To Ban or Not to Ban: Foreign Lobbying and Cross‐National Externalities

This paper studies the costs and benefits of foreign lobbying. We show how and when foreign lobbying can help internalize cross‐national externalities. We argue that this is an often overlooked benefit of foreign lobbying. We also study under what conditions a constitutional rule banning foreign lobbying is in the national interest of a country. A key factor in this calculus is whether the interests of foreign lobby groups and domestic unorganized groups coincide or not. We illustrate the logic with examples from trade policy and environmental regulation.     

“交易外部性”:外部性的重新理解及系统整合

基于对外部性和交易本质的理解,当前生产外部性和消费外部性两分的观点有失偏颇。研究提出"交易外部性"概念,即产权交易过程中,交易一方或交易以外的行为主体的权利(束)或权利部分职能被交易另一方强制利用而未被定价或实现对等补偿的现象。据此,按照发生领域和作用主体的不同,外部性可以划分为生产外部性、消费外部性和交易外部性三类,其中,交易外部性进一步包含一类交易外部性、二类交易外部性和三类交易外部性。此处的"二类交易外部性"与史普博的"内部性"具有相同的本质内涵,即"内部性"实质是"交易外部性"范畴下的一个子分类。     

Revisiting Externalities

For economies with one-sided externalities between firms, four types of results are presented and discussed: (i) the impossibility of decentralized finite-dimensional mechanisms guaranteeing Pareto optimality; (ii) the possibilities for Pigou taxes in situations where Arrovian markets cannot function; (iii) that mergers may be able to internalize "weak" externalities but not "strong" ones; and (iv) that "parallelism" of indifference curves (quasi-linear utilities, absence of income effects) is necessary, and not merely sufficient, for the validity of the Coase Invariance Theorem (asserting that alternative institutional arrangements do not change the level of externality). The paper builds on the seminal contributions of Starrett, Calsamiglia, Baumol, Bradford, Oates, Boyd, and Conley.     

Externalities and optimal taxation

This paper reexamines the optimal tax design problem (income and commodities) in the presence of externalities. The nature of the second–best, and the choice of the tax instruments, are motivated by the informational structure in the economy. The main results are: (i) environmental levies (linear or nonlinear) differ in formula from Pigouvian taxes by the expressions for the optimal tax on private goods; (ii) externalities do not affect commodity tax formulas (linear and nonlinear) for private goods; (iii) externalities do not affect the income tax structure if commodity taxes are nonlinear and affect it if commodity taxes are linear; and (iv) a general income tax plus strictly Pigouvian taxes are sufficient for efficient taxation if individuals of different types have identical marginal rates of substitution (at any given consumption bundle).     

Intersectoral Externalities and Indeterminacy

We consider a two-sector economy with positive intersectoral external effects and nonincreasing social returns. We show that if the discount factor ρ is close to 1 then local indeterminacy may be obtained with mild market imperfections. Moreover, with additional conditions, when ρ is made smaller the steady state becomes totally unstable and quasi-periodic cycles, along which equilibrium paths are indeterminate, may appear through a Hopf bifurcation. This will be proved even if the investment good is capital intensive at the private level while this condition guarantees local determinacy in the sector specific case. Journal of Economic Literature Classification Numbers: C62, E32, O41.     

Shiftable Externalities: A Market Solution

In this paper we propose a regulatory scheme for what has become known as shiftable externalities (Not In My Backyard type garbage location problemswhere the externality is characterized by the absence of jointness in supply).The scheme facilitates the establishment of a market for the externality, and it isfeasible for a wider class of regulation problems and more information efficientthan the other regulatory schemes that have been proposed for this type ofexternality. Finally, we show that it is possible to decentralize the participationdecision so as to take account of verification costs.     

Externalities in migration

"The paper presents a model which shows that the probability of migrants being mobile after migration depends on the number of previous waves. The model concludes that low order waves provide positive externalities to higher order waves. This conclusion is empirically tested by comparing the interindustry mobility of two sequential waves of political migrants to Israel."     

