Local Government Debt,Factor Misallocation and Regional Economic Performance in China

This paper examines total factor efficiency and productivity performance by taking into account local government debt (LGD) in 31 Chinese provincial regions for the period 2000–2013. The results show that neglecting LGD may overstate economic performance in Chinese provinces. The eastern region shows better performance in single factor efficiency and total factor efficiency than the non‐eastern regions. The western region shows the worst total factor performance. The north‐eastern region is the only region that has experienced a decline in total factor performance. The state‐dominated, investment‐driven development model may help technological progress across Chinese regions but could lead to significant factor misallocation. We argue that biases towards more state‐dominated investment and land supply in less productive western, central and north‐eastern regions, at the expense of investment and land supply in more productive eastern regions, have contributed to the recent slowdown in economic growth in China. Therefore, further market‐oriented reforms in factor markets should be considered in the future.     

Evaluating the Economic Effects of Flat Tax Reforms Using Synthetic Control Methods

Tax reforms are often motivated by their potential to improve economic performance. However, their actual impacts are difficult to quantify. We analyze the impact of flat tax reform on incomes using “synthetic control” methods. We identify the eight Eastern and Central European countries that adopted flat tax systems between 1994 and 2005, and then compare post‐reform GDP per capita of “treated” countries with a convex combination of similar but “untreated” countries, while accounting for the time‐varying impact of unobservable heterogeneity. We find positive impacts in all eight countries, with seven out of eight cases significant at the conventional level.     

Devolution, Sustainability and Local Economic Development: Impacts on Local Autonomy, Policy-making and Economic Development Outcomes

In this paper, we examine how devolution has affected local sustainable development. We focus on attempting to gauge how devolution will affect the promotion of sustainable development in the English regions through an analysis of the changes to date in Scotland, Wales and London. This evaluation is made more difficult because of the range of changes which devolution involves - political, institutional, organizational and cultural, and it is hard to ascribe particular outcomes to particular changes. The focus of the paper is examining how local sustainability regimes have been affected by devolution in the three case study regions. We then conclude that devolution can only add value to existing arrangements if it creates an additional level of legitimacy which supports local coalitions deepening their commitment to the principles of local sustainable development.     

Adolescent Depression and Adult Labor Market Outcomes

This article uses recently released data from a national longitudinal sample to present new evidence of the longer term effects of adolescent depression on labor market outcomes. Results suggest reductions in labor force attachment of approximately 5% and earnings reductions of approximately 15% for individuals with depressive symptoms as an adolescent. These effects are only partially reduced when controlling for channels operating through educational attainment, adult depressive symptoms, or co‐occurring illnesses. Further, the unique structure of the data allows for high‐school fixed effects as well as suggestive evidence using sibling comparisons, which allows controls for potentially important unobserved heterogeneity. Overall, the results suggest that the links between adolescent depression and labor market outcomes are quite robust and important in magnitude, suggesting the need for further investments in treatment options and opportunities during adolescence, which will likely result in long term returns.     

Intergenerational analysis of the donating behavior of parents and their offspring

Using data drawn from the U.S. Panel Study of Income Dynamics, we explore the relationship between the donating behavior of parents and that of their children aged less than 18 which gives a direct insight into whether an intergenerational relationship in donating behavior exists. Furthermore, we exploit information relating to whether or not parents encourage their children to donate to charity by talking to them about donating to unveil information related to the intergenerational transmission of philanthropic behavior. Our findings suggest that an intergenerational correlation is only present in the absence of a control for whether the parent talks to the child about donating. The effect from the parent talking to their offspring is associated with an increased likelihood that the child donates by approximately 10 percentage points, a finding which is robust to a number of different estimation strategies.     

A Distributional Analysis of the FairTax Plan: Annual and Lifetime Income Considerations

Dissatisfaction with the current federal tax system is fostering serious interest in the FairTax Plan, which would replace most of the federal taxes with a national retail sales tax. The FairTax is promoted as being progressive, but there is considerable skepticism of this claim. We examine the distributional effects of the FairTax, as well as the current system it intends to replace, under both annual income and lifetime income approaches. Global measures of progressivity suggest that the current federal tax system is progressive while the FairTax is regressive. Our results are also robust to different assumptions used for estimation.     

