International trade and terrestrial open-access renewable resources in a small open economy

Abstract .  In this paper, I investigate the effects of trade liberalization and policies on deforestation by extending a small open economy model with open-access renewable resources developed by Brander and Taylor (1997a) . I endogenize the carrying capacity of the resource. I find, unlike Brander and Taylor, that trade liberalization may increase the forest stock in the resource-abundant country and may decrease the forest stock in the resource-scarce country. Moreover, the policies primarily aimed at protecting forests, such as import restrictions by importing countries and forest certification for well-managed forests, may have perverse effects on the forest stock.     

International trade, exhaustible-resource abundance and economic growth

Countries with oil and other natural resources have grown less rapidly than those countries without. This phenomenon is known as the “natural resource curse”. We develop an infinite-horizon, two-country model of trade in which countries are identical, except that one country is endowed with deposits of an exhaustible resource and the other is not. Within the context of the model, we show that this phenomenon can be explained in part by an inelastic demand for the exhaustible resource that increases growth in trade revenues and induces the resource-abundant country to invest relatively less than the country lacking in exhaustible resources. These results are derived analytically and illustrated by an empirical analysis based on plausible parameters obtained from data.     

A Theory of Poverty Aversion and Civil Society Development

A simple model is used to discuss the political economy of the emergence of relative poverty as a foundation for redistribution policy in rich countries, as opposed to the dominant concept of absolute poverty, which prevails in the rest of the world. This issue is analyzed in connection with that of the development of civil society and its role relative to the state in fighting poverty.     

INFANT INDUSTRY AND POLITICAL ECONOMY OF TRADE PROTECTION

Abstract.  This paper introduces infant-industry considerations in political economy determination of trade protection. I build a model where the government cares about both political contributions and national welfare. A potentially beneficial high-tech industry is not viable in the country whose initial human capital is low. In the political economy equilibrium, we find that the tariff schedule will be V-shaped: it decreases initially to maintain the viability of the industry but increases thereafter as the industry expands and gains political power. We use the model to explain both China's tariff offers in WTO negotiations and GATT/WTO rules regarding developing countries.     

A political economy approach to endogenous industrial policies

This paper uses a political economy perspective to study the endogenous formation of economic policies and its interplay with political institutions. This paper provides a novel view that both the institutions and economic development status are essential factors in endogenously determining economic policies. The model aims to explain both the differences in the degree of adopting industrial policies as well as the differences in the types of industrial policies being implemented. Using a concise framework with two country-specific characteristics, the baseline model can capture three main types of industrial policy platforms of interest. In a country where voters’ political awareness is positively skewed and press freedom is relatively low, pro-heavy industry policies would be present most of the time; South Korea is representative of this type of countries. In a country where voters’ political awareness is positively skewed and press freedom is relatively high, there is usually an active industrial policy, though the target of the policy changes over time. Specifically, the policy is favoring the industry of which the industry-specific TFP is relatively high; Japan is representative of this type of countries. In a country where voters’ political awareness is negatively skewed and press freedom is relatively high, there is usually no active industrial policy; the U.S. is representative of this type of countries.     

Frontier Expansion and Economic Development

Although finding new frontiers or reserves of natural resources to exploit has been the basis of much of global economic development for the past 500 years, frontier-based development does not appear to be producing sustained high rates of growth in today's poorer economies. Through a two-sector model of frontier expansion and economic growth in a resource-dependent small open economy, this article demonstrates that such expansion will lead inevitably to a boom and bust pattern of long-run development, even if the economy's terms of trade or commodity prices remain unchanged. Initially, it is always optimal for the economy to choose the maximum rate of frontier expansion and thus ensure an immediate economic boom. However, an eventual economic decline is unavoidable. This result provides an alternative explanation of recent empirical evidence that resource-abundant developing countries display lower than expected long-run rates of growth. (JEL O13 , O41 , Q32 , Q33 )     

Transfers in a polarized country: bridging the gap between efficiency and stability

We consider a political economy model of country whose citizens have heterogeneous preferences for a national policy and some regions may contemplate a threat of secession. The country is efficient if its breakup into smaller countries leads to an aggregate utility loss. We show that in an efficient country whose citizens' preferences exhibit a high degree of polarization, a threat of secession cannot be eliminated without inter-regional transfers. We also demonstrate that if majority voting is used to determine the redistribution schemes within the country, then a high degree of polarization yields the full-compensation scheme as the unique political equilibrium.     

