Bond financed fiscal policy and the problem of instrument instability

Previous analyses of bond financed government expenditure policies have indicated stability problems but have considered only a once-for-all and sustained increase in government spending. In this paper we examine the bond financing of temporary government expenditure changes, which form part of an ongoing policy designed to “balance the budget over the business cycle.” We find that an endogenous fiscal policy can keep national output near its target value but that the effects on the national debt and the size of the public sector are likely not to be transitory. There is a strong tendency toward instrument instability, in that control of the economy forces the level of government spending to forever diverge from its equilibrium value.     

An alternative approach to income taxation

We take an alternative approach to income taxation in this paper. We view the income tax schedule as the outcome of a voting process, rather than the optimal choice of a “benevolent social planner”. We show that it is very likely for majority voting to lead to the adoption of a regressive income tax schedule, depending on the per capita government revenue requirement and the mean productivity of the population, which is in sharp contrast with the result derived from the traditional “benevolent social planner” approach to income taxation; and that given the adoption of a regressive income tax schedule, the income tax schedule would become less regressive as the ratio of the per capita government revenue requirement over the mean productivity of the population increases. Our work might shed some light on both the prevalent adoption of regressive state tax systems and the cross-state difference in terms of tax systems.     

The progressivity of equalization payments in federations

We investigate the conditions under which an inequality averse and additively separable welfarist central government would choose to set up a progressive equalization payments scheme in a federation with local public goods. A progressive equalization payments scheme is a list of per capita net (possibly negative) subsidies – one such net subsidy for every jurisdiction – that are decreasing with respect to jurisdictions per capita wealth. We examine this question in a setting where the case for progressivity is a priori the strongest, namely: all citizens have the same utility function, inhabitants of a given jurisdiction have the same wealth and are not able to move across jurisdictions and there is no cross-jurisdiction competition in the setting of tax rates. We show that the central government favors a progressive equalization payments scheme for all distributions of wealth and population sizes if and only if its objective function is additively separable between each jurisdiction's per capita wealth and number of inhabitants. When interpreted for a mean of order r social welfare function, and assuming the absence of congestion in the local public good, this condition is shown to be equivalent to the requirement that the individual indirect utility function be additively separable between wealth public good price and be raised at the power 1/r before its agregation by means of the mean-of-order r social welfare function. Some implications of this restriction to the case where the individual's direct utility function is additively separable are also derived.     

Why Doesn’t the Hong Kong Government Sell More Public Land?

Why doesn’t the Hong Kong government sell more of its enormous land holding to lower the city’s high housing price and increase the residents’ small living space? We answer the question in an overlapping generations framework. We show that while a rapid and complete privatization of government land is efficient in the absence of externalities; it is made politically difficult by a compensation gap, when the losses of current property owners are greater than the government revenue from land sales. We argue that the cross-country diversity of government land ownership owes to historical incidents in some countries (such as the U.S. in the 19th century) that allowed disposal of government land without filling the compensation gap and the absence of such incidents in others (such as Hong Kong).     

房屋拆迁中影响村民合作的因素分析——基于7个村庄的田野调查和行为实验研究

本文通过对Q市7个拆迁村的田野调查和行为实验,研究房屋拆迁中村委会偏好特征对村民合作水平的影响.本文构建了一个包含异质性村委会的多主体博弈模型,提出研究假设,并进行实证检验.主要结论如下:当政府实施低补偿策略时,出于对村民利益的考虑以及对不公平的厌恶,利他型村委会会消极执行政府的拆迁工作,降低村民合作水平;当政府实施高...     

Incentives in government contracts

This paper is concerned with the structure of compensation schemes that a government might employ when contracting with a private firm. We characterize the class of all compensation schemes that induce contracting firms to share their inside information with the government.     

Government policy and the probability of coordination failures

This paper introduces an approach to the study of optimal government policy in economies characterized by a coordination problem and multiple equilibria. Such models are often criticized as not being useful for policy analysis because they fail to assign a unique prediction to each possible policy choice. We employ a selection mechanism that assigns, ex ante, a probability to each equilibrium indicating how likely it is to obtain. We show how such a mechanism can be derived as the natural result of an adaptive learning process. This approach leads to a well-defined optimal policy problem, and has important implications for the conduct of government policy. We illustrate these implications using a simple model of technology adoption under network externalities.     

WTO membership and corruption

Despite widespread belief that accession process and formal membership to the World Trade Organization (WTO) improve the quality of governance within a country, there is no convincing empirical evidence to substantiate this thought. Here, I investigate whether the WTO status of a country has a causal effect on firm-level reports of political corruption using a nonparametric partial identification approach to bound the average treatment effects (ATEs). I also analyze conditional ATEs to explore various sources of potential heterogeneity. Contrary to popular belief, I find that WTO membership is likely to have no causal effect on domestic corruption overall. And if anything, it is likely to increase corrupt practices, particularly among firms that are established post WTO membership and those that are government owned.     

