THE DYNAMICS OF INTERACTION BETWEEN INDUSTRY AND POLITICS. THE INTRODUCTION OF ECOTAXES IN BELGIUM

In 1993 the Belgian Government introduced product charges on drink containers, batteries, certain industrial packaging, paper and disposable razors and cameras. Simultaneously, an expert commission was installed to follow up the implementation process and to propose new ecotaxes. Because the preparation of the law was not well done and only limited knowledge and experience existed, the implementation encountered serious difficulties. The commission revised the law in a global and systematic way in co-operation with the actors involved: industry, environmentalists and the administration. The methodology that was followed is explained and some important conclusions with respect to the interaction between business, politics and science considered. There is a great gap between textbook theory and the realities of the implementation process.     

INSTABILITY OF THE U.S. MONEY DEMAND FUNCTION

Abstract. The paper surveys the two major episodes of instability of the U.S. money demand function known respectively as 'the mystery of missing money' and 'the great velocity decline'. It also assesses the recent literature on open economy money demand models and their usefulness in explaining the puzzling behaviour of money demand manifested shortly after the transition to floating exchange rates.     

MANAGEMENT DEVELOPMENTS IN GOVERNMENT RESOURCE ALLOCATION: THE EXAMPLE OF THE RISE AND FALL OF P.P.B.S. (PLANNING-PROGRAMMING-BUDGETING SYSTEM)

Explanation of the rapid rise to prominence in many government activities of the U.S.A. federal government inspired P.P.B.S. are considered. In too many situations P.P.B.S. was viewed as a revolutionary management technique and not an evolutionary development in resource allocation. The form of many of the publications by proponents of P.P.B.S. – often written from a military standpoint – were insufficiently related to the environment in which most public decision-making occurs. As a result, by promising much and achieving little, the search for better solutions to many of the management problems that P.P.B.S. highlighted has received little help from the enormous activity generated.     

THE APPLICABILITY OF THE TRADITIONAL THEORY OF ECONOMIC POLICY

Abstract. The traditional theory of economic policy requires targets, instruments, an empirical economic model, and a social welfare or criterion function to be specified in order to derive the optimal economic policy. Empirical studies of reaction functions suggest that economic policy is carried out in some systematic manner, subject to interference from political factors. This survey addresses the problems of specifying, estimating and applying an economic model when economic policy is following a path specified by a reaction function. Attention is paid to rational expectations, the Lucas'critique, and the policy neutrality proposition. Lack of knowledge of the policy maker's objective function poses the most serious difficulty when applying the theory of economic policy. Various methods of determining this function are reviewed, and the possibility that policy makers might be satisficing is discussed. The role played by political factors is considered in the light of the public choice literature.     

TIME IS OF THE ESSENCE: THE IDEA OF THE COROLLARY OF THE COASE THEOREM AND A POSSIBLE APPLICATION

Extant theories on the application of the Coase Theorem to the development market have focused on the effects of zoning on the environment or upon property prices. As an original contribution to the Coasian research on the interface between the development market and the statutory planning machinery, this article seeks to develop a Coasian proposition informed by what has been called the corollary of the Coase Theorem, which allows for an empirical examination of the impact of property prices on decisions to use resources under different institutional arrangements. Our proposition is that the procedural steps taken to consume resources are not contingent on property prices unless the associated transaction costs are positive or property rights ambiguous.     

THE EFFECTS OF EXPANDING THE GENEROSITY OF THE STATUTORY SICKNESS INSURANCE SYSTEM

This article evaluates an expansion of employer‐mandated sick leave from 80% to 100% of forgone gross wages in Germany. We employ and compare parametric difference‐in‐difference (DID), matching DID and mixed approaches. Overall workplace absences increased by at least 10% or 1 day per worker per year. We show that taking partial compliance into account increases coefficient estimates. Further, heterogeneity in response behavior was of great importance. There is no evidence that the increase in sick leave improved employee health, a finding that supports a shirking explanation. Finally, we provide evidence on potential labor market adjustments to the reform. Copyright © 2013 John Wiley & Sons, Ltd.     

THE FUTURE OF THE SEABED

Increased commodity prices and improved technology have combined to increase the incentives to exploit natural resources located under the seas. However, an international seabed regime under the auspices of the United Nations presents dangers for free markets, sovereignty and security. Alternative institutional arrangements based on privatisation would produce better outcomes.     

AN INTERPRETATION OF THE SIGNIFICANCE OF THE SECOND BATTLE OF WATERLOO

Good governance is a pre-condition for economic development. Good governance, in turn, requires peace. The second Battle of Waterloo, in Sierra Leone, showed what the West can do in this regard. A small military intervention, not hemmed in by the typical restrictions on what 'peacekeepers' can do, made a huge difference to the development prospects of the country. This has important implications for the use of external military forces as part of the overall strategy for poverty reduction in Africa.     

TIME IS OF THE ESSENCE? AN EMPIRICAL APPLICATION OF THE COROLLARY OF THE COASE THEOREM

Applying the corollary of the Coase Theorem to the development market developed in Lai et al. (2007a) , we evaluate the proposition that procedural steps to use resources are not contingent on property rights assignment, unless the associated transaction costs are positive or property rights are ambiguous. Using aggregate statistics regarding planning applications for residential use, property prices, construction costs, share prices, interest rates, and application success rates in Hong Kong from 1985 to 2005, we evaluated, using regression techniques, the null hypothesis that there was no change in the relationship between readiness for submission of planning applications and property prices in response to changes in the time limits imposed on planning permissions . The relationship was more pronounced or strengthened (less obvious or weakened) when time limits were first imposed and shorter (longer). This can be explained in terms of the transaction costs of switching resource allocation according to the time limit.