Local inequality and project choice: Theory and evidence from Ecuador

This paper provides evidence consistent with elite capture of Social Fund investment projects in Ecuador. Exploiting a unique combination of data sets on village-level income distributions, Social Fund project administration, and province-level electoral results, we test a simple model of project choice when local political power is unequally distributed. In accordance with the predictions of the model, poorer villages are more likely to receive projects that provide excludable (private) goods to the poor, such as latrines. Controlling for poverty, more unequal communities are less likely to receive such projects. Consistent with the hypothesis of elite capture, these results are sensitive to the specific measures of inequality and elite power used in the empirical analysis, and are strongest for expenditure shares at the top of the distribution.     

“钻石模型”视角下战略性新兴产业创新绩效影响因素的实证研究——以新一代信息产业为例

基于对现实和理论的考察,在现有文献与"钻石模型"的基础上,对战略性新兴产业创新绩效的影响因素进行了综合分析。以新一代信息产业为例,利用2010—2014年的相关数据,采用多元回归模型对各因素的具体影响进行实证分析。结果表明:当众多因素共同影响时,新一代信息产业的生产要素、需求多样性、相关产业以及政府等因素对创新绩效具有更为显著的影响,而市场规模、支持产业以及竞争等因素的影响没有通过显著性检验;中国战略性新兴产业具有较高的技术水平与产业相关性,存在巨大的市场发展空间,但也存在创新型人才不足、垄断以及与政府支持脱节等问题。     

The effects of spending on test pass rates: evidence from Michigan

This study uses data on standardized test scores from 1992 through 1998 at Michigan schools to determine the effects of spending on student performance. The years in the data set straddle 1994, when Michigan dramatically changed the way that K-12 schools are funded, and moved toward equalization of spending across schools. Focusing on pass rates for a fourth-grade math tests (the most complete and consistent data available for Michigan), I find that increases in spending have nontrivial, statistically significant effects on math test pass rates, and the effects are largest for schools with initially poor performance.     

What and How Long Does It Take to Get Tenure? The Case of Economics and Business Administration in Austria,Germany and Switzerland

Abstract. This paper investigates the determinants of tenure decisions in Germany, Austria and the German‐speaking part of Switzerland for professorships in economics, business administration and related fields. Our dataset comprises candidates who were awarded tenure as well as those who were eligible but were not tenured. We show that business candidates have a higher probability of being tenured than economists. Youth, marital status and publications matter; gender and children do not. The market for first appointments in economics relies much more on publication performance than the market for business administration.     

Information transmission during the trial: The role of punitive damages and legal costs

This paper studies an incomplete information model in which a preventable accident occurred. The judge determining punitive damages observes the firm's (defendant) investment decisions, but is uninformed about the firm's experience adopting safety measures. Our model allows firms to file an appeal if the judge's verdict is incorrect, which the judge may accept or reject. We identify under which conditions a separating equilibrium exists where the firm's investment decisions signal its type to the judge, who responds with a correct verdict, thus avoiding future appeals. Our paper also finds conditions under which a pooling equilibrium exists whereby the firm's investment in precaution conceals its type from the judge, who can respond with an incorrect verdict thus giving rise to appeals. Furthermore, we show that the separating equilibrium is more likely to arise if the percentage of revenue that defendants are required to pay in punitive damages decreases, if the punitive‐to‐compensatory ratio increases, and if the legal cost of filing an appeal increases.     

低碳产业发展研究动态述评

低碳经济提出的大背景,是全球气候变化对人类生存和发展的严峻挑战。低碳经济模式要求与之相对应的产业模式支撑其发展,即低碳产业。低碳产业已被多个国家列为重点发展领域,其理论也成为目前学术界关注的焦点,但关于低碳产业的理论研究尚处于起步和探索阶段。低碳产业的内涵、分类、特征以及发展等问题是众多学者关注较多的部分,但仍有很多地方如分类依据、判定标准、测算指标等问题亟待深入和完善。     

Arithmetics of research specialization

In hiring decisions, universities explicitly reward focusing on a specific field. I model the use of research specialization (focusing) in hiring as a signal of ability. Without explicit reward for focusing, candidates who focus are more likely to be able. However, if job market rewards focusing, less able candidates who would otherwise be indifferent between focusing or not, start focusing, which leads to smaller likelihood of observing an able candidate among those who focus than among those who do not. Specialization works as an effective ability signal only when generation of good ideas is highly likely for all ability levels.     

Approval of social security disability appeals: analysis of judges’ decisions

This article is an empirical analysis of decisions by judges regarding requests by individuals for disability benefits. Applicants for disability benefits who are twice denied through the normal process can appeal to one of the Social Security Administration’s administrative law judges, who hold appointed positions. The data for this study are taken from decisions made by approximately 1000 judges for cases heard from 2010 through 2012. Using each judge as a unit of observation, the data reveal the number of cases heard and the number of approvals granted. We augmented the data with additional information on the presiding judge, and with data from the state in which the court resides. The purpose of the study is to determine whether a simple model can explain, first, the volume of decisions rendered at the judge level and, second, the proportion of approvals. Results indicate that the volume of decisions can be explained in part by the judge’s recent record of leniency. Evidence also supports the hypothesis that approval outcomes depend on judges’ professional tenure and economic factors in the state of jurisdiction.     