The nexus of economic and institutional evolution

The current state of the development economics literature ascribes an indisputable central role to institutions. This paper presents a formal model of institutional evolution that is based on the dynamic interactions between formal and informal institutions and economic development; the main features of the model is consistent with the fundamental theories that shed light to institutional evolution, namely the collective action and transaction cost theories, as well as dialectics. As informal institutional quality accumulates like technological know-how, while the level of formal institutional quality is chosen by the government to maximize welfare, subject to the economic and political costs. The solution of the model yields a punctuated trajectory of formal institutional evolution. Simulations reveal that the extent of diversity in informal institutional quality across a country delays formal institutional reforms. We also observe that, both the optimal quality of formal institutions and welfare are higher the more homogeneous is the country with respect to its informal institutions or the cultural attributes.     

WAGE SUBSIDY AND WELFARE IN DEVELOPING COUNTRIES

This paper seeks to answer if wage subsidy to workers displaced due to trade reform raises welfare in a developing country. We use a general equilibrium model with non‐specific factor inputs and trade liberalization as a policy variable. A combination of wage subsidy and tariff rate obtains the second‐best welfare level. The theoretical result is new, policy‐relevant and important in view of political‐economy aspects of free trade in developing and transition countries.     

论中国特色社会主义政治经济学国家主体性的特殊属性

国家在经济社会生活中所发挥的作用与所扮演的角色是在任何国家都存在的普遍性问题,国家主体性问题是政治经济学的一个基本问题.然而,对中国国家主体性问题仅仅进行一般性研究是不够的.由于中国的特殊国情、社会历史传统与客观现实等,中国特色社会主义政治经济学的国家主体性有其特殊属性,主要表现为中国国家定位的特殊性、国家职能的特殊性...     

Quality of Governance and the Formation of Preferential Trade Agreements

This paper investigates economic and political factors which explain the presence or absence of preferential trade agreements (PTAs). A model of three countries with imperfect competition markets is employed for theoretical analysis of political economy. The validity of theoretical results is tested by econometric analysis with a logit model. It is shown that countries with similar incomes are more likely to form PTAs, and that governments with low quality of governance have little incentive to form PTAs.     

资源税改革与我国欠发达资源富集区发展研究

本文阐述了我国欠发达资源富集区的区域特征,分析资源税对欠发达资源富集区发展的有关影响,进而以榆林市为例,剖析现有资源税缺陷对欠发达资源富集区发展的负面作用,最后提出促进这类区域发展的若干资源税改革建议。     

Economic Growth with Foreign Capital

In growth theory, foreign investment places a small open economy in the international steady state. In applied growth theory, foreign investment is assumed to shift technology. The present growth model separates foreign from domestic capital and develops the steady state where both capital/labor ratios are stationary. A capital scarce country would attract foreign investment and may arrive at a steady state with perpetual foreign investment. Such a steady state foreign investment host is characterized by low saving and high labor growth rates, and source countries the opposite. Incomplete convergence characterizes economic growth with foreign capital.     

The political economy of legal titling

The libertarian case for legal titling is that formalization of the economic (de facto) rights of those who own land and buildings improves prospects for capitalism and, ultimately, development. Although all rich countries have private property rights, we argue that the success of legal titling depends on a certain kind of state—what we call a property-protecting state—that is often missing in developing countries. We use insights from Austrian economics, public choice, and institutional economics to clarify the political basis for legal titling to improve land tenure security. Evidence from Afghanistan shows that legal titling has not worked because the country does not have a property-protecting state. We suggest focusing on improving political institutions before investing in legal titling. In the meantime, it makes more sense to register land ownership at the community level, without the state.

