Intergenerational Mobility and the Process of Development

This paper offers an explanation for some evidence that intergenerational earnings mobility is higher in more developed economies and that mobility is positively correlated with wage equality. In the model mobility promotes economic growth via its effect on the accumulation and allocation of human capital. Growth influences mobility via its effect on incentives to acquire education and its effect on liquidity constraints upon such acquisition. In the process of development mobility increases and the distribution of education becomes better correlated with ability. Redistributive policy has a negative effect on growth in developed economies and a positive effect in developing economies.     

Optimal education policies under endogenous borrowing constraints

This paper studies optimal education policies under endogenous borrowing constraints in a standard life-cycle model. In a closed economy, a policy that appropriately bundles an education subsidy with an old-age pension can restore the complete market allocation. Such a policy also removes persistent indeterminacies and endogenous fluctuations that exist in its absence. In a small open economy, a similar policy may restore the complete market allocation for a wide range of parameters, a range much wider than previously believed. These results broaden the rationale for a two-armed welfare state (education and pension) to a large class of economies.     

School dropout and overeducation in developing economies: Feasibility of a budgetary solution†

High rates of school dropout and overeducation are typical problems faced by developing economies. This paper addresses these issues in a unique theoretical model that accounts for complementarity between household and infrastructural investment in education production function on the one hand, and school and higher education on the other hand. The results derived in this paper show that a reallocation of the education budget in favor of school education can solve both problems at the same time if certain conditions are satisfied. Otherwise, reallocation aggravates the problems. This paper questions the efficacy of the widely practiced budget reallocation policy in favor of school education, and in turn, shows that reallocation cannot eliminate school dropouts.     

Policy Framework for Transition to a Low-Carbon World Economy

Climate change mitigation policy is the most difficult to come before our polity in living memory. There can be no solution without international agreement involving all substantial economies, and yet each country has an incentive to free ride on others. The international agreement must have five parts: agreement on the objective in terms of concentrations of greenhouse gases in the atmosphere, agreement on allocation of an emissions entitlements budget among countries, agreement on rules for international trade in entitlements, agreement on developed countries taking the lead on development of low-emissions technologies, and agreement on assistance from developed countries for climate change mitigation in developing countries. Two sources of market failure must be corrected to achieve emissions reduction targets efficiently: the external costs of emitting greenhouse gases and the external benefits of private investment in innovation in relation to low-emissions technologies.     

A cause for policy concern: the expansion of household credit in middle-income economies

This article discusses the significance of the recent growth in household credit across a range of middle-income economies. This growth is understood primarily as a result of policy, including the promotion of individual borrowing as a means to fund access to housing, education and health. A formal model of credit extension and allocation is developed, establishing that consumption lending makes a comparatively stronger contribution to aggregate profitability as well as financial fragility than production lending. Consumption lending may be understood to create distinctive endogenous tendencies to credit-market instability. The findings point to the need for a critical reconsideration of reliance on this lending for social and macroeconomic policy.     

基础科学研究需要怎样的制度安排

基础研究是一个国家在经济发展到较高水平后保持增长态势，成为全球强国的重要影响因素。目前，我国基础研究和资金投入与世界创新型国家相比仍处于较低水平，如何加速基础研究进展已成为当前科技政策亟需解决的问题。发达国家基础研究制度已有较长历史，在预算经费分配、科研主体鼓励方面为我国提供了丰富的经验。通过对发达国家经费资助、创新激励等政策进行分析，为我国在基础科学研究领域保持先进性提出对策建议。     

中国国有工业企业劳动力冗员问题研究

科尔奈发展的预算软约束理论提出了一个引人注目的关于国营企业冗员现象的解释。然而这类文献有时忽略这样一种现象,即政府、特别是转型经济中的政府往往会让国有企业(SOES)追求一些非经济目标,并通过补贴和政策性贷款来为此提供资助。通过对大约700家国有企业的研究,我们发现在不减轻企业社会负担的情况下,预算约束的硬化是直接导致九十年代初中国国企冗员上升的主要原因之一。     

Bad loans,soft budget constraints and the political economy of financial market reform in transition economies

Financial market imperfections and especially the bad debt problem are among the most important factors impeding economic restructuring in transition economies. This paper analyses the implications of non-performing loans for the lending policy of banks and for the ensuing allocation of credit. It is shown that a lending bias exists in favour of old debtors, which not only impedes structural change but may also counteract policies intended to harden budget constraints and to promote restructuring. The paper also discusses from a political economy perspective, why despite these negative implications financial market reforms were not pursued more forcefully in most countries.     

Aging,growth and the allocation of public expenditures on health and education

In this paper, I develop an overlapping generations endogenous growth model in which both public education and health are sources of growth by affecting the accumulation rate of the human capital stock and the savings rate over life expectancy. I first find that dynamic complementarities of public expenditures lead to minimum threshold levels of public education and health expenditures that ensure sustainable growth. I then show how governments can use the allocation of public expenditures as an alternative policy instrument to maximize growth without increasing the tax rate or the retirement age, as usually happens in aging economies.     

The Management of Universities; Scottish Economic Society/Royal Bank of Scotland Annual Lecture, 1999

This paper surveys the literature concerning the operation of incentive mechanisms within and across higher education institutions. A principal-agent model of intra-institution resource allocation is developed, and its implications are compared with some of the resource allocation models currently in operation in British universities. At the inter-institutional level, the model is adapted to the case where a funding council serves as principal to many agents—the universities. Evidence on the scale and scope economies, and on the technical efficiency of UK universities is presented. It is argued that the received models of resource allocation should be amended so as to encourage the development of the university system in the direction of the sustainable configuration and so as to allow for differences in efficiency across budgetary units.     

