REVERSE DISCRIMINATION AND EFFICIENCY IN EDUCATION*

This article shows that reverse discrimination policies can find a justification purely on efficiency grounds. We study the optimal provision of education when households belong to different groups, differing in the distribution of the potential to benefit from education among individuals, which is private information. The main result is that high‐potential individuals from groups with relatively few high‐potential individuals should receive more education than otherwise identical individuals from groups with a more favorable distribution of these benefits.     

POLITICAL ECONOMY OF SERVICE TRADE LIBERALIZATION AND THE DOHA ROUND*

Abstract.   In this paper we examine political economic issues of service trade liberalization of a developing country in the context of the Doha Round negotiations. We first discuss the various unique characteristics of the service industries. Then we incorporate these features in a Grossman-Helpman style political economy model and solve for the politically-determined service sector protection. We then examine how various factors such as increased cross-cutting lobbying, the reduction of state-owned service providers and linking negotiation on agricultural protection with negotiation on service sector liberalization can help reduce the political constraints on liberalizing the service sectors.     

DOHA DEVELOPMENT ROUND: REACHING BEYOND TRADE LIBERALIZATION

Abstract.  While the WTO process of multilateral trade liberalization encounters increasing resistance, in part because the most difficult issues have finally risen to the top of the agenda, market-based forces are contributing to international economic integration. One of the most potent is cross-border production networks. This paper explores the implications of such networks for trade policies and development strategies. It argues that participation in production networks requires trade policy adjustments and domestic reforms that can and should be undertaken unilaterally and that such changes will improve the climate for WTO negotiations.     

BARRIERS TO ENTRY AND DEVELOPMENT*

We ask whether barriers to entry are a quantitatively important reason for the income gap between developing countries and the United States. We develop a tractable general equilibrium model that captures the effects of barriers to entry and the other main distortions typically considered in the development literature. We carry our model to the data and ask it to match the main development facts from the Penn World Table. We find that this requires large barriers to entry in developing countries, which account for about half of the income gap with the United States.     

SLOW DEVELOPMENT AND SPECIAL INTERESTS*

This article argues that a natural implication of an innovation‐based theory of growth is that slow development facilitates the formation of special interest groups. We demonstrate this in a growth model where innovations take the form of new goods and new production processes, and where factor suppliers in individual industries can organize to form rent‐extracting special interest groups. We then examine the effect these groups have on an economy's subsequent development. We find that these groups can retard an economy's development for extended periods, but not permanently. Their long‐run effect is to increase the volatility of the development process.     

GENDER DISCRIMINATION ESTIMATION IN A SEARCH MODEL WITH MATCHING AND BARGAINING*

This article develops a search model of the labor market with matching, bargaining, and employers' taste discrimination in which—under necessary but standard distributional assumption—it is possible to separately identify gender discrimination and unobserved productivity differences. The equilibrium shows that both prejudiced and unprejudiced employers wage discriminate. Maximum likelihood estimates on CPS data indicate that half of the employers are prejudiced, average female productivity is 6.5% lower, and two‐third of the gender earning differential may be explained by prejudice. An affirmative action policy is implemented resulting in a redistribution of welfare from men to women at no cost for employers' welfare.     

SPATIAL DISCRIMINATION,PRODUCT SUBSTITUTABILITY AND WELFARE

The paper examines a quantity–location duopoly game in a spatial discrimination model in which the delivered goods are assumed to be imperfect substitutes or complements. By extending the range of the unit transportation cost analysed in the existing literature, it is shown that a dispersed equilibrium arises in which the choice of the optimal locations is affected by the degree of product substitutability. The interaction between the latter and the size of the transportation cost is also discussed in order to verify its welfare implications. In particular, it is shown that in this spatial framework imperfect substitutability may increase welfare.     

FINANCIAL DEVELOPMENT AND THE SOURCES OF GROWTH AND CONVERGENCE*

We extend the deterministic, nonparametric production frontier framework by incorporating financial development. Our analysis convincingly shows that (1) failure to account for financial development overstates the role of physical capital accumulation in labor productivity growth, (2) most of this overstated contribution stems from the efficiency‐enhancing role of well‐functioning financial institutions, (3) international polarization is solely driven by efficiency changes, and (4) increased distributional dispersion of productivity is primarily driven by technological change. Model’s extensions to account for the growth effect of changes in the institutional environment only add to the argument about the overstated role of physical capital.     

