Rewards from public office and the selection of politicians by parties

We investigate the relationship between the quality of politicians, defined in terms of their competence (skills), and rewards from public office in a game between parties and citizens in which parties play a crucial role in the selection of politicians. Parties shape the selection of politicians by manipulating information about the quality of their candidates. An increase in the rewards from public offices leads to two opposing effects on the average quality of politicians. The first is a selection effect, whereby more skilled citizens enter politics, leading to an increase in average quality. The second is a manipulation effect, as parties have the incentive to further manipulate information to increase the probability of election for their unskilled candidates, from whom they can extract higher rents in the form of service duties. We find that the second effect dominates when (i) parties’ costs of manipulating information are sufficiently low; (ii) even in the absence of manipulation, the quality of information available to citizens about candidates is sufficiently poor; and (iii) the net gains from becoming a politician for unskilled citizens are sufficiently larger than those for skilled citizens. These findings provide a rationale for the ambiguous sign of the empirical relationship between the quality and pay of politicians.     

The principal difficulty: Besley’s neo-Rousseavian aspirations

The use of the “principal–agent” model makes an implicit assumption about the existence of an underlying global optimum or “general will.” This assumption is debatable, and Besley does not defend it sufficiently or even seem to realize how strong an assumption it is. Still, it is standard in the literature, and Besley’s book is a very strong contribution to that literature. Its two greatest strengths are its solid microfoundations, and its use of the classical “comparative statics” approach to analyze dynamics.      

Depreciation and intergenerational altruism in the private provision of public goods

The static model of the private provision of public goods is refuted by empirical and experimental evidence which shows that contributions are above the levels predicted by the theory. The model is reconsidered here in an intertemporal framework that allows the formation of a stock of public good over time and admits intergenerational altruism into preferences. Both of these factors affect the level of private provision. An intertemporal version of the Samuelson rule is derived and it is shown that, for some parameter values, the provision level determined by this is matched by private provision. For other parameter values, it is shown how a system of taxation can achieve the optimum.     

Learning by Trial and Error: A Case for Moot Courts

This article describes the development of a computer tutorial for use in a history of economic ideas class. An early version of the tutorial contained ten topics, ranging from early Mercantilist thought to Jevons's marginal utility analysis. These concepts were presented in three ways: verbally, graphically, and in summary form. Student critiques were used to extend the content and revise the mode of presentation.     

城市公园供给方式的模型分析

本文建立了一个可以描述各类公共品的理论模型,提出了公共品供给的目标——社会福利和社会公平最大化之间的权衡,并在模型框架下以具体数值例子演示了具有受益排他性和消费竞争性的混和公共品如何达到最优供给,从理论上为城市公园供给方式的研究提供了一个新的视角。     

Country size and the voluntary provision of international public goods

Standard studies on voluntary contributions to an international public good treat national economies as if they were single agents. This masks the fact that nations are comprised of populations of citizens, whose collective benefits a national government takes account of when deciding on the amount of the contributions. This paper constructs a model which explicitly allows for the effect of population differences and explores their consequences. We can then present the so-called exploitation of the great by the small by Olson and Zeckhauser [Olson, M., Zeckhauser, R., 1966. An economic theory of alliances. Review of Economics and Statistics 48 (1966) 266–279] and explore how residents of larger countries fare relative to those in smaller countries. We also elaborate on the effects of changing populations and show that growing into a large country is not necessarily beneficial for the country's residents.     

Book Reviews

Books reviewed:
Nielsen, S. B., Incentives and Redistribution in the Swedish Welfare State: The Swedish Tax Reform
Hannesson, R., Principles of Economic Growth     

The Distributional Impact of Public Goods Provision: A Veil of Ignorance Approach

The "veil of ignorance" approach is used to consider the redistribution implied by different tax-benefit systems. Assuming a (hypothetical) ex-ante situation in which individuals lack any knowledge about their future income, redistribution from rich to poor can be seen as a form of insurance. Taking redistribution and insurance as synonymous, the analysis derives cases of redistributionally neutral systems of taxation and public good provision.
JEL classification : H 23; D 30;, H 41     

效应溢出与地方公共产品供给的权限

基于地方公共产品理论,探讨了具有溢出效应的地区间地方公共产品最优供给效率,尝试性地测度了地方性公共产品不同的供给形态对帕累托效率的偏离,并在此基础上指出经济权限和政治权限的耦和是实现地方公共产品最优供给的重要途径,最后借助外部性内在化的理论分析框架探讨了实现经济权限和政治权限耦合的相应制度安排。     

Voluntary contributions when the public good is not necessarily normal

We argue that there are interesting examples of privately provided public goods that do not satisfy the assumption of strict normality, and reconsider voluntary-contribution games in a more general framework. We show that, in general, (1) equalizing transfers between individuals with identical tastes can increase total supply of the public good, and (2) more of the public good can be supplied if agents move sequentially rather than simultaneously. These results are in sharp contrast to earlier conclusions derived in the literature under the assumption of strict normality.     