高校内部预算管理存在的问题与对策

随着高等教育事业的深入发展,高校的办学规模不断扩大,资金流量迅速增加,如何有效使用资金,实现资源的优化配置,成为高校财务管理的重要课题。高校内部预算管理是高校财务管理的重要组成部分,它的编制与执行关系到高校整体资金使用与合理配置,是提高高校办学效率的重要环节。     

POLICY UNCERTAINTY,ELECTORAL SECURITIES,AND REDISTRIBUTION*

This article investigates how uncertainty about the adoption of a redistribution policy affects political support for redistribution when individuals can trade policy‐contingent securities in the stock market. In equilibrium the support for redistribution is smaller than where no “policy‐insurance market” is available. This implies that in economies with well‐developed financial markets redistribution decreases with the level of participation in these markets and with income inequality. Furthermore, the existence of a policy‐insurance market may lead to a less equal distribution of income than where no insurance is available even if a majority of individuals are redistributing resources through private transfers.     

生态预算:基于预算管理改进角度的思考

本文从预算管理这一资源配置手段的改进角度出发,研究了生态预算管理的目标、预算参与、预算强调及预算指标的特点.在此基础上,汲取一般性预算管理研究成果,对生态预算参与、生态预算强调、生态预算松弛等生态预算管理方面的个体特征和改进内容进行了探索.     

Politically Motivated Fiscal Deficits: Policy Issues in Closed and Open Economies

In this paper we reconsider the trade-off between rules and discretion in fiscal policy in the presence of politically motivated fiscal deficits. We present a model of political bias in the budget process appropriately developed to allow for tax-smoothing-motivated deficits as well as for the consideration of deficit biases in open economies. We find that endowing politically-biased governments with the ability to respond to economic shocks with deficit finance will not exacerbate the existing biases. In an open economy, the ability to borrow abroad will significantly increase the deficit. However, restrictions to public foreign borrowing will not reduce the political bias as long as the private sector has access to international capital markets at the same terms as the government.     

The Limits of Discipline: Ownership and Hard Budget Constraints in the Transition Economies

The existing literature on soft budget constraints suggests that firms may be subsidized for political reasons or because of the creditors' desire to recover a part of the sunk cost invested in an earlier period. In all these models hard budget constraints are viewed as being, in principle, capable of inducing the necessary restructuring behaviour on the level of the firm. This paper argues that the imposition of financial discipline is not sufficient to remedy ownership and governance-related deficiencies of corporate performance. Using evidence from the post-communist transition economies, the paper shows that a policy of hard budget constraints cannot induce successful revenue restructuring, which requires entrepreneurial incentives inherent in certain ownership types (most notably, outside investors). The paper also shows that the policy of hard budget constraints falters when state firms, because of inferior revenue performance and less willingness to meet payment obligations, continue to pose a higher credit risk than privatized firms. The brunt of state firms' lower creditworthiness falls on state creditors. But the 'softness' of these creditors, while harmful in many ways, is not necessarily irrational, if it prevents the demise of firms that are in principle capable of successful restructuring through ownership changes.     

IS-LM stability and economic policy effectiveness: Further observations

Professor Wang (1980) has usefully extended my original model by introducing an explicit government budget constraint. However, the form of that budget constraint is very restrictive and limited. In this note, an alternative budget constraint to Wang's is developed. This permits the model and policy analysis to be significantly extended and generalized.     

A note on budget balance under interim participation constraints: the case of independent types

We provide a simple proof of the equivalence between ex ante and ex post budget balance constraints in Bayesian mechanism design with independent types when participation decisions are made at the interim stage. The result is given an interpretation in terms of efficient allocation of risk.     

A Unique Informationally Efficient Allocation Mechanism In Economies With Consumption Externalities*

This article investigates the informational requirements of resource allocation processes in pure exchange economies with consumption externalities. It is shown that the distributive Lindahl mechanism has a minimal informational size of the message space, and thus it is informationally the most efficient allocation process that is informationally decentralized and realizes Pareto‐efficient allocations over the class of economies that include nonmalevolent economies. Furthermore, it is shown that the distributive Lindahl mechanism is the unique informationally efficient decentralized mechanism that realizes Pareto‐efficient and individually rational allocations over a certain class of nonmalevolent economies.     

Educational Inequality and the Expansion of UK Higher Education

In this paper we explore changes over time in higher education (HE) participation and attainment between people from richer and poorer family backgrounds during a time period when the UK higher education system expanded at a rapid rate. We use longitudinal data from three time periods to study temporal shifts in HE participation and attainment across parental income groups for children going to university in the 1970s, 1980s and 1990s. The key finding is a highly policy relevant one, namely that HE expansion has not been equally distributed across people from richer and poorer backgrounds. Rather, it has disproportionately benefited children from relatively rich families. Despite the fact that many more children from higher income backgrounds participated in HE before the recent expansion of the system, the expansion acted to widen participation gaps between rich and poor children. This finding is robust to different measures of education participation and inequality. It also emerges from non‐parametric estimations and from a more detailed econometric model allowing for the sequential nature of education choices with potentially different income associations at different stages of the education sequence.     

Voting on meritocracy

This paper considers a setting where a resource such as education budget is to be distributed among agents. The latter differ in their ability to make use of the resource, and the issue is that of determining the allocation rule whereby the individual shares of the resource (may) depend on their relative efforts of obtaining it. The paper's focus is on endogenous determination, through voting, of the degree of meritocracy in the resource allocation system, which determines the marginal productivity of one's effort. It is found that a meritocratic system is expected to be supported by highly productive individuals and opposed by those with low productivity. When the decision making becomes less elitist and involves broader participation of population groups the support for meritocracy decreases.