Labour supply, foreign investment and welfare in the presence of public infrastructure

Within the context of a small open economy where both foreign investment and the provision of public infrastructure are endogenous, this paper examines the impact of an exogenous increase in labour supply. An increase in labour supply can be attributed to labour inflow. A number of empirical studies have demonstrated the importance of public infrastructure in real economies and both developed and developing countries have attracted significant foreign investment in recent years. This paper shows that, in the case of a diversified equilibrium, variations in labour supply do not affect the wage rate, provision of public infrastructure or welfare. However, an increase in labour supply decreases foreign investment as long as the producers of the private goods derive equal benefits from public infrastructure. In the case of complete specialisation, an increase in labour supply increases the provision of public infrastructure, which leads to an increase in the wage rate and foreign investment. An increase in labour supply increases welfare as long as the provision of public infrastructure involves some fixed cost.     

ECONOMIC PERFORMANCE AND PUBLIC INFRASTRUCTURE: AN APPLICATION TO GREEK MANUFACTURING

To comprehend the impact of public infrastructure on economic performance this paper provides a measure of productivity growth as derived from duality theory. This productivity growth is decomposed into the components of technical change, returns to scale and the effects of public infrastructure, the variable of our interest. In an application, we opt for Greek manufacturing so as to investigate whether the decline in its growth rate is partly explained by public infrastructure. Despite some variation in the estimation results of shadow shares across industries, public infrastructure asserts a cost saving effect in most industries, though it also appears that traditional labour‐intensive industries with lower level of technological advancement do not benefit from the provision of public infrastructure. The estimation results further demonstrate that while public infrastructure enhanced productivity growth over the sample period for most industries, low infrastructure investment in the 1970s and the 1980s undermined productivity growth.     

Institutions, infrastructure, and economic growth

This paper develops a structural model of infrastructure and output growth that takes account of institutional and economic factors that mediate in the infrastructure–GDP interactions. Cross-country estimates of the model indicate that the contribution of infrastructure services to GDP is substantial and, in general, exceeds the cost of provision of those services. The results also shed light on the factors that shape a country's response to its infrastructure needs and offer policy implications for facilitating the removal of infrastructure inadequacies.     

Labor Inflow Induced Wage Inequality and Public Infrastructure

By making use of a simple general equilibrium model of a small open economy, the author examines the link between labor mobility and the size of wage inequality in the presence of productive public infrastructure. The paper shows that the provision of public infrastructure plays an important part in determining the size of labor inflow induced wage inequality. Specifically, it shows that, irrespective of the relative factor intensities, a small inflow of either skilled or unskilled labor does not affect the size of wage inequality if private industries derive equal benefits from public infrastructure provision. A small inflow of skilled (unskilled) labor increases (decreases) wage inequality if skilled (unskilled) labor intensive industry derives more benefits from public infrastructure.     

Efficiency,access, and the mixed delivery of health care services

Universal health systems often rely on both pubic provision and contracting arrangements with private hospitals. This paper studies the optimal mix of public and private provision of health care services. We propose a model in which the regulator acts as athird-party payer, and aims to ensure universal access to treatment at minimal cost. Patients need one unit of medical services and differ in the severity of illness. A private and a public hospital are available. Under incomplete contracts, ownership affects the regulatory constraints and the power of managerial incentives. Only the private manager internalizes profits, and has incentives to reject costly patients and to exert effort in cost reduction. Contracting with the private hospital is optimal when managerial effort is relatively effective in reducing costs. By using the public hospital as a last resort provider, the regulator can ensure access, provide incentives to the private manager, and internalize part of the resulting cost savings. Imposing a no-dumping constraint on the private hospital reduces the power of incentives and is not always optimal.     

MODELS OF PUBLIC–PRIVATE PARTNERSHIPS FOR THE PROVISION OF GOODS

Beside the traditional public–private dichotomy for the provision of public services, an increasing attention has been devoted to the use of public–private partnerships (PPPs). This paper compares relative inefficiencies of public provision, traditional private provision and PPPs as found in real cases, in the literature and through original theoretical models.     

Putting all one's eggs in one basket: Relational contracts and the management of local public services

French municipalities often contract out the provision of local public services to private companies, and regularly choose the same private operator for a range of different services. We develop a model of relational contracts that shows how this strategy may lead to better performance at lower cost for public authorities. We test the implication of our model using an original database of the contractual choices made by 5000 French local public authorities in the years 2001, 2004 and 2008.     