Clean energy policy: Taxing carbon and the illusion of the equity objective

The Australian government has passed legislation, the Clean Energy Future Policy, establishing a carbon-emission pricing scheme. While the scheme is represented as the most efficient and cost effective means of reducing emissions, the government has also committed to ensuring equity in burden sharing, particularly through the use of household compensation methods and by minimising the disadvantages faced by energy-intensive trade-exposed industries thereby committing to these industries' continued developments. Treasury modelling used to determine the required level of household compensation has remained relatively uncontested. We question the conclusion of equity in burden sharing on the basis of this modelling. The modelling reflects fairly standard conventional economic theory in terms of market structures, the determination of prices and outputs, and the characterisation of factor markets. The behavioural assumptions overstate the consumer and producer substitution possibilities, failing to consider the possibility of technical reswitching, and ignore the impact that oligopolistic market structures would have on price increases and infrastructure investment. The full ramifications of compensation for overall government expenditure and therefore the capacity of the government to continue to fund a range of elements of the social wage, the potential for unemployment and transitioning workers to less carbon-intensive industries, are also overlooked.     

MONETARY VALUATION OF INSURANCE AGAINST FLOOD RISK UNDER CLIMATE CHANGE*

Climate change is projected to increase the risk of natural disasters, such as floods and storms, in certain regions. This is likely to raise the demand for natural disaster insurance. We present a stated preference survey using choice modeling with mixed logit estimation methods in order to examine the effects of climate change and the availability of government compensation on the demand for flood insurance by Dutch homeowners. Currently, no private insurance against flood damage is offered in the Netherlands. The results indicate that there are opportunities for the development of a flood insurance market.     

Macroeconomic implications of a sharing compensation scheme in a model of endogenous growth

This paper develops an endogenous growth model that sheds light on the roles of the revenue-sharing scheme in a macro-economy. We show that a higher sharing ratio attributable to labor unambiguously promotes the equilibrium working time, but has an ambiguous effect on the balanced-growth rate. Of interest, if the economy is characterized by a higher degree of monopoly, a sharing compensation system is more likely to boost the balanced growth rate. In a normative analysis, we show that to remedy the distortions caused by the sharing scheme and market imperfections, the government should provide a subsidy to capital incomes, while it may either tax or subsidize labor incomes.     

Social constraints and women's education: Evidence from Afghanistan under radical religious rule

We analyze how growing up under Taliban rule affects Afghan women's educational attainments and subsequent labor market and fertility outcomes. While in power from 1996 to 2001, the Taliban ruled a large portion of the Afghan territory and introduced a ban on girls’ education. Using data from the National Risk and Vulnerability Assessment survey, we rely on the fact that, depending on their year of birth and province of residence, individuals differed in the number of years they were exposed to the Taliban government while of school age. Our difference-in-differences estimates show that an additional year of exposure to the Taliban occupation while of school age reduces a woman's probability of completing basic education by about two percentage points. The effects on educational outcomes are larger in Pashtun districts and rural areas. These findings are not due to the 1992 introduction of the provisional Islamist government that preceded the Taliban, cultural differences related to ethnicity, or varying emigration rates across provinces. The estimates are robust to differences across provinces in the number of violent events before, during, and after the Taliban occupation. Women exposed to the Taliban’s radical religious rule while they were of school age are also less likely to be employed outside of the household and more likely to have an agricultural job within the household. For fertility choices, exposure to the Taliban occupation increases total number of children and lowers age at first marriage. We discuss our empirical findings against theoretical economic literature on radical religious groups (e.g., Iannaccone, 1992; Berman, 2000).     

Government employment and the provision of fringe benefits

This study uses individual level data from the United States to examine the influence of government employment on the provision of five major fringe benefits. Four of the five benefits are more likely to be provided to government workers than to their private sector counterparts. Unlike wage comparisons which typically find substantial overpayment only for federal workers, the findings suggest that past wage differentials underestimate the true compensation advantage enjoyed by government workers.     

Optimal Climate Change Policies When Governments Cannot Commit

We analyse the optimal design of climate change policies when a government wants to encourage the private sector to undertake significant immediate investment in developing cleaner technologies, but the relevant carbon taxes (or other environmental policies) that would incentivise such investment by firms will be set in the future. We assume that the current government cannot commit to long-term carbon taxes, and so both it and the private sector face the possibility that the government in power in the future may give different (relative) weight to environmental damage costs. We show that this lack of commitment has a significant asymmetric effect: it increases the social benefits of the current government to have the investment undertaken, but reduces the private benefit to the private sector to invest. Consequently the current government may need to use additional policy instruments—such as R&D subsidies—to stimulate the required investment.     

