Environmental improvement with trade liberalization

Past studies predict that trade liberalization agreements (and NAFTA in particular) harm the environment. These studies have focused on adjustments in production and have assumed that environmental policy is exogenously given. We show why trade liberalization and improved environmental quality are mutually compatible — when environmental policy is recognized as politically endogenous. We also present empirical evidence to support the basic assumptions underlying the consistency of more liberal trade policy and an improved environment.     

Why does democracy need education?

Across countries, education and democracy are highly correlated. We motivate empirically and then model a causal mechanism explaining this correlation. In our model, schooling teaches people to interact with others and raises the benefits of civic participation, including voting and organizing. In the battle between democracy and dictatorship, democracy has a wide potential base of support but offers weak incentives to its defenders. Dictatorship provides stronger incentives to a narrower base. As education raises the benefits of civic engagement, it raises participation in support of a broad-based regime (democracy) relative to that in support of a narrow-based regime (dictatorship). This increases the likelihood of successful democratic revolutions against dictatorships, and reduces that of successful anti-democratic coups.     

论政府供给偏好的短期决定:政治均衡与经济效率

本文以财政支出为主体,研究了我国政府供给偏好(规模与结构)短期决定问题。政治均衡而非经济市场均衡是理解这一问题的关键。在“有管理的竞争性政治市场”和政府追求政治支持最大化等假定下,我们考察了政治均衡决定政府供给偏好的过程及其效率属性,以及“政治价格”在两级“政治市场”上的形成机制。结论表明:政治均衡决定资源配置固有的低效率属性,因政府供给范围的“越位”和“缺位”而加剧。当前改革的重点应是推动经济市场化转轨的完成和公共财政的转型,而非完全的民主化。权威因素对“政治价格”的管理在利益分化严重的当前形势下具有建设性作用。推动渐进民主化,完善权力对等的“二级政治市场”则是长远之策。     

When will a Dictator be Good?

Dictatorship is the predominant political system in many developing countries. However, different dictators act quite differently: a good dictator implements growth-enhancing economic policies, e.g., investment in public education and infrastructure, whereas a bad dictator taxes her citizens for her own consumption. The present paper provides a theoretical model by deriving underlying determinants of dictatorial behavior. We assume that the engine of economic growth is private investment. It can increase the productivity of individuals who invest, as well as the aggregate technological level. A good dictator encourages this investment in order to tax more. However, the cost of this encouragement is that the ensuing higher growth rate will induce earlier democratization. In this paper we will illustrate the risk of choosing a growth-enhancing policy, while leading to additional tax revenues in the short-run will also increase the likelihood of a revolution resulting in the eventual overthrow of the dictator. Furthermore, we will find that the higher the return from private investments the less likely the dictator will be a good one. Contrary to McGuire and Olson (J Econ Lit 34:72–96, 1996) we find that a long life-time does not always induce positive incentives among dictators. I wish to thank Monika Merz, who carefully read the earlier version of this paper and provided many valuable suggestions. I also would like to thank the editor, the anonymous referee, Uwe Sunde, Philipp Kircher and participants at the 4th international annual conference of JEPA for helpful comments. I am grateful to Stephan Heim for his assistance. All possible errors are, of course, mine.     

A MODEL OF AN OPPORTUNISTIC-PARTISAN POLITICAL BUSINESS CYCLE

According to political business cycle theory, separate opportunistic and partisan approaches exist. It is obvious, as seen from theoretical and empirical points of view, that politicians aim for both opportunistic as well as partisan goals. This paper presents a model of a pre‐election political business cycle that manifests an indication of competence and a post‐election political business cycle that occurs because of the uncertainty of an election's winner monetary policy. In the pre‐election period competent governments expand the economy. The post‐election cycle depends on whether a leftist or a conservative government is in power in the pre‐election period, and if they are re‐elected or not.     

Is Foreign Direct Investment “Gender Blind”? Women's Rights as a Determinant of US FDI

The impact of women's rights on a country's competitiveness in the global economy is a source of contention. While educational opportunities for women, as well as political empowerment, are linked to a variety of positive outcomes, the impact of economic rights is mixed. Toward better understanding these issues, we focus on the role of women's rights in attracting foreign direct investment (FDI). Though foreign capital plays a key role in the development strategies of many countries, and many of the growth areas in FDI rely heavily on women's labor, extant literature on the determinants of FDI largely ignores gender. To gain insight into these issues, we examine the impact of women's political, economic, and educational rights across four different types of US FDI into the developing world. We find a mixed relationship between women's rights and FDI that varies across industrial sectors.     