Heterogeneity and the Voluntary Provision of Public Goods

We investigate the effects of heterogeneity and incomplete information on aggregate contributions to a public good using the voluntary contribution mechanism. The non-linear laboratory environment has three-person groups as partners under varying conditions of information and communication. Bergstrom, Blum and Varian predict that increasing heterogeneity will have no effect on aggregate contributions in a no-communication environment. Ledyard conjectures a positive effect of incomplete information, a negative effect of heterogeneity, and a positive interaction of heterogeneity and incomplete information. We find that incomplete information has a small but significant negative effect. Heterogeneity has a positive effect on aggregate contributions, but its effects interact unexpectedly with communication. In a no-communication environment, heterogeneity in two dimensions (endowment and preferences) increases contributions substantially while heterogeneity in a single dimension (endowment or preferences) has little effect. In the communication environment we find the reverse. We also find a positive interaction between heterogeneity and incomplete information. Thus we reject the Bergstrom, Blume and Varian invariance result and provide mixed evidence on Ledyard's conjectures.     

Consumption externalities and the effects of international income transfers on the global environment

In this paper, we extend the standard model of private provision of public goods by including consumption externalities to characterize a situation in which economic activities pollute the environment. We consider a case in which there are an industrial country which can afford to invest in the environment and a developing country which cannot. Then, we show that international income transfers in both directions can improve the global environmental quality as well as the welfare of each country. We also show that the results have important implications for policies such as official development assistance or the assignment of tradable emission permits.     

Did support for economic and political reforms increase during the post‐communist transition,and if so,why?

We study the dynamics of individual support for changes in the economic and political system, using a unique dataset for 12 transition economies over the period 1991–2004. We document that support for transition was initially lower in the CIS countries and that there has been a converging trend in the support for reforms between the CIS and the Baltic and Central and Eastern European countries. We suggest several explanations for the initial divergence and the post‐98 convergence in support for transition between these three groups of countries, and show that economic growth, declining income inequality and improving quality of governance have contributed to increase the support for transition. In addition, we find that increased support for the market economy and democracy in the CIS is accompanied by a larger increase in trust towards the political institutions. Our results also confirm the implications of Aghion et al. ( 2010 )'s model of a negative correlation between trust and the demand for government regulation.     

消减城乡公共产品供给差异的策略——基于政治支持差异假设的探视

本文认为导致城乡公共产品供给差异的根本原因是地方政府官员根据不同主体能够给予的政治支持做出的理性选择。文章强调了政治支持差异对地方官员行为的影响,并把上级政府、城市居民和农村居民的政治支持纳入一个统一的分析框架,分析了地方官员从不同主体获得的政治支持权重大小顺序,给出了其最优策略的均衡条件。如果要实现基本公共产品均等化目标,则需优化政治支持结构。     

Is Technological Progress Pareto-Improving for a World with Global Public Goods?

This paper investigates the welfare effects of unilateral or multilateral technological progress in a world with global public goods. We focus on the consumption relation between the private and the public good, and then show that technological progress may beself-centered (benefit oneself but harm others), self-sacrificing (harm oneself but benefit others), or self-defeating (harm all) if two goods are substitutable. In addition, any type of technological progress improves every countrys welfare if the private and the public good are close complements.     

公共品供给的政府效率解及其条件分析

传统经济理论认为,在任何一个集体中,因任何一种公共品的成本分摊与收益分享,都普遍存在着"搭便车"者的个人理性行为以及由此导致的集体非理性的结局———人人都无"车"可搭的"公共"悲剧,断言公共品供给是市场失败的领域,必须由政府替代。用斯密的市场秩序概念来处理所有的私人品,用霍布斯的主权国家概念来处理所有的公共品,也是市场经济国家资源配置制度安排的普遍选择。我认为,"搭便车"或经济人理性行为是合乎公理的经济学假设,但"搭便车"问题并不一定非由政府强制来解决不可。从理论上说,公共品的供给存在政府效率解,但政府效率解有严格的约束条件,公共品供给中的政府职能与政府失灵也都是相对于其效率条件以及满足这些条件的程度而言的。     

全球性共用品供应的分配问题

全球性共用品的供应涉及到许多问题,而这些问题在经济学文献中一直没有得到重视,其中包括对全球性共用品最优供应量的合适度量问题和在评价其供应不足、生产和使用时所产生的分配问题。此外,全球性共用品的有关性质以及获取途径也是需要加以说明的内容。本文最后将就共用品供应中的分配政策问题提出若干可行的解决方案。     

Economic Integration and Public Provision of Education

This paper develops a model of fiscal competition in public provision of a private good: education. In this framework, the welfare enhancing effects of public education provision are shown to be reduced by increased student mobility when, like in the EU, countries are unable to set differentiated fees to foreign students. Indeed, the threat of attraction of foreigners who free-ride on the national education system may induce suboptimal levels of public education provision when (price) discrimination is forbidden. Alternatively, countries may try to escape regulation and avoid equal treatment of foreign students. The paper provides some empirical evidence of the existence of a fiscal externality in education at the EU level.     

The political economy of long-term care

We build a two-dimensional political economy model to explain the provision and financing of long-term care and income redistribution. Voting agents differ in need and income opening up two conflicts: one sets families with disabled parents, who are in favor of a public long-term care program, against the ones without such parents who oppose public financing. The other sets the poor against the rich with the former preferring heavier income taxation than the latter. We show that a structure induced equilibrium always exists and that it is unique if informal care is provided in equilibrium. The equilibrium not only explains the negative association of income inequality and long-term care financing but also allows predictions about how demographic change might impact long-term care arrangements and expenses.