Effects of Public Infrastructure on Cost Structure and Productivity in the Private Sector

This paper examines the effects of public infrastructure on the cost structure and productivity in the private sector in Australia. Translog cost functions incorporating public capital infrastructure are estimated for the aggregate private sector as well as for seven broad industry groups using annual time series data for 1968/69–1995/96. The effects of public infrastructure on productivity are measured in terms of both cost-saving and output-augmenting measures. The empirical results suggest that public infrastructure has a positive and significant impact on productivity in private sector industries. Public capital serves as a substitute for both private capital and labour. The rates of return to public capital are significant and vary over the sample period.     

Demand for locally provided public services within the median voter's framework: the case of the Brazilian municipalities

In this paper we estimated the demand for local public spending for the Brazilian municipalities within a median voter's framework. The rationale for applying that framework came from the fact that in federal systems voters’ preferences are more likely to be reflected at the local level as the consumers of public services have a better knowledge of the benefits and costs of the local public expenditures. Results obtained are consistent with the theoretical background thus suggesting that this hypothesis might be useful to describe the demand for local public goods in Brazil. In particular, the use of quantile regression permitted us to investigate the impacts of the conditioning variables on local public expenses across different expenditures classes thus allowing for heterogeneity across municipalities. Our results also suggest that the impact of the city size on the quality of club goods shows crowding effects as γ is between zero and one. However, in the estimated models, marginal congestion slightly decreases with expenditure. This is a rather surprising result as one is tempted to conclude that the congestion effect should be higher on big cities. Yet, a more careful look shows the drawbacks of such an interpretation. The indivisibilities preclude the provision of certain services in small towns, concentrating their provision on larger cities. Hence, the higher expenditures of those big cities reflect not only a crowding cost but also the fact that these towns offer a wide range of services when compared to the small ones.     

中国农村耐用消费品需求研究

本文利用国家统计局1999年农户家计调查的横截面数据,采用改进的 probit 模型,对影响中国农户家电需求的因素进行了计量分析。与传统文献讨论耐用品需求的思路有所不同,本文重点讨论了影响农户家电购买因素中与基础设施有关的部分。在此基础上,本文试图遵循统计学的原理,将样本中得到的结论推广到整个农村地区,并提出相应的政策建议。     

EVALUATING EU POLICIES ON PUBLIC SERVICES: A CITIZENS' PERSPECTIVE

ABSTRACT ** : This article evaluates EU policies on public services – particularly public network services – from the citizens' point of view. It is first argued that citizens' perceptions are important because the provision of fundamental services is at stake and because they constitute the infrastructure necessary for social and economic development. Citizens’‘voice’ can, therefore, be known, analyzed and used in the design of improved policy on public services along with other indicators. Changing EU policy on public services is synthesized and classified into two main phases in section two. Citizen satisfaction with public services as revealed through surveys from 1997 to 2007 is explored in the third section. In the discussion, the prospects for EU policy on public services are considered and, it is argued that, from the perspectives of subsidiarity and proportionality, policy towards strengthening the common market is being increasingly uploaded to the supranational level in the form of directives, whilst cohesion and redistribution policies are being downloaded to the national level or dealt with at the supranational level by ‘soft’ instruments.     

Infrastructure investment and Canadian manufacturing productivity

This paper examines the relationship between Canadian public infrastructure and private output using a Constant Elasticity and Substitution-Translog (CES-TL) cost model to describe the interaction of the public and private sectors.

We find public capital a substitute for private capital within the Canadian manufacturing sector. Additionally, the services of public capital enhance the productivity of private capital. Canadian manufacturing costs are characterized by economies of scale, indicating that less than optimal plant sizes dominated Canadian manufacturing sector during the study period. Advances in disembodied technical progress are also indicated.     

A Note on Public Input Specifications

Public or fiscal policy is sometimes concerned with the provision of some infrastructure. This paper deals with the specification of such infrastructures as public inputs. Among other things, and in contrast to relevant literature, it is shown that there is no identity between various public inputs concepts. Thus, the results help to avoid misspecifications and may contribute to better public policy designs concerning the provision of infrastructures.     