     

Productivity and territorial specialization

On the basis of a relatively free trade world and global economy, specialization tends to increase the comparative advantages of a country. But in this scenario, not countries but cities are the territorial organizations that play the main role. Cities concentrate the economic activity and political influential household that reflects economic changes.The purpose of this study is to explore the principles underlie the distribution of population on a territory and the likely effect of economic development on redistributing population geographically.     

Do state trading exporters distort trade?

In this paper, we analyse the trade-distorting effects of state trading enterprises (STEs) which exist in some exporting countries. Because of these potential effects, several countries have raised the issue of state enterprises in the Doha Round negotiations in the WTO. The belief is that STEs in certain developed countries have trade effects which are equivalent to an export subsidy. STEs also exist in developing countries, though since the aim of government policy may differ from the developed country case, the trade distortion may be equivalent to an export tax. We present a theoretical model that is sufficiently general to allow us to consider the case of exporting STEs in developed and developing economies. The model is calibrated with data on two examples of STEs, one typical of an STE in a developed country, the other typical of an STE in a developing economy. In each case, we allow for differences in the nature of the STE's pay-off function. The overall conclusion is that STEs do distort trade and the trade distortion effect is potentially significant.     

From family security to the welfare state: Path dependency of social security on the difference in legal origins

We provide a new framework to analyze law and public finance from the perspective of difference in legal origins. The size of the welfare system differs from country to country. The security net provided by the family and other informal institutions also varies. Our two-sector model links these phenomena. We consider two cases of security. The first considers security achieved through intra-household resource redistribution in the traditional sector. The second case considers the welfare state, which taxes the modern sector. Switching from intense family security to an extensive welfare state model enhances growth because state taxation on the modern sector harnesses the potential productivity of the entire economy. In contrast, countries with low levels of family security should transition to a small welfare state model to sustain growth. This finding explains the different trends of welfare benefits in civil law and common law countries. The different sizes of the welfare state have their origins in family law, which differently stipulates family security between civil law and common law countries.     

经济改革和宪政转轨

该文研究经济改革和宪政转轨之间的关系,论证国家之间和国家内部不同政治力量间的竞争是宪政转轨的推动力量.通过对俄罗斯和中国的例证,该文分析了两种转轨模式下的特征和问题.结论是,在政治垄断下的经济转轨将被国家机会主义所挟持.经济转轨双轨制产生了宪政转轨的非常高的长期代价,大大超过它赎买既得利益平滑转型的短期好处.经济转轨是后社会主义国家的制度与WTO规则下的全球经济趋同的过程,而不是创造一个本质上不同的制度的创新过程.     

FISCAL INDULGENCE IN CENTRAL EUROPE: LOSS OF THE EXTERNAL ANCHOR?

In recent years, fiscal performance in Central Europe has steadily deteriorated, in contrast to the improvement in the Baltics. This paper explores the determinants of such differences among countries on the path to European Union (EU) accession. Regression estimates suggest that economic and institutional fundamentals do not provide a full explanation. An alternative explanation lies in the political economy of the accession process, and a game‐theoretic model illustrates why a country with a stronger bargaining position might have an incentive to deviate from convergence to the Maastricht criteria. The model generates alternative fiscal policy regimes – allowing for regime shifts – depending on country characteristics and EU policies.     

Immigration and income redistribution in welfare states

This paper sets out a political economy model where median voters who benefit from local income redistribution are affected by the fiscal burden of welfare payments to immigrants. The median voters also have cultural preferences. Immigrants are influenced in their relocation decision by welfare benefits in host countries. Uncoordinated, coordinated and leader–follower domestic welfare policies are compared. In the last case, the median voter in the follower country is better off than the median voter in the leader country because of a less generous welfare system and hence fewer immigrants.