Identifying Human-Capital Externalities: Theory with Applications

The identification of aggregate human-capital externalities is still not fully understood. The existing ( Mincerian ) approach confounds positive externalities with wage changes due to a downward sloping demand curve for human capital. As a result, the Mincerian approach yields positive externalities even when wages equal marginal social products. We propose an approach that identifies human-capital externalities, whether or not aggregate demand for human capital slopes downward. Another advantage of our approach is that it does not require estimates of the individual return to human capital. Applications to U.S. cities and states between 1970 and 1990 yield no evidence of significant average-schooling externalities.     

Negative Externalities and Evolutionary Implementation

We model externality abatement as an implementation problem. A social planner would like to ensure efficient behaviour among a group of agents whose actions are sources of externalities. However, the planner has limited information about the agents' preferences, and is unable to distinguish individual agents except through their action choices. We prove that if a concavity condition on aggregate payoffs is satisfied, the planner can guarantee that efficient behaviour is globally stable under a wide range of behaviour adjustment processes by administering a variable pricing scheme. Through a series of applications, we show that the concavity condition is naturally satisfied in settings involving negative externalities. We conclude by contrasting the performance of the pricing mechanism with that of a mechanism based on direct revelation and announcement dependent forcing contracts.     

Dynamic Externalities and Policy Coordination

The paper introduces trade into dynamic models with externalities and capital accumulation, and evaluates the efficiency of the Cournot–Nash equilibrium. It considers mixed economies characterized by a blend of strategic and nonstrategic sectors. Also, there are two sources of interdependence: the existence of production externalities and the endogenous determination of market prices. It is shown that policy coordination is not needed when preferences are the same. In this case, the production externalities are internalized, so that an inefficient solution becomes the efficient integrated world equilibrium due to trade.     

Externalities: A Note on Avoiding Confusion

In distinguishing the difference between a genuine externality and a pecuniary externity, Bohanon observes that the latter never enters third-party utility (or production) functions, whereas this is always the case with technical externalities.     

Urban Structure and Environmental Externalities

The objective of this paper is to analyze policy design for air pollution management in the spatial context of urban development. We base our analysis on the paper of Ogawa and Fujita (Reg Sci Urban Econ 12:161–196, 1982), which offers a proper theoretical framework of non-monocentric urban land use using static microeconomic theory where the city structure is endogenous. First, we show that when households internalize industrial pollution in their residential location choice, spatialization within the city is reinforced. This impacts directly the emissions of greenhouse gases from commuting. Then, we analyze policy instruments in order to achieve optimal land use pattern when the policy maker has to manage both industrial and commuting related polluting emissions, that interact through the land market.     

外部性补偿与西部开发

本文认为我国西部落后于东后,根本的症结是外部的存在,由于外部性的存在,使得西部地区得自于全国的收益小于它给予全国的收益,投入资源,但不能取得完全收益,西部产权遭受损害。所以,开发西部,有必要从根本上解决西部地区的外部性问题,通过把外部性内化为西部地区的要素投入,维护西部产权的完整性,进而为西部开发奠基持续而稳固的根基,把西部开发顺利推向前进。     

International and Intergenerational Environmental Externalities

We examine a world in which policymakers' actions in a given country at a given time have long-lived effects on a common resource: the global environment. We consider the first best in which long-lived planners behave cooperatively, then examine the allocation of resources when there is non-cooperation across countries, across time, or both. Finally we analyze the dynamic behavior of the economy along balanced growth paths. It is found that while long-lived international institutions are necessary to internalize all externalities, cooperation at a point in time may be harmful to future generations.     

Miracle on Sixth Avenue: Information Externalities and Search

After a long dormant period, Lower Sixth Avenue in New York has under gone a rapid revitalisation. We show that a simple search theoretic model with information spillovers can explain both the period of underuse and the rapid turnaround. The model reduces to a simple equation, which allows us to do comparative statics on the duration of vacancies. We show how the solution reacts to changes in market structure and changes in search technology. The model is suggestive of difficulties that may occur in many markets in which there are changes over time in the optimal use of resources.     

Endogenous Growth and Negative Externalities

Received March 5, 2001; revised version received August 5, 2002 Published online: April 30, 2003