Public Pension Fund Management: Best Practice and International Experience

As Japan's policymakers strive to reform the Government Pension Investment Fund, this paper reviews the core principles and best practices of public pension fund management, with a particular focus on governance and investment philosophy, as distilled from the experience of some of the largest and most advanced institutional investors. It proceeds to compare and contrast three distinct models of institutional fund management: the Norway model, the Yale/Australia Future Fund model, and the Canada model. The paper concludes by making some preliminary recommendations for the Government Pension Investment Fund reform.     

Tax revenues, fiscal corruption and “shame” costs

In this paper we explore tax revenues in a regime of widespread fiscal corruption in a static framework. We prove that the relationship between the tax rate and tax revenues depends on the relevance of the “shame effect” of being detected in a corrupt transaction. In countries with a “low shame” effect, tax revenues grow as the tax rate increases. Moreover, there is a critical tax rate where the growth rate of tax revenues begins to reduce. In countries with a high “shame effect” tax revenues increase up to a threshold value and then decrease.