sector, yet divergence in fiscal policy stance, matter for the determination of business cycle synchronization. Hence, increased fiscal federalism in EMU will contribute to increased business cycle synchronization. Our results remain robust to different specifications and sub-periods.     

Fiscal decentralization and government size: The role of democracy

This paper examines how the level of democracy in a country affects the relationship between fiscal decentralization and government size. We argue that political regimes, proxied by their democracy levels, are important for different decentralization theories to predict the impact of fiscal decentralization on government size. We test this argument using panel data from 76 developed and developing countries during 1972–2013. We find strong and robust evidence that fiscal decentralization is negatively associated with government size and that a higher level of democracy tends to mitigate the negative impact of fiscal decentralization. Therefore, our study contributes to the literature by offering a novel insight on mixed results regarding the relationship between fiscal decentralization and government size in the literature.