Using choice question formats to determine compensable values: The case of a landfill-siting process

Siting noxious facilities, such as community landfills, is a challenging problem for local planners who recognize the importance of economic efficiency and equity, political acceptance, and meeting federal regulatory standards. Meeting these criteria requires technical and socio-economic analyses in conjunction with public input. Planners may also recognize that political acceptance requires compensation for the host community, either in the form of monetary or in-kind transfers. Following Breffle and Rowe [Breffle, W.S., Rowe. R.D., 2002. Comparing choice question formats for evaluating natural resource tradeoffs. Land Econ. 78 (2), 298–314], we use a “resource-to-resource” paired-comparison survey method to estimate compensatory values associated with an in-county landfill for both the host and non-host communities. Our results indicate that while a host-community household's minimum willingness to accept payment for hosting a landfill may exceed a non-host-community household's maximum willingness to pay, a large difference in population sizes between the two communities enables the landfill to pass a Kaldor potential compensation test.     

Growth and Election Outcomes in a Developing Country

We offer the first test of the hypothesis that rapid growth helps incumbents win elections for a developing country, India. We generalize the Fair (1978) model to allow for multiple candidates and test it using cross‐state data on 422 candidates in the 2009 parliamentary elections. We find quantitatively large and statistically robust effect of growth on the prospects of the candidates of the state incumbent parties to win elections.     

Institutions and growth in limited access societies

We build a dynamic political economy model with a two-class society, workers and the elite, in which the elite formation, the innovation rate and fiscal policy are endogenous. The model generates a mapping between institutions and patterns of growth consistent with empirical evidence. Ex ante, when facing constraints in choosing institutions, the elite may delegate policy control to some of its members, even though such delegation exacerbates the conflict within the elite and causes policy failures. Committing to such institutional arrangements prevents more harmful outcomes, such as rapid entry and subsequent deterioration of the elite?s economic and political power.     

探求收入公平分配的真义

收入分配是一连串的事情。要判断收入分配公平与否，绝不能仅仅着眼于收入差距本身的大小，而必须对形成收入分配最终结果的整个流程进行全面考察。机会平等、规则平等、按贡献分配和适度调节，是构成公平收入分配的四个要素。前三者又可理解为权利平等或公正，是公平的重心所在，也是判断收入分配公平与否的主要标准。收入分配政策必须着重强调机会公平、规则公平和按贡献分配，再辅之以政府的适度调节，才能有效避免各种误解和误导。     

Dynamic enfranchisement

Why would an enfranchised elite voluntarily dilute its power by expanding the franchise? The central intuition behind our analysis is that the dilution of power by an enfranchised elite is equivalent to the delegation of power by one member of the elite—a pivotal voter—to another citizen, who in turn becomes the pivotal voter in the new (expanded) elite. Such delegation might be useful if it allows the current pivotal voter to credibly commit to future policy choices. The current pivotal voter realizes that the agent to whom authority is delegated will face similar incentives to subsequently transfer power, and this effect tempers the extent to which the franchise is extended. We develop a recursive, infinite horizon model that generates the possibility of gradual franchise expansion. We show that, in equilibrium, expansion occurs if and only if the private decisions of the citizenry have a net positive spillover to the dynamic payoff of the current pivotal voter. The class of games we study can accommodate a number of proposed explanations for franchise extension, including the threat of insurrection, and ideological or class conflict within the elite.     

SCHATTSCHNEIDER REVISITED: SENATE VOTING ON THE SMOOT-HAWLEY TARIFF ACT OF 1930

While scholars have devoted considerable attention to U.S. trade policy in the 1930s, particularly the Smoot-Hawley Tariff Act of 1930, little quantitative research focuses on the factors impinging upon elite decision makers who shaped Smoot-Hawley. We look at 11 votes on the Senate floor related to Smoot-Hawley to examine the impact of a variety of measures of constituency economic interests and member characteristics on elite decision making. Contrary to our expectations, the evidence does not support a pressure group model of policy making. We conclude by emphasizing the importance of political parties in making the Tariff Act of 1930.     

Competing for promotion: Are “THE BEST” always the best?

Several selection processes use multistage tournaments to choose the best candidates. The theoretical models predict that tournaments are efficient in selecting the best candidates, as they stimulate the best to perform relatively better than their opponents. Empirical tests are difficult, as data on the agents involved in these selections are scarce. Exploiting data from field tournaments, the World Swimming Championships, I show that two- and three-stage tournaments are effective for stimulating performance and selecting the best contestants; results indicate that the winners are the players who are most able to increase their relative performance from one stage to the next.     