经济转轨、集体腐败与政治改革--基于中国转轨经验的经济学分析

腐败是经济转轨国家中普遍存在的现象,中国当前的腐败问题呈现集体腐败的特征.文章主要是运用博弈理论对集体腐败行为进行解释.文章证明了在中国这样的经济转轨国家,由于缺乏一个独立的监督机构,一般都是上级官员作为其下级官员的监督者,他们非常容易合谋,形成集体腐败.随后文章对中国集体腐败问题做了实证分析,并且提出了相应的政治改革措施.     

Trade liberalization and trade performance of environmental goods: evidence from Asia-Pacific economic cooperation members

In this article, we study the impact of trade liberalization, including reductions in both tariff and nontariff trade barriers, on environmental goods (EGs) exports. Using bilateral trade data from 20 Asia-Pacific Economic Cooperation members, we find that tariff reduction in an exporting country has a larger positive impact on its exports of EGs than tariff reduction in an importing country. Our results also show that a lower nontariff barrier in an importing country increases its imports of EGs. A considerable amount of heterogeneity also exists in subsample results based on countries’ income levels.     

Political institutions and economic volatility

We examine the effect of political ‘institutions’ on economic growth volatility, using data from more than 100 countries over the period 1960 to 2005, taking into account various control variables as suggested in previous studies. Our indicator of volatility is the relative standard deviation of the growth rate of GDP per capita. The results of a dynamic panel model indicate that democracy reduces economic volatility. We also find that some dimensions of political instability and policy uncertainty increase economic volatility.     

发展职业教育还是普通教育——基于经济增长和教育回报视角的文献述评

国外文献显示,从人力资本特征来看,职业教育和善通教育在创新成本和投资回报期上存在差异.从经济增长的视角来看,职业教育的规模与经济发展水平似存在倒U型关系.目前国内针对职业教育的研究总体不足,实证研究结果存在明显差异.今后对于职业教育发展的研究应从侧重于“问题”分析转向“理论”探究.     

Growth and human capital: good data,good results

We present a new data set for years of schooling across countries for the 1960–2000 period. The series are constructed from the OECD database on educational attainment and from surveys published by UNESCO. Two features that improve the quality of our data with respect to other series, particularly for series in first-differences, are the use of surveys based on uniform classification systems of education over time, and an intensified use of information by age groups. As a result of the improvement in quality, these new series can be used as a direct substitute for Barro and Lee’s (2001; Oxford Economic Papers, 3, 541–563) data in empirical research. In standard cross-country growth regressions we find that our series yield significant coefficients for schooling. In panel data estimates our series are also significant even when the regressions account for the accumulation of physical capital. Moreover, the estimated macro return is consistent with those reported in labour studies. These results differ from the typical findings of the earlier literature and are a consequence of the reduction in measurement error in the series.      

Rawls’ Paradox

Rawls’ theory of justice is paradoxical, for it requires a society to aim directly to maximize the basic goods received by the least advantaged even if directly aiming is self-defeating. Rawls’ reasons for rejecting capitalist systems commit him to holding that a society must not merely maximize the goods received by the least advantaged, but must do so via specific institutions. By Rawls’ own premises, in the long run directly aiming to satisfy the difference principle is contrary to the interests of the poor, though it is meant to aid them.

Does financial liberalization matter for emerging East Asian economies growth? Some new evidence

This paper investigates the empirical relationship between financial liberalization and economic growth in East Asian region. The empirical literature suggests that there is a mixed link between financial liberalization and growth in emerging countries. Panel data techniques using LS, TSLS, and GMM are employed to shed some light on the empirical debate, we examine this issue in 6 major emerging East Asian countries over the period 1980–2002. The main result is that financial liberalization's growth effect depends on the nature as well as the intensity of financial sectors liberalization. Full liberalization of the financial sector has been associated with slower growth outcomes while more moderate partial liberalization is associated with more positive outcomes.     

Towards Sustainability Economics: Principles and Values

Synopsis  Radical alternatives, in terms of our ideas about science in society, about economics, ideology and institutional arrangements, should be included among possibilities considered within the scope of a pluralistic philosophy. While all these aspects of our mental maps are interrelated and important, economics plays a key role in attempts to get closer to a sustainable society. Mainstream neoclassical economics is not enough. The tendency to exclusively rely on this particular theory is considered part of the problems faced. A ‘sustainability economics’ more in line with dominant ideas of democracy is proposed, emphasizing the ethical, ideological and political elements. Reference is made to institutional theory but the principles and concepts suggested are in many ways similar to other kinds of heterodox economics and developments in other social sciences. Neoclassical economics is used as a point of reference in pointing to alternative ideas about human beings, organizations, markets, decision- making, efficiency, rationality, progress in society and institutional change processes. Predilection for such an alternative conceptual framework (or for neoclassical economics) is not exclusively a scientific choice but as much a matter of political and ideological preferences. One paradigm may be dominant at a time, but because of the ideological specificity of each paradigm, competing theoretical perspectives should be accepted and even encouraged in a democratic society.