Benefits Of Communications Infrastructure Capital In U.S. Economy

In this paper we empirically estimate the contribution of the communications infrastructure to the growth of output and productivity at the dis-aggregate industry and at the aggregate economy levels. The estimated value of the marginal benefits or the shadow price of the communications infrastructure capital is positive in each of 34 industries representing the major industrial sectors of the U.S. economy. This effect captures network externality benefits and can be interpreted as a willingness to pay by each industry for communications infrastructure capital services over and above their direct payments for communications services. These results suggest that an increase in communications infrastructure capital services reduces cost in all the industries and as a consequence that of the entire economy. The relatively high value of estimated total marginal benefits for the aggregate economy indicates a high social rate of return to the investments in communications infrastructure.     

The economics of university computer provision: a case study in public production and cost

Is the provision of computer services in British universities provided efficiently? The pattern of expenditure in the last twenty years is explored and a study is made of current spending across universities. Variations in unit computing costs and the output of computing expreience is studied for British universities using conventional cost and production function estimation. In addition the three-demensional production surface for the output of computer provision is estimated using distance weighted techniques. This case study has more general applicability to other areas of public production and cost.     

ICT发展是否增强地方政府财政回应性*

信息不对称导致政府对居民公共服务偏好的回应出现偏离。如何在网络社会下修正这种偏离成为建设服务型政府的重要课题。互联网等ICT技术通过降低信息成本提高政府透明度,有效增强了政府投资公共服务领域的外在约束和内在激励。本文从理论上分析了ICT对政府财政回应的影响机理,寻找政府财政回应的替代变量,并利用中国省级层面面板数据对理论假说加以检验。研究发现：(1)ICT发展加强了民众和中央政府对地方政府的监督,促使地方政府支出偏好由寻租空间更大的基础设施建设转向公共服务;(2)ICT发展增加了社会结构的复杂性,威胁了地方政府晋升考核体系中的社会治理指标,我国使地方政府的支出偏好主动转型;(3)ICT对地方公共服务水平有直接和间接两种影响机制,对东中西部有不同影响。实证结果通过了安慰剂等稳健性检验。本文的政策含义是：促进网信事业发展有助于刺激地方政府向满足居民公共服务需求转型,进而加速服务型政府建设。     

Will the fare be fair? An examination of the pricing effects of the privatization of rail services

This paper explores, with the help of a simple linear model, the implications of the proposals for restructuring British Rail within the recently proposed privatization plan. It is particularly concerned with the separation of responsibility for the provision of infrastructure from that for the provision of services, which will create a situation of bilateral monopoly, and the proposals for franchising services to a number of independent operators, creating complementary monopolies. The model predicts that both these changes will lead to higher fares and reduced demand for rail services, largely because individual agents do not take account the effect of their decisions on the other suppliers involved.     

村民自治、农村税费改革与农村公共投资

促进社会主义新农村建设的核心内容中包括农村民主建设和改善农村公共服务。本文通过对具有全国代表性调查数据的分析，通过研究村主任直接选举和农村税费改革对公共投资的影响后发现，村主任直接选举可以有效促进对农村公共投资的增加，但农村税费改革则在减轻了农民负担的同时对农村公共投资产生短期负面影响。研究建议上级政府应该进一步加大对农村的公共投资力度，同时进一步加强和完善农村村民自治和民主管理。     

Inefficiencies in Public Environmental Services

The paper discusses efficiency issues in the public provision of environmental services, in particular waste water treatment. It is shown that in the face of increasing, respectively decreasing returns to scale the zero profit constraint of a cost minimizing public firm induces underinvestment, respectively overinvestment in public capacity compared with efficient allocation between public purification and effluent control by private polluters. X-inefficiency of the public firm counter-acts the inefficiency in allocation arising from overinvestment, and it reinforces the inefficiency in allocation in case of underinvestment in public purification capacity. As subsidy can bring down the user's charge imposed on sources, but it will also increase X-inefficiency. The subsidy counteracts underinvestment but reinforces overinvestment in public capacity.     

The tax implications of cost shifting in cost-benefit analysis in mental health

This paper examines the tax implications of systems of care for psychiatric patients that rely more on the provision of services in the community rather than in state hospitals. State governments pay the costs of patient care in state hospitals, but share costs with the federal government (via Medicaid) for community based care. Taxes create distortions as gauged by the marginal cost of public funds (MCF). Since state and federal governments use different tax mixes, one needs a MCF for each form of government to evaluate system changes. Separate estimates of the MCF for each state in the USA are derived. Only for Alaska is cost shifting welfare improving.