Enforcement,Socioeconomic Diversity,and Tax Filing Compliance in the United States

In this article, we examine the determinants of tax filing compliance in the United States. We use county‐level data on non‐filing rates for the tax year 2000, obtained directly from the Internal Revenue Service. We include explanatory variables identified in the “rational compliance” framework, including an enforcement index against identified non‐filers, the audit rate of filers, and the average penalty rate for both filers and non‐filers. We also examine the role of socioeconomic diversity on tax compliance, testing whether within‐county heterogeneity in household income, language, race, and religion can help explain variation in non‐filing rates. We find that non‐filing is increasing with heterogeneity by race, although not by income or language, and that non‐filing is decreasing with heterogeneity by religious membership. As for enforcement variables, we find that non‐filing rates tend to fall with the enforcement index. Other variables have somewhat mixed results.     

The political economy of state-level fair employment laws, 1940-1964

This paper explores the political economy of anti-discrimination legislation during the ascendancy of the Civil Rights Movement. It traces the diffusion of state-level fair employment laws and evaluates the relative importance of various demographic, political, and economic factors in promoting such legislation. Activism by Jewish organizations, the NAACP, and unions (particularly the CIO) were key factors in securing the adoption of fair employment legislation. Less unemployment, a larger Catholic population, more competitive political systems, and Democratic governorships appear to have been less important. Predicted times for the adoption of fair employment laws by the southern states underscore the necessity of federal intervention to establish legal protection from job market discrimination.     

Public Debt,Economic Growth and Inflation in African Economies

We analyse the relationship between public debt, economic growth and inflation in a group of 52 African economies between 1950 and 2012. The results indicate that the limits of public debt are negatively related to economic growth and exhibit, from a given level of debt, an inverted U behaviour regarding the relationship between economic growth and public debt. Briefly, the high levels of public debt are coincident with reduced rates of economic growth and rising levels of inflation. Our results for three specific geographical areas resemble those of the overall analysis, despite some differences. In North African countries, the growth rates of the gross domestic product (GDP) and inflation also show an inverted U behaviour as the ratio of public debt/GDP increases. The highest rate of economic growth is recorded when the ratio of public debt/GDP is below 30% of GDP and corresponds to an average inflation rate of 5.33%. An identical behaviour of the GDP growth rates and inflation also appears in Sub‐Saharan countries until the third interval (60–90%). However, the highest growth rate of the GDP and GDP per capita is registered when the public debt/GDP ratio is in the second interval (30–60%). For the countries of the Southern Africa Development Community, the highest average rate of economic growth (6.8%) is similar to North African countries, when the ratio public debt/GDP is below 30% of GDP, with an average inflation rate of 11%. A number of robustness analyses were performed and the great majority of them confirm the general analysis.     

SOUTH AFRICA'S INTERGOVERNMENTAL FISCAL RELATIONS: AN EVOLVING SYSTEM

Across Africa, Latin America, Asia and the transition economies of Eastern Europe, the need to enhance the capability and capacity of sub‐national governments (SNGs) in providing public goods and services has become a main theme of development programmes. Central to this theme is the need to design an intergovernmental fiscal relations (IGFR) system that enhances the effectiveness of sub‐national governments in mobilizing revenues and implementing expenditure programmes. For South Africa, the post‐1994 dispensation has involved significant reforms to the structure and administrative capacity of the three spheres of government. Critical to these reforms is the need to formulate an IGFR framework that takes cognisance of South Africa's past, and serves as an effective policy tool in ensuring that public sector service delivery is well structured and managed. This paper provides an analysis of South Africa's evolving IGFR system. It outlines the historical evolution of the current IGFR system, identifies current challenges, and discusses implications that these challenges have for the functioning of the IGFR system. The general conclusion emerging from this study is that in the South African context, the key elements necessary for an effective IGFR system are in place. Ongoing reforms have improved the capacity of provincial and municipal authorities in carrying out their revenue and expenditure responsibilities. However, the evolving nature of South Africa's IGFR system requires that significant attention be devoted towards enhancing coordination between delivery departments and improving the capacity of many SNGs. These should not only aid the effective functioning of the IGFR system but also ensure that the gains of decentralisation are sustainable.     