The impacts of innovations and standards on trade of measurement and testing products: empirical results of Switzerland’s bilateral trade flows with Germany, France and the UK

Nowadays, the impact of the measurement and testing infrastructure on economic performance and trade is theoretically and even politically widely accepted. However, there are no empirical studies on this issue. The purpose of this paper is to elucidate the impact of innovative capacity and technical standards as one important part of the measurement and testing infrastructure on international trade flows and competitiveness. In order to focus on the direct causality between innovative technology and measurement and testing standards and the respective market, the empirical analysis concentrates on the trade of measurement and testing products of a country with a top position in measurement and testing technology. In its empirical analysis of Switzerland’s trade flows with Germany, France and the UK, the paper follows the approach of the pioneering paper of Swann et al. (Economic Journal 106 (1996) 1297), who integrated for the first time technical standards as a technology indicator in the estimation of UK trade performance. The trade flows in measurement and testing products from 1980 until 1995 are explained by both an indicator for innovative capacity and for the degree of standardisation. The first indicator is based on the patent applications at the European patent office. The latter uses the stocks of technical standards in the countries differentiated by their regional scope. Four different trade equations are analysed, besides an export and an import function, the trade balance and the intra-industry trade. The results clearly show that both Switzerland’s innovative capacity and its stocks of standards are able to explain its export performance in the three countries. Secondly, especially the stocks of international standards in Switzerland have a positive impact on imports into Switzerland from the three countries, confirming their positive role for fostering trade in general. Thirdly, Switzerland’s export surplus concerning the three trade partners is positively affected by the stocks of international standards in Switzerland, which seem to be an important factor for international competitiveness. Finally, the results of the intra-industry model underline the common view of the general trade-fostering effect of even national standards in the case of the trade with the three countries.     

Performance versus design standards in the regulation of pollution

This paper presents a model of pollution regulation in an oligopolistic market. Two forms of regulation are considered: performance standards which regulate pollution directly by an upper limit on emissions, and design standards which regulate pollution indirectly by a minimum usage requirement of an enissions control input. Equilibria under each regulatory regime are characterized. A welfare analysis reveals that performance standards are preferred to design standards if the objective is minimization of emissions plus pollution damage costs. However, the comparison is indeterminate if the regulator's objective is total surplus less pollution damage. An equivalence between emissions taxes and performance standards is established, so the above welfare comparisons also apply to emissions taxes versus design standards.     

Are you hiring Johnny Football or Johnny Doe? Uncertain labour quality and the measurement of monopsony in college football

I assess monopsony in the college football labour market as it relates to both typical and elite performers, while also accounting for the uncertain performance quality of prospective players who are in this labour market. Existing studies suggest that the marginal revenue product (MRP) of elite collegiate players later drafted into the National Football League (NFL), significantly exceeds their compensation. These comparisons overstate monopsony rents because schools don’t know ex ante which prospects will become these elite performers. Using financial data spanning 2004–2011 from 114 major schools, I estimate the MRP of players sorted into three ex post quality tiers, and find that while eventual NFL draftees generate revenue that significantly exceeds their compensation, a majority of scholarship players do not. Then, using Rivals.com talent ratings of 6,604 prospective players recruited from 2002–2008, I estimate the probability that prospects will reach each ex post quality tier given their ex ante ratings. MRP estimates are adjusted by these conditional probability estimates to reflect the expected MRP of prospects, which allows more appropriate assessment of monopsony rents. I find that schools possess substantially less monopsony power than unadjusted MRP estimates suggest.     

Oligarchy, democracy, and state capacity

We develop a dynamic political economy model in which investment in the state capacity to levy taxes and deter crime is a policy variable, and we study the evolution of state capacity when policy is chosen by an elite. We show that democratization in the sense of expansion of the elite leads to an increased investment in state capacity and to a reduction in illegal activities and has nonmonotonic effects on tax rates as it reduces the willingness of the elite to engage in particularistic spending but enhances its willingness to provide public goods. Depending on initial conditions, consensual political changes may lead either to democratization or to the entrenchment of an immovable elite.     

Manipulation through political endorsements

We study elections with three candidates under plurality voting. A candidate is a Condorcet loser if the majority of the voters place that candidate at the bottom of their preference rankings. We first show that a Condorcet loser might win the election in a three-way race. Next we introduce to the model an endorser who has private information about the true probability distribution of the preferences of the voters. Observable endorsements facilitate coordination among voters who may otherwise split their votes and lead to the victory of the Condorcet loser. When the endorser has an ideological bias towards one of the candidates, the coordination impact of endorsements remains unaltered, moreover the endorser successfully manipulates the outcome of the election in favor of his bias, even if his ideological bias is known by the voters. The results are true for any endorsement cost and any magnitude of bias as long as the electorate is large enough.