高管正向外部薪酬差距对企业R&D国际化覆盖国家差别化的影响

以2009—2018年中国沪深两市开展R&D国际化的上市公司为样本,探讨了高管正向外部薪酬差距如何影响企业R&D国际化覆盖国家的差别化问题,同时还检验了高管海外经历以及政府补助这两个内外部的影响因素对上述关系的调节作用。研究发现,高管外部薪酬高于行业平均水平时,该薪酬差距越大,企业更偏向于在科技发达国家进行R&D国际化;高管海外经历和剔除与科技创新无关部分的政府补助均对上述关系起到正向调节作用。     

市场化、政府干预与股票流动性溢价的分配

本文运用博弈论的思想和方法,结合股改实际,分别构建在市场化和政府干预下"均衡对价"的理论模型,分析了政府干预对流通股东利益流失的影响,并收集1004家股改公司的数据对政府干预与股改对价之间的关系进行实证检验,以此考察市场、政府干预与股票流动性溢价分配三者之间的关系。本文理论模型分析表明,与市场化情况相比,政府干预压缩了博弈双方的对价策略空间,进而降低了"均衡对价"水平,造成流通股东利益的流失;以宝钢股份为例对流通股东利益流失程度的数据模拟表明,与市场化情况相比,政府干预给流通股东每股所能获得的对价带来的损失达到1/4;实证结果表明,政府干预会影响股改对价的高低,随着政府干预力度的增强,国有控股公司所支付的对价降低,从而支持了本文的理论模型和研究假设。     

AN EVALUATION OF FINANCIAL INCENTIVE POLICIES FOR ORGAN DONATIONS IN THE UNITED STATES

This paper examines the association between financial incentives and organ donations. Although the National Organ Transplant Act of 1984 prohibits financial compensation for organs for transplant, we focus on the impact of laws that influence the relative cost of deceased and live organ donations on the supply of organs for transplant. First, we hypothesize that states that have relatively stringent funeral regulations, which have been associated with higher whole‐body donations, will have fewer organ donations. Second, we examine the impact of two common state laws that offer financial compensation to live donors: one that allows a tax deduction for costs incurred and the other which entitles government employees up to 30 days of paid leave. We find no evidence to support that these laws affect organ donations. (JEL I11, I18)     

中央政府供给地区生态补偿的内生缺陷——对补偿原则和收益原则内在矛盾的分析

我国现在实施的生态补偿以财政补偿为主，其中，中央对地方的财政补偿所占的比例最高。鉴于这种情况，作者从地方公共品供给的角度，考察了由于补偿原则和收益原则的内在矛盾——在功利主义回报原则下，中央政府的转移支付难以达到完全补偿；在自然回报原则下，中央政府的转移支付显著的使分配非中性，违背自然回报原则所要求的中立性——不能同时达到补偿的完全性与中性。由于这种内生缺陷的存在，中央政府供给地区生态补偿时难以使所有地区都满意，其本身也陷入难以进退的矛盾境地。本文认为在我国纵向转移支付占据主导地位的今天，政府若要有效供给诸如环境保护类型的溢出性地方公共品，就应该转变单线条的由上至下的转移支付模式，强化地方供给，加强地区之间的横向交流，如让地区之间直接谈判如何划分合作的收益或如何进行横向的补偿，以使地方政府承担更多的地区生态补偿责任。     

Government compensation and citizen support for immigration openness

This paper explores how government compensation programs like unemployment insurance and worker training may influence citizen attitudes about immigration openness. It considers several different arguments, including the proposition that social welfare programs may induce less-educated citizens to feel more negatively about their class identity, thus pushing them toward an exclusionary national identity with greater opposition to immigration openness. Using data from the International Social Survey Program's 2013 National Identity module with more than 20,000 respondents from 24 developed democracies, it reports that greater government compensation can be associated with less supportive attitudes for the least educated with a diminishing negative effect for more educated citizens. Consistent with an identity shift argument for why less-educated citizens might become more hostile toward immigration openness with greater government compensation, it also reports that greater compensation is associated with a more exclusionary national identity for less-educated citizens.     

Precautionary savings and the governance of nonprofit organizations

We present a model of nonprofit governance built on two assumptions: (1) organizations wish to hold precautionary savings in order to smooth expenditures; and (2) it is relatively easy for managers to divert these funds for personal use. Hence, donors face a trade off between expenditure smoothing and donation dissipation. We examine the model's predictions using panel data on U.S. nonprofits. We show that organizations in states with poor government oversight have managerial compensation that is more highly correlated with inflows of donations and allocate a smaller percentage of donations to the endowment for future expenditures relative to organizations in strong oversight states.