Local Intergovernmental Competition and the Law of 1/n

This article proposes an empirical framework based on a synthesis of the seminal “Law of 1/n” and “Leviathan” theories, which models the relationship between government spending and the number of jurisdictions in a federal system as determined by the interplay of the costs related to centralized government (which fall as the number of jurisdictions increases) and the costs of distributive politics (which rise as the number of jurisdictions increases). Using a panel of U.S. state and local government spending data, empirical tests based on this combined framework show that the effect of intergovernmental competition predicted by the Leviathan model is partially offset by the Law of 1/n. This result helps explain the inconsistent findings in the previous empirical literature.     

生态旅游与当地经济发展研究

生态旅游的快速发展促进了当地的经济发展,同时,当地经济的发展也对生态环境造成了负面影响,为了追求经济利益的最大化,往往以生态为代价。针对存在的部分问题,提出了一些针对性建议,以期生态旅游健康、持续发展,也希望生态旅游成为促进当地经济发展的力量。     

Contests and the Private Production of Public Goods

The private provision of public goods generally suffers from two types of efficiency failures: sorting problems (the wrong individuals contribute) and quantity problems (an inefficient amount is provided). Embedding the provision game into a contest that rewards larger contributions with higher probabilities of winning a prize may remedy such failures. Applications include tenure decisions at universities, electoral competition among politicians, etc. We identify a tradeoff between the value of the prize and the decisiveness of the contest. High‐powered incentives in contests may cause an overprovision of the public good or wasteful participation of unproductive individuals in the contest.     

The effect of bank account ownership on credit and consumption: Evidence from the UK

This article examines the causal effects of bank account ownership on credit access and consumption by isolating an exogenous change in account ownership produced by an electronic transfer mandate in the universal UK Child Benefit program. Comparing households with and without children finds that the mandate substantially affected banking behavior, with an 8.6% relative increase in transaction account ownership. When households transition into account ownership, results indicate large increases in credit card ownership (89%), and household durable goods (55%). Similar changes are not seen in loan use, weekly expenditures, or vehicle ownership. Additional evidence from a panel data set indicate declines in the use of fringe bank credit, informal loans, and debt after households transition into bank account ownership. In total, evidence suggests that an important effect of owning a bank account is improved access to credit cards which enables durable good consumption.     

Incumbency and Distributive Politics: Intergovernmental Transfers in Mexico

In this article, the objective is to focus on the likelihood that politicians will rely on intergovernmental transfers to pursue political ambition. In what circumstances are incumbents more likely to rely on transfers to win votes, than to reward core supporters? How are constraints (introduced to ensure that politicians rely on predetermined formulae which reduce the incentive to design transfers to win re‐election) likely to influence “distributive politics?” Predictions in this article are tested with reference to intergovernmental transfers to 31 Mexican states between 2004 and 2012.     

The Dynamics of Knowledge Diversity and Economic Growth

How is long run economic growth related to the endogenous diversity of knowledge? We formulate and study a microeconomic model of knowledge creation, through the interactions among a group of heterogeneous research and development (R&D) workers, embedded in a growth model to address this question. The composition of the research work force in terms of knowledge heterogeneity, in addition to its size, matters in determining the production of new knowledge. Moreover, the heterogeneity of the work force is endogenous. Income to these workers accrues as patent income, whereas transmission of newly created knowledge to all such workers occurs due to public transmission of patent information. Whether or not the system reaches the most productive state depends on the strength of the public knowledge transmission technology. Long run economic growth is positively related to both the effectiveness of pairwise R&D worker interaction and to the effectiveness of public knowledge transmission.     

Provision versus Appropriation in Symmetric and Asymmetric Social Dilemmas

Social dilemmas characterize decision environments in which individuals' exclusive pursuit of their own material self‐interest can produce inefficient allocations. Social dilemmas are most commonly studied in provision games, such as public goods games and trust games, in which the social dilemma can be manifested in foregone opportunities to create surplus. Appropriation games are sometimes used to study social dilemmas that can be manifested in destruction of surplus, as is typical in common‐pool resource extraction games. A central question is whether social dilemmas are more serious for inhibiting creation of surplus or in promoting its destruction. This question is addressed in this study with an experiment involving three pairs of payoff‐equivalent provision and appropriation games. Some game pairs are symmetric, whereas others involve asymmetric power relationships. We find that play of symmetric provision and appropriation games produces comparable efficiency. In contrast, power asymmetry leads to significantly lower efficiency in an appropriation game than in a payoff‐equivalent provision game. This outcome can be rationalized by reciprocal preference theory but not by models of unconditional social preferences.