AGRICULTURAL AND NAMA REFORM UNDER DOHA: IMPLICATIONS FOR ASIA-PACIFIC ECONOMIES

Abstract.  This paper provides estimates of the potential gains to the Asia Pacific region from completely freeing merchandise trade globally and from partial liberalizations that might emerge from the Doha Round. Particular attention is given to agriculture, where the majority of the gains would arise. The results suggest that moving to free global merchandise trade would boost real incomes in the Western Pacific proportionately more than in other regions. The Doha partial liberalization scenarios considered would move the world only a small way towards complete free trade, but inreasingly so the more developing countries themselves are willing to open up.     

LIMITED ENFORCEMENT,FINANCIAL INTERMEDIATION,AND ECONOMIC DEVELOPMENT: A QUANTITATIVE ASSESSMENT*

We present a model of economic development where the importance of financial differences caused by limited enforcement can be measured. Economies where enforcement is poor direct less capital to the production sector and employ less efficient technologies. Calibrated simulations reveal that the resulting effect on output is large. Furthermore, the model correctly predicts that the average scale of production should rise with the quality of enforcement. Finally, we find that the importance of limited enforcement rises with the importance of capital in production.     

TOURISM AND DEVELOPMENT POLICY: A QUANTITATIVE APPRAISAL*

Within the last decade the promotion of tourism has gained a prominent place in many development plans. Recently, however, doubts have been cast on previous attempts to analyse its contribution to development. This paper describes a quantitative technique which remedies some of their more obvious defects. The method is then applied to the Turkish situation, and the implications of the results are examined in the light of an explicit policy preference function.     

INCOME DISPERSION AND PRICE DISCRIMINATION

Abstract.  This paper analyses the effects of inter-market and intra-market income heterogeneities on output and social welfare under uniform pricing and differential pricing regimes by considering a finite number of markets. We first derive the linear demand curve in each market under plausible conditions, and then show that more markets (and consumers) are excluded under uniform pricing the higher are the inter-market income differences. We also show that adding markets, even of lower income levels than those of existing markets, helps to decrease prices and thus cause more markets to be served. Implications of intra-market income dispersion are also explored.     

企业融资规模、银行所有制 歧视与产能利用率

本文在对中国工业行业产能利用率进行测度的基础上,将企业融资规模和银行所有制歧视引入产能过剩的分析框架,进一步完善了产能过剩的形成机理。研究表明：产能利用率与企业融资规模密切相关,银行所有制歧视通过企业融资规模对产能利用率产生间接影响。剔除技术效率影响后,行业整体融资规模与产能利用率显著负相关,并存在明显的混合效应。从所有制来看,国有企业和外资企业融资规模与产能利用率显著负相关;民营企业融资规模发挥着相对积极作用。2008年后企业融资规模的扩大更易引起产能过剩的发生。银行所有制歧视对产能利用率的冲击效应更加强烈。     

ECONOMIC GROWTH AND SOCIAL DEVELOPMENT: A STATISTICAL INVESTIGATION*

Some writers have emphasised the adverse environmental and social effects of economic growth, while others have claimed that countries with higher levels of social well-being also tend to enjoy higher levels of per capita output. The aim of this study is to see what statistical light can be thrown on these issues by collating and comparing seventeen different social indicators for twenty countries in two bench-mark years, 1951 and 1969. Two methods of analysing data are employed. First, all the countries are ranked for each indicator in turn for a particular year. Each country is then given a score ranging from 1 to 20 for each indicator, and the scores aggregated over the indicators to obtain an overall ranking score for every country. Secondly, the data are subjected to a principal components analysis to examine the correlation between the indicators. The first principal component is a potential candidate for use as a social index number. Changes in these social variables are then related to the rate of economic growth, and no evidence is found of a negative correlation between economic growth and social development. On the contrary, the results suggest a positive correlation between the two, although the strength of this relationship may be diminishing. It is not claimed that the results are in any sense the most preferred test of the form of the relationship between economic growth and social welfare, which must be a matter for subjective evaluation; rather they are seen as a contribution to the body of empirical evidence on this subject.     

LABOR MARKET DISCRIMINATION AND CAPITAL: THE EFFECTS OF FAN DISCRIMINATION ON STADIUM AND ARENA CONSTRUCTION

We investigate the possibility that labor market discrimination affects capital. Previous research indicates that discrimination affects wages and employment in labor markets. However, the effects of discrimination on other inputs to production are not known. We develop a model of the optimal capital stock in the presence of customer discrimination and test this model using data on sports facility construction. The empirical evidence suggests that teams in cities with a larger white population and more racial segregation put less capital in place, confirming the predictions of the model about the effect of customer discrimination on capital inputs. (JEL J7, D24, L83)